<PAGE> 1
EXHIBIT 10.5
DISTRIBUTORSHIP AGREEMENT
AGREEMENT made this 6th day of JANUARY, 2000, by and between Evergreen
Network.com, Inc., a Colorado corporation, hereinafter called "Evergreen" and
BINGO WEST OF DENVER, a Colorado company, and B.J. RUNCHEL, individually,
hereinafter called the "Distributor".
WHEREAS Evergreen represents that it is the Master Distributor in Colorado for
Infinity Group, Inc.'s Tab Force(R) validation units and pull-tabs, and that it
has the right to sell and to promote the sale of Tab Force(TM) products in the
area, and
WHEREAS the Distributor desires to sell and to promote the sale of Tab Force(TM)
products, which, for the purposes of this agreement, will be referred to as
Evergreen's products,
IT IS THEREFORE AGREED:
1. RIGHT TO MARKET. Evergreen hereby grants to the Distributor the
nontransferable right to market and sell at retail the products and all its
future products bearing the "Tab Force(TM)" trademark in the territory
assigned by this Agreement.
2. TERRITORY. For the purposes of this Agreement, the territory of the
Distributor shall be the see exhibit A.
3. COVENANTS OF EVERGREEN TAB FORCE(TM). Evergreen covenants as follows:
a. If the Distributor shall not be in default under the terms of this
Agreement or of any payment owed to Evergreen under the terms of this
Agreement, Evergreen shall supply the Distributor with its products in
the regular course of its business and under terms as set forth herein
for its trademarked products.
b. During the term of this Agreement, Evergreen shall sell the Tab
Force(TM) system computers, validation units, Tab Works system, and
deals to Distributor as follows:
(i) During the term of this Agreement, Evergreen shall use its best
efforts to advertise and promote the sale of its products within the
boundaries of the state of Colorado under the "Tab Force(TM)" trade
name and trademark, and Evergreen shall supply the Distributor with
products equal in quality to the products manufactured and sold to any
Distributor or end user under the "Tab Force(TM)" trade name and
trademark.
<PAGE> 2
DISTRIBUTORSHIP AGREEMENT 12/99
4. COVENANTS OF THE DISTRIBUTOR. The Distributor covenants as follows:
a. The Distributor will rent from Evergreen the Tab Force(TM) system in
quantities sufficient to meet market demands within Distributor's
territory.
b. The Distributor will pay a monthly rental fee of $100 per Tab Force(R)
validation unit, per month. The rent payment is due on the 25th of
every month.
c. The Distributor shall pay promptly for Evergreen's products. All
Evergreen products and invoices will be paid net 10.
d. The Distributor will instruct its salespeople to regularly encourage
the sale and display of Evergreen's products in all locations within
of the Distributor's territory, and will require such salespeople to
give special effort and services in the resale of such products.
e. The Distributor will list in feature type and illustrate in adequate
space, in all catalogs and sales bulletins that the Distributor may
deliver to its salesmen, such of Evergreen's products as Evergreen may
from time to time designate.
f. The Distributor will cooperate fully with Evergreen in connection with
all Evergreen's promotions, special deals, and campaigns and when
requested will inaugurate special drives through its salespeople and
other clerks featuring such special deals and campaigns.
g. The Distributor will display samples of Evergreen's products and
advertising displays in a prominent position in its showrooms.
h. The Distributor will permit Evergreen and its representatives to
address meetings of the Distributor's sales staff on behalf of the
Evergreen's products.
i. The Distributor will do everything within its power to feature,
promote, and advertise, as a part of its merchandising and sales
policy, such products of Evergreen as Evergreen shall from time to
time sell to the Distributor, and will use its best efforts to
stimulate and increase interest in Evergreen's products.
5. TERM. The term of this Agreement shall begin on the 6th day of JANUARY,
2000, and shall end on the 31st day of DECEMBER, 2000, subject to the
following:
a. Either party on six (6) months' written notice to the other shall be
entitled to terminate this Agreement for any reason, but without
prejudice to any rights of either party to moneys due or to become due
under this Agreement.
b. If the Distributor is in default on any payment due to Evergreen for a
period of thirty (30) days, or if the Distributor defaults in
performing any of the other terms of this Agreement and continues in
default for a period of thirty (30) days after written notice thereof,
or if the Distributor is adjudicated bankrupt or insolvent, or enters
into a composition with its creditors or if a receiver is appointed
for it, or if a majority of its voting stock is transferred, or if its
ownership or control is in any way substantially changed, then
Evergreen shall have the right to terminate this Agreement upon giving
notice to the Distributor at least thirty (30) days before the time
when such termination is to take effect,
2
<PAGE> 3
DISTRIBUTORSHIP AGREEMENT 12/99
and thereupon this Agreement shall become void, but without prejudice
to the rights of either party to moneys due or to become due under
this Agreement.
c. Upon the termination of this Agreement for any reason, the Distributor
shall discontinue the use of the Tab Force(R) trademark, labels,
copyright, and other advertising media and shall remove all signs and
displays relating thereto; and, in the event of failure so to do,
Evergreen may itself remove such articles at the Distributor's
expense.
6. SALES QUOTAS AND PRICES.
a. The Distributor shall place and/or install NA or more Tab Force(TM)
validation units by N/A, 2000, and shall place, and/or install NA or
more Tab Force(TM) validation units every three (3) months thereafter
until such time as NA Tab Force(TM) validation units are in use, in
order to maintain its distributorship rights, in the territory. All
units placed by the Distributors exceeding the annual quota shall be
included in the quota for the succeeding year.
b. Tab Force(TM) pull-tabs may be purchased at the Distributor price of
.25 cents per pull-tab for resale at prices set by Distributor to
customers within the territory.
c. The Distributor agrees that Evergreen will have the right, at its
discretion, to send a representative to act only as an observer with
Distributor employees on sales calls at the expense of Evergreen.
d. The Distributor agrees that Evergreen shall have the right to review
and audit, at its expense, all contracts for the placement, or use of
Tab Force(TM).
6. ASSIGNMENT. This Agreement may be assigned by Evergreen, and the
performance of its duties thereunder delegated. The Distributor shall have
no right to grant sublicenses or assign its rights under this Agreement.
7. ARBITRATION. The Distributor and Evergreen agree that, in the event of any
disputes or controversies concerning this Agreement, they will attempt in
good faith to settle and resolve any and all differences amicably in an
effort to maintain the goals set forth in this Agreement. All disputes or
disagreements shall be reduced to writing by the parties within three (3)
days of receipt of notice of a problem. The parties, upon receipt of the
written notice and a written response, shall agree to a seven (7) day
cooling-off period.
If, following the cooling-off period, the parties cannot resolve the
dispute, the parties further agree that all disputes and disagreements
shall be submitted to a disinterested third party to try and resolve the
dispute.
If the effort to voluntarily resolve the dispute is not successful, the
dispute shall be settled by arbitration in COLORADO (state).
3
<PAGE> 4
DISTRIBUTORSHIP AGREEMENT 12/99
8. NOTICE. Any notice, payment, or demand required under this Agreement shall
be addressed as follows:
Howard Tooke, President
Evergreen Network.com, Inc.
3336 N. 32nd Street, Suite 106
Phoenix, AZ 85018
B.J. Runchel
Bingo West of Denver
665 E. 70th Ave. Bldg. 4-E
Denver, CO 80229
9. BENEFIT. This Agreement shall be binding upon and inure to the benefit of
the successors and assigns of Evergreen.
10. REPRESENTATION. The Distributor represents that it has adequate facilities,
personnel, and financial resources to perform the various covenants and
service herein set forth.
11. INSPECTION OF EQUIPMENT BY EVERGREEN. Evergreen shall have the right at any
time during business hours to enter upon the premises where the Equipment
is located for the purpose of inspecting it or observing its use,
maintenance, and operation.
12. INSPECTION AND ACCEPTANCE BY DISTRIBUTOR. Distributor shall have seven (7)
days from delivery of the Equipment pursuant to this Agreement within which
to inspect the Equipment, and shall notify Evergreen in writing within said
seven (7) days any discrepancies between such Equipment and the
description, statement of condition, and valuation as stated in Attachment
A "Equipment Summary." If no such notification is received by Evergreen
within the period, Distributor shall be conclusively presumed to have
accepted the Equipment in good condition and otherwise agreed to all terms
and conditions set forth in Attachment A including, but not limited to,
prices.
13. ALTERATIONS. Distributor shall not make any changes, alterations,
modifications, additions, or improvements to the Equipment, which is the
subject of the Agreement without the prior written consent of Evergreen.
All additions to and improvements shall immediately become the property of
Evergreen and subject to the terms of this Agreement.
14. REPRESENTATIONS AND WARRANTIES. The Distributor and Evergreen,
respectively, represent and warrant that each enters into this Agreement in
good faith with the full intent to carry our each and every one of the
provisions for which the party has any duty, responsibility, and/or
liability to carry out, that the party has full power and authority to
enter into this agreement, that the terms and conditions of this Agreement
have been duly authorized, that none of said terms and conditions violate
any other agreements of the party and, as applicable to the Facility,
violate any ordinance and/or resolution and/or other rule of the
Distributor's customer, that the person signing this Agreement has full
power and authority so to sign and to bind the party to the terms and
conditions herein affecting the party, and that each party, respectively,
shall not knowingly associate with or employ any persons who are not
licensable under the territory's laws, Ordinance, or Regulations.
4
<PAGE> 5
DISTRIBUTORSHIP AGREEMENT 12/99
15. DEFAULT: REMEDIES.
a. Distributor will be in default under this Agreement if, for any
reason:
1. Distributor does not fully pay, when due, any payment due in
connection with this Agreement;
2. Distributor fails to perform, in a full and timely manner, any
agreement or obligation under this Agreement;
3. Any representation or warranty of Distributor to Evergreen is
false when made;
4. Distributor is in default for at least ten (10) days under any
other present or future agreement with Evergreen;
5. A bankruptcy, insolvency, or receivership proceeding is filed
against Distributor and is not dismissed for thirty (30) days;
6. Distributor files or acquiesces in any bankruptcy, insolvency, or
receivership proceeding, as Debtor; or
7. The condition of Distributor affairs changes so that, in
Evergreen's opinion, Evergreen's credit risk is increased, or the
Evergreen in good faith believes that the prospect of Distributor
payment or performance is impaired.
b. If any such default occurs, Evergreen may, in its sole discretion and
without giving notice to Distributor, exercise one or more of the
following remedies as it desires:
1. Terminate the term of this Agreement, as to any or all of the
Equipment;
2. Take possession of any or all of the Equipment, wherever located
and, for this purpose, enter any premises that Distributor then
owns or occupies (and Evergreen shall not be liable to
Distributor for any such entry or removal), or make any or all of
the Equipment unusable without removing it (also without
liability);
3. Take legal action to enforce Distributor's obligations under this
Agreement, including suing for damages;
4. Sell or lease any or all of the Equipment, at public or private
sale, at such time(s) and upon such terms (if any) as Evergreen
desires, free of any rights of Distributor's (and, if Distributor
is entitled to any advance notice of such a disposition,
Distributor agrees that such a notice is reasonable if mailed to
it at least ten (10) days before the disposition);
5. Apply any advance payment, deposit, or similar money that it
holds to any amount that Distributor owes; and
6. Exercise any other right that Evergreen then has under the
Uniform Commercial Code or other applicable law.
5
<PAGE> 6
DISTRIBUTORSHIP AGREEMENT 12/99
16. INDEMNIFICATION'S. As Distributor user under this Agreement, Distributor
will be responsible for any resulting liabilities. Distributor will pay,
and indemnify Evergreen (and its employees, agents, and affiliates) against
all of the following that arise from, or are in any way connected with, the
Equipment or this Agreement (including the purchase, delivery,
installation, ownership, use, maintenance, malfunction, or interruption in
service of the Equipment or any part of it):
a. All claims, losses, liabilities, damages, and expenses whatsoever
(including reasonable attorneys' fees):
b. All actual and alleged violations of any law or other governmental
rule, except for any of the foregoing claims, losses, etc., to the
extent caused directly and primarily by Evergreen's gross negligence
or willful misconduct.
17. LOSS OR DAMAGE: INSURANCE. Distributor assumes all risk of loss for the
Equipment, and will be responsible for any loss of, damage to, or
destruction of the Equipment, regardless of cause. No loss, damage, or
destruction will reduce or terminate any of Distributor's obligations under
this Agreement, except to the extent that Distributor has paid to Evergreen
in an amount calculated to make Evergreen whole (as determined by
Evergreen) for any Equipment that is totally destroyed. However,
Distributor will notify Evergreen promptly after the occurrence of any
partial or total loss, damage, or destruction. Distributor will carry
insurance against fire, loss, and all other risks that prudent owners or
operators insure against, and ensure the Evergreen (or Evergreen's
assignee) is named as sole loss payee for Equipment losses (partial and
total). This insurance must be placed with insurers reasonably satisfactory
to Evergreen, and must have policy limits no lower than the Equipment's
full replacement value. This insurance must stipulate that Evergreen's
interest will not be invalidated by any act, omission, or misrepresentation
by Distributor or any third party. This insurance also must stipulate that,
at least as to Evergreen's interest, it cannot be canceled, terminated or
amended, or expiration. This does not mean that Evergreen has to verify
that any insurance exists or to verify any policy terms.
18. DESIGNATED LAWFUL USE. Distributor agrees to use the Equipment in a careful
manner and in compliance with any applicable governmental law, ordinances,
or regulations.
19. WAIVER. No delay or omission to exercise any right of Evergreen or
Distributor under this Agreement shall be construed as a waiver of any such
right or as impairing any such right. Any waiver by Evergreen or by
Distributor of a single breach or default must be expressed and in writing
and shall not be construed as a waiver of any prior or subsequent breach or
default.
20. NOTICES AND PAYMENTS. Any notice to be given, and any payments to be made,
under this Agreement, shall be personally delivered or mailed by certified
mail, postage prepaid, at the addresses set forth in the opening paragraph
of this Agreement. Such notice or payment shall be deemed given or made
when set.
21. SURVIVAL OF DISTRIBUTOR'S COVENANTS. Distributor's covenants under this
Agreement shall survive the expiration or earlier termination of this
Agreement whenever the context permits.
6
<PAGE> 7
DISTRIBUTORSHIP AGREEMENT 12/99
22. BINDING. This Agreement shall be binding upon and shall inure to the
benefit of the parties, their legal representatives, successors, and
assigns.
23. SEVERABILITY. If any provision of this Agreement is held invalid by a court
of competent jurisdiction, it shall be considered deleted from this
Agreement, but such invalidity shall not affect the other provisions that
can be given effect without the invalid provision.
24. JUDICIAL ENFORCEMENT: ATTORNEYS' FEES. A refusal to arbitrate, as provided
in Paragraph 8 hereof, may be remedied and an arbitration award may be
enforced in any court of competent jurisdiction; provided that, the parties
hereto agree that any such action shall be commenced and proceed in the
United States district court for the district of ____. In the event
judicial proceedings are instituted in connection with this Agreement, the
unsuccessful party shall pay to the successful party a reasonable amount
for the successful party's attorneys' fees to be fixed by the court.
25. CONDITIONS PRECEDENT. Evergreen and Distributor do hereby agree that the
following shall constitute express conditions precedent to the obligations
of the parties under this Agreement:
a. Evergreen and/or Distributor shall execute any and all additional
documents necessary or incidental to satisfy any term or condition of
this Agreement; and
b. Distributor shall obtain all government approvals necessary to this
Agreement and the activities to be performed hereunder.
26. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which will be deemed to be an original, but all of which together
will constitute one and the same instrument.
27. ENTIRE AGREEMENT. This instrument is intended by the parties as
a final expression of their agreement and as a complete and exclusive
statement of its terms. No course of prior dealings between the parties and
no usage of trade shall be relevant or admissible to supplement, explain,
or vary any of the terms set forth herein. Acceptance of, or acquiescence
in, a course of performance rendered under this or any prior agreement
shall not be relevant or admissible to determine the meaning of this
Agreement even through the accepting or acquiescing party has knowledge of
the nature of the performance and an opportunity to make objection. No
representations, understandings, or agreements have been made or relied
upon in the making of this Agreement other than those specifically set
forth herein. This Agreement can only be modified in a writing signed by
the parties or their duly authorized agents.
7
<PAGE> 8
DISTRIBUTORSHIP AGREEMENT 12/99
IN WITNESS WHEREOF the parties have executed this Agreement.
DATED: April 10th, 2000
DISTRIBUTOR: EVERGREEN NETWORK.COM, INC.:
BINGO WEST OF DENVER EVERGREEN NETWORK.COM, INC.,
a Colorado Corporation a Colorado Corporation
/s/ B.J. RUNCHEL /s/ HOWARD TOOKE
---------------- ----------------
By: B.J. Runchel Howard Tooke
Its: President President
DISTRIBUTOR:
/s/ B.J. RUNCHEL
----------------
B.J. Runchel
INDIVIDUALLY
8
