Document:

QuickLinks
 -- Click here to rapidly navigate through this document

Exhibit 10.2  

 
  SALES REPRESENTATIVE AGREEMENT    
  

        This SALES REPRESENTATIVE AGREEMENT (this "Agreement") is made and
entered into this 1st day of June, 2002, between AMERICAN GAMING ELECTRONICS, INC., a Nevada corporation
("AGE"), and MARK KOMOROWSKI (the "Representative"). 

        WHEREAS,
AGE is a wholly-owned subsidiary of Wells-Gardner Electronics Corporation ("Wells-Gardner" and, collectively with AGE and its
other subsidiaries and affiliates, the "Company"); 

        WHEREAS,
the Company is engaged in the business of designing, manufacturing, marketing, selling, distributing and servicing gaming machines, parts for gaming machines, video display
products and other related products for a variety of markets including, but not limited to, gaming machine manufacturers, casinos, cash-operated video game manufacturers and other display
integrators (the "Business"); 

        WHEREAS,
AGE wishes to appoint the Representative as its sales representative for certain products of the Company and the Representative desires to be a sales representative of such
products, all in accordance with the terms and conditions set forth in this Agreement; and 

        WHEREAS,
Wells-Gardner and the Representative are also concurrently herewith entering into Separation Agreement and General Release (the "Termination
Agreement"); 

        NOW,
THEREFORE, in consideration of the premises and mutual covenants and agreements contained herein and other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows: 

        1.    Definitions.    

        "AGE Products" shall mean all Products sold by AGE but shall not include Products sold by Wells-Gardner, any of its other subsidiaries or
any of its affiliates. 

        "Excess Inventory" shall mean the aggregate amount of the sales price of inventory sold by the Company as a direct result of an
opportunity presented by the Representative that is inventory with greater than six month usage or no usage in twelve months. 

        "Exclusive Customers" shall mean Fun Company and Summit. 

        "Markets" shall mean the following markets and uses in which and for which the Products may be sold: amusement, leisure/fitness and gaming
and shall include OEM customers, casinos and other related customers. 

        "Net Sales" shall mean the aggregate amount of the Company's net sales of Products in the Markets made as a direct result of a
solicitation made by the Representative to the purchasers of such Products. 

        "Products" shall mean all video display products, gaming machines, parts for gaming machines and other related products for a variety of
markets including, but not limited to, gaming machine manufacturers, casinos, coin-operated video game manufacturers and other display integrators currently produced or assembled and/or
sold by the Company and all future versions of such items. The Products shall not include any newly developed, acquired or licensed products without the prior written consent of the Company, which may
be withheld in its sole discretion. 

        "Sales Margins" shall mean an amount equal to the aggregate amount of Net Sales minus the aggregate cost of such Net Sales incurred by the
Company. 

        "Supplier Variance" shall mean (i) with respect to new Products, the difference between the purchase price paid by AGE and the
supplier's price and (ii) with respect to used Products, the difference between the purchase price paid by AGE and the inventory valuation of such products by the Company's finance department. 

 

        "Threshold A" shall mean $133,500. 

        "Threshold B" shall mean the dollar amount equal to the sum of Sales Margins, Supplier Variance and Excess Inventory. 

        2.    Appointment.    AGE hereby appoints the Representative, and the Representative hereby accepts appointment by
AGE, as sales representative for the Products in the Markets, under the terms and conditions contained herein. The Representative hereby agrees to engage actively and diligently in the promotion and
sale of the Products, to use his best efforts to fully develop the Markets for the Products, and to render prompt and complete sales and servicing to his customers at his sole cost and expense. 

        3.    Exclusivity.    The Representative shall be AGE's exclusive sales representative for the Products in the Markets
in Indiana, West Virginia and Canada (the "Territory") and shall be AGE's sales representative for the Products in the Markets on a
non-exclusive basis in all other geographic areas other than the Territory. In addition, the Representative shall be AGE's exclusive sales representative for the AGE Products with respect
to the Exclusive Customers. 

        4.    Sales Invoicing.    The Company shall prepare all invoicing on sales of Products to customers, except as
mutually agreed upon in writing. The Company shall furnish the Representative with a summary of the following invoices on a monthly basis: (i) invoices of Products sold in the Territory for use
in the Markets; and (ii) invoices of other products, if any, sold by the Company and for which the Representative is entitled to a commission pursuant to this Agreement. 

        5.    Commissions.    

        a)    Sales Margins Commission.    Commission equal to thirty-five percent (35%)
of Sales Margins shall accrue in favor of the Representative. 

        b)    Supplier Variance Commission.    Commission equal to thirty-five percent
(35%) of Supplier Variance shall accrue in favor of the Representative. 

        c)    Excess Inventory Commission.    Commission equal to twenty percent (20%) of Excess
Inventory shall accrue in favor of the Representative. 

        d)    Excluded Transactions.    Notwithstanding anything set forth in this Section 5,
AGE shall pay no commission on sales to Representative and his affiliates; provided that the Company gives such parties the best available export pricing and terms. 

        e)    Payment of Commission.    Notwithstanding the foregoing, the Representative shall not be
entitled to receive any commission accrued in his favor unless and until the aggregate amount of commissions accrued exceeds Threshold A and the Representative shall be entitled to payment only
with respect to those commissions accrued in excess of Threshold A ("Post Threshold Commissions"). Post Threshold Commissions shall be paid on
the thirtieth (30th) day after the end of each month in which such commissions were earned. 

        f)    All
commissions to be paid to the Representative hereunder shall be based upon the Company's invoice price to customers for its Products, excluding amounts invoiced for
taxes, freight, C.O.D. charges or insurance. 

        g)    Notwithstanding
anything herein to the contrary, the Representative shall not be entitled to any commission on Products sold for use in markets other than the Markets, on
orders canceled or refused for any reason whatsoever by the Company or by any customer, or on Products returned for credit upon the Company's authorization. In the event that the Company accepts
Products for return or is not paid by a customer within ninety (90) days of invoicing, the Company may charge back against the Representative commissions which have been paid or which are due
to the Representative as a result of the underlying sale of such Products; provided, however, that 

2

 

once the Company has been paid in full by such customers, the Representative shall be entitled to receive commissions thereon at the rate set forth herein. The Representative assumes responsibility
for the accuracy of all matters on all orders taken by the Representative. 

        h)    The
Representative shall have the right to examine the Company's records solely to confirm that commissions were calculated in accordance with this Agreement. In the
event that the Representative fails to notify the Company of any disagreement within ninety (90) days after receiving a statement of commissions due in accordance with this Section 5,
such statements shall be conclusively deemed to be correct and binding upon the Representative. 

        6.    Sales Terms.    All orders submitted by the Representative to the Company shall be on the Company's regular
terms and conditions then in effect and shall be made expressly subject to the approval of the Company at the home office of the Company at 9500 West 55th Street, Suite A, McCook, Illinois 60525. The
Company reserves the right to reject, for any reason whatsoever, any order submitted by the Representative to the Company under this Agreement, all without any liability whatsoever to the Company. The
Company also reserves the right, for any reason whatsoever, to change its quoted priced of Products from time to time and to discontinue or modify at any time or times the production, assembly, design
and/or sales of Products. 

        7.    Sample and Product Information.    The Company shall furnish the Representative with such samples, sales
bulletins, product brochures, instruction manuals, and technical guidance as may from time to time be available; provided, however, that this Section 7 shall not obligate the Company to furnish
any other such material or any financial assistance to the Representative. 

        8.    Adjustments, Compromises and Collections.    The Representative has no authority, without prior written
agreement by the Company, to represent the Company in making any adjustments or compromises and the Representative has no authority to make any connections for or on behalf or the Company. 

        9.    Intellectual Property Rights and Use.    Ownership and all right, title and interest in and to any trademarks,
trade names, service marks or copyrights, whether or not registered, relating to any Product are and shall remain vested solely in the Company. The Representative may not use any of the Company's
trademarks, trade names, service marks or copyrights, whether or not registered, without the Company's prior written consent and shall immediately modify or discontinue such if, when and as requested
by the Company. 

        10.    Product Warranty.    It is understood and agreed that the Company's product warranty with respect to the
Products shall be limited to the provisions set forth in the standard warranty of the Company in effect at the time of delivery thereof. The Representative shall have no authority to alter or enlarge
upon such warranties. 

        11.    Independent Contractor.    It is expressly understood and agreed by the parties: 

	a)
	that
the Representative is an independent contractor and shall not in any way obligate or create liability on the party of the Company; and

	b)
	and
that no contracts, commitments, statements or representations made by or on behalf of the Representative shall be binding in any binding in any respect on the Company. The Company
shall not
be liable at any time for any payments to the Representative or on behalf of the Representative not specifically set forth in this Agreement. 

        12.    Expenses.    During the period beginning on the date hereof and ending (whether or not the term of this
Agreement is renewed) on May 31, 2003, AGE shall reimburse the Representative for reasonable travel and entertainment expenses incurred during such time period and documented on expense reports
in accordance with the Company's policy; provided, however, that the amount of such reimbursement shall not exceed $15,000 in the aggregate. 

3

 

        13.    Restricted Stock.    The Company hereby determines that the Representative is eligible to participate in the
Wells-Gardner Electronics Corporation 1998 Incentive Plan (the "Plan") and shall issue to the Representative 3,200 shares of Restricted Stock, as such
term is defined in the Plan (the "Shares"), effective as of July 26, 2002. The Shares shall be subject to the terms of the Restricted Stock
Agreement to be entered into by the Company and the Representative, which terms shall include that the Shares shall vest upon the accrual in favor of the Representative of Threshold B equal to at
least $133,500 in the aggregate. 

        14.    Term and Termination.    

	a)
	Unless
otherwise terminated in accordance with its terms, the term of this Agreement shall be from the date hereof to May 31, 2003; provided, however, that this Agreement shall
be automatically renewed for successive periods of one year, provided further that neither party shall have given the other party ninety days prior advance written notice of its or his intent to not
renew this Agreement for a successive one year term. If the term of this Agreement is renewed under this Section 14(a), and assuming that the Threshold Amount as been accrued,
Section 5(e) shall be deleted in its entirety and replaced with the following new Section 5(e): 

Payment of Commission.    Commissions shall be paid on the thirtieth (30th) day after the end of each month in which such commissions were
earned. 

	b)
	In
the event of a material breach or default of any of the terms or conditions of this Agreement and/or the Termination Agreement by one party, the other party may terminate this
Agreement and/or the Termination Agreement; provided, however, that if the breach or default is capable of being cured, the nonbreaching party must provide the breaching party with written notice
thereof and if cured within sixty (60) days of such notice, such breach or default may not be grounds for termination hereunder.

	c)
	This
Agreement shall terminate upon an assignment for the benefit of creditors by the Representative or by or against the Representative or any of his affiliates, or the institution of
proceedings by or against the Representative or any of his affiliates or any in bankruptcy or under any insolvency laws or for reorganization, receivership or liquidation, provided such proceeding is
not dismissed within sixty (60) days of the institution thereof.

	d)
	In
the event of the death, legal incapacity or permanent disability of the Representative, then, in any such event, this Agreement shall forthwith terminate.

	e)
	Subject
to Section 14(b), the Representative shall be entitled to receive commissions hereunder on Net Sales made after termination of this Agreement to the extent orders
therefor were received by the Company prior to the effective date of termination of this Agreement, subject to all other conditions of payment hereof. 

        15.    Remedies.    It is agreed that each party shall be entitled to an injunction or injunctions to prevent breaches
of this Agreement and to specifically enforce the terms and provisions thereof in any action instituted in any court of the United States or any stated thereof having subject matter jurisdiction, in
addition to and not in lieu of, any other remedy to which such party may be entitled, at law or in equity. 

        16.    Confidential Information.    

	a)
	The
Representative recognizes and acknowledges that certain knowledge and information which he has acquired or developed relating to the Business, including pricing and quotation
techniques, costs, developments, activities or products of the Business or the business affairs of any person or entity doing business with the Business, including, but 

4

 

not
limited to, customer and vendor lists, cost and selling and service prices for specific customers, customers' needs and requirements, and all inventions, ideas, discoveries, creations,
developments, improvements, designs and processes so acquired (hereinafter collectively referred to as "Confidential Information") are the valuable
property of the Company and shall be held by the Representative in confidence and trust for the sole benefit of the Company. 

	b)
	The
Representative agrees not to use, disclose, divulge or publish, without the prior written consent of Company, at any time during the term hereof or thereafter, any Confidential
Information; provided, however, that Confidential Information shall not include (a) information which is known to the public or is generally known within the industry of businesses comparable
to the Business (other than as a result of the Representative's violation of this covenant) or (b) information which the Representative is required to disclose pursuant to law or order of a
court having jurisdiction over the Representative
(provided that the Representative offers the Company an opportunity to obtain an appropriate protective order or administrative relief against disclosure of such Confidential Information).

	c)
	Promptly
upon the termination of this Agreement, the Representative shall on its own initiative turn over to the Company all Confidential Information and all other information and
material, including, without limitation, all and any Product samples, pamphlets, catalogs, booklets and other advertising data and literature concerning the Company and/or the Products, and all copies
thereof, in the possession, custody or control of the Representative. 

        17.    Restrictive Covenants.    

	a)
	The
Representative agrees that during the term of this Agreement, he will not, directly or indirectly, be in any manner engaged in, connected with (as a shareholder, employee,
independent contractor or otherwise) or employed by (or act as an independent contractor or other representative for) any person, firm or corporation which is engaged in a business which, anywhere
inside or outside the United States or Canada, (i) is competitive with the Company or a successor or affiliate thereof or (ii) promotes, sells, markets, licenses, distributes or
advertises products whether existing or under development, which are similar to or competitive with the Products anywhere; provided, however, that this subsection shall not be deemed to limit the
Representative's, right to (i) own less than 10% of the common stock of a publicly held corporation whose shares are traded on a recognized stock exchange or
over-the-counter or (ii) pursue independently of the Company an opportunity presented by the Representative to the Company but affirmatively rejected by the Company
during the one-year period following such rejection.

	b)
	During
the term of this Agreement, the Representative shall not, directly or indirectly, (i) solicit for employment and/or hire or offer employment to any individual who is or
was an employee of the Company within 90 days of the date of this Agreement and who becomes an employee of the Company or its subsidiaries at any time during the term of this Agreement, or
(ii) encourage any Company employee to terminate his or her relationship with the Company or its subsidiaries.

	c)
	During
the term of this Agreement, except in furtherance of the Representative's sales representative duties under this Agreement, the Representative shall not solicit any person or
entity who is or was a customer or client of the Company, or its subsidiaries and who becomes a customer or client of the Company or its subsidiaries at any time during the term of this Agreement, for
the purpose of (i) engaging in, or assisting any 

5

 

person
or entity in engaging in, the Business, or (ii) soliciting or encouraging any customer, client of the Company, or its subsidiaries to terminate or otherwise alter his, hers or its
relationship or prospective relationship with the Company or its subsidiaries. 

	d)
	In
the event of a breach, violation or attempted breach or violation of any of the provisions of this Section 17, the Company shall be entitled to an injunction or restraining
order immediately upon the commencement of any suit therefor by the Company and without notice. Nothing herein shall be construed as prohibiting the Company from pursuing any other remedy available to
it for any such breach of violation for the recovery of damages, including punitive damages by reason thereof.

	e)
	The
necessity of protection against the competition of the Representative and the nature and scope of such protection has been carefully considered by the parties hereto. The parties
hereby agree and acknowledge that the duration, scope and geographic area applicable to the restrictions set forth in this Section 17 are fair, reasonable and necessary. The consideration
provided for herein is sufficient and adequate to compensate for agreeing to the restrictions contained in this Section 17. If, however, any court determines that the foregoing restrictions are
not reasonable, such restrictions shall be modified, rewritten or interpreted to include as much of their nature and scope as will render them enforceable. 

        18.    Limitation of Remedy.    The Representative shall have no claim against the Company for compensation or
otherwise with regard to this Agreement or the representation created hereby, whether in contract, in tort, under any warranty or otherwise, either during the term of this Agreement or after its
termination, for any termination in accordance with this Agreement. The Company shall not, by any reason of this termination of this Agreement, for sale or use of Products, for negligence, or
otherwise, be liable to the Representative for any special, incidental of consequential damages or similar relief, including but not limited to, property damage, personal injury, compensation or
damages for loss of present or prospect profits or revenues, loss of goodwill or expenditures, investments or commitments made in entering to this Agreement or in connection with the performance of
obligations hereunder. Notwithstanding the foregoing, the Representative shall have the right to pursue commissions and expenses to which the Representative is entitled under this Agreement. 

        19.    Waiver.    No change in, addition to, or waiver of any of the provisions of this Agreement shall be binding
upon any party hereto unless in writing signed by each party except as otherwise provided herein. No failure of a party to exercise any right given to it hereunder, or to insist upon strict compliance
with any obligation hereunder, and no custom or practice of the parties at variance with the terms hereof shall constitute a waiver of the party's rights to demand exact compliance with the terms
hereof. Waiver by a party of any particular default shall not affect or impair its rights in respect to any subsequent default of the same or of a different nature, nor shall any delay or omission of
a party to exercise any rights arising from such default affect or impair the party's rights as to such default or any subsequent default. 

        20.    Notices.    All notices required or permitted by the terms of this Agreement shall be in writing and shall be
sent by certified or registered mail, postage prepaid, addressed as follows: 

If
to AGE: 

American
Gaming & Electronics, Inc.

c/o Wells-Gardner Electronics Corporation

9500 West 55th Street, Suite A

McCook, Illinois 60525 

6

 

If
to the Representative: 

Mark
Komorowski

8581 Ventura Drive

St. John, IN 46373 

or
such other address as any party may designate in a notice to the others. 

        21.    Assignments.    This Agreement shall be binding upon and inure to the benefit of the parties, their successors
and assigns. This Agreement shall not be assignable by the Representative without the prior written consent of AGE. Upon any assignment by the Representative that is not consented to in writing by
AGE, AGE may terminate this Agreement solely at its option. 

        22.    Survival.    Notwithstanding any termination of this Agreement, any duty or obligation which has been incurred
by the terms hereof or which has not been fully observed, performed or discharged, shall survive termination until such duty or obligation has been fully observed, performed or discharged. The rights
or remedies hereunder are cumulative to any other rights or remedies which may be grant by law. 

        23.    Severability.    If any covenant or other provisions of this Agreement is invalid, illegal, or incapable of
being enforced, by reason of any rule of law, administrative order, provisions of this Agreement shall, nevertheless, remain in full force and effect, and no covenant or provision shall be deemed
dependent upon any other covenant or provision unless so expressed herein. 

        24.    Applicable Law.    This Agreement shall be governed by and construed in accordance with the laws of the State
of Illinois. 

        25.    No Third Party Beneficiaries.    Except for the Company and as set forth in Section 26, no persons other
than AGE and the Representative shall have any rights, to commissions or otherwise, by virtue of or under this Agreement, and the Representative shall not acquire, by virtue of this Agreement, any
rights to commissions or otherwise under any other agreement that AGE may execute with any other sales representative. 

        26.    Assignment.    It is the intent of the Representative to form an entity to perform this Agreement in full or in
part and such entity will, without its consent, by bound by the terms of this Agreement and sign an instrument of accession with respect to this Agreement. 

        27.    Integration/Modification/Entire Agreement.    This Agreement constitutes the entire agreement and final
understanding of the parties with respect to the subject matter hereof and supersedes and terminates any and all prior agreements, prior and/or contemporaneous communications and/or agreements between
the parties, whether written or verbal, express or implied, direct or indirect, relating in any way to the subject matter hereof. This Agreement is intended by the parties to be a complete and wholly
integrated expression of their understanding and agreement, and it may not be altered, amended, revised, modified or otherwise changed in any way except by a written instrument, which specifically
identifies the intended alteration, amendment, revision, modification or other change and clearly expresses the intention to so change this Agreement, signed by the Representative and by an officer of
AGE. 

        28.    Headings.    The headings in this Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof. 

        29.    Counterparts.    This Agreement may be executed in several counterparts, each of which shall be deemed an
original but both of which constitute one and the same Agreement. 

[Signature
Page Follows] 

7

 

        IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. 

	 	 	AMERICAN GAMING & ELECTRONICS, INC.
	

	
 	

 	
 	

 
	 	 	By:	 	/s/  ANTHONY SPIER      
 Title: Chairman
	

 	
 	

 	
 	

 
	 	 	 	 	/s/  MARK KOMOROWSKI      

8

QuickLinks

SALES REPRESENTATIVE AGREEMENTEXHIBIT 10.7

                                  June 10, 2002

Board of Directors
Color Imaging, Inc.
4350 Peachtree Industrial Blvd, Suite 100
Norcross, GA 30071

Gentlemen:

In connection with my resignation as Chairman and Chief Executive Officer of the
company this date, it is my understanding  that my employment  contract with the
Company made June 28, 2000, has, by my resignation, been amended to: (1) reflect
my current  position as Chairman and Chief Executive  Officer of Logical Imaging
Solutions,  Inc. with the duties and  responsibilities in connection  therewith;
(2) that my current  salary and benefits  will  continue as they are now through
June 10, 2003, and unless  otherwise  extended by the Company shall terminate on
that date without notice; and (3)  notwithstanding  the modification of the term
of the agreement hereby,  that this amendment does not constitute a guarantee of
employment  by the  Company or Logical  Imaging  Solutions,  Inc.  for any fixed
period.  However,  in the event my employment is terminated by me or the Company
prior to June 10, 2003, my current  salary and benefits  will  continue  through
that date.

I  understand,  in my position as Chairman and Chief  Executive  Officer of LIS,
that certain  expenditures  contemplated  in connection  with the furtherance of
LIS'  technology,  any joint  venture  or  technology  licensing  or other  like
arrangement  and  other  expenditures  other  than the most  routine  day to day
business  expenses  are to be  approved  by the  executive  management  of Color
Imaging, Inc.

As always, I will devote my very best efforts and energies to the success of the
Company for the benefit of our stockholders and employees, and I truly desire to
make a significant difference in advancing our common interests in LIS and Color
Imaging, Inc.

Sincerely,

/s/ Michael W. Brennan
Michael W. Brennan
Chairman & Chief Executive Officer

Acknowledged and accepted:
Color Imaging, Inc.

/s/ Sueling Wang
Sueling Wang
President

1498729

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00041-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00041-of-00352.parquet"}]]