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Exhibit 10.37
GTECH CORPORATION
AGREEMENT NO. 99240564004
BY AND BETWEEN
GTECH CORPORATION
00 XXXXXXXXXX XXX
XXXX XXXXXXXXX, XX 00000
AND
TRANSACT TECHNOLOGIES INCORPORATED
AND
MAGNETEC CORPORATION
0 XXXXX XXXX
XXXXXXXXXXX, XXXXXXXXXXX 00000
FOR THE PURCHASE OF
REFER TO SECTION 1
COMMENCEMENT DATE: JULY 14, 1999
TERM: Through December 31, 2004
GTECH REPRESENTATIVES TRANSACT REPRESENTATIVES
Xxxxxxx Middlebrook___________ Xxxx Xxxxxxxx ___________
Xxxxx Xxxxxxxxxx ________ Xxxx Xxxxxxxxx ___________
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GTECH CORPORATION OEM PURCHASE AGREEMENT
1. TERMS AND CONDITIONS
1.1 Definitions
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1.2 OEM Purchases
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1.3 No Minimum Commitment
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1.4 Exclusivity
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2. ORDERING
2.1 Purchase Orders
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2.2 Priority Orders
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2.3 Provisioning Orders
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2.4 Lead Time
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2.5 Rescheduling
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2.6 Cancellation for Convenience
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2.7 Forecast
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3. SHIPPING, PACKAGING, DELIVERY
3.1 F.O.B.; Title; Risk of Loss
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3.2 Shipment
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3.3 Packaging
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3.4 International Shipments
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3.5 Early Arrival
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4. PRICE
4.1 Unit Prices
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4.2 Price Reduction on Spare Parts and Repairs
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4.3 Cost Savings
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5. PAYMENT
6. TAXES AND DUTIES
7. CHANGES
7.1 Product Changes
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7.2 GTECH Changes
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7.3 Enhancements, Successor Products
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7.4 Modified Printer Design
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8. PRODUCT QUALITY AND RELIABILITY REQUIREMENTS
8.1 VENDOR Survey
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8.2 Final Test and Inspection Data
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8.3 Test Equipment and Procedure Correlation
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8.4 Source Inspection
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8.5 Ship-To-Stock Program
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8.6 Failure Analysis and Corrective Action
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8.7 GTECH's Rights with Respect to Non-Conforming Goods
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9. INSURANCE
9.1 VENDOR Insurance Coverage
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9.2 Workers Compensation and Employers Liability
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9.3 Automobile Liability
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9.4 Public Liability
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9.5 Umbrella Policy
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9.6 Crime Insurance
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9.7 Proof of Insurance
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10. INDEMNITY
11. SPARE PARTS
11.1 Recommended Spare Parts
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11.2 Non-Standard Parts
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11.3 Emergency Stock
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11.4 Spares Support
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11.5 Purchase of Spare Parts from Third Parties
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12. REPAIR SUPPORT
12.1 Repair Orders
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12.2 International Repair and Support
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12.3 Failure Analysis
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12.4 Repair Capabilities
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12.5 Test Equipment
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12.6 Qualified VENDOR List
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12.7 Diagnostics
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12.8 Documentation
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13. TRAINING
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14. WARRANTIES
14.1 Product Compliance
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14.2 Authority
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14.3 Title; Infringement
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14.4 Conformance; Defects
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14.5 Freight Costs on Warranty Repairs
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14.6 Freight Charges on Non-Warranty
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14.7 Disclaimer of Warranties
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15. BAILMENT AGREEMENT
16. TOOLING
16.1 Ownership and Use
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16.2 Storage; Notice of Ownership
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17. FORCE MAJEURE
18. CONFIDENTIALITY
18.1 VENDOR
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18.2 GTECH
18.3 Magnetec Printer and Modified Printer Designs
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18.4 Reverse Engineering
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18.5 Equitable Remedies
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19. PUBLIC ANNOUNCEMENTS
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20. NOTICES
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21. ASSIGNMENT
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22. TERM AND TERMINATION
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22.1 Term
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22.2 Termination; By GTECH
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22.3 Termination; By VENDOR
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22.4 Obligations of Termination
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22.5 Right of First Refusal
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23. CONFLICTING PROVISIONS
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24. MANUFACTURING RIGHTS
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25. MISCELLANEOUS
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ATTACHMENTS
1. - Product Specification
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2. - Pricing
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3. - Lead Time & Rescheduling
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4. - Bailment Agreement
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5. - Non-Warranty Repair Costs
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6. - Manufacturing Rights
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7. - GTECH Owned Tooling List
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AMENDED AND RESTATED GTECH OEM PURCHASE AGREEMENT
This Amended and Restated GTECH OEM PURCHASE AGREEMENT ("Agreement"), dated as
of July 14, 1999 ("Effective Date"), is made by and between GTECH Corporation,
Transact Technologies Incorporated and Magnetec Corporation. For the mutual
promises set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereby
amend and restate that certain GTECH OEM PURCHASE AGREEMENT among the parties
dated as of October 1, 1996, and amended and restated as of December 15, 1997,
as follows:
This Agreement is made by and between GTECH CORPORATION, a Delaware corporation,
with offices at 00 Xxxxxxxxxx Xxx, Xxxx Xxxxxxxxx, XX 00000 ("GTECH") and
TRANSACT TECHNOLOGIES INCORPORATED, a Delaware corporation, with offices at 0
Xxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxxxx 00000 and MAGNETEC CORPORATION, a
Connecticut corporation, with offices at 0 Xxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxxxx
00000 ("Transact Technologies Incorporated and Magnetec Corporation are
hereinafter referred to as "VENDOR"). This Agreement sets out the terms and
conditions under which VENDOR will sell the Products and provide the Services
described in this Agreement and Attachments to GTECH. Transact Technologies
Incorporated and Magnetec Corporation are jointly and severally liable for all
obligations of VENDOR hereunder.
1. TERMS AND CONDITIONS
1.1 Definitions
(a) Products. As used in this Agreement, "Products" means the products,
as well as VENDOR's spare parts (including those provided pursuant to
Section 11 of this Agreement), subassemblies, operating supplies,
maintenance kits, and options, if any, produced in accordance with the
specification attached hereto as Attachment 1 ("Specification") and any
subsequent modifications authorized in accordance with the terms of
this Agreement, including without limitation the Magnetec Printer, as
defined in Section 1.1(d), and the Modified Printer, as defined in
Section 1.1(e). Products include pre-approved VENDOR model numbers in
conjunction with the specification.
(b) Services. As used in this Agreement, "Services" means the ancillary
services, if any, to be provided by VENDOR in accordance with the terms
of this Agreement including without limitation, those services
described in Section 12 and 13 of this Agreement.
(c) ISYS Terminal. As used in this Agreement, "ISYS Terminal" refers to
GTECH's ISYS lottery terminal and any substantially identical successor
or derivative terminals. [For example, for purposes of this paragraph,
the modification of the Xxxxxxx terminal to the Spiffany terminal would
be considered a substantially identical successor or derivative
terminal; whereas the change from the Xxxxxxx terminal to the ISYS
terminal would not be considered a substantially identical successor or
derivative terminal.]
(d) Magnetec Printer. As used in this Agreement, "Magnetec Printer"
refers to the existing 27-wire impact printer as produced and
manufactured by VENDOR for GTECH under the
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October 1, 1996 OEM Agreement, as amended and restated on
December 15, 1997, including all modifications previously agreed to by
GTECH and VENDOR.
(e) Modified Printer. As used in this Agreement, "Modified Printer"
refers to the 27-wire impact printer with certain modifications to be
designed by VENDOR in accordance with Section 7.4.
(f) Initial Order. As used in this Agreement, "Initial Order" refers to
the order which GTECH must place on or before September 1, 1999, for a
minimum of * Magnetec Printers, as set forth in Attachments 2 and 3.
(g) Memorandum of Understanding. As used in this Agreement, "Memorandum
of Understanding" means the Memorandum of Understanding executed among
GTECH and VENDOR, dated July 12, 1999.
1.2 OEM Purchases. GTECH represents that the Products purchased under this
Agreement are intended primarily for resale, rental or lease directly
and indirectly to GTECH's customers under trademarks and trade names
selected by GTECH for use in conjunction with GTECH systems or with
other value added by GTECH, its subsidiaries or its distributors.
Products may also be used by GTECH and its subsidiaries for their
internal use.
1.3 No Minimum Commitment. Except as set forth in Attachments 2 and 3,
unless otherwise specified, there is no minimum quantity of purchases
under this Agreement. VENDOR will furnish Products and Services on an
as-ordered basis. Notwithstanding any other provision of this Agreement
to the contrary, GTECH hereby agrees to purchase from VENDOR the
minimum number of Products set forth on the schedule of firm fixed
deliveries provided in Attachments 2 and 3 of this Agreement. GTECH's
agreement to purchase such Products is a non-cancelable order for the
total number of units set forth in Attachments 2 and 3, to be delivered
on the same schedule as set forth thereon, subject only to GTECH's
right to accelerate, all in accordance with the terms and conditions of
this Agreement, unmodified by any purchase order issued hereunder.
1.4 Exclusivity. During the term of this Agreement,
(a) VENDOR shall be GTECH's exclusive supplier of a 27-wire impact
printer for the ISYS Terminal, and for the Altura terminal to the
extent GTECH elects to use a 27-wire impact printer in the Altura
terminal;
(b) GTECH shall neither use the VENDOR's printer technology (except in
connection with this Agreement) nor manufacture or alternate source any
27-wire impact printer for the terminals described in 1.4(a); and
(c) VENDOR shall not manufacture or supply 27-wire impact printers,
directly or indirectly, to any competitor of GTECH in the lottery
industry for their use in competition with GTECH in the lottery
industry.
*Confidential treatment requested.
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(d) It is expressly understood and agreed that, except as provided in
Sections 1.4(a), 1.4(b), and 11, GTECH may itself manufacture any other
products and services and/or procure any other products and services
from other sources.
2. ORDERING
2.1 Purchase Orders. All purchases under this Agreement will be made under
purchase orders referencing this Agreement issued by GTECH or by any
subsidiary or affiliate of GTECH. Purchase Orders will be deemed
accepted by VENDOR unless rejected in writing by VENDOR specifying the
reasons for rejection within fourteen (14) calendar days after receipt
of the Purchase Order. Purchase orders may be rejected by VENDOR only
if a Purchase Order does not comply with the terms and conditions of
this Agreement or proposes new or additional terms that are not
acceptable to VENDOR. Any purchase order issued in connection with the
non-cancelable order set forth in Attachment 3 shall not add any new or
different terms or otherwise propose to modify or amend to this
Agreement with respect to such order.
2.2 Priority Orders. GTECH Purchase Orders for spare parts identified as
"Priority Orders" shall be shipped within twenty-four (24) hours after
receipt by VENDOR's Customer Service Division. In the event that
Products ordered within the Normal Lead Time are overdue for delivery
to GTECH , VENDOR shall ship Product to GTECH at no additional cost to
GTECH, and any premium freight charges shall be prepaid by, and borne
by VENDOR. To the extent that VENDOR or its suppliers are not presently
in possession of the tooling necessary to make a part or an assembly
for the Product, VENDOR's obligations in this section will be suspended
until that tooling is returned to VENDOR or its suppliers.
2.3 Provisioning Orders. GTECH Purchase Orders for spare parts identified
as "Provisioning Orders" shall be shipped within twenty (20) days after
receipt by VENDOR. Provisioning Orders shall not be decremented by
placement of any Priority Orders, unless expressly requested by GTECH.
To the extent that VENDOR or its suppliers are not presently in
possession of the tooling necessary to make a part or an assembly for
the Product, VENDOR's obligations in this section will be suspended
until that tooling is returned to VENDOR or its suppliers.
2.4 Lead Time. Subject to GTECH's right to accelerate described in
Attachment 3, unless otherwise agreed in writing, Products or Services
will be delivered on the schedule set forth in Attachment 3. If GTECH
requests delivery with less than Normal Lead Time to meet a special
requirement, including the replacement of Products lost or damaged in
shipment, VENDOR will use its best efforts to expedite delivery;
including, without limitation, giving GTECH first priority with respect
to all Products in stock or on order, provided however, that GTECH
shall not pay any additional charges or costs for expediting unless
such charges or costs have been accepted in writing by GTECH.
2.5 Rescheduling. GTECH may reschedule delivery of any Product or Service
by written notice to VENDOR at any time before the delivery date
specified in the applicable Purchase Order as specified in Attachments
2 and 3 only with approval of VENDOR, which approval shall not be
unreasonably withheld.
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2.6 Cancellation for Convenience. Except as provided in Attachments 2 and
3, GTECH may cancel any or all Purchase Orders or part thereof at any
time prior to the scheduled delivery date. In the event of cancellation
with respect to customized GTECH-specific Products which cannot be
resold, GTECH and VENDOR will negotiate a reasonable cancellation
charge based on VENDOR's cost, as supported by proper documentation, to
be paid to VENDOR as liquidated damages as GTECH's sole obligation and
VENDOR 's sole remedy. In no event shall such cancellation charges
exceed the amount specified in Attachment 2, 2A1, 2A2, and 2A3,
Pricing.
2.7 Forecast. Any forecast is provided as a good faith estimate of GTECH's
anticipated requirements for Products for the periods indicated based
on current market conditions and does not constitute a commitment to
purchase any quantity of Products or Services.
3. SHIPPING, PACKAGING, AND DELIVERY
3.1 F.O.B., Title, Risk of Loss. Unless otherwise agreed, deliveries of
Products will be made F.O.B. VENDOR's dock, continental U.S. facility.
Subject to proper packaging, title and risk of loss shall pass to GTECH
upon proper tender of the Products to the carrier. VENDOR will provide
proof of delivery upon request, provided that such request is made
within one hundred fifty (150) days of shipment by VENDOR, and will
provide reasonable assistance to GTECH at no charge in any claim GTECH
may make against a carrier or insurer for misdelivery, loss or damage
to Products after title has passed to GTECH.
3.2 Shipment. VENDOR will ship Product in accordance with GTECH's
instructions if a delivery date is specified in the purchase order. In
the absence of any other instructions, Products will be shipped by
common carrier commercial land freight for delivery in the continental
United States and by ocean freight for deliveries elsewhere, insurance
and shipping charges collect.
3.3 Packaging. VENDOR shall affix to the outside of each shipment a list of
contents, including serial numbers, to allow for review of contents
upon receipt. Products shall be packaged in accordance with any special
instructions in Attachment 1. Where no special instructions for
packaging is provided, GTECH's general packaging specification ,
Attachment 1, (or current version supplied to VENDOR) shall be used.
3.4 International Shipments. If GTECH specifies delivery for international
shipment by GTECH or GTECH's freight forwarder, VENDOR will be
responsible for obtaining any necessary U.S. Department of Commerce
export licenses, permits or approvals. GTECH will be responsible for
any licenses, permits or approvals of the country of import.
3.5 Early Arrival. GTECH reserves the right to reject Products arriving at
GTECH's facilities more than five (5) days before the delivery date if
one is specified in the Purchase Order.
4. PRICE
4.1 Unit Prices. The prices for Products, Services, (if separately priced)
operating supplies, maintenance kits, and spare parts under this
Agreement will be as specified in Attachment 2, 2A1, 2A2, and 2A3.
Unless otherwise stated in Attachment 2, 2A1, 2A2, and 2A3, the prices
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and pricing formulas in Attachment 2, 2A1, 2A2, and 2A3 will remain in
effect for the Term of the Agreement and any extensions. GTECH
international subsidiaries may purchase Products under the same
conditions as in Attachment 2, 2A1, 2A2, and 2A3 in US Dollars.
4.2 Price Reductions on Spare Parts and Repairs. In the event of a price
reduction on the Product covered under this Agreement, VENDOR agrees to
reduce the list price of that component, the component as a spare part,
and repairs as related to that component. The price reduction will
apply to all Purchase Orders for spare parts and repairs which are
scheduled for delivery no less than thirty (30) days after the
effective date of the price reduction.
4.3 Cost Savings. As set forth in Attachment 2, GTECH and VENDOR shall seek
ways to reduce the costs of producing the Magnetec Printer, the
Modified Printer, and spare parts for those printers and will share
equally the benefits generated by such efforts.
5. PAYMENT
VENDOR may issue invoices no earlier than the shipping date of the
Products or Services. Payment will be made * in US dollars of receipt
of proper invoices. Payment shall not constitute acceptance on
non-conforming Products. For repair of Products at international
locations, term of payment will be *.
6. TAXES AND DUTIES
GTECH will pay as a separately invoiced item only such sales, use,
value-added or similar tax listed therein (all other taxes are
excluded, including, without limitation, taxes based upon VENDOR's net
income), lawfully imposed on the sale of the Products or provision of
Services to GTECH. Taxes, duties or like charges imposed on the
Products after title has passed to GTECH will be paid by GTECH unless
such charges are the result of a trade sanction imposed on VENDOR's
Products, as specified in Section 22.2, below. In lieu of taxes, GTECH
may furnish to VENDOR a tax exemption certificate. VENDOR agrees to
provide reasonable assistance to GTECH, without charge, in any
proceeding for the refund or abatement of any taxes GTECH is required
to pay under this Section 6.
7. CHANGES
7.1 Product Changes. VENDOR shall submit evaluation samples of all Product
changes that affect form, fit, function, maintainability, reparability,
reliability or appearance before such changes are implemented. VENDOR
shall forward one (1) copy of all requests to make the changes
generally described above to: GTECH CORPORATION, 00 Xxxxxxxxxx Xxx,
Xxxx Xxxxxxxxx, XX 00000, Attention: Purchasing Agent. GTECH may, at
its option, decline to have such changes incorporated into the
Products. Proposed changes will not be incorporated into the Products
until accepted in writing by GTECH. In no event will GTECH ever be
deemed to have accepted any change in the price or delivery schedule
without its prior written consent.
7.2 GTECH Changes. GTECH may request changes in the Products at any time or
times during
*Confidential treatment requested.
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the term of this Agreement. If such changes in the Products will
require changes in the prices and/or delivery schedule, VENDOR must
respond promptly with a written change proposal setting forth the
changes in prices and/or delivery schedule. Such proposal, when signed
by an authorized representative of GTECH, will become part of this
Agreement. Should VENDOR question the benefits of any such change
requested by GTECH, VENDOR shall have the right to present its concerns
to GTECH, and GTECH shall consider those concerns before such change is
implemented by VENDOR. If VENDOR cannot respond within thirty (30)
days, VENDOR must provide, within a thirty (30) day period written
explanation to GTECH as to why they cannot and notify GTECH as to when
they can. If VENDOR does not respond with a written communication
within thirty (30) days after receipt of GTECH's request, such changes
will be implemented without any alternation in the price and/or
delivery schedule. Such changes, so long as they have not previously
been implemented anywhere by VENDOR, are and shall remain the property
of GTECH, and VENDOR may not use such changes or disclose them to
others without the prior written consent of GTECH.
7.3 Enhancements, Successor Products. If during the term of this Agreement,
VENDOR offers improvements, options, additional functionality or other
enhancements to the Products not available at the time this Agreement
is signed ("Enhancements") or other products which substantially
replace the Products ("Successor Products"), VENDOR will offer such
Enhancements and/or Successor Products to GTECH at prices that do not
exceed those charged to any other customer of VENDOR purchasing *
quantities of such Enhancements or Successor Products. If GTECH elects,
in writing, to purchase such Successor Products or Enhancements, the
Enhanced Products or Successor Products as the case may be, will be
substituted to make up the balance of any committed quantity under this
Agreement. In any event, GTECH may, at its option, elect to continue to
purchase Products as originally specified for the balance of the then
current ordering period.
7.4 Modified Printer Design. All changes relating to the design and
manufacture of the Modified Printer are governed by this section and
Sections 7.1, 7.2, and 7.3 are inapplicable to those changes. GTECH and
VENDOR will work together to complete the design and production process
for the Modified Printer. As soon as practicable after execution of
this Agreement, GTECH will provide VENDOR with documentation and other
information used by GTECH to manufacture the Modified Printer, and any
other information which will assist VENDOR in the design of the
Modified Printer. With the assistance and collaboration of GTECH,
VENDOR will prepare full and complete schematic diagrams, assembly
drawings, and structured Bills of Material for the Modified Printer.
The parties will use their best efforts to produce the Modified Printer
as soon as is reasonably practicable, after final approval by GTECH and
VENDOR of the Modified Printer design and satisfactory completion of
the full life test. VENDOR shall fill orders after the Initial Order
with Modified Printers, provided that the modified design has been
approved prior to the placement of such order and production of the
modified design can be reasonably accomplished by January 1 of the
following year. Any tooling necessary to manufacture the Modified
Printer is to be paid for and will be owned by GTECH. In the event
GTECH and VENDOR have finally approved and tested the modified design,
and GTECH desires to place an order of Modified Printers for delivery
starting before January 1 of the following year, GTECH and VENDOR agree
that
*Confidential treatment requested.
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such an order may be placed for level-loaded delivery over a fifty (50)
week period beginning before January 1, so long as GTECH places such
order in the minimum quantities contained in Attachment 2 at least
ninety (90) days in advance of the first delivery of Modified Printers.
8. QUALITY AND RELIABILITY REQUIREMENTS
GTECH requires that the VENDOR have in place at its manufacturing
facility or facilities, adequate quality and reliability safeguards to
ensure that all Product shipped to GTECH meets or exceeds all
parameters called forth in the product specification, Attachment 1, and
that the Product is not subject to any infant mortality.
8.1 VENDOR Survey. The VENDOR will allow GTECH to perform a VENDOR survey
at the VENDOR's facility or facilities. This survey will include, but
is not limited to, an audit of the manufacturing process, inspect
standing inventory, reviewing the inventory yielded at each inspection
and test point in the manufacturing process, and review of the standing
on-going reliability test data.
8.2 Final Test and Inspection Data. The VENDOR will make final test and
inspection data (yield information), and on-going reliability test data
available at the request of GTECH throughout the life of the Product.
8.3 Test Equipment and Procedure Correlation. The test equipment and
procedures used in the VENDOR's final inspection and test, will
correlate with the test equipment and procedures used by GTECH; if
correlation is not achieved within thirty (30) days after notification
of non correlation by GTECH, the VENDOR agrees to obtain additional
test equipment and/or develop procedures at no cost to GTECH which are
capable of correlation. Said test equipment and procedures will be
mutually agreed upon by both the VENDOR and GTECH Test Engineering,
Procurement Quality and Purchasing. GTECH remains responsible for all
supplied software and VENDOR is responsible for implementing the
updated software supplied by GTECH.
8.4 Source Inspection. The VENDOR will allow GTECH ( or its
representatives) to perform source inspection at their facility (or
facilities), using mutually agreed upon test equipment and procedures.
To do this in a timely fashion, the VENDOR will notify GTECH (or its
representative) that source inspection is available at least one week
prior to the requested source inspection date. Source inspection
activity will continue, at the discretion of GTECH Procurement Quality
Organization, throughout the life of the Product, or until such time as
the product meets or exceeds all requirements of the GTECH
Ship-To-Stock program.
8.5 Ship-To-Stock Program. The VENDOR will participate in the GTECH
Ship-To-Stock program. This program requires that the VENDOR's product
achieve a quality level sufficient for Ship-To-Stock status (minimum of
98% AQL) for a consecutive ninety (90) day period of shipment to GTECH.
If, due to the VENDOR's inability to meet the Ship-To-Stock criteria,
GTECH OEM Purchasing, with approval by VENDOR, said approval not
unreasonably to be withheld, may recover all reasonable costs
associated with continued unacceptable quality by taking a credit
against the purchase price of the Products.
8.6 Failure Analysis and Corrective Actions. The VENDOR agrees to supply,
within fifteen (15) calendar days, written failure analysis and
corrective actions for any in warranty devices failing to meet any and
all form, fit, function, quality or reliability requirements called out
in the product specification.
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8.7 GTECH's Rights with Respect to Non-Conforming Goods. The testing
procedures available to GTECH are discretionary and not mandatory. In
the event GTECH chooses not to perform any or some portion of such
testing, or such testing would not reasonably reveal a non conformance
in the Products, GTECH reserves its right under the, and subject to,
Uniform Commercial Code to reject any shipment of Products and to have
VENDOR repair such Products at GTECH's facility or to immediately ship
such Products back to VENDOR for repair and reshipment to GTECH in
timely fashion at VENDOR's expense.
9. INSURANCE
9.1 VENDOR Insurance Coverage. VENDOR shall purchase and maintain
throughout the life of this agreement, such insurance as will protect
it and GTECH from claims set forth below which may arise out of or
result from the VENDOR's operations under this Agreement whether such
operations be by it or by any subcontractor or by anyone for whose acts
any of them may be liable. VENDOR shall cause GTECH to be an additional
insured under all coverages except Worker's Compensation. Appropriate
endorsements will be attached to state that the VENDOR's policy will be
primary to any other policies that may be in effect.
9.2 Workers Compensation and Employers Liability. VENDOR shall obtain
Workers Compensation Insurance as required by statute, and if
applicable contractors liability under the Federal Longshoremen and
Harbor Workers Act. Employers liability coverage shall be in an amount
of no less than $500,000. VENDOR shall provide to or require workers'
compensation coverage, as required by statute, of any and all
subcontractors who are associated with any work for GTECH.
9.3 Automobile Liability. Policies should provide a minimum combined single
limit of $1,000,000 for each occurrence of bodily injury and property
damage.
9.4 Public Liability. Policies will provide a minimum of $1,000,000 per
occurrence for bodily injury and property damage, endorsed at a minimum
with the following coverages:
- Products and completed operations to the policy limits;
- Fire Legal Liability to policy limits;
- Blanket Contractual Liability to policy limits;
- Independent contractors inclusion to policy limits;
- Personal injury or the equivalent as provided by a Broad form
Comprehensive general Liability Policy.
9.5 Umbrella Policy. An umbrella policy with limits of no less than
$5,000,000 will be in place and will include all the above listed
primary policies.
9.6 Crime Insurance. A Crime Insurance (Fidelity Bond) policy in the amount
of $500,000 that will pay on behalf of the contractor to GTECH for
losses caused by the dishonest acts of the
VENDOR or his employees, agents, or designees.
9.7 Proof of Insurance. Evidence of said insurance will be in the form of a
certificate of insurance and will be provided within ten (10) days from
the date of this agreement. Notification to
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GTECH will occur within fifteen (15) days of any cancellation or
material change in coverage. In the event of a failure to furnish such
proof or the cancellation or material change of such insurance, without
prejudice to any other remedy GTECH may have, GTECH may terminate this
agreement, or at its option, charge the cost of required insurance to
the VENDOR. Coverage will be in effect with Insurance carriers licensed
to do business in any state that the VENDOR will perform its services
and will be rated no less than A by the AM Best Company. All
Certificates of Insurance are to be forwarded to: GTECH Corporation, 00
Xxxxxxxxxx Xxx, Xxxx Xxxxxxxxx, XX 00000, ATTN: Risk Management
Department.
10. INDEMNITY
In addition to, and not in limitation of, any other indemnifications,
warranties and covenants set forth herein, VENDOR hereby agrees to
indemnify and hold GTECH harmless with respect to any and all costs,
expenses and liability, including without limitation reasonable
Attorney's fees, arising out of any claim or action based on a failure
of the Products or Services to meet the specifications set forth
herein, or the failure of the VENDOR to meet any of its obligations
hereunder. This indemnity does not include any components of the
Products supplied by GTECH to VENDOR, including the docking slide,
circuit boards, software and Axiohm printhead.
VENDOR shall defend, indemnify and hold GTECH, GTECH's subsidiaries,
affiliates, distributors and customers harmless from any and all costs,
expenses and liability, including reasonable attorney's fees, arising
out of any claim or action based on actual or alleged infringement by
the Products or any patent, copyright, trade secret or other
proprietary interest associated therewith. GTECH shall give VENDOR
prompt notice of any claim or action and shall provide reasonable
assistance to VENDOR, at VENDOR'S expense, in defending any such claim
or action. If an injunction is issued which prohibits the use or sale
of the Products by reason of any matter covered by this Section 10,
then VENDOR shall, at its expense, either: (a) procure for GTECH and
its customers the right to continue using the Products; (b) modify the
Products so they become non-infringing; (c) substitute equivalent
non-infringing products; or, (d) if neither (a) through (c) are
reasonably available, GTECH may return the Products to VENDOR and
VENDOR will refund the purchase price to GTECH less depreciation based
upon the straight line method and a product life of five (5) years.
Notwithstanding the foregoing, VENDOR shall have no liability to GTECH
for actual or claimed infringement arising out of: (a) compliance with
detail designs, plans or specifications furnished by GTECH unless such
infringement would arise independent of such designs, plans or
specifications; (b) use of the Products in combination with other
equipment or software not reasonably contemplated by VENDOR; or, (c)
use of the Products in any process not reasonably contemplated by
VENDOR. VENDOR acknowledges that the Specification attached to this
Agreement is not a "specification" which excuses VENDOR from performing
its obligations hereunder.
GTECH shall defend, indemnify and hold VENDOR, VENDOR's subsidiaries,
affiliates, distributors and customers harmless from any and all costs,
expenses and liability, including reasonable attorney's fees, arising
out of any claim or action based on actual or alleged infringement by
any component of the Products provided to VENDOR by GTECH under this
Agreement or any patent, copyright, trade secret or other proprietary
interest associated
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15
therewith. VENDOR shall give GTECH prompt notice of any claim or action
and shall provide reasonable assistance to GTECH, at GTECH's expense,
in defending any such claim or action. If an injunction is issued which
prohibits the use or sale of the Products by reason of any matter
covered by this paragraph of Section 10, then GTECH shall, at is
expense, either: (a) procure for VENDOR the right to continue using
such components of the Products; (b) modify such components so they
become non-infringing; or (c) substitute equivalent non-infringing
components of the Products.
The terms and conditions of this Section 10 shall survive the
expiration or termination of this Agreement for any reason whatsoever.
11. SPARE PARTS
11.1 Recommended Spare Parts.(see Attachment 2A1 and 2A2). VENDOR has
provided a Recommended Spare Parts List ("RSL"), attached as Attachment
2A1 and 2A2 to this Agreement, for all Products, except the Modified
Printer, covered by this Agreement. The RSL shall include all parts and
assemblies necessary to repair and maintain the Products purchased
under this Agreement. A separate RSL shall be supplied for each product
model or configuration, identifying all common parts. Within a
reasonable time after completion of the approved design of the Modified
Printer, VENDOR shall provide GTECH a recommended spare parts list for
the Modified Printer.
11.2 Non-Standard Parts. If the Product contains a part not readily
available in the marketplace, VENDOR shall make such part available to
GTECH in accordance with Section 11.4.
11.3 Emergency Stock. VENDOR shall maintain an adequate supply of the spare
parts identified in Attachment 2A1 at its facility to support Priority
Orders, as described in Section 2.2.
11.4 Spares Support. VENDOR shall make all spare parts including
Non-Standard Parts as described in Section 11.2 above, available during
the term of this Agreement and for a period of five (5) years
thereafter. In the event VENDOR is unable to fill GTECH's Purchase
Orders in a reasonable time, VENDOR shall make available, at no charge
to GTECH, VENDOR 's manufacturing drawings and specifications, list of
suppliers, and information necessary to purchase and/or manufacture all
parts and/or assemblies or subassemblies for the parts which are not
available from the VENDOR, and VENDOR shall be liable for the
difference between GTECH's cost of manufacture and VENDOR's sales
price.
11.5 Purchase of Spare Parts from Third Parties. GTECH may purchase spare
parts from third parties except the cutter, the VENDOR's printhead, and
those parts manufactured from the tooling identified in Attachment 7 to
this Agreement.
12. REPAIR SUPPORT
12.1 Repair Orders. In addition to VENDOR's obligations under Section 14,
VENDOR agrees to repair all out of warranty failures within * from the
receipt of the Product,
* Confidential treatment requested
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or else replace such Product within forty (40) calendar days with new
Product which shall conform to the Product Specification, Attachment 1.
12.2 International Repair and Support. VENDOR shall identify international
locations, as required, for the repair and support of the Product and
subassemblies. In the event that these international locations are not
available, GTECH may then be contracted to perform International Repair
and Support.
If GTECH is contracted for International Repair and Support, VENDOR
shall provide GTECH with the necessary training to certify a
technician(s) to perform in-warranty repairs on the VENDOR's behalf
during the warranty period. However, these charges will not extend past
twelve (12) months after the printer is installed in an on-line
application. VENDOR shall be responsible for all costs associated for
the training of these technician(s). In addition, VENDOR agrees to
reimburse GTECH for the technician's salary every three (3) months,
based on the following formula:
*
The above formula may be renegotiated on or before December 31, 1999
based upon actual in-warranty repair failure data.
VENDOR shall maintain an adequate supply of spare parts at each of the
GTECH location(s) contracted to support in-warranty repairs. VENDOR
will also provide and maintain all necessary test fixtures, diagnostics
and test procedures at each of these locations for the warranty period.
At the end of the warranty period, GTECH may purchase the test fixtures
and spare parts from the VENDOR per Attachments 2A1, 2A2 and 2A3.
In the event that the VENDOR's certified technician(s) is not able to
repair or render the Product operational, defective units will be
returned to VENDOR's Connecticut facility for repair, or replacement,
at VENDOR's expense.
12.3 Failure Analysis. VENDOR shall provide a failure analysis on each
Product which is returned for repair under warranty. On serialized
Products repair data shall be provided for each serialized unit
returned. VENDOR shall provide general failure data on out of warranty
returns.
12.4 Repair Capabilities. GTECH reserves the right to repair any of the
assemblies, subassemblies, or other items comprising the Product
purchased under this Agreement. VENDOR will supply GTECH with the
necessary support to repair the Product, including the information
listed under Sections 12.4, 12.5, 12.6, 12.7 and 12.8.
* Confidential treatment requested
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17
12.5 Test Equipment. VENDOR shall make available to GTECH (per Attachment
2A3), upon written request by GTECH, any test procedures, special
tools, jigs, fixtures, diagnostics, programs, test equipment or
supplies necessary to repair the unit, any of the assemblies,
subassemblies, piece parts, components, or other items comprising the
Product purchased under this Agreement to component level.
12.6 Qualified Vendor List. VENDOR shall supply GTECH a qualified Vendor
list ("QVL") for standard components used in the Products purchased
under this Agreement. This QVL shall include the manufacturers and
vendors along with the corresponding part numbers for standard
components used in the Product, any of the assemblies, subassemblies,
piece parts, components, or other items comprising the Products
purchased under this Agreement. Updates to this list shall be forwarded
to GTECH CORPORATION, 00 Xxxxxxxxxx Xxx, Xxxx Xxxxxxxxx, XX 00000,
Attention: Procurement Agent Responsible for Commodity.
12.7 Diagnostics. VENDOR shall provide to GTECH all applicable diagnostics,
test programs and test routines, necessary to repair to component
level, the unit, any of the assemblies, subassemblies, piece parts,
components, or other items comprising the Products purchased under this
Agreement.
12.8 Documentation. In consideration of the purchase of Products under this
Agreement, and at no additional cost, VENDOR hereby grants onto GTECH
the right to use, reprint, and distribute VENDOR's Product manuals and
documentation ("Documentation"), including but not limited to user's
manuals, schematics, maintenance, theory of operation and
troubleshooting guides, and any other Documentation that VENDOR shall
make available during the Term of this Agreement. Upon request, VENDOR
shall provide camera ready copies of the Documentation to GTECH at no
additional charge. GTECH agrees to display copyright notices in
accordance with VENDOR 's reasonable written instructions.
13. TRAINING
GTECH may schedule five (5) students per quarter in VENDOR's training
classes to be held at GTECH World Headquarters, 00 Xxxxxxxxxx Xxx, Xxxx
Xxxxxxxxx, RI, or at VENDOR's facility at 0 Xxxxx Xxxx, Xxxxxxxxxxx,
XX, during the term of this agreement. A minimum of one (1) of the
training classes will include component level training to enable GTECH
to repair to a component level, the unit, any of the assemblies,
subassemblies, or other items comprising the products purchased under
this agreement. GTECH agrees to pay a $65.00 per hour trainer charge.
14. WARRANTIES
14.1 Product Compliance. VENDOR represents and warrants that all Products
delivered to GTECH under this Agreement, with the exception of
components of the Products supplied by GTECH, will comply with
applicable UL, CSA, TUV, CE and VDE standards and will comply with the
applicable FCC and CISPR rules for the type of Product involved,
including type acceptance or certification where required. VENDOR will
obtain and maintain at its own expense all applicable listings,
certifications and approvals in VENDOR's name. VENDOR will provide
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all necessary information and assistance to GTECH with respect to
listings, certifications and approvals that are required to be in
GTECH's name.
14.2 Authority. VENDOR warrants that: (a) it has the right to enter into
this Agreement; (b) all necessary actions, corporate and otherwise,
have been taken to authorize the execution and delivery of this
Agreement and the same is the valid and binding obligation of VENDOR;
(c) all licenses, consents and approvals necessary to carry out all of
the transactions contemplated in this Agreement have been obtained by
VENDOR; and, (d) VENDOR's performance of this Agreement will not
violate the terms of any license contract, note or other obligation to
which VENDOR is a party.
14.3 Title; Infringement. (a) VENDOR warrants that: (i) it has and shall
pass to GTECH good title to the Products free and clear of all liens
and encumbrances; (ii) the Products do not infringe any patent,
trademark or copyright or otherwise violate the rights of any third
party; (iii) no claim or action is pending or threatened against VENDOR
or, to VENDOR 's knowledge, against any licenser or supplier of VENDOR
that would adversely affect the right of GTECH or any customer of GTECH
to use the Products for their intended use.
(b) GTECH warrants that: (i) it has and shall pass to VENDOR good title
to any components of the Products that it provides to VENDOR under this
Agreement free and clear of all liens and encumbrances; (ii) such
components of the Products do not infringe any patent, trademark or
copyright or otherwise violate the rights of any third party; and (iii)
no claim or action is pending or threatened against GTECH as regards
any such components or, to GTECH's knowledge, against any licenser or
supplier of such components to GTECH that would adversely affect the
right of VENDOR to use such components as required under this
Agreement.
14.4 Conformance; Defects. Unless otherwise specified in Attachment 1,
VENDOR warrants that the Products will: (a) be new; (b) conform to the
Specification; (c) be free from defects in materials and workmanship
for a period of fifteen (15) months from date GTECH ships to customer.
Excluded for this warranty are components of the Products supplied by
GTECH, including the docking slide, circuit boards, software and Axiohm
printhead. Beginning January 1, 2000, GTECH will supply VENDOR on a
quarterly basis with a list of the Products shipped to its customers,
the date of shipment, and the corresponding serial numbers, of Products
shipped during the previous quarter. In the event that GTECH's
quarterly notice omits a Product shipped during the previous quarter,
VENDOR's warranty obligation (as to the omitted Product) shall not
extend beyond eighteen (18) months from the date of shipment from
VENDOR's facility to GTECH. Upon written notice from GTECH of a Product
or part that fails to meet the foregoing warranty, VENDOR will promptly
repair or replace such Products(s) within ten (10) days of receipt by
VENDOR of the failed or non-conforming Product or spare part.
14.5 *. All Products returned to VENDOR for repair under warranty shall be
shipped, FOB GTECH's designated repair facility, * to VENDOR. VENDOR
shall return all Product repaired under warranty, FOB GTECH's
designated stocking facility *.
* Confidential treatment requested
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14.6 Freight Charges on Non-Warranty Repairs. Freight charges directly
associated with the repair of non-warranty products and/or spare parts
shall be borne by GTECH provided VENDOR uses a GTECH designated
carrier.
14.7 DISCLAIMER OF WARRANTIES. EXCEPT FOR THE WARRANTIES SET FORTH HEREIN,
VENDOR DISCLAIMS ALL WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, ALL WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
15. BAILMENT AGREEMENT
Any tools, equipment, software, documentation or other materials
supplied by GTECH to VENDOR whether separately listed or not, are made
available pursuant to the terms and conditions of the GTECH Bailment
Agreement attached hereto as Attachment 4 and are provided solely for
use by VENDOR in its performance of this Agreement.
16. TOOLING
16.1 Ownership and Use. Any Tooling purchased by GTECH for the manufacture
of the Product, whether kept at GTECH's, VENDOR's, or VENDOR's
supplier's premises, shall remain the property of GTECH for GTECH's
exclusive use. During the term of this Agreement, VENDOR shall have the
right to use, or to have a third party use, the Tooling only for the
purpose of performing VENDOR's obligations under this Agreement, and
GTECH shall have the right to use, or to have a third party use, the
Tooling only if one of more of the events described in Section 3 of the
Manufacturing Rights Agreement (Attachment 6) occurs. GTECH shall be
responsible for all costs associated with all repairs or replacements
of the tooling. Upon the expiration of the term of this Agreement,
VENDOR shall have no right to use, or to have a third party use, the
Tooling for any purpose except as agreed by the parties in writing, and
GTECH shall have the right to use, or to have a third party use, the
Tooling for any reason whatsoever.
16.2 Storage; Notice of Ownership. The Tooling, purchased by GTECH as
outlined in Attachment 7 and used by VENDOR in the manufacture of this
Product, shall be stored and maintained by VENDOR or VENDOR's supplier
but may be removed from such locations at any time by GTECH, without
notice, and at no additional cost to GTECH. VENDOR shall take such
steps to protect GTECH's title to the Tooling as GTECH may reasonably
request. At a minimum, VENDOR shall cause a sign to be affixed to such
tooling stating "Property of GTECH Corporation" and shall notify each
third party using the Tooling in writing that the Tooling is owned by
GTECH.
17. FORCE MAJEURE
Either party shall be excused from its performance hereunder to the
extent that its performance is prevented by fire, flood, acts of God,
strikes or other causes beyond its reasonable control; provided that,
the party claiming Force Majeure notifies the other in writing within
five (5) days of the commencement of the condition preventing its
performance and its intent to rely thereon to extend the time for its
performance of this Agreement.
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18. CONFIDENTIALITY
18.1 VENDOR. VENDOR acknowledges and agrees that all documents, data,
software, trade secrets or information in any form which are provided
by GTECH (hereinafter "Confidential Information") is the property of
GTECH. VENDOR will receive and maintain all Confidential Information in
the strictest confidence and, except as provided herein, shall not use
Confidential Information for its own benefit or disclose it or
otherwise make it available to third parties without the prior written
consent of GTECH. VENDOR agrees to limit the use of Confidential
Information to only those of its employees who need Confidential
Information for the purpose of this Agreement and to advise all of its
employees of GTECH's rights in the Confidential Information. Nothing in
this Agreement shall be construed as granting or conferring any rights
by license or otherwise in any Confidential Information, trademarks,
patents or copyrights of GTECH, except for the limited purposes of
VENDOR 's performance hereunder. Confidential Information does not
include information which is: (a) in the public domain; (b) already
known to the party to whom it is disclosed (hereinafter "Recipient") at
the time of such disclosure; (c) subsequently received by Recipient in
good faith from a third party having prior right to make such
subsequent disclosure; (d) independently developed by Recipient without
use of the information disclosed pursuant to this Agreement; (e)
approved in writing for unrestricted release or unrestricted disclosure
by the party owning or disclosing the information (hereinafter
"Discloser"); or (f) produced or disclosed pursuant to applicable laws,
regulations or court order, provided the Recipient has given the
Discloser written notice of such request such that the Discloser has an
opportunity to defend, limit or protect such production or disclosure.
At the request of a Discloser, and in any event upon the expiration or
other termination of this Agreement, each Recipient shall promptly
deliver to Discloser all products, components and equipment provided by
Discloser as well as all records or other things in any media
containing or embodying Discloser's Confidential Information within its
possession or control which were delivered or made available to each
Recipient during or in connection with this Agreement, including any
copies thereof.
18.2 GTECH. GTECH acknowledges and agrees that all confidential, proprietary
information and trade secrets of VENDOR provided to GTECH, including,
without limitation the Manufacturing Package, as described in
Attachment 6, and the printhead design and manufacture documents,
tooling, data, software, the information provided by VENDOR pursuant to
Sections 12.5, 12.6, 12.7 and 12.8 of this Agreement, or other
information in any form which are provided by VENDOR (hereinafter
"Confidential Information") is the property of VENDOR except that the
tooling paid for by GTECH remains the property of GTECH. GTECH will
receive and maintain all Confidential Information in the strictest
confidence and, except as provided herein, shall not use Confidential
Information for its own benefit or disclose it or otherwise make it
available to third parties without the prior written consent of VENDOR.
GTECH agrees to limit the use of Confidential Information to only those
of its employees who need Confidential Information for the purpose of
this Agreement and to advise all of its employees of VENDOR's rights in
the Confidential Information. Nothing in this Agreement shall be
construed as granting or conferring any rights by license or otherwise
in any Confidential Information, trademarks, patents or copyrights of
VENDOR, except for the limited purposes of GTECH 's performance
hereunder. Confidential Information does not include information which
is: (a) in the public domain; (b) already known to the party to whom
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it is disclosed (hereinafter "Recipient") at the time of such
disclosure; (c) subsequently received by Recipient in good faith from a
third party having prior right to make such subsequent disclosure; (d)
independently developed by Recipient without use of the information
disclosed pursuant to this Agreement; (e) approved in writing for
unrestricted release or unrestricted disclosure by the party owning or
disclosing the information (hereinafter "Discloser"); or (f) produced
or disclosed pursuant to applicable laws, regulations or court order,
provided the Recipient has given the Discloser written notice of such
request such that the Discloser has an opportunity to defend, limit or
protect such production or disclosure. At the request of a Discloser,
and in any event upon the expiration or other termination of this
Agreement, each Recipient shall promptly deliver to Discloser all
products, components and equipment provided by Discloser as well as all
records or other things in any media containing or embodying
Discloser's Confidential Information within its possession or control
which were delivered or made available to each Recipient during or in
connection with this Agreement, including any copies thereof.
18.3 Magnetec Printer and Modified Printer Designs. VENDOR owns the designs
of the Magnetec Printer and the Modified Printer (except for any
components of the Products supplied by GTECH, such as docking slides,
circuit boards, software and Axiohm printhead), and GTECH shall not use
the designs of the Magnetec Printer and the Modified Printer during the
term of this Agreement for its own benefit except as contemplated in
this Agreement. GTECH may not disclose or otherwise make available to
third parties the designs without the prior written consent of VENDOR,
provided, however, that VENDOR agrees that GTECH may sell, transfer or
display Magnetec Printers or Modified Printers to third parties in the
ordinary course of GTECH's business. Vendor further agrees that GTECH
may have third parties repair Magnetec Printers or Modified Printers,
or parts thereof, provided GTECH make a good faith effort to execute
confidentiality agreements with such third parties. [For purposes of
this Section, GTECH makes a good faith effort if it notifies the GTECH
General Counsel and the Vice Presidents in charge of Facilities
Management and Product Sales Contracts of the existence of this
requirement.] At the conclusion of the term of this Agreement, GTECH
and VENDOR shall each have the right to use any aspect of the design of
the Magnetec Printer or the Modified Printer (except that GTECH may not
use VENDOR's printhead and VENDOR may not use any docking slide,
circuit boards, software, docking cable or the Axiohm printhead
proprietary to GTECH), unless VENDOR exercises its right of first
refusal contained in Section 22.5.
18.4 Reverse Engineering. GTECH agrees that, during the term of this
Agreement, it will not attempt to reverse engineer the Magnetec Printer
or the Modified Printer, whether undertaken directly by GTECH or by any
third party acting on GTECH's behalf.
18.5 Equitable Remedies. The parties agree that a breach of the restrictions
and obligations in Section 18 by one party will cause the other party
substantial and continuing damage, the value of which will be difficult
or impossible to ascertain, and other irreparable harm for which the
payment of monetary damages alone will be inadequate. Therefore, in
addition to any other remedy which the potentially aggrieved party may
have under this Agreement or at law or in equity, in the event of such
a breach or threatened breach by a party of the restrictions and
obligations in Section 18, the potentially aggrieved party shall be
entitled to seek both
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temporary and permanent injunctive relief to cease/halt such breach or
threatened breach, and to prevent further breaches of the restrictions
and obligations in question.
19. PUBLIC ANNOUNCEMENTS
VENDOR and GTECH agree that the existence and terms of this Agreement
are Confidential Information. VENDOR and GTECH further agree not to
make any public announcements regarding this Agreement, it being
understood that if either is advised by counsel that it is required by
law or the rules of any stock exchange to make such announcement, it
will immediately contact and consult with the other regarding the form
and substance of such announcement prior thereto. Upon the execution of
this Agreement, the parties shall forthwith issue a joint press release
satisfactory to both parties and consistent with the regulations of the
Securities and Exchange Commission concerning this Agreement and the
Memorandum of Understanding.
20. NOTICES
All notices required or contemplated by this Agreement shall be deemed
effective if written and delivered in person or if sent by registered
mail, return receipt requested, to GTECH at the address shown above to
the attention of GTECH's Representative or to VENDOR at the address
shown above to the attention of VENDOR's Representative; or such other
persons or addresses as may hereafter be designated by the respective
parties. Notices to GTECH under Section 19 hereof shall not be
effective unless a copy is delivered personally or sent by registered
mail, return receipt requested to the Office of the General Counsel of
GTECH at the address shown above.
21. ASSIGNMENT
This Agreement and the disclosure of Confidential Information hereunder
is made in reliance upon VENDOR 's reputation, skill and expertise.
VENDOR agrees not to assign this Agreement or any right or obligation
hereunder without the prior written consent of GTECH in each instance.
Any attempted assignment shall be void. This covenant not to assign
without consent shall include attempts to assign to parents or
subsidiaries of VENDOR or any transfer of a majority interest in VENDOR
or substantially all of VENDOR's assets. The consent by GTECH to any
assignment shall not constitute a waiver of the need for consents for
any further assignments. GTECH may not unreasonably withhold consent to
an assignment, and shall restrict its basis for withholding consent to
the proposed assignee's status as a competitor to GTECH, an entity of
inferior financial status to VENDOR or an entity whose business
practices are such that the likelihood of breach is increased.
22. TERM AND TERMINATION
22.1 Term. This Agreement commenced on July 14, 1999 and will continue from
that date until December 31, 2004 unless terminated earlier as provided
in this Agreement.
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22.2 Termination; By GTECH. GTECH may terminate this Agreement at any time
if (a) VENDOR fails or neglects to perform any of its obligations
hereunder and such condition has not been cured within * of written
notice thereof by GTECH (to the extent such default cannot be cured
within * it shall not be default if VENDOR has commenced a cure within
* and has actually cured such default within *); (b) VENDOR, or
VENDOR's parent or a wholly owned subsidiary of VENDOR, is the subject
of trade sanctions by the United States government, or any other
government, or quasi-governmental agency which materially affects
GTECH's ability to sell, lease, or maintain the Product; (c) VENDOR
attempts to assign this Agreement or any obligation hereunder without
GTECH's consent; (d) any assignment is made of VENDOR's business for
the benefit of creditors, or if a petition in bankruptcy is filed by or
against VENDOR and is not dismissed within ninety (90) days, or if a
receiver or similar officer is appointed to take charge of all or part
of VENDOR's property, or if VENDOR is adjudicated a bankrupt.
22.3 Termination; By VENDOR. VENDOR may terminate this Agreement if: (a)
GTECH fails to perform any of its obligations hereunder and such
condition has not been cured within thirty (30) days of written notice
thereof by VENDOR; provided that, VENDOR may not terminate this
Agreement for reason of non-payment by GTECH of any disputed amounts,
or (b) if any assignment is made of GTECH's business for the benefit of
creditors; or, (c) if a petition in bankruptcy is filed by or against
GTECH and is not dismissed within ninety (90) days, or if a receiver or
similar officer is appointed to take charge of all or part of GTECH's
property, or if GTECH is adjudicated a bankrupt.
22.4 Obligations of Termination. Upon expiration or termination of this
Agreement for any reason, VENDOR shall promptly deliver to GTECH all
tools, equipment, software documentation and other materials furnished
to VENDOR by GTECH hereunder. VENDOR's obligations under Sections 2, 9,
10, 11, 13, 14, 15, 17, 18, 19, 21 and 24 hereof shall survive
expiration or Termination of this Agreement or its extensions
regardless of the manner of Termination. GTECH's obligation under
Section 10, 14, 18 and 19 hereof shall survive expiration or
Termination of this Agreement or its extensions regardless of the
manner of Termination.
22.5 Right of First Refusal. Should GTECH desire to purchase, manufacture,
or alternate source 27-wire impact printers for the ISYS Terminal after
the term of this Agreement, then it shall notify VENDOR in writing of
this fact and the exact details of the commercially reasonable
specifications, terms and prices no earlier than one year prior to the
conclusion of the term of this Agreement. Upon such notification,
VENDOR shall have sixty (60) days within which to exercise its right of
first refusal to accept such specifications, terms and prices for such
printer for periods after the conclusion of this Agreement. GTECH may
not commit to purchase, manufacture, or alternate source the 27-wire
impact printers until Magnetec refuses to accept such specifications,
terms, and prices, or fails to respond in such sixty (60) day period.
23. CONFLICTING PROVISIONS
In the event of a conflict between the terms and conditions of this
Agreement and the terms and conditions of any Purchase Order, the terms
and conditions of this Agreement shall control the
* Confidential treatment requested.
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terms and conditions on any Purchase Order, unless the parties
otherwise agree in writing prior to the placement of the Purchase
Order. The terms and conditions of this Agreement shall prevail over
any inconsistent terms and conditions contained in paragraph 2 the
Memorandum of Understanding.
Notwithstanding any assignment, VENDOR shall remain responsible for the
full performance of all of the terms and conditions of this Agreement.
24. MANUFACTURING RIGHTS
Manufacturing Rights will be governed by Attachment 6.
25. MISCELLANEOUS
This Agreement and Attachments and Purchase Orders issued and Accepted
hereunder set forth the entire understanding of the parties with
respect to the Products and merges all prior written and oral
communications relating thereto, except the written Mutual Release
between GTECH and VENDOR of even date and the Memorandum of
Understanding. This Agreement can be modified or amended only in a
writing signed by a duly authorized representative of each party.
Section headings are provided for the convenience of reference only and
shall not be construed otherwise.
No failure to exercise, or delay in exercising, on the part of either
party, any right, power or privilege hereunder shall operate as a
waiver thereof, nor will any single or partial exercise of any right,
power or privilege hereunder preclude the further exercise of the same
right or the exercise of any other right hereunder.
If any party to this Agreement breaches any term of this Agreement,
then that party shall pay to the non-defaulting party all the
non-defaulting party's costs and expenses, including reasonable
attorneys' fees, incurred by that party to enforce the terms of this
Agreement.
This Agreement is made pursuant to and shall be governed by the laws of
the State of Rhode Island, without regard to its rules regarding
conflict of laws. The parties agree that the courts of the State of
Rhode Island shall have exclusive jurisdiction over all matters arising
from this Agreement.
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IN WITNESS WHEREOF, THE PARTIES HERETO HAVE EXECUTED THIS
AGREEMENT ON THE DATES MENTIONED BELOW.
VENDOR:
TRANSACT TECHNOLOGIES INCORPORATED GTECH CORPORATION
BY /s/ Xxxx X. Xxxxxxxx BY /s/ Xxxxxxx X. Xxxxxxxxxxx
--------------------
Title President and CEO Title VP of International Operations
--------------------
Date July 14, 1999 Date July 14, 1999
--------------------
MAGNETEC CORPORATION
BY /s/ Xxxx X. Xxxxxxxx
--------------------
Title President and CEO
--------------------
Date July 14, 1999
--------------------
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Attachment 1
Product Specification
1. Product Specifications and Services Description.
2. Product Unique Packaging Specifications, if any.
3. Certification, approvals.
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Attachment 2
Pricing
TERMS AND CONDITIONS
1. On or before September 1, 1999, GTECH will place a firm,
non-cancelable Initial Order for a minimum of * Magnetec
Printers. Unit pricing for the non-RAP version of the Magnetec
Printer is as follows: * per printer for an order of *
printers; * per printer for an order of * printers; or * per
printer for an order of * or more printers. VENDOR shall fill
the Initial Order with Magnetec Printers.
2. VENDOR shall deliver the Initial Order on a level loaded
weekly basis for fifty (50) weeks between January 1, 2000 and
December 31, 2000 as stated in Attachment 3, and shall deliver
all subsequent orders on a similar basis for the appropriate
period of the order.
3. Assembly and/or test GTECH circuit boards, ribbon, docking
slide, docking cable assembly and Axiohm printhead are not
included in price.
4. Packaging will adhere to GTECH specifications 00-0000-00 and
00-0000-00, and is included in the price of product and spare
parts.
5. Prices for spare parts and assembly fixtures will be
determined by Attachment 2A1, 2A2, and 2A3 through January,
2001. Prices for spare parts after January 2001 will be
re-negotiated on or before November 2000. The good faith
re-negotiation of spare part prices will be based upon
VENDOR's volume of purchased material and assemblies as
required to support the requirements specified in Attachment
3, and those beyond the requirements specified in Attachment
3. If negotiations are not completed by November 2000, the
prices will remain in effect.
6. After 2000, GTECH shall place its annual orders, if any, by
October 1st for printers to be delivered on a level-loaded
basis during the following year.
7. In the event that GTECH desires to place an order for Magnetec
Printers for delivery after December 31, 2000, the parties
will seek ways to reduce the costs of producing the Magnetec
Printer , and the spare parts for that printer, and share
equally the benefits generated by such efforts. To this end,
VENDOR will provide a costed Xxxx Of Material for the Magnetec
Printer to GTECH on or before January 1, 2000. The price for
the Magnetec Printer will be calculated as set forth in
Paragraph 1 of this Attachment, as adjusted in accordance with
Paragraph 8(II) of this Attachment, and reduced only where a
cost reduction related to a committed volume has been approved
by GTECH and VENDOR as to both dollar amount and feasibility
of design and only for the subsequent year's production. In
that event, the price of each Magnetec Printer shall be
reduced by one half of any such approved cost reduction.
* Confidential treatment requested.
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8. VENDOR's pricing for the Modified Printer will be based on the
prices/volumes for the Initial Order set forth in Paragraph 1
of this Attachment and will be adjusted on an annual basis as
follows:
I. Prices will be adjusted as a result of any
manufacturing, labor and/or component cost variances
between the Magnetec Printer and the Modified
Printer.
II. In connection with orders scheduled for delivery
after January 1, 2001, the base pricing in effect for
the previous year will be adjusted to reflect any
change in the Consumer Price index for Urban
Consumers/U.S. City Average ("CPI") during that year.
III. Prices also will be adjusted to reflect any cost
saving achieved in accordance with Paragraph 9 of
this Attachment.
9. The parties will seek ways to reduce the costs of producing
the Modified Printer and the spare parts for that printer and
share equally the benefits generated by such efforts. To this
end, VENDOR will provide a costed Xxxx Of Material for the
Modified Printer to GTECH within ten (10) days of final
approval of the Modified Printer design by both GTECH and
VENDOR after a full life test. The pricing for the Modified
Printer will be reduced only where a cost reduction related to
a committed volume has been approved by GTECH and VENDOR as to
both dollar amount and feasibility of design and only for the
subsequent year's production. The pricing shall be reduced by
one half of any such approved cost reduction.
10. In the event GTECH and VENDOR approve the use of the Axiohm
printhead in the Modified Printer, VENDOR will reduce the
price of the Modified Printer by $52 to cover the elimination
of the Magnetec printhead, adjusted in accordance with
Paragraph 8 of this Attachment, and GTECH will supply the
Axiohm printhead to VENDOR at no charge to VENDOR. VENDOR will
xxxx back to GTECH and GTECH shall pay any reasonable costs
associated with quality control, warranty, and production
issues caused by the Axiohm printhead. At the expiration of
this Agreement, VENDOR shall have no right to use the Axiohm
printhead.
11. Unit Pricing for the RAP version of either the Magnetec
Printer or the Modified Printer shall be as set forth above,
plus * per printer.
* Confidential treatment requested.
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Attachment 2A
RECOMMENDED SPARES LIST AND PRICING
2A1 Spare Parts Priority
2A2 Spare Parts Provision
2A3 Test Fixture and Tool List
-00-
00
Xxxxxxxxxx 0X0
Xxxxx Parts Priority
PART NUMBER DESCRIPTION GTECH PRICE
----------- ----------- -----------
M021243-04 ASSY, PRINTHEAD *
M021260-01 ASSY, RIBBON-MOTOR *
M034348-07 ASSY, CUTTER *
M034351-03 ASSY, P/H-CARRIAGE *
M034352-01 ASSY, SHAFT & PULLEY *
M034355-02 ASSY, CARRIAGE-MOTOR *
M034356-02 ASSY, PAPER, FEED-MOTOR *
M034357-04 SOLENOID *
M034488-02 ASSY, PAPER OUT SENSOR *
* Confidential treatment requested.
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Attachment 2A2
Spare Parts Provision
PART NUMBER DESCRIPTION GTECH PRICE
069477-06C5 WASHER, #6 FLAT $ *
069477-08C5 #8 WASHER $ *
M034434-04 ASSY, SHAFT & ROLLER $ *
M034472-01 CABLE, FLEX $ *
M034477-01 ASSY, COVER & HANDLE $ *
M034554-03 ASSY, TRANSPORT $ *
R034575-01 CUTTER ASSY W/O TRANS $ *
M034510-01 ASSY, RAP $ *
M063521-10 RETAINING RING $ *
M063703-01 RING, RETAINER $ *
M064535-01 BEARING, BALL $ *
M064571-01 SPRING, COMPRESSION $ *
M065066-01 PIN, GROVE. 1/8 DIA $ *
M065197-08 #8 SQUARE NUT $ *
M065242-01 SCREW, #6-32 $ *
M065244-01 SEM $ *
M065244-02 #6 SEMS $ *
M065244-04 SCREW, 6-32 SEMS $ *
M065553-02 MICROSWITCH $ *
M065812-01 NUT, NYLON (4-40) $ *
M066009-01 SPACER, SOLENOID $ *
M066154-01 #4 SEMS $ *
M066828-06 SHAFT, LOWER $ *
M066838-01 ROLLER, IDLER $ *
M066853-03 PLATEN BAR $ *
M067099-03 BELT, TIMING $ *
M067105-02 SPRING, CART.PLUNGER $ *
M067242-02 SPRING, LEVER RELEASE $ *
M067243-02 CABLE, DRIVE $ *
M067309-02 SIDE, PLATE $ *
M067315-01 CATCH, RIGHT $ *
M067315-02 CATCH, LEFT $ *
M067318-02 CLIP, SPRING $ *
M067321-01 ECCENTRIC, ADJ $ *
M067322-01 SHAFT, CARRIAGE LATCH $ *
M067323-01 PLUNGER, RIBBON SWITCH $ *
M067325-02 BRACKET, SOL.MOUNTING $ *
M067334-01 SPRING $ *
M067337-01 SCREW, #4 $ *
M067364-01 GROUND STRAP $ *
* Confidential treatment requested
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Attachment 2A2
Spare Parts Provision (continued)
PART NUMBER DESCRIPTION GTECH PRICE
----------- ----------- -----------
M067365-03 GROUND STRAP BASE $ *
M067366-01 COVER, ACCESS $ *
M067486-02 CLIP, SPRING $ *
M067497-05 #8-32 SEMS $ *
M067497-08 #8-32 SEMS $ *
M067497-14 #8 SEMS $ *
M067523-01 COVER, CABLE $ *
M067524-01 COVER, RIGHT PIVOT $ *
M067525-01 COVER, LEFT PIVOT $ *
M067526-03 COVER, BELT $ *
M067532-01 PULLEY, 22 GROVE $ *
M067564-01 WASHER, B'VILLE SPRING $ *
M067564-02 WASHER, B'VILLE SPRING $ *
M067566-03 GROUND SYSTEM $ *
M067662-01 SHIELD $ *
M067665-01 STRAP $ *
* Confidential treatment requested
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Attachment 2A3
Assembly Fixture List
PART NUMBER DESCRIPTION PRICE
TNM 1091 Set Gauge $*
TNM 1090 Check Gauge $*
TNM 1077 Carriage Alignment Fixture $*
TNM 1078 Cable & Belt Fixture $*
TNM 1112 Paper Feed Roller Removal Tool $*
TNM 1113 Paper Feed Roller Insertion Tool $*
TNM 1094 Cutter Adjustment Gauge $*
TNM 1095 Cutter Check Gauge $*
* Confidential treatment requested
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Attachment 3
DELIVERY
The printers will be a mix of RAP and non-RAP versions with firm fixed
deliveries (except for acceleration) for the Initial Order as follows:
Order Quantity per Week Duration
----- ----------------- --------
* at least */wk Fifty (50) weeks during calendar 2000
* at least */wk Fifty (50) weeks during calendar 2000
* at least */wk Fifty (50) weeks during calendar 2000
All orders after the Initial Order shall be filled in a similar
level-loaded manner.
ACCELERATION OF SCHEDULE
Based on a sixty (60) calendar day lead time, GTECH may accelerate or
decelerate delivery schedules so long as GTECH accepts delivery of the
minimum quantities set forth above, subject to VENDOR's Agreement.
PRODUCT MIX RAP/NON RAP
Based on a thirty (30) calendar day lead time, GTECH may alter the mix
of RAP and Non-RAP printers on orders.
* Confidential treatment requested.
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Attachment 4
Bailment Agreement
Bailee Name and Address: Date
Transact Technologies & Magnetec Corporation Term of Use: Term of OEM Purchase Agreement
0 Xxxxx Xxxx Xxxxxxx xx Xxxxxxxx: Enable Bailee, as VENDOR
Xxxxxxxxxxx, XX 00000 under OEM Agreement, to manufacture Products
Property Location (if different) per specifications of GTECH.
The following terms shall govern the bailment of the property listed
below ("Property") by GTECH CORPORATION, ("GTECH") to the BAILEE identified
above.
1. Title. Title to the Property is and shall remain with
GTECH at all times and Bailee shall not sell,
lease or assign the Property or do anything
inconsistent with GTECH 's title. BAILEE shall
segregate the Property from all other property
not owned by GTECH which is located on BAILEE's
premises and shall take such additional steps
as GTECH may reasonably request to protect
GTECH's title to the Property, including the
execution of appropriate filing statements.
2. Use; Location. The Property may be used by BAILEE only for the
purpose described above. Unless otherwise
agreed in writing, the Property shall remain at
the Property Location specified above at all
times. GTECH shall have the right to enter the
Property Location during normal business hours
to inspect the Property.
3. Term. The Term of Use of the Property will be
as specified above unless extended by mutual
agreement of the parties. BAILEE shall return
the Property to GTECH upon expiration of the
term of Use or earlier request of GTECH in the
same condition as delivered, reasonable wear
and tear excepted.
4. Transportation. Unless specifically listed below, BAILEE shall
be responsible for all costs of freight to and
from the site and for all drayage, set up,
installation and deinstallation costs.
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5. Software. If the Property includes software, such
software, including any subsequent updates, is
provided for use only on the designated CPU.
BAILEE may make up to two (2) machine readable
copies for backup purposes provided that
GTECH's copyright or proprietary notice is
reproduced on each copy. All copies remain the
property of GTECH. BAILEE agrees to maintain
all software and related documentation in
strict confidence and will not disclose or
otherwise make the software and documentation
available to any third party without the prior
written consent of GTECH. No rights or license
to any patents, trademarks or copyrights of
GTECH are granted to BAILEE hereby.
6. Loss, Insurance. BAILEE shall bear all risks of loss. BAILEE
hereby agrees to compensate GTECH at the stated
value for Property which is lost, damaged or
destroyed. BAILEE shall insure the Property for
such stated value and upon request, shall give
GTECH a certificate of insurance.
7. No Warranty. The Property is provided to BAILEE without
warranty of any kind, express, implied or
statutory. In no event will GTECH be liable for
any loss or damages whatsoever arising out of
the use of or inability to use the Property.
BAILEE is responsible for the backup and
security of any data used with the Property.
8. Maintenance;
Supplies. Unless specifically listed below, maintenance
services for the Property and expendable supply
items used in conjunction with the Property
must be separately acquired by BAILEE.
9. General. Property shall be governed by this Bailment
Agreement from the time at which BAILEE takes
possession until the return of the Property to
GTECH. This Agreement may be amended only in
writing and shall be governed by Rhode Island
law.
PROPERTY DESCRIPTION
( ) Property Description attached pages.
BAILEE GTECH CORPORATION
By By
Title Title
Date Date
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Attachment 5
Non-Warranty Repair Costs
At the end of the warranty period, all out of warranty repair charges
will be charged at the rate of * per hour in increments of one-quarter (1/4)
hour. Parts used in these repairs will be charged separately using the spare
parts pricing in Attachment 2A1 and 2A2. Parts replaced will be returned with
the repaired printer.
* Confidential treatment requested.
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Attachment 6
Manufacturing Rights
1. Manufacturing Documentation Package
(a) Magnetec Printer. * VENDOR agrees to deliver to GTECH, or at
VENDOR's option, or to a mutually agreed upon escrow agent, all of the
documentation and other information used by VENDOR to manufacture, test,
maintain and support the Magnetec Printer (herein, the "Magnetec Printer
Manufacturing Package")(both the Magnetec Printer Manufacturing Package and the
Modified Printer Manufacturing Package, as defined in section 1(b) below, are
collectively referred to as the "Manufacturing Package") including, without
limitation, the full and complete schematic diagrams, assembly drawings, tooling
specifications and design, structured Bills of Materials, printed circuit board
artwork, parts and vendor lists, test specifications, test fixtures, assembly
aids and the information provided by the VENDOR pursuant to Sections 12.5, 12.6,
12.7, and 12.8 of this Agreement and software in both machine readable source
and object forms. As a part of this package, VENDOR also agrees to provide
access to and joint control of VENDOR tooling, agency approval files (FCC, UL,
CE, CSA, VDE, etc.), a complete description of any special tools, fixtures and
test equipment that are required but are not readily available in the
marketplace. Neither GTECH nor escrow agent will have any right to use the
Manufacturing Package except as set forth in section 3 below or as otherwise
authorized by VENDOR.
(b) Modified Printer. * VENDOR agrees to deliver to GTECH, or at
VENDOR's option, to a mutually agreed upon escrow agent, all of the
documentation and other information used by VENDOR to manufacture, test,
maintain and support the Modified Printer (herein, the "Modified Printer
Manufacturing Package") including, without limitation, the full and complete
schematic diagrams, assembly drawings, tooling specifications and design,
structured Bills of Materials, printed circuit board artwork, parts and vendor
lists, test specifications, test fixtures, assembly aids and the information
provided by VENDOR pursuant to Sections 12.5, 12.6, 12.7, and 12.8 of this
Agreement and software in both machine readable source and object forms. As a
part of this package, VENDOR also agrees to provide access to and joint control
of VENDOR tooling, agency approval files (FCC, UL, CE, CSA, VDE, etc.), a
complete description of any special tools, fixtures and test equipment that are
required but are not readily available in the marketplace. Neither GTECH nor
escrow agent will have any right to use the Manufacturing Package except as set
forth in section 3 below or as otherwise authorized by VENDOR.
2. Updates; Verification; Expenses. VENDOR agrees to update the "Manufacturing
Package" as necessary from time to time to keep the package current with the
latest version of the Products delivered to GTECH under this Agreement. If the
"Manufacturing Package" is delivered to any person other than GTECH, GTECH shall
have the right to inspect the package from time to time to verify the contents
of the "Manufacturing Package" and VENDOR's compliance with this section. All
costs and expenses of any kind associated with the preparation and maintenance
of the "Manufacturing Package" as well as any fees of any person other than
GTECH holding the "Manufacturing Package" will be paid by VENDOR.
* Confidential treatment requested.
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3. Right to Manufacture. If any one or more of the following events occurs,
GTECH shall have the right, including the rights under any of the VENDOR's
applicable patents and copyrights, to use the Manufacturing Package to
manufacture or have manufactured the Products:
a.) VENDOR ceases doing business as an entity or is finally
adjudicated a bankrupt under Chapter 7 of the Bankruptcy Act
or any similar or successor provision for the liquidation or
dissolution of VENDOR.
b.) VENDOR admits in writing its inability to provide Products to
GTECH strictly in accordance with the terms of this Agreement.
c.) VENDOR assigns this Agreement in violation of section 25 of
this Agreement to any person or organization that competes
with GTECH in any market or whose interests are otherwise
inimical to GTECH's.
d.) A petition in bankruptcy is filed by or against VENDOR and is
not dismissed within ninety (90) days thereafter or if a
receiver, trustee in bankruptcy or similar officer is
appointed to take charge of all or a substantial part of
VENDOR's property.
Except as provided in this section or as otherwise authorized by VENDOR, neither
GTECH nor any second source manufacturer shall have any right to use the
Manufacturing Package for any purpose and shall hold such information
confidential and shall not disclose such information to any party.
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ATTACHMENT 7
GTECH OWNED TOOLING LIST
Tool Description Tool Number Vendor Vendor's Address Vendor's Telephone #
---------------- ----------- ------ ---------------- --------------------
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