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EXHIBIT 10.47
NOTE: THE MATERIAL HEREIN MARKED BY BRACKETS AND AN ASTERISK HAS BEEN DEEMED
CONFIDENTIAL BY SCIENTIFIC GAMES HOLDINGS CORP. AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
INSTANT LOTTERY TICKETS SUPPLY AGREEMENT
THIS AGREEMENT is made as of the date of signature by the parties.
BETWEEN
SCIENTIFIC GAMES INC., a company incorporated in the State of Delaware, U.S.A.,
the principal office of which is at 0000 Xxxxxxxxx Xxxxx Xxxxxxx, Xxxxxxxxxx,
Xxxxxxx 00000, X.X.X. ("Contractor");
CAMELOT GROUP PLC, a company incorporated in England and Wales (registered no
2822203), the registered office of which is at Xxxxxxxx Xxxxx, Xxxxxxx Xxxx,
Xxxxxxx XX0 0XX ("Camelot"); and
XXXXXX DE LA RUE LIMITED, a company incorporated in England and Wales
(registered no. 720284) the registered office of which is at 0 Xxxx Xxxxxx,
Xxxxxx XX0X0XX ("TDLR").
WHEREAS
In connection with Camelot's operation of the UK National Lottery, the parties
desire to enter into this Agreement by which the Contractor will become the
exclusive supplier of instant tickets to Camelot for the term of this Agreement
on the terms and conditions herein contained, and TDLR will provide advisory
services if Camelot so requests.
In consideration of the covenants herein contained IT IS AGREED as follows:
1. INTERPRETATION
1.1 In this Agreement:
"Act" means the Companies Xxx 0000;
"Agreement" means this agreement and any
schedules thereto and any other
document referred to therein which
is expressly stated to form part of
this agreement;
"Business Day" means any day (other than a
Saturday) when clearing banks in
London and New York are open for the
transaction of normal business;
"Change Order" means the change described in Clause
23;
"Group Undertaking" means, in relation to a company, a
company which is a parent
undertaking or subsidiary
undertaking of that company or a
subsidiary undertaking of any parent
undertaking of that company, for the
time being;
"Insolvency Event" means, in relation to the Contractor,
any of the following events:
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(a) an order is made by a court of
competent jurisdiction, or a
resolution is passed, for the
winding-up of such party
(otherwise than a members'
voluntary winding-up in the
course of a reorganisation or
restructuring) or any
analogous proceeding or
action is taken; or
(b) a petition is presented to a
court of competent
jurisdiction for an order for
the administration of, or an
application is made for
analogous proceedings in
respect of, such party; or
(c) a manager, receiver,
administrative receiver,
liquidator, administrator,
trustee or other similar
officer is appointed over the
whole or a substantial part
of the undertaking, property
or assets of such party; or
d) any encumbrancer takes
possession of the whole or
substantial part of the
undertaking, property or
assets of such party; or
(e) such party stops payment or
threatens to stop payment of
its obligations generally or
cease to carry on its
business or a substantial
part thereof (except for the
purpose of a reconstruction
or amalgamation approved by
the other party); or
(f) such party convenes a meeting
of its creditors or makes or
proposes any arrangement or
composition with, or any
assignment for the benefit
of, its creditors; or
(g) a petition is presented for a
bankruptcy order against such
party, or such party being an
individual, has an interim
order made against him
pursuant to section 251 of
the Insolvency Xxx 0000,
makes an arrangement or
compounds with his creditors
generally, applies for an
interim order under section
253 of the Insolvency Xxx
0000 in connection with a
voluntary arrangement under
the Insolvency Xxx 0000 or is
made the subject of analogous
proceedings or makes
analogous arrangements or
applications in any
jurisdiction; or
(h) such party is dissolved or
ceases to exist; or
(i) any other similar proceedings
to any of the above (a) to
(h) are effected in any
jurisdiction in relation to
the Contractor.
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"Intellectual Property
Rights" means any intellectual property
rights of any nature whatsoever
existing in the United Kingdom or
elsewhere, including, without
limitation, patents, trade marks,
service marks, registered designs,
applications for any of the
foregoing, copyright rights in
designs, inventions, confidential
information and know how;
"Lottery" means the National Lottery as
defined in the National Lottery Act;
"National Lottery Act" means the National Lottery etc. Xxx
0000 as modified or reenacted or
both from time to time thereafter
and any subordinate legislation made
thereunder;
"OFLOT" means the office of the Director
General of the National Lottery,
appointed under the National Lottery
Act and/or the Director General
himself;
"Promotion Licence" means any licence current from time
to time under Section 6 of the
National Lottery Act to promote
lotteries;
"Running Licence" means the Licence current from time
to time under Section 5 of the
National Lottery Act to run the
Lottery;
"Specification" means:
(a) the detailed specification for
Tickets whether for general
use in the Lottery or for a
specific Lottery game
operated by Camelot pursuant
to a Promotion Licence and
agreed by Contractor in
relation to each Lottery game
(being the Working Papers for
each such game) as set out on
Schedule 1;
(b) any modification and
supplements to any of the
above documents agreed by the
parties and (if required)
approved by OFLOT;
(c) any modifications and
supplements to any of the
above documents arising from
a Change Order;
provided that, in the event of
conflict, the modifications and
supplements referred to in (c) shall
prevail over document (b), which
shall in turn prevail over document
(a);
"Territory" means the United Kingdom and such
other countries jurisdictions or
areas as may be specified by OFLOT
from time to time;
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"Tickets" means such instant or scratch off
Lottery Tickets for use in the
National Lottery which comply with
the Specification;
"Working Papers" means the papers agreed between the
Contractor and Camelot for each game
and the agreed Working Papers shall
constitute the Specification for
that game.
"Year" means each consecutive period of
twelve (12) months during the
currency of this Agreement,
beginning on the date of this
Agreement, and each anniversary
thereof.
1.2 In this Agreement, a reference to:
1.2.1 (subject to Clause 1.4) a statutory provision
includes a reference to:
(a) the statutory provision as modified or
re-enacted or both from time to time (whether
before or after the date of this Agreement);
and
(b) any subordinate legislation made under the
statutory provision (whether before or after
the date of this Agreement);
1.2.2 persons includes a reference to any body corporate,
unincorporated association or partnership;
1.2.3 a person includes a reference to that person's legal
representatives or successors;
1.2.4 a Clause, party or Schedule, unless the contrary is
indicated, is a reference to a clause or a party or
schedule to this Agreement.
1.3 Words and expressions contained in this Agreement which are
not defined in Clause 1.1 or elsewhere in this Agreement have,
unless the contrary is indicated, the same meaning as in or,
if the definition of the relevant word or expression is
changed therein, the Running Licence.
1.4 Subject to Clause 1.3, words and expressions contained in this
Agreement which are not defined in Clause 1.1 or elsewhere in
this Agreement have, unless the contrary is indicated, the
same meaning as in the Act, but excluding any statutory
modification to the Act not in force at the date of this
Agreement.
1.5. The Schedules form part of this Agreement and shall have the
same force and effect as if set out in the body of this
Agreement and references to this Agreement include the
Schedules.
1.6 Except to the extent that the context requires otherwise, any
reference in this Agreement to this Agreement, the Running
Licence or any other agreement or document is a reference to
this Agreement or, as the case may be, the Running Licence,
the relevant agreement or document as from time to time
amended, supplemented or novated and includes a reference to
any document which amends, supplements or novates this
Agreement or, as the case may be, the relevant agreement or
document.
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1.7 The headings of this Agreement shall not affect the
interpretation of this Agreement.
2. TERM AND CONDITIONS PRECEDENT
2.1 This Agreement is conditional upon the continuing approval
by OFLOT of the identity of the Contractor. In the event that
the approval of OFLOT shall not be forthcoming, this Agreement
shall terminate and Camelot shall have no liability in respect
of such non-approval and termination. All and any costs,
expenses and other outgoings incurred by the Contractor prior
to approval by OFLOT shall be for the Contractor's own
account.
2.2 This Agreement is conditional upon the Contractor having
provided and continuing to provide the appropriate Schedule 10
declarations as required by OFLOT.
2.3 Subject to the earlier termination provisions of Clause 24
hereof, this Agreement shall commence on the date of signature
by the parties and shall continue until 31 December 1997.
Thereafter (upon the written agreement of Camelot and the
Contractor to extend this Agreement which (if given) shall be
given not later than 30 September in each relevant Year), this
Agreement shall be extended from Year to Year upon the terms
and conditions herein contained until expiry or earlier
termination of Camelot's Running Licence.
3. SUPPLY OF TICKETS
3.1 The Contractor shall supply instant lottery Tickets to Camelot
in accordance with the Specification set out in Schedule 1 and
in the quantities required by Camelot set out in Schedule 2,
which shall be set out in the Working Papers for each game.
Separate purchase orders shall be issued for each game. A
signed Working Paper is Camelot's agreement to issue such a
purchase order.
3.2 The Contractor acknowledges that time is of the essence in
performing its obligations pursuant to this Agreement.
4. DELIVERY, CARRIAGE, INSURANCE AND CUSTOMS DUTIES
4.1 Tickets shall be shipped from the Contractor's printing
facility to Camelot's Northampton, England warehouse in
accordance with the delivery schedules set forth in the
Working Papers for each game. The Contractor shall pay total
shipping costs and insurance to Camelot's Northampton
Warehouse. Camelot shall pay V.A.T. and customs duty.
4.2 The data processing tapes produced by the Contractor for the
high and low tier validation files for each game, full
accounting and inventory records for each game and the ticket
validation tapes for each game shall be shipped from the
Contractor's printing facility to Camelot's headquarters in
Watford, England. The Contractor shall pay total shipping
costs and insurance. Camelot shall pay V.A.T. and customs
duty.
4.3 The Contractor shall make available the Tickets in accordance
with the delivery schedule agreed by Camelot provided that if
Camelot requires any consignments of Tickets to be stored
other than in bulk storage the Contractor shall be entitled to
charge Camelot an additional charge for storage.
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4.4 The Contractor warrants to Camelot that all consignments of
Tickets shall be delivered by the date specified in Schedule
2. In the event of any delay the Contractor shall be liable
to pay liquidated damages at the rate of 1% per day or part
day of delay of the price of the Tickets as specified in
Schedule 2 which have not been delivered and such liquidated
damages shall accrue from the date on which delivery should
have been made until delivery is actually made provided that
if the delay in delivery of any consignment exceeds 30 days
Camelot shall be entitled to terminate this Agreement
immediately by notice in accordance with Clause 24.2.1.
Camelot shall be entitled to offset any liquidated damages
against any sum which it may owe to the Contractor. The
parties acknowledge that the calculation of liquidated damages
is a genuine pre-estimate of the loss and damage which Camelot
may suffer as a result of late delivery.
4.5 The Contractor shall, at its own cost, obtain and maintain in
force for the duration of this Agreement an on demand
irrevocable performance bond or bank guarantee in the amount
of Five Hundred Thousand Pounds Sterling (L.500,000). The
performance bond or bank guarantee shall be provided by a
prime London bank or insurance company acceptable to and in a
form acceptable to Camelot and shall entitle Camelot to call
the performance bond or bank guarantee on first written demand
in the event of Camelot certifying to the bank or insurance
company that the Contractor is in default of its obligations
hereunder, subject to the provisions of Clause 25 below.
4.6 For the purposes of the Contractor's obligations hereunder,
the Contractor shall obtain at its own cost, and maintain in
force for the duration of this Agreement insurances of the
type and with the extent of cover specified in Schedule 3.
Insurance shall be provided only by prime, reputable insurance
companies acceptable to Camelot.
4.7 In relation to each insurance policy specified in Schedule 3
so obtained, the Contractor shall procure that:
(a) each insurer provides detailed certificates of
insurance cover before either the Contractor starts
to perform any of its contractual obligations or
within 30 days of the Agreement being executed by
both parties, whichever date is the sooner;
(b) all policies of insurance so obtained waive rights of
subrogation against Camelot; and
(c) each insurer shall notify Camelot in writing not less
than 30 days before the cancellation or termination
date in respect of each policy of insurance
underwritten by the insurer.
5. PRICE, TERMS OF PAYMENT AND TICKET REQUIREMENTS
5.1 In consideration of the Contractor supplying Camelot with the
Tickets in accordance with this Agreement, Camelot shall pay
the Contractor the price calculated in accordance with
Schedule 2, including the options described therein. All
prices stated therein include delivery and insurance to
Camelot's Northampton warehouse via seafreight and overland
truck but are exclusive of V.A.T. and customs duty. Camelot
shall pay V.A.T. and customs duty.
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5.2 All sums payable by Camelot to the Contractor in respect of
the price for Tickets shall be paid within sixty (60) days of
delivery to Camelot's Northampton warehouse or receipt of
invoice, whichever is the later. Camelot shall be entitled
to a discount of 1.1% for payment within seven (7) days of
delivery or receipt of invoice, whichever is the later.
Camelot shall pay a late charge of 0.5% per month for payments
more than sixty (60) days following delivery or receipt of
invoice, whichever is the later, provided that all payments
shall be made within one hundred twenty (120) days of delivery
or receipt of invoice, whichever is the later.
5.3 If, in any of Camelot's financial years, sales by Camelot of
instant tickets manufactured under this Agreement exceed
L.1.43 billion (L.1,430,000,000), Camelot shall pay the
Contractor a sum attributed to the Contractor's marketing
advice. This sum shall be calculated by multiplying L.0.30
per 1,000 tickets sold by Camelot in excess of L.1.43 billion
and if due, shall be paid by Camelot in a lump sum within 30
days of the end of the financial year. Camelot's auditor's
report confirming the amount of instant tickets sold shall be
conclusive in the absence of manifest error.
5.4 In the event that the parties agree to extend this Agreement
in accordance with the provisions of Clause 2.3, the ticket
prices as set forth in Schedule 2 (and which have two
components, a printing price and a freight price) shall be
reviewed with effect from 1st January 1998 (the Effective
Date) and 1st January in each year thereafter and shall be
increased or decreased, as the case may be, in the following
manner.
Paper costs (which it is agreed represent 35% of the ticket
printing price) will be increased or decreased, as the case
may be, from the Effective Date by reference to the increase
or decrease in the US Producer Price Index for Paper in the
preceding year.
The balance of the 65% of the ticket printing price will be
increased or decreased, as the case may be, from the Effective
Date by reference to the increase or decrease in the US
Producer Price Index in the preceding year provided that the
effect of the US Producer Price Index on the 65% proportion of
the price shall not exceed 3%.
Freight costs will be increased or decreased, as the case may
be, from the Effective Date by the actual increase or decrease
in such costs in the preceding year.
5.5 In accordance with the requirements of Clause 7.1(c)(iv), the
Contractor shall obtain the prior written approval of Camelot
before producing Tickets for Camelot with "new technology."
For the purposes of this Clause, "new technology" means a
major innovation or enhancement in the manner of production or
in the materials used for the production of instant lottery
tickets which results in tickets that are in Camelot's
reasonable opinion materially different from those produced
before. With respect to tickets produced with new technology
which, in Camelot's sole opinion, are unsuitable for its
operation, there shall be no obligation upon Camelot to accept
such tickets.
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5.6 The pricing provided by Contractor to Camelot in this
Agreement is based upon Camelot's purchase of all of its
instant lottery ticket requirements from the Contractor from
and after the date of signature by the parties. Camelot
agrees that it shall purchase its instant lottery Tickets
exclusively from the Contractor from and after the date of
signature of the parties, provided that Camelot's existing
commitments to Xxxxxxx Banknote Limited to print "Go For It"
in May 1996 (26,000,000 tickets) and "Scratch of the Day" in
June 1996 (80,000,000 tickets) for an aggregate total of
106,000,000 tickets will be honoured. All instant lottery
ticket purchases by Camelot shall be shown on Camelot's
auditor's report provided to Contractor by Camelot.
5.7 Camelot shall pay to the Contractor a charge of L.16,025 for
any printing delay caused by or at the request of Camelot,
once Working Papers have been signed and the press date has
been established. Camelot shall pay to the Contractor a
charge of L.22,435 for any printing cancellation at the
request of Camelot, once Working Papers have been signed and
the press date has been established. The total of these sums
shall be in full settlement of such delay and/or cancellation,
as the case may be.
5.8 Prior to the expiration of this Agreement, the Contractor will
produce a minimum of 50,000,000 Tickets for Camelot printed in
the UK. In the event that the Contractor fails to do so,
Camelot will have the option of purchasing up to 50,000,000
Tickets from a UK printer notwithstanding the exclusivity
requirements of this Agreement.
5.9 Prices in Schedule 2 will apply to the game "Pigs Might Fly"
being printed by the Contractor in May 1996. On or before 31
December 1996, the Contractor will reimburse or credit Camelot
for the difference in price between the price set forth on
Schedule 2 and the price charged for this game in its Working
Papers.
6. TITLE
6.1 Title to Tickets supplied to Camelot shall pass on receipt of
the consignment by the Contractor's shipping agent provided that
the Contractor shall be responsible for delivery of such
consignment to Camelot's Northampton warehouse in accordance
with Clause 4.1 and shall bear all risks in connection
therewith.
7. WARRANTIES BY CONTRACTOR AND LIABILITY
7.1 The Contractor warrants and undertakes to Camelot that:
(a) it shall use all reasonable care and skill in
supplying the Tickets and acknowledges that Camelot
is relying on the Contractor to supply Tickets fit
for the purpose referred to in Clause 7.1c;
(b) that the Tickets shall be printed in facilities
appropriate to the instant lottery printing industry
which operate with security systems, conditions and
procedures appropriate to the instant lottery ticket
printing industry and that the Contractor shall
comply in all respects with Condition 15 of the First
Running Licence relating to secure areas;
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(c) Tickets supplied to Camelot under this Agreement
shall:
(i) be of merchantable quality and fit for the
purpose of being issued, distributed, sold
and used as scratch off instant lottery
Tickets in the Lottery;
(ii) be free from defects in design, material and
workmanship;
(iii) conform to the specification in the Working
Papers (and to the instant validation
algorithm referred to in Clause 19 hereof);
(iv) be manufactured using that manufacturing
process described in Schedule 6 hereto which
describe the manner of manufacture of Tickets
heretofore manufactured by the Contractor.
This process may be changed only after
samples produced using any such revised
process have been previously approved by
Camelot in writing and the provisions of
Clause 5.5 shall apply;
and
(v) comply in all respects with all statutes,
statutory rules, orders, codes and
regulations which may be in force from time
to time in so far as any of these relate to
the manufacture or transportation of Tickets
or to the performance by the Contractor of
any of its obligations hereunder.
7.2 In order to check that the Contractor is complying with its
obligations pursuant to this Agreement including in particular
complying with the specification in the Working Papers,
Camelot or its nominated agents shall have the right (A) to
inspect and/or carry out inventories of Tickets at the
manufacturing facilities of the Contractor upon giving
reasonable notice to the Contractor; (B) to inspect, examine
and test plant and machinery and materials used in the
manufacture of the Tickets; (C) audit the quality control
process; and (D) audit the security procedures. No such
inspection, examination, testing or audit shall in any way
release the Contractor from any of its obligations under this
Agreement. The cost of conducting all inspections and audits
described in A, B, C, and D above shall be borne by Camelot.
If any inspections, audits, or tests are made by Camelot or by
the Contractor as a result of these changes by the Contractor
to processes or plant, then the cost and expenses attributable
to the visit(s) to the Contractor's plant (subject to
verification thereof) will be borne by the Contractor.
7.3 Camelot shall be entitled to carry out random sample testing
of any consignment of Tickets delivered to Camelot to ensure
that Tickets therein comply in all respects with the
specification in the Working Papers. If a single ticket in any
pack within a consignment fails to conform to the
specification Camelot shall be entitled to reject the entire
pack. Camelot shall be entitled to recall any Tickets which
have been distributed by Camelot to its agents for sale to the
public if, after delivery to Camelot, any such Tickets are
determined by Camelot to be defective.
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7.4 Without prejudice to any other rights of Camelot hereunder,
the Contractor undertakes to Camelot that the Contractor shall
either:
i. promptly replace any defective Tickets, at Camelot's
option for a period of one hundred and twenty (120)
days from the date of delivery of such Tickets to
Camelot's Northampton warehouse and provided always
that Camelot shall promptly notify Contractor of the
specific problem or defect and the consignment number
or batch number of the defective Tickets; or
ii alternatively, at Camelot's option, the Contractor
shall give a refund or credit for the cost of the
defective Tickets and shall reimburse Camelot's own
costs and expenses (subject to verification thereof)
incurred in connection with recalling or preventing
the distribution or sale of such defective Tickets to
third parties.
Without prejudice to the foregoing provisions of this Clause,
at no time will Camelot exercise its option under 7.4i unless
the quantity of defective Tickets is five million or more.
Where the quantity of defective Tickets is less than five
million, 7.4ii will therefore prevail.
7.5 Notwithstanding Clause 7.4, the Contractor shall not be
obliged to replace any defective Tickets after delivery to
Camelot if the Contractor proves that the defect or damage to
the Tickets has been caused by any of the following causes not
attributable to the Contractor, its suppliers, sub-contractors
or agents: act or omission of Camelot or its suppliers,
sub-contractors or agents, theft from Camelot's Northampton
warehouse (or following delivery to Camelot's Northampton
Warehouse), accident, neglect, abuse, misapplication,
incorrect storage or acts of nature or man (other than normal
wear and tear).
7.6 The Contractor shall at its own expense be responsible for the
destruction of any defective Tickets notified by Camelot to
the Contractor. This responsibility shall include the
collection of such Tickets if so required by Camelot.
8. INTELLECTUAL PROPERTY RIGHTS
8.1 Copyright in any work carried out by the Contractor under this
Agreement shall be the property of Camelot and the Contractor
shall take all such steps as may be required to vest ownership
thereof in Camelot.
8.2 Camelot shall at its own expense carry out a trademark search
in the United Kingdom of all names selected for any instant
lottery games. Camelot shall at its discretion decide if the
selected names are satisfactory.
8.3 Save as provided in Clause 8.4, if the Contractor wishes or is
required to pay a royalty to a third party for the use of that
third party's intellectual property in connection with the
manufacture or supply of Tickets the Contractor shall:
(a) ensure that it obtains such sublicence as may be
required by Camelot to enable the Tickets to be
distributed and sold in the Lottery;
(b) pay the costs of such royalty payment itself.
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8.4 If Camelot wishes to use a third party's trademark, design
right or copyright in any name or ticket design for an instant
lottery ticket game, Camelot shall procure that the third
party licenses Camelot on terms acceptable to Camelot and
Camelot shall be responsible for paying any royalty to the
third party.
9. INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS
9.1 The Contractor warrants and undertakes to Camelot that the use
by Camelot in accordance with this Agreement of the
Intellectual Property Rights (if any)licensed to Camelot and
the provision and use in accordance with this Agreement of
such goods and services as are provided to Camelot under this
Agreement shall not constitute an infringement of the
Intellectual Property Rights of any third party.
9.2 Conditional upon Clause 9.3 and 9.4 the Contractor shall
defend, hold harmless and indemnify Camelot against all
damages awarded against Camelot as a result of any action
brought against Camelot and any amount paid by Camelot as a
result of a settlement of such an action by Camelot to the
extent that such action is based upon a complaint that the
provision and use in accordance with this Agreement of such
goods and services as are provided to Camelot by the
Contractor under this Agreement constitutes an infringement of
the Intellectual Property Rights of any third party (an "IPR
Claim") and against any reasonable costs and expenses incurred
in the course of defending an IPR Claim.
The Contractor shall not be liable for actions taken at the
instruction of Camelot after the Contractor has expressed
written reservations to such actions. Camelot shall promptly
notify Contractor in the event of an IPR Claim so that
Contractor shall be permitted to provide timely defense of
such IPR Claim.
9.3 Camelot agrees that:
9.3.1 it shall immediately notify the Contractor of any IPR
Claim of which it has notice,
9.3.2 it shall not make any admission as to liability or
agree to any settlement of or compromise any IPR
Claim without the prior written consent of the
Contractor.
9.4 Nothing in Clause 9.2 shall relieve Camelot of its obligation
to mitigate to the extent reasonable any loss, damages, costs
and expenses arising as a result of any IPR Claim.
9.5 The Contractor (or any person acting on behalf of or
authorised by the Contractor) shall, at its own expense, be
entitled to have sole conduct and control of and/or settle all
negotiations and litigation arising from any IPR Claim and
Camelot shall, at the Contractor's request and expense,
promptly give the Contractor all reasonable information in
connection with those negotiations and litigation.
9.6 Without prejudice to Clause 9.2, in connection with any IPR
Claim, the Contractor may at its own expense:
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9.6.1 procure the right for Camelot to continue to use the
Intellectual Property Rights (if any) licensed under the
provisions of this Agreement and such goods and services as
are provided to Camelot by the Contractor under this Agreement
in accordance with this Agreement; or
9.6.2 with the prior written consent of Camelot, modify the goods or
services or replace the goods or services and or any parts
thereof with goods or services of the same or superior quality
so as to avoid the infringement or alleged infringement but
maintaining compliance of the specification with the Running
Licence and any other request of OFLOT.
9.7 The Contractor shall have no liability for any third party
claim concerning infringement of any Intellectual Property
Rights except as expressly provided by this Clause 9.
9.8 This Clause 9 shall survive the expiration or earlier
termination of this Agreement until the expiry of the relevant
statute of limitation which may apply to any claim hereunder.
9A. PRINTING OF CONTRACTOR'S NAME ON TICKETS
In consideration for Camelot permitting the Contractor to
print its name on the back of Tickets, in a manner
pre-approved in writing by Camelot and subject always to any
instruction or direction to the contrary which OFLOT may give
from time to time, the Contractor agrees to pay Camelot the
sum of L.5,000. TDLR in furtherance of the services
contemplated in Clause 34 hereof will invoice this amount to
the Contractor on behalf of Camelot and Camelot will in turn
invoice TDLR, plus any applicable VAT.
10. CONFIDENTIALITY
10.1 As used herein, "Property" means all formulae, processes,
tools, developments, inventions, products and components
thereof, and all commercially valuable things (including
without limitation hardware and software) directly or
indirectly provided under or in connection with this
Agreement.
10.2 As used herein, "Confidential Information" means all
information of a confidential nature (including, without
limitation, all trade secrets, financial, operating, economic,
technical, engineering, programming and other technical,
commercial and lottery know-how) and any copies or records
thereof, whether presented orally or in writing, in any
medium, directly or indirectly disclosed by either party to
the other pursuant to or in connection with this Agreement
(including but not limited to all negotiations preceding this
Agreement), provided that said information is descriptive or
used or useful in connection with the creation, development,
modification, production, testing, maintenance, marketing or
other use of Property. "Confidential Information" shall not
include information which is:
(a) in the public domain otherwise than in circumstances
giving rise to a breach of the terms of this
Agreement or the earlier agreement between the
parties dated June, 1995;
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(b) already known to the recipient at the time that said
information is disclosed by the disclosing party
provided that said knowledge is documented by records
in the disclosing party's possession predating such
disclosure;
(c) subsequently received by the recipient in good faith
from a non-party to this Agreement who has the prior
right to make such subsequent disclosure;
(d) approved in writing for unrestricted release or
unrestricted disclosure by the recipient; or
(e) developed independently by the recipient other than
from information disclosed by the disclosing party or
disclosed in breach of any of the obligations
contained in this Clause 10.
10.3 The recipient hereby acknowledges that all Confidential
Information is vital to the disclosing party's business and
success. Therefore, the recipient agrees that it shall at all
times keep all Confidential Information in the strictest of
confidence. Camelot further agrees that, without the
Contractor's prior express written consent, it shall never
disclose, directly or indirectly, in whole or in part, alone
or in conjunction with others, any Confidential Information to
anyone, other than its shareholders or the employees or
advisers of any of them with a need to know such Confidential
Information for purposes contemplated by this Agreement, or to
any third party retained to provide services to Camelot in
connection with this Agreement provided that such third party
needs to know such Confidential Information and executes a
confidentiality agreement with the Contractor in a form
approved by Camelot prior to the disclosure of any
Confidential Information to said third party and provided that
Camelot shall, at the Contractor's expense, provide the
Contractor with details of all Confidential Information which
is disclosed to such third party and shall assist the
Contractor in procuring the destruction or return of all
documents and other material in the possession, custody or
control of such third party that bear or incorporate any such
Confidential Information when it is no longer necessary for
the third party to possess or have custody or control of such
documents and other material.
10.4 Notwithstanding Clause 10.3, Camelot shall be entitled to
produce or disclose Confidential Information as required by
applicable law, regulation or court order or by any regulatory
body including OFLOT or stock exchange provided that Camelot
has (if reasonably practicable) given the Contractor prior
written notice of such request such that the Contractor has an
opportunity to defend, limit or protect such production or
disclosure.
10.5 Subject to Clause 10.3 and 10.4, each recipient further agrees
that neither it nor any of its employees shall in any way
(directly or indirectly, in whole or in part, alone or in
conjunction with others) disclose, use or copy in any medium
any Confidential Information without the disclosing party's
prior specific written authorization. Any authorized
reproduction, in whole or in part, in any medium, of documents
or other media containing Confidential Information made by the
disclosing party shall bear any copyright, trademark, patent
and other proprietary notices appearing on the original.
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10.6 Each recipient shall take all reasonable measures to protect
the confidentiality of Confidential Information. Without
limiting the foregoing, and in addition to any requirements
set forth in this Clause 10, the recipient shall employ
security measures and a degree of care regarding Confidential
Information which are at least as protective as those employed
by the recipient regarding its own proprietary property and
confidential information.
10.7 Without prejudice to Clause 24, the recipient undertakes
within seven (7) days of a written request of the disclosing
party in the event of a material breach of this Clause 10 by
the recipient or on termination of this Agreement whichever is
earlier and at the option of the disclosing party:
10.7.1 promptly to return to the disclosing party all
relevant Property (to the extent that such Property
was supplied by or on behalf of the disclosing
party to the recipient and to which the recipient
does not have title), documents and other material
in its possession, custody or control that bear or
incorporate any of the disclosing party's
Intellectual Property Rights or Confidential
Information; or
10.7.2 promptly to destroy by shredding or incineration
all documents and other material in its possession,
custody or control which bear or incorporate any
part of the disclosing party's Confidential
Information and to certify to the disclosing party
that this has been done.
10.8 In the event that the recipient is obliged to return Property,
documents and other material to the disclosing party pursuant
to Clause 10.7 as a result of (i) a breach of this Clause 10
or (ii) termination of this Agreement as a result of a
revocation of Camelot's Running Licence and/or any Promotion
Licences other than due to the fault of the Contractor, such
return shall be at the recipient's cost (as the case may be).
In all other circumstances such return shall be at the
disclosing party's cost.
10.9 This Clause 10 shall without time limitation survive the
expiration or termination of this Agreement.
11. COMPLIANCE WITH RUNNING LICENCE
1 1.1 The Contractor acknowledges:
11.1.1 that it has read and understands the provisions of the
Running Licence; and
11.1.2 that Camelot is relying upon the Contractor (amongst
others) to perform its obligations under this
Agreement in such a way as to enable Camelot to comply
with the requirements of the Running Licence; and
l 1.1.3 that Camelot is responsible to OFLOT for any act or
omission of the Contractor and their respective
sub-contractors or suppliers, which affect compliance
with the Running Licence.
11.2 The Contractor shall (insofar as the requirements of the
Running Licence relate to and are connected with the goods and
services provided or to be provided by the
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Contractor under this Agreement) use its best endeavours to
enable Camelot to comply with the requirements of the Running
Licence, in each case taking into account any particular
requirements of or determination by OFLOT.
11.3 Without in any way limiting the generality of Clause 11.1 and
11.2 above, the Contractor agrees that it will provide OFLOT
from time to time with such information and such access to
premises, books, accounts, records and other items referred to
in condition 22(1) and condition 22(3) of the Running Licence
and employees as may enable OFLOT to satisfy itself in the way
envisaged in conditions 22(1) and 22(3)(a) and (b) of the
Running Licence (insofar as any of the same relate to and are
connected with the goods and services provided or to be
provided by the Contractor under this Agreement) and shall use
its best endeavours to procure the provision of like
information and access to its sub-contractors and suppliers,
as in all cases OFLOT from time to time may require in order
to satisfy the requirements of the Running Licence
11.4 Without limiting the generality of Clauses 11.1 and 11.2, the
Contractor shall take all appropriate steps including without
limitation the measures listed in paragraph 2 of condition 14
of the Running Licence (insofar as they relate to and are
connected with the goods and services provided or to be
provided by the Contractor under this Agreement) to enable
Camelot to comply with condition 14 of the Running Licence.
11.5 The Contractor shall establish and maintain to Camelot's
reasonable satisfaction adequate systems of control over all
applicable operations comprised in its business in relation to
the matters referred to in condition 22(5) of the Running
Licence and shall use its best endeavours to procure parallel
obligations from those sub-contractors and suppliers whom
OFLOT is required to approve under the Running Licence.
11.6 The parties shall promptly establish and implement a procedure
pursuant to which the Contractor shall provide details of its
connected parties and changes in such connected parties and
procure relevant undertakings to be given to OFLOT so as to
enable Camelot to comply with its obligations under condition
24 of the Running Licence.
11.7 Without limiting the generality of Clauses 1.1.1 and 11.2, the
Contractor shall use its best endeavours to procure that each
of its agreements with its sub-contractors and suppliers
(insofar as the same may be involved in the supply of goods
and services provided or to be provided by the Contractor
under this Agreement) (together "Sub-Contractors") contains
provisions as between the Contractor and the said Sub-
Contractors in like terms as those contained in this Clause 11
and Clauses 24 (Termination) and 29 (Assignment and
Subcontracting) and shall use its best endeavours to procure
that each Sub-Contractor imposes a like obligation upon each
of its Sub-Contractors in respect of their own sub-contracts
and supplier agreements.
12. PRIZE GUARANTEES
The Contractor shall submit with each game to Camelot's Internal Audit
Manager and Instant Tickets Logistics Manager an audit letter relating
to the production of each game signed by a major international firm of
accountants acceptable to Camelot and in the form
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specified in Schedule 4. The value of the prizes in the
Tickets delivered for each game shall be within +/- 1.0% of
the expected value for the quantity delivered based on the
prize structure in the approved Working Papers for each
game.
13. SECURITY ANALYSIS AND REPORT
13.1 The Contractor shall provide Camelot with a ticket risk
assessment report six months after the date of signature of
the Agreement and every six months thereafter. The report
shall analyse the strengths and weaknesses of the current
technology of the Contractor (including the manufacturing
process and the tickets) having regard to the instant lottery
ticket printing industry and current technological
developments intended to enhance ticket security.
14. SECURITY BREACH
14.1 The Contractor shall conduct regular security checks during
its manufacturing and delivery process to include (but not be
limited to) the items listed in Schedule 5. If the Contractor
discovers any breach of security (including but not limited to
theft or disappearance of any paper stock, tickets, waste,
merger tapes, program tapes or the like) it shall immediately
notify Camelot's Director of Security by telephone of such
breach and thereafter shall also provide Camelot with written
notification of the breach and describe the remedial steps to
be taken which shall be to the satisfaction of Camelot.
14.2 Without prejudice to the Contractor's obligations under this
Agreement, Camelot shall be entitled to require the
Contractor to provide additional or alternative security,
subject always to agreement upon the costs thereof.
15. ACCOUNTING RECORDS
The Contractor shall maintain all ticket validation, financial and
accounting records and other evidence relating to the Contract and the
performance of its obligations hereunder (collectively referred to in
this Clause as the "records"). The Contractor shall maintain financial
and accounting records in accordance with generally accepted
principles of accounting acceptable to the Contractor or as specified
by Camelot.
The Contractor shall make the records available to Camelot and such
other persons as they may decide for inspection subject to Camelot
giving not less than 5 working days' notice thereof where practicable.
The Contractor shall preserve such records for three (3) years from
the date of the final payment due under the Contract and any extension
thereof.
16. TICKET PURCHASE AND PRIZE PAYMENT RESTRICTIONS
16.1 The Contractor shall procure that none of its directors,
officers or employees shall participate in or purchase any
ticket or receive any prize in any instant ticket game of the
Lottery.
16.2 The Contractor shall notify Camelot promptly upon signature of
this Agreement with the names and addresses of its directors
and officers and such of its employees as shall be involved in
fulfilling the Agreement and shall promptly advise Camelot of
any changes in such details.
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17. FIELD SERVICE REPRESENTATIVE
The Contractor shall at its own cost nominate a field service
representative who shall be the coordinating contact with Camelot. The
field service representative nominated shall be suitably experienced
in instant lottery ticket games in order to be able to respond
promptly to Camelot's requests. The Contractor shall promptly replace
the field service representative within 10 days of Camelot's
requesting the Contractor so to do.
18. COMPUTER GRAPHICS CO-ORDINATION
The Contractor shall supply at its own expense at Camelot's premises
at Watford a duplicate of its colour printer used for ticket design in
the Contractor's design facility, for use in connection with the
Contractor's work for Camelot. Camelot acknowledges receipt of such
colour printer. At the end of the term of this Agreement the printer
will become the property of Camelot.
19 INSTANT TICKET ALGORITHM
The Contractor shall use the instant validation algorithm to produce
the low and high tier record and the validation and bar code data on
each ticket in accordance with the algorithm. The algorithm which is a
proprietary item of GTECH Corporation, Xxxx Xxxxxxxxx, Xxxxx Xxxxxx,
XXX ("GTECH") has been provided to the Contractor who has signed a
non-disclosure agreement with GTECH.
20. MARKETING SERVICES
20.1 During the Agreement the Contractor shall co-operate with
Camelot in discussing marketing plans and strategies for
Tickets and providing marketing assistance.
20.2 At the beginning of each financial year of the Agreement the
Contractor shall provide a marketing plan which is subject to
discussion and amendment by Camelot and which may or may not
be adopted by Camelot.
21. RETAILER TRAINING
The Contractor shall, at its own cost, co-operate and assist Camelot
in developing and providing training programs for retailers of Tickets
if they so request.
22. LOTTERY ANCILLARY ACTIVITIES
22.1 In this Clause 22 "lottery ancillary activities" shall have
the meaning set out in condition 4 of the Running Licence but
subject always to the limitation in Clause 22.6.
22.2 The Contractor shall not undertake or cause or knowingly
permit any other person to undertake any lottery ancillary
activities without the prior written consent of OFLOT, which
consent shall be sought by Camelot after consultation with the
Contractor.
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22.3 In the event that OFLOT shall give its prior written consent
in accordance with Clause 22.2, the Contractor shall provide
Camelot with an annual report of all lottery ancillary
activities undertaken by it within three months after the end
of that year.
22.4 If, at any time, OFLOT requires Camelot to stop any lottery
ancillary activities of the Contractor then carried on in
whole or in part by the Contractor which, in OFLOT's opinion,
jeopardise or may jeopardise any aspect of the operations of
the Lottery, the Contractor shall on written notice given by
Camelot to the Contractor cease and shall cause or procure (so
far as it is able) any sub-contractor to cease such lottery
ancillary activities forthwith.
22.5 The Contractor shall use all reasonable endeavours to impose
such like obligations to those contained in the foregoing
Clause 22.2 to 22.4 upon any sub-contractor or supplier to
whom the Contractor may sub-contract or delegate from time to
time the performance of any of its obligations under this
Agreement and shall use all reasonable endeavours to procure
that the sub-contractor shall, in turn, impose such like
obligations upon any further sub-contractor to whom the
sub-contractor may subcontract from time to time the
performance of any of its obligations under the subcontract.
22.6 It is recognised by the parties that the use or supply of
equipment or services in the course of the Contractor's or its
sub-contractor's or supplier's trade or business shall not
constitute a lottery ancillary activity, notwithstanding that
such equipment or services may be used or supplied by the
Contractor or its contractors or sub-contractors or suppliers
in connection with the Contractor's performance of its
obligations under this Agreement.
22.7 Without prejudice to Clause 22.6 should there be any doubt or
difference between the parties as to whether an activity
constitutes a lottery ancillary activity, Camelot shall, if
reasonably practicable, consult with OFLOT upon the matter.
23. CHANGE CLAUSE
23.1 The parties acknowledge that they have entered into this
Agreement on the basis of the Running Licence and the
application submitted by Camelot to run the Lottery. In the
event of OFLOT making any changes to the Running Licence or
the functional specification as contemplated in condition 17.6
of the Running Licence, or imposing any other requirements on
Camelot which result in or necessitate any material change(s)
to the nature, scope, specifications, implementation
(including the timing of any such implementation) acceptance,
testing or certification of any of the goods or services to be
supplied by the Contractor to Camelot under this Agreement,
Camelot shall advise the Contractor of this fact in writing
("Change Proposal"). The Contractor shall promptly evaluate
and advise Camelot on the proposed changes (including without
limitation the technical feasibility and commercial viability
of any such changes, any impact on the terms of this
Agreement, in particular the timing of the implementation
and/or delivery of goods or services as originally
contemplated under this Agreement and the costs of
implementing such changes). After consulting with the
Contractor and agreeing amendments to the Change Proposal
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and, subject to such Change Proposal being technically
feasible, Camelot may then order the Contractor to implement
such Change Proposal ("Change Order") irrespective of whether
the cost of implementation has been agreed, subject to the
provisions of Clause 23.3.
23.2 The Contractor shall promptly implement any Change Order
issued by Camelot in accordance with Clause 23.1.
23.3 Camelot shall pay the Contractor any additional costs as are
reasonably and properly incurred by the Contractor (other than
those arising as a result of the termination required by OFLOT
of any lottery sub-contract with the Contractor's suppliers
and sub-contractors) in providing goods and services under
this Agreement as a result of a Change Order subject always to
the Contractor bearing up to L.10,000 worth of such additional
costs as are reasonably and properly incurred in any 12 month
period arising in connection with Change Orders. In the event
of the Contractor and Camelot failing to agree on the costs of
any Change Order the matter may be referred at any time by
either party to an expert whose decision shall be final and
binding.
The expert shall be appointed by agreement between the parties
or failing agreement by the President for the time being of
the Institute of Chartered Accountants in England and Wales.
The terms of appointment of the expert shall include the right
to make an award of costs as he considers just and equitable.
The parties hereby undertake to supply the expert with all
such assistance, documents and information as he may
reasonably require for the purpose of his determination. The
parties do not intend the reference to an expert to constitute
an arbitration within the scope of any arbitration legislation
and agree the expert's decision is not a quasijudicial
procedure and that the parties shall have no right of appeal
against the expert's decision.
23.4 In the event that the Contractor considers any change(s) the
subject of a Change Proposal above to be technically
unfeasible or commercially unviable the Contractor and Camelot
shall consult and Camelot shall then consult with OFLOT with a
view to agreeing with OFLOT changes that are technically
feasible or commercially viable.
23.5 Any Change Order shall vary the provisions of the Agreement
which shall otherwise continue to bind both parties.
23.6 The provisions of this Clause 23 shall be without prejudice to
any liability of either party arising from any breach of this
Agreement by any party to this Agreement prior to any Change
Order.
24. TERMINATION AND BREACH
24.1 Without prejudice to the provisions of Clause 29.4, in the
event that the Running Licence (or any other Running Licence
subsequently granted to Camelot or a Camelot Group
undertaking) and/or Promotion Licences granted to Camelot or a
Camelot Group undertaking from time to time subsequently
expire, are terminated
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or revoked without new licences being granted or awarded to
any Camelot Group Company such that the Camelot Group
Undertaking does not hold a Running Licence and at least one
Promotion Licence, then (subject to Clause 24.4) this
Agreement shall terminate immediately.
24.2 In the event that:
24.2.1 the Contractor fails to deliver any consignment of
Tickets within thirty (30) days of the date
specified in the Working Papers therefor;
24.2.2 the Contractor commits a material breach of its
obligations under this Agreement and (if the breach
is capable of remedy) fails to remedy such breach
within thirty (30) days of written notice from
Camelot specifying the nature of the breach; or
24.2.3 the Contractor commits a persistent material breach
of its obligation under this Agreement, where any
material breach which, though remedied on each
occasion, is repeated three times in two calendar
months will be deemed to be a persistent material
breach; or
24.2.4 the Contractor suffers an Insolvency Event;
24.2.5 Force Majeure preventing or delaying the Contractor
from performing its obligations under this
Agreement exceeds 30 days then (subject to Clause
24.4)
Camelot shall be entitled to terminate this Agreement
forthwith by written notice to the Contractor either in whole
or in so far as it relates to specified goods or services.
24.3 In the event that OFLOT requires in the exercise of its
functions under the National Lottery Act that this Agreement
be terminated, this Agreement shall, on receipt by the
Contractor of written notice from Camelot of OFLOT's decision,
terminate forthwith or within such period OFLOT may specify.
For the avoidance of doubt such termination shall not of
itself constitute a breach of this Agreement by any party to
this Agreement (subject to Clause 24.4).
24.4 Any termination of this Agreement under this Clause 24 shall
not affect any accrued rights or liabilities of any of the
parties nor shall it affect the coming into force or
continuance in force of any provision of this Agreement which
is expressly or by implication intended to come into or
continue in force on or after such termination.
24.5 Camelot shall not be liable for special, indirect or
consequential losses or expenses suffered by the Contractor
howsoever arising, including without limitation loss of
anticipated profits, goodwill, reputation, business receipts
or contracts, or any losses whatsoever resulting from loss of
use, data or profits, or any damages suffered by the
Contractor as a result of a third party claim for any such
special, indirect or consequential losses or expenses arising
out of or in connection with this agreement, whether in an
action of contract, tort (including negligence) or otherwise,
provided that the foregoing shall not affect the duty (subject
to the provisions of this Agreement) of Camelot to pay for
Tickets supplied by the Contractor and accepted by Camelot.
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25. FORCE MAJEURE
25.1 Neither Camelot nor the Contractor shall be liable for any
delay in performing any obligation hereunder for any cause
beyond its reasonable control, including but not limited to
strike and labour disputes, accidents, war, invasion, riot,
rebellion, civil commotion, insurrection or any act or
judgment of any court granted in any legal proceeding, fire,
wind, lightning, explosion, volcanic eruption, compliance with
any law or governmental order, rule, regulation or direction,
shipping accidents and freight embargoes, but not including
faults or delays in deliveries from its sub-suppliers or
faults or delays by its sub-contractors in providing service
unless such faults or delays arise as a result of
circumstances beyond the reasonable control of such
sub-suppliers and sub-contractors such as those cited above
("Force Majeure") provided that the party claiming the benefit
of this Clause 25.1 shall have taken all reasonable
precautions to avoid and shall take all reasonable steps to
minimise the effect of the event of Force Majeure.
25.2 If either Camelot or the Contractor is delayed in performance
or fails to perform due to Force Majeure, the party claiming
delay or failure shall give the other party, in writing at the
earliest possible time, written notice of its claim for an
extension of time, together with a statement of the facts upon
which it bases its claim. If the causes of the delay or
failure to perform are agreed to be beyond the reasonable
control of the party claiming delay or failure to perform, the
other party shall grant reasonable extension(s) of time not
exceeding 30 days in the case of delays by the Contractor for
completion of the performance of its obligations under this
Agreement or any part thereof, provided that all reasonable
action has been taken by the delayed party to prevent such
delay or failure to perform from extending the time for
completion its obligations hereunder. If the delay caused by
Force Majeure exceeds 30 days Camelot shall be entitled to
terminate the Agreement forthwith pursuant to Clause 24.2.5.
25.3 Notwithstanding any other provision of this Agreement, with
effect from the occurrence of an event of Force Majeure as a
result of which the Contractor is unable to supply Tickets to
Camelot, Camelot shall be entitled to seek and contract for
supplies from a third party, until the event of Force Majeure
shall have ceased.
26. NOTICES
26.1 Any notice or other communication under or in connection with
this Agreement shall be in writing and shall be delivered
personally or by courier or sent by registered post (air mail
if overseas) or by telefax (with a copy duly sent by
registered post at the same time), to the party due to receive
the notice marked for the attention of the person or persons
and to the address or telefax number specified in Clause 26.2
(with if applicable, a copy of such notice at the same time
being delivered or sent in accordance with this Clause to the
person or persons at the address or telefax number specified
in Clause 26.2) or for the attention of such other person or
persons and/or to such other address or telefax number and/or
copied to such other person or persons as the relevant party
may from time to time specify by notice in writing to the
others.
26.2 The address and telefax number of each of the parties and the
person or persons for whose attention each notice or other
communication should be marked are as follows:
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26.2.1 Scientific Games Inc
0000 Xxxxxxxxx Xxxxx Xxxxxxx
Xxxxxxxxxx Xxxxxxx 00000 XXX
Telefax: 000-000-000-0000
For the attention of: Company Secretary
26.2.2 Camelot Group plc
The National Xxxxxxx
Xxxxxxx
Xxxxxxx Xxxx
Xxxxxxx XX0 0XX
Telefax: 00 (0)-0000-000000
For the attention of: Group Solicitor
26.3 Any notice or other communication delivered or sent in
accordance with Clauses 26.1 and 26.2 shall be deemed to have
been duly given:
26.3.1 if delivered personally or by courier, at 10 am
local time in the place of receipt on the first
(1st) Business Day after being left at the address
referred to in Clause 26.2;
26.3.2 if sent by mail other than air mail, on the third
(3rd) Business Day after posting it;
26.3.3 if sent by air mail, on the eighth (8th) Business
Day after posting it;
26.3.4 if sent by telefax, at 10 am local time in the
place of a receipt on the first (1st) Business Day
after completion of its transmission.
27. SEVERABILITY
The parties acknowledge that the provisions contained herein
(including without limitation any relating to Confidential
Information) are required for the reasonable protection of the
business interests of the parties. The illegality, invalidity or
unenforceability of any provision of this Agreement under any
applicable law shall not affect its legality, validity or
enforceability under any law of any other jurisdiction nor the
legality, validity or enforceability of any other provision, and to
this end the provisions hereof are declared to be severable.
28. SCOPE OF THE AGREEMENT: AMENDMENTS
28.1 This Agreement and the other documents referred to in this
Agreement shall constitute the entire agreement between the
parties relating to the subject matter thereof and expressly
exclude any warranty, condition or other undertaking implied
by law or by custom and supersede all previous such agreements
and understandings between the parties with respect thereto
and each of the parties acknowledges and confirms that it does
not enter into this Agreement in reliance upon any
representation, warranty, condition or undertaking not
expressly set out
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in the provisions of this Agreement or any of the documents
referred to in this Agreement. That certain Instant Lottery
Tickets Supply Agreement, dated June 1995, among Camelot,
Contractor and Xxxxxx De La Rue Limited is hereby terminated.
28.2 Save as otherwise expressly provided in this Agreement, no
variation of this Agreement shall be valid unless it is in
writing and signed by or on behalf of both parties.
29. ASSIGNMENT/SUB-CONTRACTING
29.1 The Contractor agrees that it shall not assign or transfer or
purport to assign or transfer any of its rights or obligations
under this Agreement to any person ("Person") without the
prior written consent of the other party (which shall not be
given unless OFLOT shall have first approved the Person
pursuant to its powers under condition 6 of the Running
Licence) and provided that (subject always to the prior
approval of OFLOT as aforementioned) Camelot shall be entitled
to assign its rights and obligations under this Agreement to a
group undertaking of their respective entities.
29.2 The Contractor shall not be entitled to sub-contract the
performance of any of its obligations under this Agreement to
any third party without the prior written consent of Camelot
and such consent is subject to OFLOT's approval. If such
consent and approval are obtained the Contractor shall
nevertheless remain fully responsible and liable for the
performance of all its obligations under this Agreement. In
particular (but without limitation to the generality of the
foregoing) the Contractor undertakes to ensure that any third
party to whom the performance of any of its obligations is
sub-contracted is made aware of and complies with the
obligations of confidentiality set out in Clause 10 of this
Agreement. The Contractor shall make available to Camelot on
request at intervals of not greater than six months (or such
shorter period as OFLOT may require) a list of the names and
addresses of sub-contractors appointed by the Contractor under
this clause with details of their responsibilities. The
Contractor shall also make available to Camelot details of any
other person who may, from time to time, perform any of the
obligations of the Contractor under this Agreement.
29.3 If OFLOT requires in the exercise of its functions under the
National Lottery Act that any lottery contract or lottery
sub-contract be terminated, the Contractor undertakes that it
will on receipt by the Contractor of written notice from
Camelot of OFLOT's decision terminate forthwith or within such
period as OFLOT may specify any lottery sub-contract (or use
all reasonable endeavours to procure the termination of any
lottery sub-contract as the case may be). For the avoidance of
doubt such termination of itself shall not constitute a breach
of this Agreement by any party to this Agreement.
29.4 If the Running Licence and all of the Promotion Licences
granted to Camelot subsequently expire, are terminated or
revoked without new licences being granted to Camelot such
that Camelot or any Camelot group company does not hold a
Running Licence and at least one Promotion Licence, Camelot
shall be entitled to assign its respective rights and
obligations under this Agreement (including the licences
granted hereunder and all Confidential Information) to a third
party to which a Running Licence has been granted, commencing
on the
-23-
24
expiry of Camelot's Running Licence and/or Promotion Licence,
provided that such third party enters into a written
undertaking with the Contractor to be bound by the terms and
conditions of this Agreement in a form reasonably acceptable
to the Contractor.
30. WAIVER
The failure to exercise or delay in exercising a right or remedy under
this Agreement shall not constitute a waiver of the right or remedy or
a waiver of any other rights or remedies and no single or partial
exercise of any right or remedy under this Agreement shall prevent any
further exercise of the right or remedy or the exercise of any other
right or remedy.
31. AUTHORITY
Each party represents and warrants to the other parties that the
execution, delivery and performance of this Agreement by such party
has been duly and validly authorised by its Board of Directors, that
the person(s) whom execute(s) this Agreement on its behalf is/are duly
authorised to do so, and that this Agreement will not contravene the
provisions of any applicable law or regulation or of any agreement,
indenture or other instrument to which it is a party.
32. GOVERNING LAW. JURISDICTION AND AGENTS FOR SERVICE
32.1 This Agreement is governed by, and shall be construed in
accordance with, English law.
32.2 The courts of England shall have exclusive jurisdiction to
hear and determine any suit, action or proceedings, and to
settle any disputes, which may arise out of or in connection
with this Agreement (respectively, "Proceedings" and
"Disputes") and, for such purposes, each party irrevocably
submits to the jurisdiction of the courts of England. For the
avoidance of doubt, nothing shall prevent a party enforcing a
judgment obtained in the courts of England against the
appropriate party in any jurisdiction.
32.3 Each party irrevocably waives any objection which it might at
any time have to the courts of England being nominated as the
forum to hear and determine any Proceedings and to settle any
Disputes and agrees not to claim that the courts of England
are not a convenient or appropriate forum.
32.4 Contractor hereby irrevocably appoints Wragge & Co, 00 Xxxxxxx
Xxx, Xxxxxxxxxx X0 0XX as its agent for service of legal
proceedings in England.
33. COUNTERPARTS
This Agreement may be executed in any number of counterparts each of
which when executed and delivered shall be an original, but all the
counterparts together shall constitute one and the same instrument.
-24-
25
34. SERVICES OF TDLR
TDLR agrees to perform such services as Camelot may request, and as
TDLR may agree to provide from time to time in relation to the supply
of instant tickets hereunder.
AS WITNESS the hands of the parties or their duly authorised representatives as
of the date of signature by the parties.
/s/ Xxxxxxx X. Xxxxxx
Signed for and on behalf of _____________________________________
SCIENTIFIC GAMES INC. Signature
Xxxxxxx X. Xxxxxx
_____________________________________
Name
President & CEO
_____________________________________
Position
10/JUN/96
_____________________________________
Date Signed
/s/ Xxxxx X. Xxxxxx
Signed for and on behalf of _____________________________________
CAMELOT GROUP PLC Signature
Xxxxx X. Xxxxxx
_____________________________________
Name
_____________________________________
Position
12/JUN/96
_____________________________________
Date Signed
Signed for and on behalf of _____________________________________
XXXXXX DE LA RUE LTD. Signature
_____________________________________
Name
_____________________________________
Position
_____________________________________
Date Signed
-25-
26
SCHEDULE 1
SPECIFICATION FOR INSTANT LOTTERY TICKETS
The Contractor and Camelot shall agree the Working Papers for each game and the
agreed Working Papers shall constitute the Specification for that game.
-1-
27
NOTE: THE MATERIAL HEREIN MARKED BY BRACKETS AND AN ASTERISK HAS BEEN DEEMED
CONFIDENTIAL BY SCIENTIFIC GAMES HOLDINGS CORP. AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE 2
PRICES, QUANTITIES AND DELIVERY
1. PRICES
Prices for the exact specification of product for each game will be determined
from the matrix below.
Notes:
a) All prices include delivery and insurance to Camelot's
warehouse at Northampton via overland truck and ocean freight.
b) All prices are in pounds sterling.
c) All prices are quoted exclusive of UK Value Added Tax and UK
customs duties.
d) Prices for intermediate quantities of tickets not specified on
the matrix will be determined by interpolation from the
matrix.
e) The prices are valid until 31st December 1997 and thereafter
(in the event that the Agreement is extended) pursuant to
Clause 2.3, in accordance with the provisions of Clause 5.4.
f) The prices are for tickets produced at Contractor's plants in
the United States.
g) Tickets printed in the UK will not exceed prices below by [*].
h) The ticket prices below contain two elements, a printing price
and a freight price. The freight element of the price for
each column is as follows:
1.8" x 4.0" - [*]
2.0" x 4.0" - [*]
3.0" x 4.0" - [*]
4.0" x 4.0" - [*]
The remainder is the printing price.
PRICE MATRIX FOR EXCLUSIVE SUPPLY
OF CAMELOT'S INSTANT LOTTERY TICKETS
Game Size 1.8 x 4.0 2.0 x 4.0 3.0 x 4.0 4.0 x 4.0
--------- --------- --------- --------- ---------
25,000,000 [*] [*] [*] [*]
50,000,000 [*] [*] [*] [*]
75,000,000 [*] [*] [*] [*]
80,000,000 [*] [*] [*] [*]
100,000,000 [*] [*] [*] [*]
125,000,000 [*] [*] [*] [*]
200,000,000 [*] [*] [*] [*]
300,000,000 [*] [*] [*] [*]
-1-
28
NOTE: THE MATERIAL HEREIN MARKED BY BRACKETS AND AN ASTERISK HAS BEEN DEEMED
CONFIDENTIAL BY SCIENTIFIC GAMES HOLDINGS CORP., AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
2. REORDERS
a) If an order in process (on the press) is increased, the price
shall be the price for the total quantity of the tickets
ordered.
b) For orders previously completed (off the press), the reduction
to rerun the game as a continuation of the original game:
[*] per reorder (using the price matrix for
quantity reordered)
3. OPTIONS
a) Additional cost per thousand for each additional graphic colour
over four or any reduction for colours less than four.
Additional Colour(s) Price Increase/Colour [*] /per 1,000 Tickets
Reduction of Colour(s) Price Decrease/Colour [*] /per 1,000 Tickets
Number of Graphic Colour Stations Available 8 total graphic colours
including display, back and
overprint.
b) Cost per thousand for perforated stub, with and without image
information.
i) Without Imaging [*] /per 1,000 Tickets
ii) With Imaging [*] /per 1,000 Tickets
c) Cost per thousand for die-cut tickets [*] /per 1,000 Tickets
d) Cost per thousand for scene changes in printing [*] /per 1,000 Tickets
e) Cost per scene for multiple scenes within a game
i) Alternative Graphic Scene [*] per Scene
ii) Alternative Photographic Scene [*] per Scene (transparencies provided)
f) Cost per thousand for colour pulsing - background
colour changes within a press run [*] per colour change
g) Increase in cost per thousand for printing on 0.25
mm aluminum foil ticket (total board/foil weight
200-220 g/m2) US equivalent: approx 10 pt. [*] /per 1,000 Tickets
h) Cost per thousand for insertion into shrink wrapped
packs. Cards, retailer instructions, redemption
envelopes or similar items. [*] /per 1,000 Tickets
-2-
29
NOTE: THE MATERIAL HEREIN MARKED BY BRACKETS AND AN ASTERISK HAS BEEN DEEMED
CONFIDENTIAL BY SCIENTIFIC GAMES HOLDINGS CORP., AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
i) Cost per thousand tickets for coloured foil
i) Gold [*] /per 1,000 Tickets
ii) Other [*] /per 1,000 Tickets
j) Cost per thousand, if any, for ticket packaging in quantities
other than 200.
The basic ticket price is for 200 tickets, fan folded in packs and
each pack wrapped in clear shrink, with top tickets clearly
readable, or labelled as to contents. The price differentials
associated with packaging tickets in other pack size categories
applied to the basic ticket price are as follows:
500 tickets per pack: subtract [*] per 1,000 tickets
400 tickets per pack: subtract [*] per 1,000 tickets
300 tickets per pack: subtract [*] per 1,000 tickets
150 tickets per pack: add [*] per 1,000 tickets
100 tickets per pack: add [*] per 1,000 tickets
k) Cost per thousand, if any additional numbered
inserts in each pack of tickets (approx 3" x 7"
; 3 colour/1 colour) [*] /per 1,000 Tickets
l) Cost per thousand for unnumbered inserts in each
pack of tickets (approx 3" x 7"; 3 colour/1 colour) [*] /per 1,000 Tickets
m) Cost for no omissions games (2" x 4"; 100 million
tickets only) [*] /per 1,000 Tickets
n) Cost for use of a label containing a bar code
replacing the pack activation card. [*] /per 1,000 Tickets
o) Other prices:
1. Four Colour Process on White Background for Aluminum Foil
Tickets. The basic ticket price does not include printing a
four colour process on a white background. The price
differential for printing four colour process on a white
background applied to the basic ticket price is
as follows: add [*] per 1,000 tickets
2. Coated Stock for Aluminum Foil Tickets. The price quoted
under 3(g) of the Pricing Schedule is for tickets printed on
white card stock and aluminum foil laminated, uncoated. The
card stock is 10 point and will not curl, separate, or
be easily split.
-3-
30
NOTE: THE MATERIAL HEREIN MARKED BY BRACKETS AND AN ASTERISK HAS BEEN DEEMED
CONFIDENTIAL BY SCIENTIFIC GAMES HOLDINGS CORP. AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
The price differential for coated stock applied to the quote
under 3(g) of the Pricing Schedule
price is as follows:
2" x 4" add [*] per 1,000 tickets
3. Recyclable Ticket Stock. The basic ticket price for a 2" x 4"
ticket size assumes the tickets will be printed on standard
virgin, white 10 point stock. The price differential to
provide other TERRA 2000(R) stocks, applied to the basic
ticket price
is as follows:
12 point, virgin paper add [*] per 1,000 tickets
10 point, recycled paper add [*] per 1,000 tickets
12 point recycled paper add [*] per 1,000 tickets
4. Coupons Among Instant Tickets. The basic
ticket price assumes that all tickets within
the pack will be instant game tickets. Scientific
Games can provide a coupon among the tickets
printed in the same size and colours as the
regular instant tickets. The price differential
for providing one coupon within 15 consecutive
tickets applied to the basic ticket price is
as follows: add [*] per 1,000 tickets
5. Unusual Top Prizes. The basic ticket price
includes insurance coverage for prizes for up to
[*]. For additional insurance coverage for
top prizes, above [*] the price differentials
applied to the basic price are as follows:
The price for insurance
coverage above [*]
shall be negotiated at the
time of request. However,
it is anticipated that the cost
will be [*] per 1,000 tickets for
Games with the prizes between
[*] and [*] and [*] per
1,000 tickets for Games with top prizes
between [*] and [*].
This supplemental cost will apply only
where such prizes are won on the tickets
themselves and not where a symbol on the
ticket allows the purchaser merely to become
eligible to win a larger prizes (e.g., as a
participant on a T.V. game show).
-4-
31
NOTE: THE MATERIAL HEREIN MARKED BY BRACKETS AND AN ASTERISK HAS BEEN DEEMED
CONFIDENTIAL BY SCIENTIFIC GAMES HOLDINGS CORP. AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
6. Accelerated Deliveries. The basic ticket
price assumes that tickets will be delivered
on a timely basis, in accordance with the
schedule. To accelerate the delivery of
tickets by one day (if available) from the
normal schedule, the price differential applied
to the basic ticket price is as follows: add [*] per day
7. Additional Regular Sized Sample Tickets. The
basic ticket price assumes that 250,000 actual
size, voided sample tickets will be delivered
with each game. The price differential beyond
this number, assuming that the game does not
include multiple scenes or varying colours
during the production run is as follows:
the same price per 1,000 tickets
as the ticket quantity order
8. Flourescent and/or Metallic Inks. The basic
ticket price assumes that flourescent and/or
metallic ink will not be applied to the tickets.
To include flourescent inks (displays, overprints
and/or seal coats) the price differential applied
to the basic ticket price is as follows:
add [*] per square inch of each
ticket per 1,000 tickets if 50% or more of
each ticket is covered (e.g., 2" x 4" =
8 sq. ins. x [*] = [*] per 1,000 tickets);
add [*] per square inch of each ticket
per 1,000 tickets if less than one-half of each
ticket is covered (e.g., 2" x 4"= 8 sq. ins.
x [*] = [*] per 1,000 tickets)
9. Two Colour Imaging. The basic ticket price
assumes that all imaged data on the tickets
within a game will be printed with the same
colour of ink jet imager ink. To include two
colour imaging the price differential applied
to the basic ticket price is as follows: add [*] per 1,000 tickets
10. Full Ticket Imaging. Ticket designs which
require printing tickets 4-up. The price
differential applied to the basic ticket
price is as follows: add [*] per 1,000 tickets
-5-
32
4. LEAD TIMES FOR DELIVERY OF ORDERS AND REORDERS
a) The Contractor will ensure that all games ordered will be "on
press" within twenty-five (25) calendar days after Working
Papers are signed by Camelot and the Contractor, and that the
first shipment (50% of tickets) will take place within ten
(10) days of the press date.
The balance of the tickets will be shipped within seventeen
(17) days of the press date.
Shipping time by ocean freight is approximately 17-20 days.
b) The lead time for reorders of 50 million tickets will be
fifteen (15) calendar days plus shipping time of approximately
17-20 days, and
the lead time for reorders of 50 to 100 million tickets will
be twenty (20) calendar days plus shipping time of
approximately 17-20 days,
provided that the Contractor receives the reorder from Camelot
within thirty (30) days of the date of the last shipment. If
Camelot requires the gravure cylinders to be kept for
subsequent reorders it shall provide written notice to
Contractor of such requirement no more than thirty (30) days
following the prior order of tickets for such game.
-6-
33
SCHEDULE 3
OBLIGATORY INSURANCE COVER TO BE
OBTAINED BY THE CONTRACTOR
1. EMPLOYERS LIABILITY
The Contractor shall maintain Employer's Liability Insurance in
respect of all its employees for a sum of not less than Five Million
Pounds Sterling (L.5,000,000) any one occurrence or series of
occurrences. Camelot shall be held harmless from any claims in respect
of the operations performed on behalf of Camelot. Camelot shall also
be an Additional Insured on the Contractor's policy in respect of the
operations performed on behalf of Camelot.
2 PUBLIC LIABILITY INSURANCE
The Contractor shall maintain Public Liability Insurance in respect of
potential liability to third parties arising out of the operations and
products of the Contractor. This insurance shall be for a sum of not
less than One Million Pounds Sterling (L.1,000,000) any one
occurrence, without aggregate, save that in the case of product
liability the limit shall be not less than Two Million Pounds Sterling
(L.2,000,000) in aggregate. Camelot and its employees shall be
Additional Insured on the Contractor's policy in respect of the
operations performed on behalf of Camelot by the Contractor.
3 GENERAL INSURANCE
The Contractor shall maintain insurance cover for normal commercial
risks on terms acceptable to Camelot.
The insurances shall include (in addition to those listed in
paragraphs 1, 2 and 4):
(i) Property damage - premises/equipment/stocks damaged by fire
and other perils;
(ii) business interruption/financial losses as a result of (i);
(iii) Printers' Errors and Omissions Insurance with a limit of at
least Five Million Pounds Sterling (L.5,000,000) per claim or
series of claims. This policy shall indemnify the Contractor
in the event of compensation being payable to Camelot or any
third party as a result of errors or omissions in the course
of the Contractor's business including, but not limited to,
such matters as over-redemption of prizes, ticket take back
etc. and costs and loss of revenue incurred in connection
therewith and copyright or patent infringement actions. The
policy will be for the exclusive benefit of Camelot.
(iv) professional indemnity insurance in respect of advice given
pursuant to this Agreement with a limit of at least Five
Million Pounds Sterling (L.5,000,000) per claim or series of
claims.
4. INSURANCE FOR TICKETS IN TRANSIT
The Contractor shall maintain insurance cover for losses of or damage
to tickets in transit to Camelot's warehouse in Northampton. The
insurance shall be for not less than 110% of the CIF value of each
shipment.
34
SCHEDULE 4
AUDIT LETTER
35
[LETTERHEAD] DELOITTE & TOUCHE LLP
INDEPENDENT ACCOUNTANT'S REPORT
February 1, 1995
Xx. Xxxx Xxxx
Vice President, Manufacturing
Scientific Games Inc.
0000 Xxxxxxxxx Xxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Dear Xx. Xxxx:
We have applied the following procedures enumerated below, which were agreed to
by Scientific Games' management and The National Lottery (the users), solely to
assist the users in evaluating your assertion that United Kingdom Instant Game
No. 01 ("Instants") was produced in accordance with certain aspects of the
final executed Working Papers and any post-executed changes to such Working
Papers between Scientific Games and The National Lottery as specified in the
Game Specifications listed in Attachment A and the Prize Structure listed in
Attachment B. The sufficiency of these procedures is solely the responsibility
of the specified users of the report. Consequently, we make no representation
regarding the sufficiency of the following procedures described below either
for the purpose for which this report has been requested or for any other
purpose.
1. Judgmentally selected three Imager tapes from the tapes that management
advised us were prepared for printing, obtained print images for ten
tickets from each tape selected, and determined that the printed
images matched the game specifications listed in Attachment A without
exception.
2. Read the Imager audit program source code, written by Scientific Games
personnel, for the purpose of determining that it correctly identified
and counted the data which determined the number and distribution of
winning ticket images, and that it verified the game specifications
listed in Attachment A without exception.
3. Compared the recorded date and time of the Imager audit source code
obtained in Step 2 to the date and time of the compiled version of the
source code used in the production of the game tickets and found them
to be in agreement.
36
Xx. Xxxx Xxxx
February 1, 1995
Page 2
4. Read the Imager audit program results reports for the three Imager
tapes selected in Step 1 and proved conformity of such results with the
game specifications and prize structure in the final executed Working
Papers without exception.
5. Read the font table file reports and agreed the ticket image play data
characters in such font table file with the final executed Working
Papers without exception.
6. Created and processed test data using the Imager audit program and
determined that the program would detect errors in the game ticket
images without exception.
7. Read the bar code for ten ticket images from each of the tapes
selected using the Bar Code Decoder program written by Scientific Games
personnel and proved the readability of the bar code and encryption of
the validation number and pack number without exception.
8. Read the Prize Structure Summary Report provided by Scientific Games
personnel and compared the Report to the seeding of high level winners
as presented in Attachment B without exception.
9. Read a sample of the Quality Assurance checklists for this game,
prepared by Scientific Games personnel, and found that ticket images
and finished tickets were tested for readability and conformance with
the Working Papers without exception.
10. Obtained written representation from Scientific Games management in the
form of:
- Pre-press Job Control Checklist
- Management Representation Letter
providing us with assurance that the game was produced in accordance
with the executed Working Papers and any post-executed changes.
These agreed-upon procedures are substantially less in scope than an
examination, the objective of which is the expression of an opinion on your
assertion that United Kingdom Instant Game No. 01 ("Instants") was produced in
accordance with certain aspects of the final Working Papers and any
post-executed changes to such Working Papers between Scientific Games and The
National Lottery, as specified in the Game Specifications listed in Attachment
A and the Prize Structure listed in Attachment B; accordingly, we do not
express such an opinion. We are required to report to you under the
provisions of the Statement on Standards for Attestation Engagements No. 3 on
Compliance Attestation dated December 1993 that apply to agreed-upon procedures
engagements, that had we performed additional procedures, other matters might
have come to our attention that would have been reported to you.
37
Xx. Xxxx Xxxx
February 1, 1995
Page 3
This report is intended solely for the information of Scientific Games'
management and The National Lottery and should not be used by those who did not
participate in determining the procedures.
Yours truly,
/s/ Deloitte & Touche LLP
38
ATTACHMENT A
GAME SPECIFICATIONS
I. Play style:
Match any three like amount play symbols and win that amount.
2. Number of tickets per pack: 200
3. Number of packs per pool: 1,200
4. Quality Control Inspection (QCI) window:
A QCI window appears on each ticket. The 3-digit ticket number is
imaged inside the QCI window on the front of each ticket.
5. Pack-ticket number:
Format: 2-digit game identification number*
6-digit pack number
3-digit ticket number
Example: 01-00000 1-000
Pack numbers start at 000001. Ticket numbers run
from 000 to 199 within each pack.
* The two digit game identification number is (01)
for the first 150,000,000 tickets, (71) for the
second 150,000,000 tickets, and (91) for the
remaining tickets.
6. Validation number:
The validation number is made of two segments, one each of ten and
four digits. The first segment is an enc~pted validation number,
followed by a space. The second segment is an encrypted retailer
verification code. The four consecutive digits in the retailer
verification code are boxed for clarity.
Example: 1234S67890 1234
Validation numbers are unique throughout the game.
7. Bar code:
Format: 2-digit game identification number*
6-digit pack number
1 0-digit encrypted validation data
* The two digit game identification number is (01)
for the first 150,000,000 tickets, (71) for the
second 150,000,000 tickets, and (91 ) for the
remaining tickets.
39
8. Valid play symbols and captions:
There are six play spots. Valid symbols and captions are:
Symbol Caption
------ -------
L.1.00 -ONE-
L.2.00 -TWO-
L.5.00 -FIVE-
L.10.00 -TEN-
L.20.00 TWNTY
L.50.00 FIFTY
L.200 TWHUN
L.1,000 -THOU
L.50,000 FIFTHO
8. Floating image play area:
The game "floats".
9. Patterns:
- No adjacent losing tickets have identical play symbols in the
same locations.
- No more than one winner of L.50 or above appears in a pack.
- No consecutive string of losing tickets in a pack exceeds
three times the overall odds of the prize structure, or
seventeen consecutive losing tickets.
- Four or more like play symbols do not appear on a ticket.
- Losing tickets contain approximately the following quantities
of pairs of play symbols
Three pairs of play symbols - 40% of losing tickets
Two pairs of play symbols - 40% of losing tickets
One pair of play symbols - 20% of losing tickets
- No ticket has more than one occurrence of three identical play
symbols.
- Losing tickets use the play symbols in the following
approximations:
L.50,000 10% L.10.00 5%
L.1,000 20% L.5.00 5%
L.200 20% L.2.00 5%
L.50.00 20% L.1.00 5%
L.20.00 10%
40
ATTACHMENT B
PRIZE STRUCTURE PER POOL:
All amounts below are stated in British Pounds
Winners
Per Pool of
Get: Win: 240.000 Tickets
---- ---- ---------------
3 - L.1.00's 1 24,000
3 - L.2.00's 2 12,000
3 - L.5.00's 5 4,200
3 - L.10.00's 10 2,400
3 - L.20.00's 20 1,200
3 - L.50.00's 50 120
3 - L.200's 200 20
3 - L.1,000's 1,000 *
3 - L.50,000's 50,000 *
----------------------------------------------------------------------
43,940
* Approximately I winning ticket in 2 pools.
** Approximately I winning ticket in 10 pools.
PRIZE STRUCTURE PER PACK:
One of the following Mini-Pools is used in each pack of 200 tickets.
Approximately 1/4 of the packs use Mini-Pool A; approximately 1/2 ofthe packs
use Mini-Pool B; and approximately 1/4 of the packs use Mini-Pool C.
All prize amount and prize values below are stated in British Pounds.
Mini-Pool A Mini-Pool B Mini-Pool C
------------ ----------- -----------
Low-End Prizes: Occurs Value Occurs Value Occurs Value
--------------- ------ ----- ------ ----- ------ -----
1 18 18 20 20 22 22
2 10 20 11 22 8 16
5 4 20 3 15 4 20
10 0 0 2 20 4 40
20 2 40 1 20 0 0
------------------------------------------------------------------------------------------------
34 98 37 9738 98
------------------------------------------------------------------------ --
41
SCHEDULE 5
SECURITY PROCEDURES
The Contractor shall:
- Maintain plant shift activity reports.
- Generate and maintain security and safety discrepancy reports.
- Monitor and control all radio communications
- Maintain a control dispatch station for all security and safety
activities.
- Monitor all intrusion alarms.
- Log all access granted to the building, restricted areas and tape
storage vault.
- Log all denied access occurrences by the card access system.
- Monitor CCTV screens for unauthorised activities.
- Handle all telephone communications relating to safety and security,
controlling the movement of the security patrol force.
- Ensure the integrity of the control centre as a restricted area.
- Maintain all.building maps in a current status.
- Notify outside agencies as well as members of the Security Department
in the event of an emergency.
- Monitor the card entry system and dispatch security personnel as
necessary.
- Monitor the secure packaging of the product.
- Monitor the secure loading of the product on the freight forwarders's
exclusive use containers.
- Maintain detailed shipping documents.
- Log the location and use of all ticket stock.
- Ensure the secure destruction of all waste ticket stock.
42
SCHEDULE 6
MANUFACTURING PROCESS
The Contractor will follow the manufacturing processes outlined in
Sections 3.6.1, 3.6.2, 3.6.3 and 3.6.4 of its proposal to TDLR dated
August 23, 1994, describing the manufacture of instant tickets for
Camelot.
