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Exhibit 10.4.1
CONTRACT
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CONTRACT NO.: 35520-355
CONTRACT TERM: October 1, 1998 - September 30, 2001
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ISSUED BY: Virginia Lottery, 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000
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CONTRACTOR'S NAME: On-Point Technology Systems, Inc.
0000 Xxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx
FIN# 000-000-0000
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SUPPLIES/SERVICES:
ITVM PURCHASE AND MAINTENANCE
Contract consists of this Page 1 with signatures and Pages 2 through 5 which are
attached hereto.
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VALUE OF CONTRACT: $8,973,797 Estimated
ACCOUNTING DATA: Cost Code: 833 Account Code: 3311 - $5,613,845
Cost Code: 833 Account Code: 1274 - $3,359,952
Contract Officer: Xxxxxxxx XxxXxxxxx, 000-000-0000
Send Invoices to: Virginia Lottery
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Accounts Payable
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In witness whereof, the parties have caused this contract to be executed as set
forth below.
ON-POINT TECHNOLOGY SYSTEMS, INC. VIRGINIA LOTTERY
By /s/ Xxxxx X. Xxxxxxx By /s/ Xxxxxxx X. Xxxxxx
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(Signature) (Signature)
Xxxxx X. Xxxxxxx, Xx. Vice President Xxxxxxx X. Xxxxxx, Purchasing Manager
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Name and Title Name and Title
Date September 28, 1998 Date September 25, 1998
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This Contract entered into as of 1st day of October, 1998 by On-Point Technology
Systems, Inc. ("Contractor"), and the State Lottery Department ("Lottery" or
"Virginia Lottery "), an agency of the Commonwealth of Virginia, both sometimes
hereinafter referred to as the "Parties".
The Lottery and the Contractor agree that the terms and conditions of this
Contract shall be:
A. CONTRACT TERM: The term of this Contract shall be from October 1, 1998 to
September 30, 2001. This Contract may be extended by the Virginia Lottery
for two consecutive one year periods under the terms of the current
Contract. Any such decision to extend shall be made at a reasonable time
(approximately 90 days) prior to the expiration date.
B. SCOPE OF SERVICE: The Contractor shall provide equipment and services as
described in the Request for Proposals dated May 18, 1998, Lottery's
letter dated June 12, 1998, Contractor's Proposal dated June 24, 1998, and
modified by Contractor's letters dated July 21, 1998, August 6, 1998 and
August 11, 1998, and modified as follows:
1. Contractor shall deliver and install #ITR-85005L-8 ITVM units in
lots of 50 machines beginning five (5) weeks after receipt of
Lottery Blanket Order Release form.
2. Contractor shall deliver #ITR-85005L-12 ITVMs in lots of 50 machines
beginning seven (7) weeks after receipt of Lottery Blanket Order
Release form.
3. Contractor agrees to maintain a perpetual inventory of 20 ITVM
units, of which 10 will be held at its Virginia office for immediate
shipment, and 10 will be held at its San Diego facilities. The bin
size of the units shall be specified by the Lottery from time to
time. Contractor understands that units from the perpetual inventory
will be billed to the Lottery upon installation.
4. Contractor will provide the Lottery ITVM sales and performance
reports from On-Point's service database. Reports shall be issued to
the Lottery at least every 60 days.
5. Contractor agrees that ITVMs shipped will be equipped with the
appropriate firmware to allow acceptance of new US $20 currency. In
the event that Mars has not provided to Contractor appropriate
firmware prior to shipment of ITVM units to the Lottery, Contractor
agrees to retrofit units already shipped at no additional charge to
the Lottery.
6 Contractor shall provide the Lottery EPROM chips to enable
acceptance of new US currency for currently installed ITVM units at
actual cost. Field installation of EPROM chips shall be performed
during routine preventative maintenance, and at no additional charge
to the Lottery.
7. Contractor shall provide internal labels identifying each dispenser
in the ITVM to provide ease of identification of the dispenser.
8. Contractor shall install baffles to separate ticket bins in each
ITVM.
9. Contractor shall reposition the ITVM printer for greater ease of
access.
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10. The Contractor agrees to install Medico locks with small key heads
on all ITVM units to be shipped.
11. Contractor agrees to provide field upgrades, as required by the
Lottery, of #ITR-85005L-12 units to #ITR8500SL-15 units. The
additional hardware, software and installation involved in the field
upgrade shall be covered by Contractor's warranty.
12. Contractor agrees to provide field upgrades of ITVMs in order to add
the communication option during routine preventative maintenance.
13. Contractor shall provide an 18 month warranty in accordance with
Contractor's proposal.
14. Contractor will work with the Lottery to customize ITR-85005L-12
and/or 15 game machines to the Lottery's specific requirements to
include, but not be limited to, paint color and placement, window
placement and size, window lighting, button membrane design.
15. Trade In Options: the Contractor agrees to provide the following
trade-in allowance: Existing Model Trade-In Allowance
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ITR-7500-8 $500 each
ITR-85005L-8 $1,200 each
ITR-8500-12 $1,500.00
(ex remanufactured program)
16. Contractor agrees to provide preventative maintenance, repairs,
installations, de-installations and swaps for the Lottery's existing
887 ITVM units. Preventive maintenance shall be performed on all
ITVM units on a 60-day cycle.
17. Contractor agrees to provide spare parts, as required by the
Lottery, at the Contractor's Most Favorable Parts Replacement and
Repair Price.
18. Penalties for Missed Preventative Maintenance - Failure on the part
of the Contractor to provide preventative maintenance as scheduled
will result in a penalty of $100 per incident, and the Contractor
shall continue to be assessed $100 per week until preventive
maintenance has been performed.
19. Penalties for Excess Response Time - Failure to repair ITVMs within
the required response time shall result in a penalty. In all cases,
the determination as to whether or not an ITVM is in operational
condition shall be determined by the Lottery. For purposes of this
Contract, a service call begins when the call is dispatched by
Lottery Retailer Support to the Contractor.
20. Contractor shall be assessed a penalty at the rate of $100 per hour
or fraction thereof beyond the appropriate required response time.
In applying the penalties herein described, the Lottery will
consider the circumstances which precipitated the delays.
21. No credits shall accrue to the Contractor for timely performance.
22. All penalty payments will be due to the Lottery within thirty (30)
calendar days of being assessed to the Contractor. At the Lottery's
option, penalty payments may be taken as credits against
Contractor's invoices.
23. Section 2.2 Scope of Requirements, Lot I - ITVM Equipment Xxxxxxxx,
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Xxxxxxxxx X.0 is hereby deleted.
C. COMPENSATION: The Lottery and the Contractor agree to the following
provisions for compensation:
Lot I
ITR8S00SL-8 $4,095 x 310 = $1,269,450
ITR8S00SL-12 $5,895 x 700 = $4,126,500
ITR8S00SL-15* $6,795
Beta Brites $285 x 747 = $212,895
Training: $500 x 10= $5,000
Field Upgrade ITR8500SL-12 to
ITR85005L15 $1,575 each*
Total Purchase Price: $5,613,845
Lot II
Preventative Maintenance/Repair - New Equipment:
@$42 ea/mo.
Yr 1: $42 x 710 x 12 = $357,840
Yr 2: $42 x 860 x 12 = $433,440
Yr 3: $42 x 1010 x 12 = $509,040 $1,249,920
Preventative Maintenance/Repair - Current Equipment
887 x $42 x 12 = $447,048 x 3 years: $1,341,144
Installation: $65 x 444/yr x 3 years: $86,580
De-installation $45 x 180/yr x 3 years: $24,300
Swapping $65 x 120/yr x 3 years: $23,400
Total Moves and Changes: $134,280
Extended Warranty (following 18 mo warranty)- New Equipment
ITR8500SL-8 @$12 each per month
ITR8500SL-12 @$14 each per month
Estimated 3 year total: $187,560
Extended Warranty - Current Equipment:
887 ITVMs @ $14 each per month. Estimated 3 year total: $447,048
Total Maintenance and Repair: $3,359,952
Total Estimated Contract Amount: $8,973,797
*Item not included in price totals.
D. GENERAL PROVISIONS - Nothing in this Contract shall be construed as
authority for either party to make commitments which will bind the other
party beyond the provisions contained herein. Furthermore, the Contractor
shall not assign, sublet, or
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subcontract any work related to this Contract or any interest it may have
herein without the prior written consent of the Lottery.
E. INTEGRATION OF CONTRACT - This Contract, the Request for Proposals dated
May 18, 1998, Lottery's letter dated June 12, 1998, the Contractor's
Proposal dated June 24, 1998, and the Contractor's letters dated July 21,
1998, August 6, 1998, and August 11, 1998 constitute the entire agreement
between the Lottery and the Contractor. No alteration, amendment or
modification of this Contract shall be effective unless it is reduced to
writing, signed by the parties and attached hereto.
F. PRECENDENCE OF TERMS - Except for Paragraphs B.1.1, B.1.2, B.1.3, B.1.6,
B.1.9, b.1.11, B.1.13, B.1.14, B.1.15 and B.1.16 of the General Terms and
Conditions, which shall apply in all instances, in the event there is a
conflict between the General Terms and Conditions and any Special Terms
and Conditions used in a particular procurement, the Special Terms and
Conditions shall apply.
G. GENERAL PROVISIONS - Nothing in this Contract shall be construed as
authority for either party of make commitments which will bind the other
party beyond the provisions contained herein. Furthermore, the Contractor
shall not assign, sublet, or subcontract any work related to this Contract
or any interest it may have herein without the prior written consent of
the Lottery.
H. DISPUTES - Resolution of disputes arising under this Contract will proceed
in accordance with the Lottery Department's Regulations.
I. APPLICABLE LAW AND COURTS - This Contract shall be governed in all
respects by the laws of the Commonwealth of Virginia, and any litigation
with respect thereto shall be brought in the courts of the Commonwealth of
Virginia. The Contractor shall comply with applicable federal, state and
local laws and regulations.
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