Agreement by and between TransAct Technologies Incorporated One Hamden Center 2319 Whitney Avenue, Suite 3B Hamden, CT 06518 and GTECH Corporation 10 Memorial Boulevard Providence, RI02903

BUYER may, at its option, decline to have such changes incorporated into the Products.  Proposed changes will not be incorporated into the Products until accepted in writing by BUYER.  BUYER shall make best effort to respond in writing to TRANSACT within fifteen (15) calendar days of BUYER’s receipt of change notification. In no event will BUYER ever be deemed to have accepted any change in the price or delivery schedule without its prior written consent.

7.2           BUYER Changes.  BUYER may request changes in the Products at any time during the Term of this Agreement by submitting a written change request to TRANSACT.  For each written change request received from BUYER, TRANSACT will provide BUYER with a written proposal including any applicable non-recurring engineering charge, change in Product prices and/or delivery schedule, and any other change in terms.  Such proposal, only if agreed to and signed by an authorized representative of BUYER and TRANSACT, will become part of this Agreement.  Any changes that require Tooling, which is paid for by BUYER, are and shall remain the property of BUYER, and TRANSACT may not use such changes or disclose them to others without the prior written consent of BUYER.

7.3           Enhancements, Successor Products.  If during the Term of this Agreement, TRANSACT offers improvements, options, additional functionality or other enhancements ("Enhancements") to the Products not available at the time this Agreement is signed or other products which substantially replace the Products ("Successor Products"), TRANSACT will offer such Enhancements and/or Successor Products to BUYER by providing a description and a price.    If BUYER elects, in writing, to purchase such Enhancements or Successor Products, the Enhanced Products or Successor Products will be ordered separately from any orders which may be open at that time. No substitutions or changes will be made on open purchase orders with delivery within [**] lead-time. If BUYER requires changes implemented within [**], BUYER will cover the cost of rework, excess and obsolete material when agreed to in advance in writing by BUYER and TRANSACT.  In any event, BUYER may, at its option, elect to continue to purchase Products as originally specified for the Term of this Agreement and any extensions thereafter.

7.4           Restricted Sales.  TRANSACT will not sell, lease or otherwise provide online lottery printers to BUYER’S existing customers, or provide printers with the packet protocol set forth in BUYER’s Specification 96-0258-01 to any third party but BUYER.   Nothing in this section shall preclude TRANSACT from selling, leasing or otherwise providing other printers to any third party in its discretion.  If BUYER wins a new customer and notifies TRANSACT, then TRANSACT will not sell, lease or otherwise provide lottery printers to BUYERS new customer.  If BUYERS new customer is TRANSACT’S existing customer, then TRANSACT will so notify BUYER and TRANSACT may continue to sell lottery printers to this customer.

8.           Quality and Reliability Requirements

8.1           Quality and Reliability Requirements.  TRANSACT agrees to maintain adequate quality and reliability safeguards to ensure that all Products shipped to BUYER meet or exceed all parameters specified in the Product Specification and that the Product is not subject to any infant mortality.

8.2           Reliability Test.  TRANSACT shall conduct a reliability test on the Products to ensure that the Products meet or exceed all parameters specified in the Product Specification.  BUYER may review the results of TRANSACT’s reliability test on the Products.

8.3           Survey.  TRANSACT will allow BUYER to perform a survey at TRANSACT’S facility or at any subcontractor of TRANSACT with reasonable written notice.  This survey will include, but is not limited to, an audit of the manufacturing process, reviewing the yields at each inspection and test point in the manufacturing process, review of the on-going reliability test data, Product design changes, corrective action, and field reliability performance and repair data.  The cost of BUYER travel to the survey will be borne by BUYER.

8.4           Failures of Consequence:  If BUYER’s customers world-wide experience excessively high failure rates (> or equal to 20% annualized) during the warranty period in any given jurisdiction that is determined by both parties to be TRANSACT’s responsibility, BUYER may recover all commercially reasonable costs associated with this unacceptable Product performance by taking credit against the purchase price of the Product or TRANSACT can, at its discretion assume all costs directly by providing required support services to repair, upgrade or replace defective Product in a timely manner to BUYER’s satisfaction.  These additional costs are typically related to screening, sorting, testing, packaging, handling by a third party and airfreight to expedite any of these activities.

9.1           TransAct Insurance Coverage.  TRANSACT shall purchase and maintain during the Term of this Agreement, such insurance as will protect it and BUYER from claims set forth below which may arise out of or result from TRANSACT’s operations under this Agreement whether such operations be by it or by any subcontractor or by anyone for whose acts any of them may be liable.  TRANSACT shall cause BUYER to be additional insured under all coverages except Workers’ Compensation.

9.2           General Liability.  Policy will provide a minimum of $2,000,000 per occurrence for Products and Completed Operations.

9.3           Proof of Insurance.  Evidence of said insurance will be in the form of a certificate of insurance and will be provided within ten (10) calendar days from the date of this Agreement.  Notification to BUYER will occur within thirty (30) calendar days of any cancellation or material change in coverage.  Coverage will be in effect with insurance carriers licensed to do business in any state that the TRANSACT will perform its services and will be rated no less than A by the AM Best Company.  All Certificates of Insurance are to be forwarded to: GTECH Corporation, 10 Memorial Boulevard, Providence RI  02903 ATTN: Risk Management Department.

In addition to, and not in limitation of, any other indemnifications, warranties and covenants set forth herein, but subject to Section 22 hereof, TRANSACT hereby agrees to indemnify and hold BUYER harmless with respect to any and all costs, expenses and liability, including without limitation reasonable attorney’s fees, arising out of any claim or action based on a failure of the Products or Services to meet the specifications set forth herein or the failure of the TRANSACT to meet any of its obligations hereunder.

TRANSACT shall defend, indemnify and hold BUYER, its subsidiaries, affiliates, distributors and customers harmless from any and all costs, expenses and liability, including reasonable attorney's fees, arising out of any claim or action based on actual or alleged infringement by the Products or any patent, copyright, trade secret or other proprietary interest related to such Products.  BUYER shall give TRANSACT prompt written notice of any claim or action and shall provide reasonable assistance, at TRANSACT'S expense, in defending any such claim or action.  If an injunction is issued which prohibits the use or sale of the Products by reason of any matter covered by this Section 10, then TRANSACT shall, at its expense, either:  (a) procure for BUYER, its subsidiaries, affiliates, distributors and customers the right to continue using the Products;  (b) modify the Products so they become non-infringing;  (c) substitute equivalent non-infringing products; or, (d) if neither (a) through (c) are reasonably available, BUYER may return the Products to TRANSACT and TRANSACT will refund the purchase price to BUYER less depreciation based upon the straight line method and a product life of five (5) years.

Notwithstanding the foregoing, TRANSACT shall have no liability to BUYER for actual or claimed infringement arising out of:  (a) compliance with detail designs, plans or specifications furnished by BUYER unless such infringement would arise independent of such designs, plans or specifications;  (b) use of the Products in combination with other equipment or software not reasonably contemplated by TRANSACT; (c) use of the Products in any process not reasonably contemplated by TRANSACT or (d) BUYER’s negligence in making repairs of the Products.  TRANSACT acknowledges that the Specifications in Attachment 1 is not a "specification" which excuses or releases TRANSACT from performing its indemnity and other obligations hereunder.

           In addition to, and not in limitation of, any other indemnifications, warranties and covenants set forth herein, BUYER hereby agrees to indemnify and hold TRANSACT harmless with respect to any and all costs, expenses and liability, including without limitation reasonable attorney’s fees, arising out of any claim or action based on a failure of BUYER to meet any of its obligations hereunder.

11.1           Repair Orders.  In addition to TRANSACT's obligations under Section 12, TRANSACT agrees to repair all “in warranty” and “out of warranty” failures within twenty (20) calendar days from the receipt of the Products, or else replace such Products with new Products that shall conform to the Specifications.

11.2           Failure Analysis.  TRANSACT shall provide a failure analysis on Products that are returned for repair under warranty. On request by BUYER, TRANSACT will provide failure analysis for serialized units returned for a specific failure mode or region.

11.3           Repair Capabilities.  BUYER reserves the right to repair any of the assemblies, subassemblies, or other items comprising the Products purchased under this Agreement to the recommended spare parts (RSL) level. The RSL level is defined as the lowest part level repairable without special tools and fixtures. TRANSACT will supply BUYER with the necessary support to repair the Products.

11.4           Test Equipment.  TRANSACT shall make available to BUYER, upon written request by BUYER, any of TRANSACT’s test procedures, special tools, jigs, fixtures, diagnostics, programs, test equipment or supplies necessary to repair the unit, any of the assemblies, subassemblies, piece parts, or other items comprising the Products purchased under this Agreement to the recommended spare parts level. BUYER agrees to pay reasonable costs to TRANSACT for hardware test equipment only. Other items such as procedures, schematics, diagnostics, programs etc. will be made available at no charge.

11.5           Diagnostics.  TRANSACT shall provide to BUYER its diagnostics, test programs and test routines, necessary to repair to the recommended spare parts level, the unit, any of the assemblies, subassemblies, piece parts, components, or other items comprising the Products purchased under this Agreement.

11.6           Documentation.  In consideration of the purchase of Products under this Agreement, and at no additional cost, TRANSACT hereby grants onto BUYER the unlimited right to use, reprint, and distribute TRANSACT's Product manuals and documentation ("Documentation"), including but not limited to user's manuals, schematics, maintenance, theory of operation and troubleshooting guides, and any other Documentation that TRANSACT shall make available during the Term of this Agreement.  Upon request, TRANSACT shall provide electronic copies of the Documentation to BUYER at no additional charge. BUYER agrees to display copyright notices in accordance with TRANSACT's reasonable written instructions.

11.7           Confidential and Proprietary Information.  BUYER acknowledges and agrees that the test equipment and diagnostics described in Sections 11.4 and 11.5 constitute proprietary and Confidential Information of TRANSACT, subject to Section 15 of this Agreement and any other confidentiality agreement between the parties.  BUYER agrees not to use any of such test equipment or diagnostics for any purpose other than the maintenance and repair of the Products in accordance with this Agreement and not to deliver, disclose or permit the disclosure of any such test equipment or diagnostics to any third party.

11.8           Future Training.  BUYER may schedule a maximum of six (6) students per year in TRANSACT’s regularly scheduled training class, at TRANSACT’s location, during the Term of this Agreement.  If no regularly scheduled classes are conducted, then BUYER may request TRANSACT to conduct one (1) class per year in which BUYER may schedule a maximum of six (6) students.  The cost of travel for training will be paid for by BUYER.

 12.1           TRANSACT Standards.  TRANSACT represents and warrants that all Products delivered to BUYER under this Agreement will comply with applicable UL, CSA, CE, TUV and VDE standards and will comply with the applicable FCC rules for the type of Products involved, including type acceptance or certification where required.  TRANSACT will obtain and maintain at its own expense all applicable listings, certifications and approvals in TRANSACT's name. TRANSACT will provide all necessary information and assistance to BUYER with respect to listings, certifications and approvals that are required to be in BUYER's name.

12.2           Authority.  TRANSACT warrants that: (a) it has the right to enter into this Agreement; (b) all necessary actions, corporate and otherwise, have been taken to authorize the execution and delivery of this Agreement and the same is the valid and binding obligation of TRANSACT; (c) all licenses, consents and approvals necessary to carry out all of the transactions contemplated in this Agreement have been obtained by TRANSACT; and (d) TRANSACT'S performance of this Agreement will not violate the terms of any license contract, note or other obligation to which TRANSACT is a party.

12.3           Title; Infringement.  TRANSACT warrants that:  (a) it has and shall pass to BUYER good title to the Products free and clear of all liens and encumbrances;  (b) the Products do not infringe any patent, trademark or copyright or otherwise violate the rights of any third party;  (c) no claim or action is pending or threatened against TRANSACT or, to TRANSACT's knowledge, against any licenser or supplier of TRANSACT that would adversely affect the right of BUYER or any customer of BUYER to use the Products for their intended use.

12.4           Conformance; Defects.  Unless otherwise specified in Attachment 1, TRANSACT warrants that the Products will:  (a) be new; (b) conform to the Specification; (c) be free from defects in materials and workmanship for a period of [**] from shipment to BUYER or a customer in accordance with the terms of TRANSACT’s standard product warranty policy.  Upon written notice from BUYER of a Product or part that fails to meet the foregoing warranty, TRANSACT will promptly repair or replace such Products within twenty (20) calendar days of receipt by TRANSACT of the failed or non-conforming Products or spare parts.

12.5           Freight Costs on Repairs.  All Products returned to TRANSACT for repair under warranty shall be shipped to TRANSACT by standard ground service, freight collect, FOB from wherever failed Product is located. TRANSACT shall return all Products repaired under warranty, freight prepaid by TRANSACT to same location. Shipping of warranty repair units to/from TRANSACT and from/to BUYER’s field operations by any means other than standard ground service or equivalent for international locations will be paid by BUYER.

12.6           Freight Charges on Non-Warranty Repairs.  Freight charges directly associated with the repair of non-warranty products and/or spare parts shall be borne by BUYER.

12.7           Warranty Terms TRANSACT warranty term is [**] from date of shipment to BUYER or a customer per Section 12.4 above.  TRANSACT warranty is valid only when TRANSACT approved papers are used.  Use of unapproved papers will void the warranty.

All Tooling for the Products is owned by TRANSACT.  Any subsequent tooling purchased by BUYER for the manufacture of the Products (“Tooling”), whether kept at BUYER's or TRANSACT’s premises, shall remain the property of BUYER for BUYER's exclusive use.  The Tooling purchased by BUYER and used by TRANSACT in the manufacture of the Products shall be stored and maintained by TRANSACT but may be removed from TRANSACT's location at any time by BUYER, without notice, solely at BUYER’s expense.  TRANSACT shall take such steps to protect BUYER's title to the Tooling as BUYER may reasonably request.  At a minimum, TRANSACT shall cause a sign to be affixed to such tooling stating "Property of GTECH Corporation".  TRANSACT will immediately notify BUYER of any change in the location of the tooling.

For the purposes of this Agreement, a “Force Majeure” shall mean an event or effect that cannot be reasonably anticipated or controlled, including but not limited to an action of the elements, or any other cause which, by the exercise of reasonable diligence, said Party is unable to prevent.  Neither BUYER nor TRANSACT shall be liable to the other for any delay in or failure of performance under this Agreement due to a “Force Majeure” occurrence provided that the Party claiming Force Majeure notifies the other in writing within five (5) calendar days of the commencement of the condition preventing its performance and its intent to rely thereon to extend the time for its performance of this Agreement.  The foregoing shall not apply to BUYER’s obligation to pay any amounts due and payable to TRANSACT.

15.1           Each party agrees not to disclose or use (except as permitted or required for performance by the party receiving such Confidential Information (as defined below) of its rights or duties hereunder) any Confidential Information of the other party obtained during the Term of this Agreement. Each party further agrees not to disclose or provide any of such Confidential Information of the other party to any third party and to take appropriate measures to prevent any such disclosure by its present and future employees, officers, agents, subsidiaries, or consultants during the Term. Each party acknowledges and agrees that all documents, data, software or information in any form which is provided by either party (hereinafter “Confidential information”) is the property of the disclosing Party. Each Party will receive and maintain all Confidential Information in the strictest confidence and except as provided herein, shall not use Confidential Information for its own benefit or disclose it or otherwise make it available to third parties without prior written consent of the disclosing Party. Each party agrees to limit the use of Confidential Information of the other party to only those of its employees who need the Confidential Information for the purpose of this Agreement and to advise all of its employees of the other party’s rights in the Confidential Information. Nothing in this Agreement shall be construed as granting or conferring any rights by license or otherwise in any Confidential Information, trademarks, patents or copyrights of either party to the other party, except for the limited purposes of either parties performance hereunder.

15.2           For purposes of this Agreement, “Confidential Information” means all information relating to a party, its business and prospects (including but not limited to, intellectual property, business practices, know-how, trade secrets, business plans, designs, blueprints, drawings, models and prototypes), disclosed by such party from time to time to the other party in any manner, whether orally, visually or in tangible form (including, without limitation, documents, devices and computer readable media) and all copies thereof, created by either party. The term “Confidential Information” shall be deemed to include all notes, analyses, compilations, studies, interpretations or other documents prepared by a party which contain, reflect or are based upon the information furnished to the receiving party by the disclosing party under this Agreement, but shall not include information which is: (a) in the public domain; (b) already known to the Party to whom it is disclosed (hereinafter “Recipient”) at the time of such disclosure; (c) subsequently received by Recipient in good faith from a third party having prior right to make such disclosure; (d) independently developed by Recipient without use of the information disclosed pursuant to this Agreement; or (e) approved in writing for unrestricted release or unrestricted disclosure by the Party owning or disclosing the information (hereinafter “Discloser”). In the event Recipient is required or legally compelled to disclose any of the Confidential Information as a result of a legal process or pursuant to governmental action, the Discloser may seek a protective order or other appropriate remedy and/ or waive compliance with the provisions of this Agreement, At the request of a Discloser, and in any event upon the expiration or termination of this Agreement, each Recipient shall promptly deliver to Discloser all products, components and equipment provided by Discloser as well as all records or other things in any media containing or embodying Discloser’s Confidential Information within its possession or control which were delivered or made available to each Recipient during or in connection with this Agreement, including any copies thereof.

Both parties agree not to make any public announcements regarding this Agreement or to disclose any of the terms and conditions hereof to any third party without prior written consent of the other party, except as required by law.

All notices required or contemplated by this Agreement shall be deemed effective if written and delivered in person or if sent by registered mail, return receipt requested or recognized overnight delivery service, fax or electronic mail, to BUYER at the address shown above to the attention of BUYER's Representative or to TRANSACT at the address shown above to the attention of TRANSACT's Representative; or such other persons or addresses as may hereafter be designated by the respective Parties.  A copy of all Notices sent to BUYER shall be addressed to the Office of General Counsel at the address shown above.

 
 

This Agreement and the rights, duties and obligations of the parties hereto shall not be assignable, transferable or delegable by either party hereto without the prior written consent of the other, not to be unreasonably withheld; provided that either party may assign this Agreement in connection with the transfer of its business to a third party, whether by sale of assets, sale of stock, merger, consolidation or other transfer of control without the prior written consent of the other party; and provided further that Buyer may assign its rights and/or obligations hereunder, in whole or in part, to any parent or subsidiary corporation, or any affiliate, without the consent of, but upon notice to, TRANSACT.

19.1           Term.           This Agreement will commence on the 29th day of May, 2015 (“Effective Date”) and shall continue through and including December 31, 2019 (“Term”) unless terminated earlier as provided in this Agreement.  Unless either Party notifies the other in writing at least ninety (90) calendar days before the end of the Term of its intent to terminate this Agreement at the end of the Term, this Agreement will be extended automatically and will continue in effect without any volume commitment until terminated by either Party on ninety (90) calendar days prior written notice.  Unless otherwise agreed in writing, the prices, terms and conditions for Purchase Orders for the Products during any such extension shall be the same as those prices, terms and conditions in effect at the end of the Term.

19.2           Termination by BUYER.  BUYER may terminate this Agreement at any time if (a) TRANSACT fails or neglects to perform any of its obligations hereunder and such condition has not been cured within forty five (45) calendar days of written notice thereof by BUYER; (b) TRANSACT, or TRANSACT's parent or a wholly owned subsidiary of TRANSACT, is the subject of trade sanctions by the United States government, or any other government, or quasi-governmental agency which materially affects BUYER's ability to sell, lease, or maintain the Product; (c) TRANSACT attempts to assign, except to a successor-in-interest this Agreement or any obligation hereunder without BUYER's consent;  (d) any assignment is made of TRANSACT's business for the benefit of creditors, or if a petition in bankruptcy is filed by or against TRANSACT and is not dismissed within ninety (90) calendar days, or if a receiver or similar officer is appointed to take charge of all or part of TRANSACT's property, or if TRANSACT is adjudicated a bankrupt; or (e) the Products are infringing and TRANSACT is unable to procure a right for BUYER to continue to use the Products as set forth in Section 10 hereof.

19.3           Termination by TRANSACT.  TRANSACT may terminate this Agreement if:  (a) BUYER fails to perform any of its obligations hereunder and such condition has not been cured within forty five (45) calendar days of written notice thereof by TRANSACT; provided that, TRANSACT may not terminate this Agreement for reason of non-payment by BUYER of any disputed amounts, or (b) if any assignment is made of BUYER's business for the benefit of creditors; or, (c) if a petition in bankruptcy is filed by or against BUYER and is not dismissed within ninety (90) calendar days, or if a receiver or similar officer is appointed to take charge of all or part of BUYER's property, or if BUYER is adjudicated a bankrupt.

The provisions of Sections 10, 11, 12, 15, 16 and 22, shall survive the termination and expiration of this Agreement.  All other provisions which, by their nature and subject matter, involve obligations or transactions which occur or continue after the termination or expiration of this Agreement shall also survive until fully performed.

In the event of a conflict between the terms and conditions of this Agreement and the terms and conditions of any Purchase Order, the terms and conditions of this Agreement will supersede any contrary terms set forth in such purchase order or TRANSACT’s acceptance, confirmation, invoice or other document, unless as mutually agreed upon by both parties.