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EXHIBIT 10.1 SERVICE AGREEMENT

Consulting Services Agreement

EXHIBIT 10.1 SERVICE AGREEMENT | Document Parties: GTECH HOLDINGS CORP | CAIXA ECONOMICA FEDERAL | GTECH BRASIL LTDA., You are currently viewing:
This Consulting Services Agreement involves

GTECH HOLDINGS CORP | CAIXA ECONOMICA FEDERAL | GTECH BRASIL LTDA.,

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Title: EXHIBIT 10.1 SERVICE AGREEMENT
Date: 6/30/2005
Industry: Computer Services     Sector: Technology

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                                                                    EXHIBIT 10.1

 

                                                                       page 1/18

 

 

                                SERVICE AGREEMENT ENTERED INTO ON THE ONE SIDE

                                 BY CAIXA ECONOMICA FEDERAL AND ON THE OTHER SIDE

                                BY THE COMPANY GTECH BRASIL LTDA., AS FOLLOWS:

 

 

Under the terms of this instrument, CAIXA ECONOMICA FEDERAL, a

government-controlled financial institution created and established under the

terms of Decree-Law No. 759, dated 12/Aug/69, and Decree No. 66303, dated

06/March/70, currently governed by the bylaws approved by Decree No. 5056, dated

29/April/04, altered by Decree No. 5210, dated 21/Sept/04, registered under

corporate taxpayer No. CNPJ 00.360.305/0001-04, having its head office at the

following address: SBS, Quadra 4, Lotes 3/4, represented herein by its National

Manager Bid Tenders and Contracts, Mr. VALNEI BATISTA ALVES, a Brazilian,

married, bearer of individual I.D. No. RG 486.516 - SSP/DF and individual

taxpayer No. CPF 288.956.816-49, hereinafter referred to simply as CAIXA, on the

one side and on the other side the company GTECH BRASIL LTDA., having its head

office at the following address: Avenida Ceci, 1600 - Lote 2 - Barueri - Sao

Paulo, SP, registered under corporate taxpayer No. CNPJ 68.926.628/0001-00,

represented herein by its Directors FERNANDO ANTONIO DE CASTRO CARDOSO, a

Brazilian, married, a business administrator, bearer of individual I.D. No. RG

8.359.303-2 - SSP/SP and individual taxpayer No. CPF/MF 019.983.778-30, residing

and domiciled in the city of Barueri, Sao Paulo, and JOSE MARIA JUNQUEIRA

SAMPAIO MEIRELLES, a Brazilian, a lawyer, divorced bearer of individual I.D. No.

RG 7.142.728-SSP/SP, and individual taxpayer No. CPF/MF 106.235.608-01, residing

and domiciled in the capital city of Sao Paulo, hereinafter referred to simply

as GTECH, in view of the authorization by CAIXA's Board of Governors n(0)

1354/2005, dated 04/May/2005 - proceeding No. 5307.01.0002.0/2005 - Direct

Contracting grounded on Article 25, caput, of Law No. 8666/93, have between them

agreed upon the performance of the services comprising the object of this

instrument, with the parties being subject to the rules contained in Law No.

8666/93, dated 21/June/93 and its alterations, and MARE Normative Ruling No. 05,

dated 21/July/95, as well as the clauses set out below.

 

ARTICLE ONE - OBJECT

 

This Agreement has as its object the rendering of the following services, solely

to support the transactions to be effected through GTECH terminals currently

installed in the lottery network and at CAIXA locations during the period of

transition to the new operating model for CAIXA's Lotteries:

 

      I)     maintenance and operation of CAIXA'S on-line, real-time lottery

            system;

 

      II)    development, implementation and operation of applications to support

            new products and services delegated by or agreed with CAIXA;

 

      III)   pay-out of winning tickets in the Brazilian Federal Lottery and

            Brazilian Federal Instant Lottery;

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                                                                       page 2/18

 

      IV)    receipt of payment of public utility bills and other payments

            effected at Lottery Outlets, including the payment of social

            benefits;

 

      V)     the capture, transmission and processing of lottery and non-lottery

            transactions captured at lottery outlets;

 

      VI)    the rendering of services in receiving tax returns of exempt

            individuals;

 

      VII)   the sale of authorized numbers for enabling pre-paid cell phone

            service.

 

      VIII) the initial loading and the reloading of the SPTrans "Bilhete Unico"

             in the city of Sao Paulo [T.N.: reusable electronic bus pass];

 

      IX)    deactivation of Lottery Outlets, in accordance with schedule

            determined by CAIXA in Annex II, with guarantee of continuity,

            support, maintenance and perfect performance of all the services

            contracted for, until the new system and other services to replace

            them are duly installed and in full operation.

 

PARAGRAPH ONE - Characterization of the object, the specifications, technical

requirements and conditions for performance of the services, as well specific

obligations in relation to the object contracted for are contained in Annexes I

through V, which are an integral part of this agreement.

 

PARAGRAPH TWO - GTECH shall maintain a structure compatible with providing all

the infrastructure and resources needed for rendering the services throughout

the duration of this agreement, taking into consideration the schedule

stipulated by CAIXA in Annex II, so as to:

 

      I) maintain the online, real-time lottery system in operation for the

      perfect functioning of all GTECH terminals for the capture of lottery and

      non-lottery transactions, distributed among the Lottery Outlets, as well

      as maintaining in like operating condition all its interfaces with the

      various systems connected to it, including the generation of files and

      reports needed for management by CAIXA;

 

      II)maintain in operation the data transmission system, for the perfect

      functioning of all the terminals belonging to it and used for the capture

      of lottery and non-lottery transactions that are installed in the Lottery

      Outlets distributed throughout Brazilian territory;

 

      III) maintain in operation the system for remote support and rendering of

      on-site services for the perfect functioning of all its terminals

      installed in the Lottery Outlets distributed throughout Brazilian

      territory;

 

      IV) maintain the services of the Call Center for as long as this agreement

      is in effect for all Lottery Outlets having equipment connected to the

      GTECH system distributed throughout Brazilian territory;

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                                                                       page 3/18

 

      V) maintain the Lottery Outlets permanently supplied with consumables

      (wager slips and rolls of printer paper) and inked ribbons, so as to

      guarantee that the network of terminals belonging to GTECH continues in

      full activity;

 

      VI) maintain the structure for the development and maintenance of systems

      and applications, with specialists in its legacy systems to answer routine

      and emergency calls and for new developments that may be necessary.

 

PARAGRAPH THREE - During the period in which this agreement is in effect, GTECH

shall provide for the complete de-installation, deactivation and removal of its

equipment installed at Lottery Outlets and other locations, in accordance with

the schedule set down by CAIXA in Annex II, which shall be subject to

alterations, provided they are communicated to GTECH with 40 days' notice.

 

ARTICLE TWO - GTECH'S OBLIGATIONS

 

The following are obligations of GTECH, in addition to the others provided for

in this agreement and its Annexes:

 

      I) to perfectly execute the services contracted for, using trustworthy and

      technically qualified personnel, within the agreed timeframes, complying

      with the established hours for service;

 

      II) to always deliver the services performed as checked and perfect,

      undertaking liability for any losses that defects or imperfections can be

      proven to have been caused to CAIXA or third parties, directly, in

      addition to redoing the incorrect work, when necessary, without onus or

      expense to CAIXA;

 

      III) to notify CAIXA immediately and in writing of any abnormalities it

      may note in the performance of the services;

 

      IV)to provide clarifications within the scope of this agreement as

      requested by CAIXA, whose complaints it undertakes to promptly remedy;

 

      V) to oversee, at its own expense and risk, the perfect performance of the

      services undertaken, independent of the oversight to be exercised by

      CAIXA;

 

      VI) to organize itself in such a way as to provide all the infrastructure

      necessary for providing the services set out herein, with the required

      quality and exactness;

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                                                                       page 4/18

 

      VII) to provide all the means necessary to guarantee full operability of

      the services, including consideration of circumstances such as strikes or

      stoppages of any kind, except for situations outside GTECH's control;

 

      VIII) to comply and enforce compliance with the norms regarding

      occupational health and safety as provided in the relevant legislation;

 

      IX) to undertake all measures and obligations established in the specific

      legislation regarding occupational accidents, especially when its

      employees are affected in the performance of the services or in connection

      with them, even if they occur at CAIXA's premises or at Lottery Outlets;

 

      X) to keep its employees duly identified by the use of employee ID badges

      when performing services at CAIXA's premises or at Lottery Outlets;

 

      XI) to accept, under the same contractual terms, increases or cuts that

      may be necessary, up to the limit of twenty-five percent (25%) of the

      initial updated value of this agreement;

 

       XII) during the contractual term, to maintain all SICAF registration and

      partial qualification conditions, as well as the other qualifications

      required under this Agreement, pursuant to Art. 55, XIII of Law No.

      8666/93;

 

      XIII) to allow all and any oversight by CAIXA in relation to the

      performance of the services, as well as fulfilling the obligations

      provided for expressly or implicitly in this Agreement;

 

      XIV) to maintain absolute secrecy as to the information contained in the

      documents or materials handled by its employees, dispensing special

      attention to their safekeeping, when necessary;

 

      XV) during the entire term of this Agreement, to provide CAIXA and the

      lottery retailers with permanent support and maintenance services for

      terminals and terminal applications already installed;

 

      XVI) to participate in weekly meetings in Brasilia or Sao Paulo, at

      CAIXA's discretion, to deliberate upon actions relating to development,

      operations, and maintenance, as well as those relating to the logistics of

      replacing GTECH's services;

 

      XVII) to comply with the deadlines established in the schedule defined by

      CAIXA in Annex II, with CAIXA being entitled to cancel de-installation by

      means of prior notice of five (5) business days of the scheduled date,. In

      the event of cancellation, the new date for de-installation shall be not

      less than 20 days of the originally scheduled date, unless otherwise

      agreed by the parties;

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                                                                       page 5/18

 

      XVIII) to maintain Technical Assistance Bases (TABs) and accredit

      technical representatives in order to provided maintenance and technical

      assistance services for GTECH equipment allocated to the performance of

      the services, for the time periods and conditions established herein,

      taking into consideration the de-installation schedule established by

      CAIXA;

 

      XIX) during the de-activation and replacement of the network, to guarantee

      CAIXA continuity, support and maintenance for the perfect execution of all

      the services contracted for until the network, the system and the other

      services that will replace them are duly installed and fully operational;

 

      XX) to maintain the entire on-line, real time lottery and financial

      services system, transferring to CAIXA in full the intelligence and

      respective logical and physical designs and operationalizing it jointly

      with CAIXA;

 

      XXI) to maintain the already existing terminals for the purpose of

      auditing and monitoring the system, at locations indicated by CAIXA;

 

      XXII) for auditing purposes, to allow unrestricted access to systems

      intelligence and operations by the employees designated by CAIXA;

 

      XXIII) when so requested, to supply CAIXA with files formatted for

      operational, auditing and control purposes, in compliance with the

      specifications stipulated by it.

 

ARTICLE THREE - GTECH'S LIABILITY

 

Following are the areas of GTECH's liability:

 

      I) all and any damage or losses it is proven to have caused to CAIXA or to

      third parties, even if unintentional, by itself, its directors, employees,

      representatives or agents, which liability shall not be precluded or

      diminished by the oversight or monitoring exercised by CAIXA;

 

      II) to be liable before CAIXA for any type of sanction, fine, penalty or

      any assessment or action it may suffer as a consequence of the provision

      of services, as well as for the labor contracts of its employees, even in

      those cases that involve judicial decisions, releasing CAIXA from any

      joint and several liability or responsibility;

 

      III) to be liable for losses, unauthorized reproductions and/or

      adulterations that may occur in documents and magnetic files during the

      period in which they are in its safekeeping.

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                                                                        page 6/18

 

PARAGRAPH ONE - GTECH authorizes CAIXA to deduct directly from the invoices for

payments that are due it, or from the contractual guarantee, the amount

corresponding to the aforementioned damages or losses, independent of any

judicial proceeding, prior defense in an administrative proceeding being ensured

it before the aforementioned deduction is effected.

 

PARAGRAPH TWO - The amount to be reimbursed to CAIXA in the event of losses for

which GTECH is liable shall be calculated using the TR index for the period

between the date of occurrence of the fact that gave rise to the loss or damage

and the date of the actual reimbursement to CAIXA, using the following formula:

 

            VIN

    VAT = ------- X IDF, where:

            IDI

 

-    VAT = restated amount

-    VIN = initial amount

-    IDI = cumulative TR index on the initial date

-    IDF = cumulative TR index on the final date

 

ARTICLE FOUR - CAIXA'S OBLIGATIONS

 

The following are CAIXA's obligations:

 

      I) to inform GTECH of changes in the addresses of Lottery Outlets, by

      means of keeping their registration data updated in the SIGEL;

 

      II) to input data and service requests for the Lottery Outlets in the

      SIGEL;

 

      III) to effect the payments due under the terms established in this

      agreement;

 

      IV) to notify GTECH of any irregularities encountered in the performance

      of the services;

 

      V) to oversee the Lottery Outlets so that they are legally licensed for

      the sale of wagers and the provision of financial services;

 

      VI) to authorize pay-out of lottery prizes;

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                                                                       page 7/18

 

      VII) to supply GTECH with the technical specifications for new products

      and services to be incorporated by GTECH into the network for the capture

      and processing of data, via SST, SSL or SJL;

 

      VIII) to homologate the applications developed by GTECH within a maximum

      timeframe of ten (10) consecutive days as of their presentation by GTECH,

      under penalty of such applications being considered tacitly homologated;

 

      IX) to oversee the Lottery Outlets to ensure that their electrical

      installations are in perfect working order and are provided with

      sufficient space to ensure that the installed terminals function normally;

 

      X) to notify GTECH within the timeframe stipulated in Article One,

      Paragraph Three of any alteration to the schedule set out in Annex II,

      under penalty of Caixa being liable for payment of the amount of four

      hundred Brazilian reals (R$ 400,00) per occurrence.

 

      XI) to make available the systems information required to authorize

      financial transactions, on line and in real time, under penalty of being

      required to pay for transactions that were not completed as a result of

      such contractual non-performance on CAIXA's part.

 

      XII) to make available to GTECH and notify the Lottery network before

      beg


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