[GTECH CORPORATION LOGO] AGREEMENT NO.: 51-1001-00/SL810 LPX

 

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                                                                   Exhibit 10.47

 

[GTECH CORPORATION LOGO]                                             rev 12-11-02

 

 

                       AGREEMENT NO.: 51-1001-00/SL810 LPX

 

                                  BY AND BETWEEN

 

                                GTECH CORPORATION

                                55 TECHNOLOGY WAY

                       WEST GREENWICH, RHODE ISLAND 02817

 

                                       AND

 

                               BCM ADVANCED RESEARCH

                                    1 HUGHES

                                IRVINE, CA 92618

 

                               FOR THE PURCHASE OF

 

                                CPU MOTHER BOARDS

 

GTECH REPRESENTATIVES:                                      VENDOR REPRESENTATIVES

 

     JOHN PICARD                                                 TOM SKIBINSKI

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                    GTECH CORPORATION OEM PURCHASE AGREEMENT

 

1.       TERMS AND CONDITIONS.................................................1

   1.1     PRODUCTS...........................................................1

   1.2     SERVICES...........................................................1

   1.3     OEM PURCHASES......................................................1

   1.4     NO MINIMUM COMMITMENT; NO EXCLUSIVITY..............................1

   1.5     SPARE PARTS........................................................1

2.       ORDERING.............................................................2

   2.1     PURCHASE ORDERS....................................................2

   2.2     LEAD TIME..........................................................2

   2.3     RESCHEDULING.......................................................2

   2.4     CANCELLATION FOR CONVENIENCE.......................................2

   2.5     FORECAST...........................................................2

3.       SHIPPING, PACKAGING, AND DELIVERY....................................3

   3.1     F.O.B., TITLE, RISK OF LOSS........................................3

   3.2     SHIPMENT...........................................................3

   3.3     PACKAGING..........................................................3

   3.4     INTERNATIONAL SHIPMENTS............................................3

   3.5     EARLY ARRIVAL......................................................3

4.       PRICE................................................................3

   4.1     UNIT PRICES........................................................3

   4.2     PRICE REDUCTION....................................................3

   4.3     PRICE REDUCTIONS ON SPARE PARTS AND REPAIRS........................4

5.       PAYMENT..............................................................4

6.       TAXES AND DUTIES.....................................................4

7.       CHANGES..............................................................4

   7.1     PRODUCT CHANGES....................................................4

   7.2     GTECH CHANGES......................................................4

   7.3     ENHANCEMENTS, SUCCESSOR PRODUCTS...................................5

8.       COOPERATION IN LOTTERY AND GAMING MARKET.............................5

   8.1     TRANSFER OF EQUIPMENT..............................................5

    8.2     NON-COMPETE CLAUSE.................................................5

   8.3     VENDOR OUTSIDE REQUIREMENTS........................................5

9.       QUALITY AND RELIABILITY REQUIREMENTS.................................5

   9.1     QUALITY AND RELIABILITY REQUIREMENTS...............................5

   9.2     RELIABILITY PLAN...................................................5

   9.3     RELIABILITY TEST...................................................5

   9.4     RELIABILITY TEST REPORT............................................6

   9.5     VENDOR SURVEY......................................................6

   9.6     TEST EQUIPMENT AND PROCEDURE CORRELATION...........................6

   9.7     FINAL TEST AND INSPECTION DATA.....................................6

   9.8     SOURCE INSPECTION..................................................6

   9.9     RECEIVING INSPECTION...............................................6

   9.10    FIELD RELIABILITY REPORTING........................................6

   9.11    FAILURE ANALYSIS AND CORRECTIVE ACTIONS............................7

   9.12    GTECH'S RIGHTS WITH RESPECT TO NON-CONFORMING GOODS................7

10.      INSURANCE............................................................7

   10.1    VENDOR INSURANCE COVERAGE..........................................7

   10.2    GENERAL LIABILITY..................................................7

   10.3    PROOF OF INSURANCE.................................................7

 

 

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11.      INDEMNITY............................................................8

12.      REPAIR SUPPORT.......................................................8

   12.1    REPAIR ORDERS......................................................8

   12.2    INTERNATIONAL REPAIR AND SUPPORT...................................8

   12.3    FAILURE ANALYSIS...................................................8

   12.4    REPAIR CAPABILITIES................................................9

   12.5    TEST EQUIPMENT.....................................................9

   12.6    QUALIFIED VENDOR LIST..............................................9

   12.7    DIAGNOSTICS........................................................9

   12.8    DOCUMENTATION......................................................9

13.      TRAINING.............................................................9

   13.1    INITIAL TRAINING...................................................9

   13.2    COMPONENT LEVEL TRAINING..........................................10

   13.3    FUTURE TRAINING...................................................10

14.      WARRANTIES..........................................................10

   14.1    AGENCY/STANDARDS COMPLIANCE.......................................10

   14.2    AUTHORITY.........................................................10

   14.3    TITLE; INFRINGEMENT...............................................10

   14.4    CONFORMANCE; DEFECTS..............................................10

   14.5    FREIGHT COSTS ON REPAIRS..........................................10

15.      TOOLING.............................................................10

16.      FORCE MAJEURE.......................................................11

17.      CONFIDENTIALITY.....................................................11

18.      PUBLIC ANNOUNCEMENTS................................................12

19.      NOTICES.............................................................12

20.      ASSIGNMENT..........................................................12

21.      TERM AND TERMINATION................................................12

   21.1    TERM..............................................................12

   21.2    TERMINATION BY GTECH..............................................12

   21.3    TERMINATION BY VENDOR.............................................13

   21.4    OBLIGATIONS ON TERMINATION........................................13

22.      CONFLICTING PROVISIONS..............................................13

23.      MANUFACTURING RIGHTS................................................13

24.      MISCELLANEOUS.......................................................13

 

 

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                          GTECH OEM PURCHASE AGREEMENT

 

         THIS AGREEMENT between GTECH CORPORATION, a Delaware corporation, with

offices at 55 Technology Way, West Greenwich, RI 02817 ("GTECH") and BCM

Advanced Research, a California corporation, with offices at 1 Hughes, Irvine,

California 92618 ("VENDOR") sets out the terms and conditions under which VENDOR

will sell the Products and provide the Services described in this Agreement and

Attachments to GTECH.

 

1.        TERMS AND CONDITIONS

 

         1.1.      PRODUCTS. As used in this Agreement, "Products" means the cpu

mother board, as well as the VENDOR's recommended spare parts, subassemblies,

operating supplies, maintenance kits, and options, if any, produced in

accordance with the specifications and any subsequent modifications authorized

in accordance with the terms of this Agreement attached hereto as Attachment

1("PRODUCT Specifications").

 

         1.2.      SERVICES. As used in this Agreement, "Services" means the

ancillary services, if any, to be provided by VENDOR in accordance with the

terms of this Agreement including without limitation, those services described

in Sections 12 and 13 of this Agreement.

 

         1.3.      OEM PURCHASES. The Products purchased under this Agreement are

intended primarily for resale, rental or lease directly and indirectly to

GTECH's customers under trademarks and trade names selected by GTECH for use in

conjunction with GTECH systems. Products may also be used by GTECH and its

subsidiaries for their internal use.

 

         1.4.      NO MINIMUM COMMITMENT; NO EXCLUSIVITY. Unless otherwise

specified in Attachment 2, there is no minimum quantity of purchases under this

Agreement. VENDOR will furnish Products and Services on an as-ordered basis. It

is expressly understood and agreed that GTECH is not obligated to purchase any

or all of the Products and Services from VENDOR and that GTECH may manufacture

competitive Products and Services itself and/or procure competitive products and

services from other vendors.

 

         1.5.      SPARE PARTS. VENDOR shall provide a Recommended Spare Parts

List ("RSL") for all Products covered by this Agreement. The RSL shall include

all parts and assemblies necessary to repair and maintain the Products purchased

under this Agreement. The RSL shall include a forecast of parts that must be

repaired and/or replaced over the first three years of service. A separate RSL

shall be supplied for each product model or configuration, identifying all

common parts.

 

                  a.        NON-STANDARD SPARE PARTS. If the Product contains a

part not readily available in the marketplace ("Non-Standard Spare Parts"),

VENDOR shall make such part available to GTECH in accordance with Section

1.5(b).

 

                  b.        SPARE PART SUPPORT. VENDOR shall make all spare parts

including Non-Standard Spare Parts as described in Section 1.5(a) above,

available during the Term of this Agreement and for a period of five (5) years

thereafter. In the event VENDOR is unable to fill

 

 

                                     

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GTECH's Purchase Orders for spare parts promptly, VENDOR shall make available,

at no charge to GTECH, VENDOR's manufacturing drawings and specifications, list

of suppliers, and information necessary to purchase and/or manufacture all parts

and/or assemblies or subassemblies for the parts that are not available from the

VENDOR.

 

2.         ORDERING

 

         2.1       PURCHASE ORDERS. All purchases under this Agreement will be

made under purchase orders ("Purchase Orders") referencing this Agreement issued

by GTECH or by any subsidiary or affiliate of GTECH. Purchase Orders will be

placed directly with VENDOR or its designated distributor and deemed accepted by

VENDOR unless rejected in writing by VENDOR specifying the reasons for rejection

within fourteen (14) calendar days after receipt of the Purchase Order. VENDOR

may reject purchase orders only if a Purchase Order does not comply with the

terms and conditions of this Agreement.

 

         2.2       LEAD TIME. Unless otherwise agreed, Purchase Orders shall

specify a delivery date with the normal lead-time of eight (8) weeks FOB, Taiwan

("Lead Time"). If GTECH requests delivery to meet a special requirement,

including but not limited to the replacement of Products lost or damaged in

shipment, VENDOR will use all commercially reasonable efforts to expedite

delivery; including, without limitation, giving GTECH first priority with

respect to all Products in stock or on order, provided however, that GTECH shall

not pay any additional charges or costs for expediting unless such charges or

costs have been accepted in writing by GTECH. In the event that Products ordered

within the Lead Time are overdue for delivery to GTECH, VENDOR shall ship

Products to GTECH and any premium airfreight charges shall be prepaid by, and

borne by VENDOR.

 

         2.3       RESCHEDULING. GTECH may reschedule delivery of any Product or

Service by written notice to VENDOR at anytime before the delivery date

specified in the applicable Purchase Order with the following conditions:

 

                  a.        If materials have already been procured for the

rescheduled Purchase Orders, GTECH will be invoiced for and liable for those

materials.

 

                  b.        If the Purchase Order to be rescheduled has already

entered the production line there can be no rescheduling.

 

         2.4       CANCELLATION FOR CONVENIENCE. GTECH may cancel any or all

Purchase Orders or part thereof at any time prior to the scheduled delivery date

with the following conditions:

 

                  a.        If materials have already been procured for the

Purchase Orders to be cancelled and cannot be used elsewhere by VENDOR within 30

calendar days of the cancellation, GTECH will be invoiced for and liable for

those materials.

 

                  c.        If the Purchase Order to be cancelled has already

entered the production line there can be no cancellation.

 

         2.5       FORECAST. GTECH will provide a three (3) month rolling

forecast upon request by VENDOR. Any forecast, which may be provided, is a good

faith estimate of GTECH's

 

 

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anticipated requirements for the Products for the periods indicated based on

current market conditions and does not constitute a commitment to purchase any

quantity of Products or Services.

 

3.        SHIPPING, PACKAGING, AND DELIVERY

 

         3.1       F.O.B., TITLE, RISK OF LOSS. Unless otherwise agreed, delivery

of Products will be made F.O.B. VENDOR's dock, Taiwan facility if procured

directly with VENDOR. Delivery of Products will be made F.O.B. distributor's

dock in continental U.S. if procured thru distribution. Subject to proper

packaging, title and risk of loss shall pass to GTECH upon proper tender of the

Products to the carrier. VENDOR or distributor will provide proof of delivery

upon request and will provide reasonable assistance to GTECH at no charge in any

claim GTECH may make against a carrier or insurer for misdelivery, loss or

damage to Products after title has passed to GTECH.

 

         3.2       SHIPMENT. VENDOR will ship Products in accordance with GTECH's

instructions as specified in the Purchase Order. In the absence of any other

instructions, Products will be shipped by common carrier commercial land freight

for delivery in the continental United States and by ocean freight for

deliveries elsewhere, insurance and shipping charges collect.

 

          3.3       PACKAGING. VENDOR shall affix to the outside of each shipment

a list of contents, including serial numbers, to allow for review of contents

upon receipt. Products shall be packaged in accordance with GTECH's General

Packaging Specifications or equivalent as specified in Attachment 5.

 

         3.4       INTERNATIONAL SHIPMENTS. If GTECH specifies delivery for

international shipment by GTECH or GTECH's freight forwarder, VENDOR will be

responsible for obtaining any necessary U.S. Department of Commerce export

licenses, permits or approvals. GTECH will be responsible for any licenses,

permits or approvals of the country of import.

 

         3.5       EARLY ARRIVAL. GTECH reserves the right to reject Products

arriving at GTECH's facilities more than five (5) calendar days before the

delivery date specified in the Purchase Order.

 

4.        PRICE

 

         4.1       UNIT PRICES. All pricing will be specified in Attachment 2 and

shall remain in effect for the Term of this Agreement and any extensions

thereafter.

 

         4.2       PRICE REDUCTION. VENDOR represents that the prices specified

in Attachment 2 are the lowest prices charged to any other customer of VENDOR

purchasing the same or lesser quantities of Products and/or Services under

similar terms and conditions. If at any time or times hereafter, VENDOR offers

Products and/or Services to any other customer on more favorable terms,

conditions or prices, VENDOR shall, at that time, offer the same terms,

conditions and prices to GTECH. If accepted by GTECH, such terms, conditions

and/or prices shall apply to all Products and Services purchased by GTECH for

the balance of the Term and any extensions thereafter.

 

 

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         4.3       PRICE REDUCTIONS ON SPARE PARTS AND REPAIRS. In the event of a

price reduction on the Products covered under this Agreement, VENDOR agrees to

reduce the list price of all spare parts on VENDOR's RSL, by a percentage rate

equal to the reduction in the price of the Products. Any and all discounts that

are stated in Attachment 2 of this Agreement shall remain in effect, and may be

applied to all purchases made hereunder. The price reduction will apply to all

Purchase Orders for spare parts and repairs that are scheduled for delivery no

less than fifteen (15) calendar days after the effective date of the price

reduction.

 

5.        PAYMENT

 

         VENDOR may issue invoices no earlier than the shipping date of the

Products or Services. Payment will be made within thirty (30) calendar days of

receipt of proper invoices. Payment shall not constitute acceptance on

non-conforming Products. For repair of Products at international locations, term

of payment will be thirty (30) calendar days.

 

6.        TAXES AND DUTIES

 

         GTECH will pay as a separate invoiced item only such sales, use,

value-added or similar tax listed therein (all other taxes are excluded,

including, without limitation, taxes based upon VENDOR's net income), lawfully

imposed on the sale of the Products or provision of Services to GTECH. Taxes,

duties or like charges imposed on the Products after title has passed to GTECH

will be paid by GTECH unless such charges are the result of a trade sanction

imposed on VENDOR's Products, as specified in Section 21.2, below. In lieu of

taxes, GTECH may furnish to VENDOR a tax exemption certificate. VENDOR agrees to

provide reasonable assistance to GTECH, without charge, in any proceeding for

the refund or abatement of any taxes GTECH is required to pay under this Section

6.

 

7.         CHANGES

 

         7.1       PRODUCT CHANGES. VENDOR shall submit evaluation samples of all

Products changes that affect form, fit, function, maintainability, reparability,

reliability or appearance at least thirty (30) calendar days before such changes

are implemented. VENDOR shall forward (2) copies of all requests to make the

changes generally described above to: GTECH CORPORATION, 55 Technology Way, West

Greenwich, RI 02817 Attention: Purchasing Agent. GTECH may, at its option,

decline to have such changes incorporated into the Products. Proposed changes

will not be incorporated into the Products until accepted in writing by GTECH.

In no event will GTECH ever be deemed to have accepted any change in the price

or delivery schedule without its prior written consent.

 

         7.2       GTECH CHANGES. GTECH may request changes in the Products at

any time or times during the Term of this Agreement. If such changes in the

Products will require changes in the prices and/or delivery schedule, VENDOR

must respond promptly with a written change proposal setting forth the changes

in prices and/or delivery schedule. Such proposal, when signed by an authorized

representative of GTECH, will become part of this Agreement. If VENDOR does not

respond with a written change proposal within thirty (30) calendar days after

receipt of GTECH's request, such changes will be implemented without any

alternation in the price and/or delivery schedule. Such changes, which are

deemed by GTECH to be proprietary

 

 

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and/or confidential, shall remain the property of GTECH and VENDOR may not use

such changes or disclose them to others without the prior written consent of

GTECH.

 

         7.3       ENHANCEMENTS, SUCCESSOR PRODUCTS. If during the Term of this

Agreement, VENDOR offers improvements, options, additional functionality or

other enhancements ("Enhancements") to the Products not available at the time

this Agreement is signed or other products which substantially replace the

Products ("Successor Products"), VENDOR will offer such Enhancements and/or

Successor Products to GTECH at prices that do not exceed those charged to any

other customer of VENDOR purchasing the same or lesser quantities of such

Enhancements or Successor Products. If GTECH elects, in writing, to purchase

such Enhancements or Successor Products, the Enhanced Products or Successor

Products will be substituted to make up the balance of any committed quantity

under this Agreement. In any event, GTECH may, at its option, elect to continue

to purchase Products as originally specified for the Term of this Agreement and

any extensions thereafter.

 

8.        COOPERATION IN LOTTERY AND GAMING MARKET

 

         8.1       TRANSFER OF EQUIPMENT. During the Term of this Agreement and

any extensions thereof, GTECH shall have the sole discretion as to whether to

submit proposals or bids for the sale, lease or other transfer of the Products

to any current or potential customer of GTECH or its affiliates, and as to

whether such a proposal or bid shall be submitted by GTECH, by VENDOR or jointly

with other parties.

 

         8.2       NON-COMPETE CLAUSE. VENDOR further agrees that during the Term

of this Agreement and any extensions thereof, and for the one (1) year period

after the expiration or earlier termination, VENDOR shall not directly or

indirectly, engage in or participate in any effort or act to induce any of the

customers, associates or employees of GTECH or its affiliated companies to take

any action which is in direct conflict with the business interests of GTECH, its

subsidiaries or affiliates.

 

         8.3 VENDOR OUTSIDE REQUIREMENTS. VENDOR agrees that it shall advise its

distributors outside the U.S. of the covenants and responsibilities set forth in

this Agreement.

 

9.        QUALITY AND RELIABILITY REQUIREMENTS

 

         9.1       QUALITY AND RELIABILITY REQUIREMENTS. GTECH requires that the

VENDOR have in place at its manufacturing facility, adequate quality and

reliability safeguards to ensure that all Products shipped to GTECH meet or

exceed all parameters specified in the Product Specification, and that the

Product is not subject to any infant mortality.

 

         9.2       RELIABILITY PLAN. The VENDOR will submit to GTECH Quality

Assurance ("QA") a reliability test plan for the Products, which will include

the VENDOR's reliability requirements based on the Products Specification and

test schedule. GTECH QA will review the reliability plan for the Product,

provide comments and approve the plan when satisfied that all design

requirements will be adequately tested.

 

         9.3       RELIABILITY TEST. The VENDOR will conduct a reliability test

on the Products to ensure that the Products meet or exceed all parameters

specified in the Product Specification.

 

 

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GTECH may participate and/or monitor the VENDOR's reliability test on the

Product at the VENDOR's facility. The VENDOR will provide GTECH QA with a

minimum two weeks notice prior to the start of the reliability test.

 

         9.4        RELIABILITY TEST REPORT. The VENDOR will submit to GTECH QA a

formal reliability test report for the Products based on the results of the

Product reliability test. The reliability test report will contain all data

necessary to verify and confirm that the Products meet all the design

requirements identified in the Product Specification and any resultant design

changes and corrective action to resolve any test failures. GTECH QA must

approve the VENDOR's reliability test report before the VENDOR can be approved

to ship Products to GTECH.

 

         9.5       VENDOR SURVEY. The VENDOR will allow GTECH to perform a vendor

survey at the VENDOR'S facility. 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.

 

         9.6       TEST EQUIPMENT AND PROCEDURE CORRELATION. The test equipment

and procedures used in the VENDOR's final inspection and test, will correlate

with the test equipment and procedures used by GTECH upon mutual agreement

between VENDOR and GTECH.

 

         9.7       FINAL TEST AND INSPECTION DATA. The VENDOR will provide GTECH

with inspection and/or test data based on the mutually agreed upon test

equipment and procedures with each lot of Products delivered to GTECH. The

VENDOR will make final test and inspection data (yield information), on-going

reliability test data, field reliability performance data, and repair data

available at the request of GTECH