[GTECH CORPORATION LOGO] AGREEMENT NO. 530133-7202

 

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                                                                   Exhibit 10.45

 

[GTECH CORPORATION LOGO]                                              REV 7-2-02d

 

 

                            AGREEMENT NO. 530133-7202

 

                                  BY AND BETWEEN

 

                                GTECH CORPORATION

                                55 TECHNOLOGY WAY

                       WEST GREENWICH, RHODE ISLAND 02817

 

                                       AND

 

                       TRANSACT TECHNOLOGIES INCORPORATED

                                  7 LASER LANE

                              WALLINGFORD, CT 06492

 

                               For the Purchase of

 

                              GTECH Model GLP305/SA

 

          GTECH REPRESENTATIVES:                 VENDOR REPRESENTATIVES

 

               JOHN PICARD                             MARK BAUER

          ----------------------                 ----------------------

 

 

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                    GTECH CORPORATION OEM PURCHASE AGREEMENT

 

1.        TERMS AND CONDITIONS.............................................5

         1.1       PRODUCTS................................................5

         1.2       SERVICES................................................5

         1.3       OEM PURCHASES...........................................5

         1.4       NO MINIMUM COMMITMENT; NO EXCLUSIVITY...................5

         1.5       SPARE PARTS.............................................5

2.        ORDERING.........................................................6

         2.1       PURCHASE ORDERS.........................................6

         2.2       LEAD TIME...............................................6

         2.3       PRIORITY ORDERS.........................................6

         2.4       RESCHEDULING............................................6

         2.5       CANCELLATION FOR CONVENIENCE............................6

         2.6       FORECAST................................................6

3.        SHIPPING, PACKAGING, AND DELIVERY................................6

         3.1       F.O.B., TITLE, RISK OF LOSS.............................7

         3.2       SHIPMENT................................................7

         3.3       PACKAGING...............................................7

         3.4       INTERNATIONAL SHIPMENTS.................................7

         3.5       EARLY ARRIVAL...........................................7

4.        PRICE............................................................7

         4.1       UNIT PRICES.............................................7

         4.2       PRICE REDUCTION.........................................7

         4.3       PRICE REDUCTIONS ON SPARE PARTS AND REPAIRS.............7

5.        PAYMENT..........................................................8

6.        TAXES AND DUTIES.................................................8

7.        CHANGES..........................................................8

         7.1       PRODUCT CHANGES.........................................8

         7.2       GTECH CHANGES...........................................8

         7.3       ENHANCEMENTS, SUCCESSOR PRODUCTS........................9

8.        COOPERATION IN LOTTERY AND GAMING MARKET.........................9

         8.1       TRANSFER OF EQUIPMENT...................................9

         8.2       NON-COMPETE CLAUSE......................................9

         8.3       VENDOR OUTSIDE REQUIREMENTS.............................9

9.        QUALITY AND RELIABILITY REQUIREMENTS............................10

         9.1       QUALITY AND RELIABILITY REQUIREMENTS...................10

         9.2       RELIABILITY PLAN.......................................10

         9.3       RELIABILITY TEST.......................................10

         9.4       RELIABILITY TEST REPORT................................10

         9.5       VENDOR SURVEY..........................................10

         9.6       TEST EQUIPMENT AND PROCEDURE CORRELATION...............10

         9.7       FINAL TEST AND INSPECTION DATA.........................10

         9.8       SOURCE INSPECTION......................................10

 

 

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         9.9       RECEIVING INSPECTION...................................11

         9.10      FIELD RELIABILITY REPORTING............................11

         9.11      FAILURE ANALYSIS AND CORRECTIVE ACTIONS................11

         9.12      GTECH'S RIGHTS WITH RESPECT TO NON-CONFORMING GOODS....11

         9.13      FAILURES OF CONSEQUENCE................................12

10.       INSURANCE.......................................................12

         10.1      VENDOR INSURANCE COVERAGE..............................12

         10.2      GENERAL LIABILITY......................................12

         10.3      PROOF OF INSURANCE.....................................12

         10.4      FIRST PRODUCTION PERFORMANCE BOND......................12

11.       INDEMNITY.......................................................12

12.       REPAIR SUPPORT..................................................13

         12.1      REPAIR ORDERS..........................................13

         12.2      INTERNATIONAL REPAIR AND SUPPORT.......................13

          12.3      FAILURE ANALYSIS.......................................14

         12.4      REPAIR CAPABILITIES....................................14

         12.5      TEST EQUIPMENT.........................................14

         12.6      QUALIFIED VENDOR LIST..................................14

         12.7      DIAGNOSTICS............................................14

         12.8      DOCUMENTATION..........................................14

13.       TRAINING........................................................14

         13.1      INITIAL TRAINING.......................................14

         13.2      COMPONENT LEVEL TRAINING...............................15

         13.3      FUTURE TRAINING........................................15

14.       WARRANTIES......................................................15

         14.1      VENDOR STANDARDS.......................................15

         14.2      AUTHORITY..............................................15

         14.3      TITLE; INFRINGEMENT....................................15

         14.4      CONFORMANCE; DEFECTS...................................15

         14.5      FREIGHT COSTS ON REPAIRS...............................16

         14.6      FREIGHT CHARGES ON NON-WARRANTY REPAIRS................16

         14.7      WARRANTY TERMS.........................................16

15.       TOOLING.........................................................16

16.       FORCE MAEJURE...................................................16

17.       CONFIDENTIALITY.................................................16

18.       PUBLIC ANNOUNCEMENTS............................................17

19.       NOTICES.........................................................17

20.       ASSIGNMENT......................................................17

21.       TERM AND TERMINATION............................................18

         21.1      TERM...................................................18

         21.2      TERMINATION BY GTECH...................................18

         21.3      TERMINATION BY VENDOR..................................18

         21.4      OBLIGATIONS OF TERMINATION.............................18

22.       CONFLICTING PROVISIONS..........................................18

23.       MANUFACTURING RIGHTS............................................19

24.       MISCELLANEOUS...................................................19

 

 

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         ATTACHMENTS

 

1         Products Specifications

2         Pricing

3         Spare Parts Pricing

4         Warranty Information

5         General Packaging Specification

6         Tooling

7         Manufacturing Rights

 

 

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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 TransAct

Technologies Incorporated a Delaware corporation, with offices at 7 Laser Lane,

Wallingford, CT 06492 ("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 thermal

printer, 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

("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 upon receipt of the first

production order. The RSL shall include all parts and assemblies necessary to

repair and maintain the Products purchased under this Agreement. The RSL shall

include a non-binding, best estimate 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(c).

 

                  b.        EMERGENCY STOCK. VENDOR shall maintain an adequate

supply of spare parts at its facility to support Priority Orders, as described

in Section 2.3.

 

                  c.        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

 

 

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Agreement and for a period of five (5) years thereafter. In the event VENDOR is

unable to fill 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, and VENDOR shall be liable for the difference

between GTECH's cost of manufacture and VENDOR's sales price.

 

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 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 sixty (60) calendar days ("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 replacement Products to GTECH

at no cost to GTECH, and any premium airfreight charges shall be prepaid by, and

borne by VENDOR.

 

         2.3 PRIORITY ORDERS. GTECH Purchase Orders for any and all spare parts

identified as "Priority Orders" shall be shipped within twenty-four (24) hours

after receipt by VENDOR.

 

         2.4 RESCHEDULING. Within 30 calendar days of scheduled delivery date,

GTECH may reschedule within the scheduled month. At 31-60 calendar days before

scheduled delivery date, an order maybe rescheduled up to 30 calendar days later

than the scheduled delivery date, or the end of the calendar quarter, whichever

is greater. Each order may be rescheduled a maximum of two times, once with each

method listed in this section.

 

         2.5 CANCELLATION FOR CONVENIENCE. Within 60 calendar days calendar days

of scheduled delivery date, no cancellation is permitted. At 61+ calendar days

before scheduled delivery date, GTECH may cancel any or all Purchase Orders.

 

         2.6 FORECAST. Any forecast, which may be provided, is a good faith

estimate of GTECH's 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

 

 

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

Products will be made F.O.B. VENDOR's dock at 20 Bomax Drive, Ithaca NY 14850.

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

proper tender of the Products to the carrier. VENDOR 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 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. All

pricing 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.

 

         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, and the cost of

repairs, 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.

 

 

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5.        PAYMENT

 

         5.1 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. In the event that GTECH elects to take delivery at

VENDOR's international manufacturing location, an additional thirty (30)

calendar days will be added to reflect estimated shipping time. Payment shall

not constitute acceptance on non-conforming Products. For repair of Products at

international locations, term of payment will be forty-five 45 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,

repairability, reliability or appearance at least ninety (90) 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. GTECH shall make best effort to respond in writing to VENDOR

within fifteen (15) calendar days of GTECH's receipt of change notification. 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 are and 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.

 

 

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         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 ordered separately from any orders which may be open at that

time. No substitutions will be made on open purchase orders with delivery within

sixty (60) calendar days lead-time. 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. During the Term of this Agreement and any extensions thereof, VENDOR

shall not without GTECH's prior written consent, supply the Products provided

herein to any other person or entity for use in connection with the operation of

public or private on-line or in-lane lotteries in the U.S. or abroad.

 

         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 but not if VENDOR has terminated this

Agreement pursuant to Section 21.3 hereof, VENDOR shall not directly or

indirectly, become engaged in, or financially interested in, any on-line or

in-lane lottery business which is in competition with the on-line or in-lane

lottery business of GTECH, its subsidiaries or affiliates; provided, however,

that (a) nothing contained herein shall prevent VENDOR from supplying products

or services to competitors of GTECH so long as such products or services do not

compete against GTECH's on-line or in-lane lottery business or (b) purposely and

knowingly engage in or participate in any effort or act to induce any of the

customers, or employees of GTECH or its affiliated companies to take any action,

which is in direct conflict with the on-line or in-lane lottery business of

GTECH, its subsidiaries or affiliates or (c) GTECH elects to purchase comparable

thermal printer products for Altura on-line terminal and no longer purchases

Product from VENDOR; provided further, however, that the limitations of the last

sentence of Section 8.1, and of this Section 8.2 shall not apply from and after

the earlier to occur of (i) GTECH or an affiliated company enters into an

agreement with a third party to purchase a new comparable thermal printer that

competes with VENDOR's Product, (ii) GTECH or an affiliated company purchases a

new comparable thermal printer that competes with VENDOR's Product from a third

party, or (iii) GTECH or an affiliated company commences manufacturing (itself

or under contract with a third party) a new comparable thermal printer that

competes with VENDOR's Product.

 

         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.

 

 

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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. GTECH may participate and/or monitor the VENDOR's

reliability test on the Product at the VENDOR's facility.

 

         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. If correlation is not achieved

within 30 calendar days prior to the first production shipment, the VENDOR

agrees to obtain additional test equipment and/or develop procedures that are

capable of correlation. Said test equipment and procedures will be mutually

agreed upon by both the VENDOR and GTECH Purchasing, QA and Test Engineering.

 

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

inspection and/or test data based on the mu