[TEXAS LOTTERY LOGO] Exhibit 10.1
TEXAS LOTTERY COMMISSION
CONTRACT FOR LOTTERY OPERATOR
OCTOBER 10, 2001
CONTRACT FOR LOTTERY OPERATION AND SERVICES
[TEXAS LOTTERY LOGO] PAGE 1
TABLE OF CONTENTS
GLOSSARY OF TERMS................................................................................................ V
PART I GENERAL INFORMATION....................................................................................... 1
1.1 ENGAGEMENT........................................................................................ 1
1.2 INTRODUCTION ..................................................................................... 2
1.3 LOTTERY OPERATOR (GTECH).......................................................................... 2
1.4 GTECH/LOTTERY RELATIONSHIP........................................................................ 3
1.5 GTECH'S OBLIGATIONS............................................................................... 4
1.6 ERROR OR AMBIGUITY WAIVED BY GTECH................................................................ 4
1.7 MODIFICATION OF INFORMATION SUPPORTING A PROPOSAL................................................. 4
1.8 CAPTIONS ...................................................................................... 5
1.9 SURVIVAL ...................................................................................... 5
1.10 CONTRACT EXECUTED IN FIVE ORIGINALS............................................................... 5
PART II NOTICES ...................................................................................... 6
2.1 CONTACT PERSON.................................................................................... 6
2.2 NOTICES ...................................................................................... 6
PART III GENERAL CONTRACTUAL TERMS AND CONDITIONS................................................................ 8
3.1 GOVERNING LAW..................................................................................... 8
3.2 CONTRACT ELEMENTS................................................................................. 8
3.3 AMENDMENTS........................................................................................ 8
3.4 WAIVER ...................................................................................... 9
3.5 CLARIFICATION OF LOTTERY'S INTENT................................................................. 9
3.6 LOTTERY'S FINANCIAL OBLIGATIONS................................................................... 9
3.7 RELATIONSHIP OF THE PARTIES....................................................................... 10
3.8 PAYMENT........................................................................................... 10
3.9 ASSIGNMENTS....................................................................................... 11
3.10 SUBCONTRACTING.................................................................................... 12
3.11 LOTTERY APPROVAL OF STAFFING...................................................................... 12
3.12 COMPLIANCE........................................................................................ 13
3.13 TERM OF CONTRACT.................................................................................. 13
3.14 TERMINATION AT WILL............................................................................... 14
3.15 TERMINATION FOR CAUSE............................................................................. 14
3.16 TERMINATION FOR IMPOSSIBILITY OF PERFORMANCE...................................................... 16
3.17 TERMINATION WITHOUT PENALTY....................................................................... 17
3.18 EFFECT OF TERMINATION............................................................................. 17
3.19 EFFECTIVE DATES OF CONTRACT OBLIGATIONS........................................................... 18
3.20 WARRANTIES........................................................................................ 18
3.21 GTECH SITE VISITS................................................................................. 23
3.22 INTELLECTUAL PROPERTY RIGHTS...................................................................... 23
3.23 PRE-EXISTING AND THIRD PARTY RIGHTS............................................................... 25
3.24 REMEDIATION....................................................................................... 26
3.25 INTELLECTUAL PROPERTY SEARCH...................................................................... 26
3.26 ACCOUNTING RECORDS................................................................................ 27
3.27 AUDIT REQUIREMENTS................................................................................ 27
3.28 RIGHT TO ADDITIONALLY AUDIT GTECH'S TEXAS OPERATIONS.............................................. 28
3.29 QUARTERLY CONTRACT COMPLIANCE STATEMENT........................................................... 29
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3.30 ANNUAL CONTRACT COMPLIANCE REVIEW................................................................. 29
3.31 QUARTERLY COST REVIEW............................................................................. 29
3.32 INDEMNIFICATION................................................................................... 31
3.33 BONDS AND INSURANCE............................................................................... 32
3.34 SELF INSURANCE.................................................................................... 33
3.35 PERFORMANCE BOND.................................................................................. 33
3.36 FIDELITY BOND..................................................................................... 33
3.37 GENERAL LIABILITY INSURANCE....................................................................... 34
3.38 PROPERTY INSURANCE................................................................................ 34
3.39 ERRORS AND OMISSIONS INSURANCE.................................................................... 35
3.40 AUTOMOBILE LIABILITY INSURANCE.................................................................... 35
3.41 CRIME INSURANCE................................................................................... 36
3.42 DISCLOSURE OF LITIGATION.......................................................................... 36
3.43 FORCE MAJEURE / DELAY OF PERFORMANCE.............................................................. 37
3.44 SECURITY PROGRAM.................................................................................. 38
3.45 TAXES, FEES AND ASSESSMENTS....................................................................... 38
3.46 NEWS RELEASES..................................................................................... 39
3.47 ADVERTISING....................................................................................... 39
3.48 HIRING OF TEXAS LOTTERY PERSONNEL................................................................. 40
3.49 HIRING OF LOBBYIST; SUPPLEMENTAL INFORMATION...................................................... 40
3.50 REAL ESTATE LEASE COSTS........................................................................... 40
3.51 END OF CONTRACT CONVERSION........................................................................ 40
3.52 NON-DISCLOSURE AGREEMENT.......................................................................... 42
3.53 USUFRUCT ...................................................................................... 42
3.54 TICKET PURCHASE................................................................................... 42
3.55 EQUIPMENT ...................................................................................... 43
3.56 PROGRAMS ...................................................................................... 43
3.57 LOTTERY PURCHASE OPTION........................................................................... 46
3.58 SANCTIONS AND REMEDIES SCHEDULE................................................................... 46
3.59 LIQUIDATED DAMAGES................................................................................ 54
3.60 DISPUTE RESOLUTION................................................................................ 55
3.61 CERTIFICATIONS.................................................................................... 55
3.62 CODE OF CONDUCT................................................................................... 56
3.63 CONTACT WITH TEXAS LOTTERY EMPLOYEES.............................................................. 57
3.64 INCIDENTS AND ANOMALIES........................................................................... 57
3.65 TRADEMARK AND SERVICE MARK SEARCH................................................................. 57
3.66 ATTACHMENT OF THIRD PARTY SYSTEMS, TERMINALS OR PRODUCTS.......................................... 58
PART IV REQUIRED INFORMATION..................................................................................... 59
4.1 STATEMENT OF UNDERSTANDING........................................................................ 59
4.2 BACKGROUND INFORMATION AND EXPERIENCE............................................................. 60
4.3 FINANCIAL SOUNDNESS............................................................................... 60
4.4 BACKGROUND INVESTIGATIONS......................................................................... 60
4.5 STAFFING PLAN..................................................................................... 61
4.6 RESUMES........................................................................................... 61
PART V HISTORICALLY UNDERUTILIZED BUSINESS / MINORITY BUSINESS PARTICIPATION..................................... 62
5.1 INTRODUCTION...................................................................................... 62
5.2 BUSINESS SUBCONTRACTING PLAN (BSP) PROCEDURES..................................................... 63
5.3 BUSINESS SUBCONTRACTING PLAN (BSP) INCORPORATED INTO CONTRACT..................................... 64
5.4 CHANGES TO THE BSP AFTER A CONTRACT HAS COMMENCED................................................. 64
5.5 REPORTING AND COMPLIANCE WITH THE BSP............................................................. 64
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PART VI LOTTERY GAMING SYSTEM.................................................................................... 67
6.1 PROVISIONS OF CONTRACT............................................................................ 67
6.2 RFP GOVERNS....................................................................................... 67
6.3 EXCEPTIONS AND MODIFICATIONS...................................................................... 68
PART VII SALES AND MARKETING..................................................................................... 71
7.1 PROVISIONS OF CONTRACT............................................................................ 71
7.2 CONTRACT GOVERNS OVER RFP; RFP GOVERNS OVER PROPOSAL.............................................. 71
7.3 EXCEPTIONS ...................................................................................... 72
PART VIII FACILITIES ...................................................................................... 73
8.1 FACILITIES ...................................................................................... 73
8.2 PRIMARY DATA CENTER REQUIREMENTS.................................................................. 73
8.3 BACK-UP DATA CENTER............................................................................... 74
8.4 INSTANT TICKET WAREHOUSE.......................................................................... 75
8.5 FIELD OFFICES (SALES AND SERVICE FACILITIES)...................................................... 76
8.6 ACCESS SECURITY AT COMPUTER SITE AND OTHER FACILITIES............................................. 76
8.7 ADDITIONAL NECESSARY ITEMS FOR GTECH'S FACILITIES................................................. 77
PART IX CONVERSION PLAN ...................................................................................... 78
9.1 CONVERSION PLAN................................................................................... 78
9.2 INSTALLATION AND ACCEPTANCE TESTING............................................................... 79
9.3 PROJECT REPORTING AND MONITORING.................................................................. 79
9.4 VALIDATION AFTER CONVERSION....................................................................... 79
PART X COST ...................................................................................... 81
10.1 INTRODUCTION...................................................................................... 81
10.2 GENERAL ...................................................................................... 81
10.3 BASE SYSTEM AND SERVICES PRICING.................................................................. 81
10.4 TEXAS LOTTERY-SPECIFIED OPTIONS................................................................... 82
10.5 TEXAS LOTTERY-INVITED OPTIONS..................................................................... 83
10.6 OFFERED OPTIONS................................................................................... 85
10.7 SUBCONTRACTING.................................................................................... 85
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ATTACHMENT A POLICY ON THE UTILIZATION OF HISTORICALLY UNDERUTILIZED BUSINESSES (HUBS)/MINORITY BUSINESSES...... 96
ATTACHMENT B-1 BUSINESS SUBCONTRACTING PLAN LETTER OF TRANSMITTAL............................................... 99
ATTACHMENT B-2 HUB/MINORITY BUSINESS SOLICITATION (HUB-S) DETERMINATION OF GOOD FAITH EFFORT (DGFE)........... 100
ATTACHMENT C-1 PROGRESS ASSESSMENT REPORT (HUB-PAR) DOCUMENTATION OF WORK SUBCONTRACTED....................... 102
ATTACHMENT C-2 HUB/MINORITY BUSINESS NON-SUBCONTRACTORS AFFIDAVIT (NON-SUB-AFF)................................ 103
ATTACHMENT D V.T.C.A., GOVERNMENT CODE Section 466.155........................................................ 104
ATTACHMENT E MODEL PERFORMANCE BOND........................................................................... 106
ATTACHMENT F SECURITY BACKGROUND INFORMATION.................................................................. 107
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GLOSSARY OF TERMS
This Glossary assigns definitions to the listed terms. The definition given to a
term applies whenever the term appears in GTECH's Proposal and in this Contract.
ACCEPTANCE - Written approval from the Executive Director transmitting notice to
GTECH that the Texas Lottery Commission has evaluated the performance of an
action by GTECH as meeting the acceptance criteria and the Texas Lottery's
requirements. In the absence of defined acceptance criteria, acceptance testing
shall be in the Executive Director's sole discretion.
ACCEPTANCE CRITERIA - Standards defined or established by the Texas Lottery to
measure the performance or quality of goods or services offered under this
Contract. The decision whether to establish acceptance criteria is in the sole
discretion of the Texas Lottery, and, if established, the form and content of
the criteria will be determined by the Texas Lottery.
ACCEPTANCE TESTING - System-level testing conducted by the Texas Lottery to
ensure that offered goods or services meet the Texas Lottery's requirements
prior to accepting goods or services from GTECH.
APPLICATION LOTTERY SOFTWARE - The games and other applications that are
provided, or designed and implemented pursuant to the requirements in the RFP
and this Contract and are intended to be executed in conjunction with GTECH's
Base Lottery Software.
BSP - The Business Subcontracting Plan required by Chapter 2161 of the Texas
Government Code and by Texas Lottery Commission Rule 16 Texas Administrative
Code Section 403.301.
BACK-UP DATA CENTER - The back-up computer facility located within the State of
Texas, which is maintained and operated by GTECH, such maintenance and operation
to be exclusively for the Texas Lottery unless the Texas Lottery otherwise
agrees in writing.
BASE LOTTERY SOFTWARE - The software to be provided by GTECH, including all
necessary functionality to meet the Texas Lottery's requirements in a base
system and the ability to add new applications for new games.
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CHAIN ACCOUNTS - Retailers operating with more than one selling location and
utilizing a single bank account for the Electronic Funds Transfer process.
CONTRACT - This document, which is an agreement entered into by the Texas
Lottery and GTECH, which incorporates by reference specific contents of the RFP
and GTECH's Proposal, and any amendments to this Contract.
CONTRACT AWARD - The signing of a Contract between the Texas Lottery and GTECH
Corporation.
CORPORATE ACCOUNTS - Retailers operating with more than one selling location;
achieving a $50,000 minimum weekly sales average; and utilizing a single bank
account for the Electronic Funds Transfer process.
DAY - A calendar day.
DRAWING DAY - A day on which a drawing is held for any Texas Lottery On-Line
game.
EXECUTIVE DIRECTOR - The Executive Director of the Texas Lottery Commission or
an employee of the Texas Lottery Commission authorized to act on behalf of the
Executive Director.
FACILITIES MANAGEMENT - GTECH's responsibilities to develop, manage, and operate
the computer facilities, computer hardware, software, terminals,
telecommunications networks, services and personnel which are necessary to
provide and support Texas Lottery games.
GSC - General Services Commission, now the Texas Building and Procurement Board.
HUB - Historically Underutilized Business.
ICS - The Texas Lottery Internal Control System.
INDEPENDENT ACCOUNTS - Retailers operating with one or more selling locations
and utilizing separate bank accounts in each location for the Electronic Funds
Transfer process.
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INSTANT TICKET - The ticket purchased for participation in an instant game.
INSTANT TICKET TELEMARKETING STAFF - GTECH employees and subcontractors who
review Retailer inventory, determine Retailer needs and place orders for instant
ticket games.
INTELLECTUAL PROPERTY RIGHTS - The worldwide legal rights or interests evidenced
by or embodied in: (i) any idea, design, concept, method, process, technique,
apparatus, invention, discovery, or improvement, including any patents, trade
secrets, and know-how; (ii) any work of authorship, including any copyrights,
moral rights or neighboring rights; (iii) any trademark, service mark, trade
dress, trade name, or other indicia of source or origin; (iv) domain name
registrations; and (v) any other similar rights. The Intellectual Property
Rights of a party include all worldwide legal rights or interests that the party
may have acquired by assignment or license with the right to grant sublicenses.
INVITED OPTION - An Invited Option is an option of specific interest to the
Texas Lottery; however, the Texas Lottery makes no commitment to acquire an
invited option or to any quantity or timing for acquisition of an invited
option.
KEY ACCOUNT - Retailers operating with more than one selling location; achieving
a $100,000 minimum weekly sales average; and utilizing a single bank account for
the Electronic Funds Transfer process.
LATA - Local Access Transfer Area. A geographical area within which a divested
Bell telephone company is permitted to offer local telecommunications and
exchange services.
LOTTERY EQUIPMENT - The hardware and other equipment to be provided by GTECH to
meet the Texas Lottery's requirements for the operation of the lottery games and
related services as required by this Contract.
LOTTERY GAMING SYSTEM, GAMING SYSTEM OR SYSTEM - The system to be provided by
GTECH that includes the set of Lottery Software, Lottery Network, Lottery
Equipment and any other components that perform all Lottery functions,
including, but not limited to, sales, validations,
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inventory and Retailer management, claims processing, marketing support, Instant
Ticket warehousing and distribution, and reporting. These systems will provide
the ability to control, monitor and report all lottery activity.
LOTTERY IN-HOUSE LOCAL AREA NETWORK - The network which enables communications
between devices of the Texas Lottery facilities and personnel.
LOTTERY MANAGEMENT SYSTEM - A subset of the Lottery Gaming System used to
perform Texas Lottery management functions.
LOTTERY NETWORK - A communications system provided by GTECH which provides
interface and compatibility between terminals, modems, data sets, lines or other
communication media and the Lottery Gaming System, the back up data center and
the ICS.
LOTTERY OPERATOR - The Successful Proposer, GTECH Corporation, bound by this
Contract with the Texas Lottery to perform functions, activities, and/or
services in connection with the operation of the Texas Lottery.
LOTTERY SALES REPRESENTATIVE (LSR) - Any GTECH employee responsible for dealing
with the Retailer sales and field services in regard to instant and On-Line
games.
LOTTERY SOFTWARE - Includes both the Base Lottery Software and the Application
Lottery Software, which together comprise all software in the Lottery System.
MAJOR CONTRACT - The following contracts in which the Texas Lottery has entered
into or may enter into in the future are considered major contracts: lottery
operations and services, advertising services, drawings auditor, financial
auditor, security auditor, Instant Ticket manufacturer, and drawings television
studio. The Texas Lottery may, at its sole option, add or delete contracts that
are considered major contracts.
MID-RANGE TERMINAL - The GVT Extra terminal described in GTECH's Proposal, or
any other terminal approved for use by the Texas Lottery, that combines, at an
attractive cost, the features and benefits of instant validation terminals and
On-Line terminals, allowing for On-Line sales in
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a site typically served by an instant-only terminal, or marginally performing
On-Line retailers, using dial-up, leased, or alternative communication
connection.
MODIFIED BIG BANG CONVERSION - A conversion in which the existing online
terminal population is gradually swapped out and replaced with the new terminal
population procured by this Contract. Each new terminal will immediately
communicate with the central system. This Contract will implement a Modified Big
Bang Conversion.
OFFERED OPTION - An option not identified in the RFP but offered and included in
the Proposal. The Texas Lottery makes no commitment to quantity or timing for
acquisition of Offered Options except as specifically provided for in this
Contract.
ON-LINE TERMINAL - The Isys terminal described in GTECH's Proposal and the
Altura terminal described in GTECH's Proposal, available on the terms specified
in this Contract and the Proposal, or any other terminal approved by the Texas
Lottery, that is installed at a Retailer location for the purpose of printing
and validating On-Line Tickets, validating Instant Tickets and performing pack
management and accounting functions and other functions as identified in this
Contract.
ON-LINE TICKET - A computer-generated ticket issued to a player, by an On-Line
retailer, as a receipt for the combination of numbers a player has selected, and
generated on an On-Line terminal on official Texas Lottery paper stock, by
either selecting his or her own numbers or selecting Quick Pick, which is a
random number generator operated by the computer. That ticket shall be the only
acceptable evidence of the combination of digits, numbers, or symbols selected.
On-Line Tickets may be purchased only from On-Line retailers.
OPERATING HOURS - The period of time during a Day that the Lottery designates,
in its sole discretion, that instant and On-Line game sales, validations,
reporting, and management functions are available. The Texas Lottery's current
Operating Hours are from 6:00 a.m. to 12:00 a.m. Central Time.
PC - A Personal Computer.
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PACK - A shrink wrapped package of Instant Tickets.
PLAY SLIP - A preprinted form used for marking a player's choices that is
readable by Optical Mark Readers (OMR) that are provided by GTECH or that are
incorporated into devices provided by GTECH.
PLAYER ACTIVATED TERMINAL - The EZExpress terminal described in GTECH's
Proposal. The EZExpress terminal is a player-operated On-Line terminal capable
of selling Lottery tickets.
PRIMARY DATA CENTER - The computer facility that supports the Lottery Gaming
System located in Austin, Texas, which is maintained and operated by GTECH under
the terms of this Contract.
PROPOSAL - All information and materials submitted by GTECH in response to the
RFP.
RFP - The Request for Proposals of March 16, 2001, as amended or clarified by
the responses to proposers' questions which were issued by the Texas Lottery
Commission on April 30, 2001 and May 14, 2001.
RETAILER - A Texas Lottery sales agent, licensed by the Texas Lottery to sell
lottery tickets, as contemplated by Texas Government Code, Chapter 466.
RETAILER BILLING PERIOD - The current billing period is Sunday through Saturday.
The weekly billing period is subject to change at the sole discretion of the
Texas Lottery.
SALES - For purposes of calculating the compensation due to GTECH, sales are
defined as sold tickets processed by the Lottery Gaming System, less any tickets
that have been canceled, returned and less any promotional tickets or
promotional coupons subject to the exclusion set forth in 10.6.3 of the RFP.
SPECIFIED OPTION - A Specified Option is an option that must have been included
in the Proposal; however, the Texas Lottery does not commit to acquire a
Specified Option or to any quantity or timing for acquisition of a Specified
Option.
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STATE - The State of Texas and its agencies, boards and commissions, officers
and employees.
SUBCONTRACTOR - Any person other than an employee of GTECH who performs any of
the services specified in this Contract.
SUCCESSFUL PROPOSER - GTECH Corporation.
TERMINAL OPTIMIZATION PLAN - The Plan that the Texas Lottery and GTECH will
develop pursuant to section 6.3.4 of this Contract.
TEXAS LOTTERY COMMISSION, TEXAS LOTTERY, LOTTERY OR TLC - That agency created by
Chapters 466 and 467, Texas Government Code. The Texas Lottery Commission may be
referred to as the Texas Lottery, Lottery or TLC throughout this document.
WORKING DAYS - Business days occurring Monday through Friday except for the
legal holidays observed by the State of Texas. The terms "working days" and
"business days" may be used interchangeably.
WORKS - Any idea, design, concept, method, process, technique, apparatus,
invention, discovery, or improvement, whether patentable or unpatentable, trade
secrets, and know-how; any work of authorship (including any computer software,
documentation, design documents, requirements, whether registered or
unregistered), any trademark, service mark, trade dress, trade name, logo or
other indicia of source or origin, domain name registrations and uniform
resource locaters, (whether registered or unregistered), and any other similar
materials, funded by revenues obtained from the Lottery, or developed by GTECH
or any third party for GTECH for the Lottery. Works shall include without
limitation all enhancements, whether complete or incomplete, to the Application
Lottery Software and Base Lottery Software created pursuant to this Contract.
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PART I
GENERAL INFORMATION
1.1 ENGAGEMENT
1.1.1 The Texas Lottery Commission ("Lottery" or "Texas Lottery") hereby
engages GTECH Corporation ("GTECH," "Successful Proposer," or "Lottery
Operator") to provide goods and services related to the administration
and operation of the state lottery on the terms outlined in this
Contract.
1.1.2 GTECH Corporation ("GTECH," "Successful Proposer," or "Lottery
Operator") hereby accepts this engagement and agrees to provide the
goods and services related to the administration and operation of the
state lottery on the terms outlined in this Contract.
1.1.3 The Lottery agrees to provide, and GTECH agrees to accept, as full and
complete compensation for its goods and services as outlined in this
agreement, the percentage of gross sales set forth in Part X of this
Contract.
1.1.4 This Contract is based on the RFP and the responsive Proposal. Where
sections of those documents are referred to by this Contract, those
sections are thereby incorporated into this Contract.
1.1.5 The RFP required certain representations, warranties, information and
disclosures, some of a continuing nature, and the Lottery has relied on
the representations, warranties, information and disclosures submitted
in response to the RFP and in the Proposal in entering into this
Contract. GTECH specifically warrants and represents that it has made
all representations and warranties and provided all information and
disclosures required
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GENERAL INFORMATION
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by the RFP, and that all representations, warranties, information and
disclosures that it provided are true and correct.
1.2 INTRODUCTION
Although the Texas Lottery is contracting for some operational
functions, it shall maintain control over those functions and be
assured that they are being performed in a manner that will guarantee
the integrity of the Texas Lottery and the Lottery Gaming System.
1.3 LOTTERY OPERATOR (GTECH)
The services required by the Texas Lottery can generally be categorized
as follows:
(a) Instant Ticket and On-Line Gaming System Design, Operation and
Maintenance
(b) Lottery Management System Design, Operation and Maintenance
(c) Telecommunications Network Design, Operation and Maintenance
(d) Terminal Installation, Maintenance and Repair
(e) Marketing Research Personnel and Services
(f) Promotions Personnel and Services
(g) Field Sales Personnel and Services
(h) Instant Ticket and On-Line Ticket stock Warehousing
(i) Instant Ticket and On-Line Ticket stock Packing
(j) Instant Ticket and On-Line Ticket stock Distribution
(k) Ticket Order Processing and Telemarketing
(l) Hotline Support System
(m) Facilities.
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GENERAL INFORMATION
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1.4 GTECH/LOTTERY RELATIONSHIP
1.4.1 The Texas Lottery will not relinquish control over Lottery operations.
GTECH will function under the supervision of the Texas Lottery and must
operate in a manner that will not cause any embarrassment to the Texas
Lottery and the State of Texas. The Lottery is a publicly owned and
managed institution. Although GTECH is from the private sector, its
operations are subject to the same scrutiny and oversight that would
exist if all operations were performed by Texas Lottery employees. All
operations must be conducted in adherence to the highest ethical
standards.
1.4.2 Final decisions regarding the direction or control of the Lottery are
always the prerogative of the Texas Lottery, not GTECH. While GTECH may
make a strong argument for a course of action based on a business
judgment, the Texas Lottery may dictate a course within its sole
discretion that is more appropriate for an agency of the State of
Texas. In order to enhance communication and sharing of information,
GTECH's word processing, spread sheet, presentation, project management
and e-mail applications must be compatible with Texas Lottery
applications. Currently, the Texas Lottery's standard PC applications
include: Windows 98 Operating System, Office '97, Oracle, Adobe
Acrobat, Internet Explorer, and Reflection. The Texas Lottery may
update or change these applications in its discretion at any time, and
GTECH shall ensure that its applications are at all times compatible
with the Texas Lottery applications.
1.4.3 The Texas Lottery may rely greatly upon the guidance of GTECH in all
matters, but reserves the sole right to reject that guidance for any
reason. GTECH, conversely, must accept and support the decisions of the
Texas Lottery.
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GENERAL INFORMATION
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1.5 GTECH'S OBLIGATIONS
GTECH is and will always be responsible for the performance of these
contractual obligations and shall be liable for the non-performance of
any or all subcontractor(s). GTECH represents that the identity of any
and all subcontractors and a description of the contractual
relationships between GTECH and each subcontractor has been disclosed
in the response to the RFP. Each disclosure is fully incorporated as a
basis to this Contract. GTECH must obtain written approval from the
Texas Lottery before subcontracting any portion of the Contract
requirements.
1.6 ERROR OR AMBIGUITY WAIVED BY GTECH
GTECH may not raise or inquire about any error, ambiguity, conflict,
discrepancy, exclusionary specification or omission in this Contract.
As provided by the RFP, by submitting its Proposal on which the
Contract is based, GTECH has waived any claim that the RFP and Contract
are or were ambiguous and shall not contest the Texas Lottery's
interpretation of any Contract term. For any error or ambiguity that is
reported, GTECH should obtain clarification and GTECH shall not be
entitled to additional compensation, relief or time by reason of the
any ambiguity, conflict, discrepancy, omission, or error that arises
under this Contract or its later correction.
1.7 MODIFICATION OF INFORMATION SUPPORTING A PROPOSAL
The RFP imposes on GTECH a continuing obligation to notify the Texas
Lottery following the submission of its Proposal of any changes,
updates, modifications, etc. to the information, data or facts
submitted in its Proposal which could reasonably be expected to affect
the Texas Lottery's consideration of the Proposal. That continuing
obligation is a basis of this Contract. GTECH warrants that it has made
all appropriate notifications prior to the date of this Contract's
execution. In no case shall a notification
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GENERAL INFORMATION
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by GTECH or acknowledgement of a notification by the Texas Lottery be
construed as an agreement by the Texas Lottery to modify the Contract
to incorporate the subject of the notification. An agreement to modify
the Contract in response to a notification exists only when the Texas
Lottery indicates its agreement in writing.
1.8 CAPTIONS
The captions to sections in this Contract are for convenience only and
are not part of the Contract's substantive terms.
1.9 SURVIVAL
Provisions of this Contract (i) that provide for their applicability
beyond the term of this Contract (including but not limited to all of
the warranties and representations that by their terms provide for
applicability beyond the Contract period), or (ii) that do not
specifically provide for their applicability beyond the term of this
Contract but are necessary to enable the Lottery, by itself or through
a successor vendor, to continue to offer its On-Line Ticket and Instant
Ticket games, shall survive any termination of this Contract for the
period of applicability provided, and if no period of applicability is
provided, for so long as is necessary to enable the Lottery, by itself
or through a successor vendor, to continue to offer its On-Line Ticket
and Instant Ticket games.
1.10 CONTRACT EXECUTED IN FIVE ORIGINALS
This Contract will be executed in five (5) original documents.
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GENERAL INFORMATION
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PART II
NOTICES
2.1 CONTACT PERSON
The point of contact for inquiries and additional information
concerning this Contract is Linda Cloud, whose address and facsimile
number are as follows:
Linda Cloud
Executive Director
Texas Lottery Commission
P. O. Box 16630
Austin, TX 78761-6630
(512) 344-5000
Fax (512) 478-3682
The physical address for overnight, commercial and hand deliveries is:
Linda Cloud
Executive Director
Texas Lottery Commission
611 East 6th Street
Austin, TX 78701
2.2 NOTICES
Notices to each party shall be made by personal delivery or by
certified (or registered) mail return receipt requested to the address
listed below for each party. Notices shall be given to GTECH at the
below listed address:
GTECH Corporation
55 Technology Way
West Greenwich, RI 02817
Attn: Office of the General Counsel
Fax: (401) 392-0391
CONTRACT FOR LOTTERY OPERATIONS AND SERVICES PART II
NOTICES
[TEXAS LOTTERY LOGO] PAGE 7
Notices shall be given to the Texas Lottery at the below listed
address:
Texas Lottery Commission
Attention: Linda L. Cloud, Executive Director
P.O. Box 16630
Austin, Texas 78761-6630
FAX (512) 478-3682
The Texas Lottery or GTECH shall notify the other in writing of any
change in the addresses to which notices shall be sent.
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NOTICES
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PART III
GENERAL CONTRACTUAL TERMS AND CONDITIONS
3.1 GOVERNING LAW
This Contract shall be governed by, construed and interpreted in
accordance with the applicable laws of the State of Texas. Any and all
actions or suits brought by GTECH or any related party regarding this
Contract shall be brought in the district court of the County of Travis
of the State of Texas. This section is purely a venue provision and
shall not be deemed a waiver of sovereign immunity.
3.2 CONTRACT ELEMENTS
In the event of any conflict or contradiction between or among the RFP,
the Proposal and this Contract, the documents shall control in the
following order of priority: the Contract, the RFP and the Proposal.
3.3 AMENDMENTS
This Contract may be amended only by a written agreement signed by both
parties. Only written agreements signed by the Executive Director of
the Texas Lottery shall be binding on the Texas Lottery. Only written
agreements signed by an officer of GTECH shall be binding on GTECH.
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3.4 WAIVER
The failure of either party to object to or to take affirmative action
with respect to any conduct of the other party which is in violation or
breach of the terms of this Contract shall not be construed as a waiver
of the violation or breach, or of any future violation or breach.
3.5 CLARIFICATION OF LOTTERY'S INTENT
It is GTECH's responsibility to address and resolve all questions with
the Texas Lottery's designated staff members, and achieve a clear
understanding of all Texas Lottery requirements during each stage of
the Contract term. The Texas Lottery will use reasonable efforts to
provide timely resolutions to questions of policy or procedure as they
may affect GTECH's effort. Key Texas Lottery staff will be available to
GTECH on a reasonable basis, but may not be available on State holidays
or weekends. The Texas Lottery's normal office hours are from 8:00 a.m.
to 5:00 p.m., Central Time, Monday through Friday of each week of the
Contract term, excepting State holidays.
3.6 LOTTERY'S FINANCIAL OBLIGATIONS
The financial obligations of the Texas Lottery under this Contract are
payable solely out of the income, revenues and receipts of the Texas
Lottery and are subject to statutory restrictions and appropriations.
Performance by the Texas Lottery under this Contract is subject to acts
of the Texas Legislature. The Texas Lottery shall have no liability in
the event that performance by the Texas Lottery is compromised or
terminated by acts or omissions of the Texas Legislature.
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3.7 RELATIONSHIP OF THE PARTIES
GTECH and the Texas Lottery agree and understand that GTECH will render
the goods, services and requirements under this Contract as an
independent contractor and nothing contained in this Contract will be
construed to create or imply a joint venture, partnership, principal,
agent or any other relationship between the parties. GTECH employees
will not be considered employees of the Texas Lottery within the
meaning of any federal, state, or local law, ordinance, or regulation
including, but not limited to, laws, ordinances, or regulations
concerning unemployment insurance, social security benefits, workers
compensation, or withholding requirements. GTECH is responsible for
complying with any such laws, ordinances, or regulations, and will
indemnify and save harmless the Texas Lottery from any costs or
damages, including attorney's fees, sustained by the Texas Lottery
resulting from GTECH's breach of its obligations under this section.
3.8 PAYMENT
3.8.1 All payments will be made in accordance with Texas Government
Code Section 2251.001 et seq. ("Payments for Goods and Services").
3.8.2 GTECH shall submit invoices in triplicate on a weekly basis, noting the
contract number, detailing services rendered and date of services.
3.8.3 GTECH agrees that if the Texas Comptroller of Public Accounts is
prohibited from issuing a warrant to GTECH under section 403.055 of the
Texas Government Code, any payments owed to GTECH under this Contract
will be applied towards the debt or delinquent taxes that GTECH owes
the State of Texas until the debt or delinquent taxes are paid in full.
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3.8.4 GTECH acknowledges that the State of Texas requires consistent, high
quality performance during the entire term of this Contract and during
any transition to an alternate or successor provider. GTECH agrees that
to ensure such consistent high quality performance, and an orderly
transition to a new vendor, the Texas Lottery may withhold five percent
(5%) of all payments due during the last year of this Contract (the
"Hold Back"). In the event that GTECH fails to fully and completely
perform all of its duties under this Contract, or the transition to an
alternative vendor is unsuccessful, and such failure is proximately
caused in whole or part by any act or omission of GTECH, the Texas
Lottery shall be entitled to retain the Hold Back or such portion as
the Executive Director deems equitable. Otherwise, promptly upon full
and complete performance of GTECH's duties under this Contract, the
Texas Lottery shall pay the Hold Back to GTECH.
3.9 ASSIGNMENTS
3.9.1 No right or obligation of GTECH under this Contract may be assigned by
GTECH without the prior written approval of the Texas Lottery, and in
the event of any such approval, the terms and conditions hereof shall
apply to and bind the party or parties to whom the right or obligation
is assigned as fully and completely as GTECH is hereunder bound and
obligated. No assignment shall operate to release GTECH from its
liability for the timely and effective performance of its obligations
hereunder. Assignments made in violation of this provision shall be
null and void.
3.9.2 Subject to the limitations on assignment contained herein, this
Contract shall inure to the benefit of, and be binding upon, the
successors and assigns of the respective parties hereto.
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3.10 SUBCONTRACTING
3.10.1 GTECH is prohibited from subletting, conveying, assigning or otherwise
disposing of all or any portion of this Contract, its rights, title, or
interest therein without the previous written approval of the Texas
Lottery. If any part of any Contract between the Texas Lottery and
GTECH is to be subcontracted, the subcontractor must comply with all
security requirements of the Texas Lottery. The Texas Lottery reserves
the sole right to require GTECH to terminate any subcontractor with or
without cause.
3.10.2 In the event the Texas Lottery approves of the use of any subcontractor
in performance of the Contract, GTECH is not relieved of its
responsibility and obligation to meet all the requirements of this
Contract.
3.10.3 The Texas Lottery will incur no additional obligations and GTECH's
obligations will not be reduced as a result of any such subcontracts.
3.10.4 GTECH agrees to indemnify and hold the Texas Lottery harmless from any
of the claims or actions of its subcontractors.
3.11 LOTTERY APPROVAL OF STAFFING
GTECH shall not employ or Contract with or permit the employment of
unfit or unqualified persons or persons not skilled in the tasks
assigned to them and GTECH shall at all times employ sufficient labor
to carry out functions and services in the manner and time prescribed
by this Contract. GTECH is responsible to the Texas Lottery for the
acts and omissions of GTECH's employees, agents (including, but not
limited to, lobbyists) and subcontractors and GTECH shall enforce
strict discipline among its employees, agents (including, but not
limited to, lobbyists) and subcontractors performing the services under
the Contract. Any person employed by GTECH shall, at the written
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request of the Texas Lottery, and within the Texas Lottery's sole
discretion, be removed forthwith by GTECH from work relating to the
Contract.
3.12 COMPLIANCE
GTECH agrees to comply with all applicable laws, rules and regulations,
including without limitation those involving non-discrimination on the
basis of race, color, religion, national origin, age, sex and
disability.
3.13 TERM OF CONTRACT
3.13.1 The initial term of this Contract will end on August 31, 2007, subject
to the termination provisions in this Contract and subject to the Texas
Lottery being continued and funded by the Texas Legislature. In
addition, the Texas Lottery hereby exercises its right to extend this
Contract for four (4) additional one-year periods to end August 31,
2011. This Contract shall at all times be subject to the termination
provisions herein and to the Texas Lottery being continued and funded
by the Texas Legislature, both during the initial contract period and
during any and each additional period.
3.13.2 The Texas Lottery further reserves the right to reactivate or further
extend the initial Contact, or any extension thereof, on three (3) days
notice for one ninety (90) day period if a different vendor is chosen
for a subsequent contract during the transition period to the
subsequent vendor. The Texas Lottery also reserves the right to further
extend the initial Contract upon expiration of such ninety-day
extension, if any, for a period of two (2) years. To meet this
requirement, GTECH must maintain the system in a state of readiness, so
as to be able to accommodate the Texas Lottery's possible exercise of
its rights under this Section, for thirty (30) days after completion of
the initial Contract period or any exercised extension thereof. If the
Texas Lottery wishes to exercise its rights under this Section to
extend or reactivate the Contract for the ninety-day period, it
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must give the Contractor three (3) days prior written notice to that
effect on or before the twenty-seventy (27th) day after the expiration
of the term of this Contract. If the Texas Lottery wishes to exercise
its rights under this Section to extend the Contract for the two (2)
year extension period, it must timely exercise its right to extend or
reactivate this Contract for the ninety-day period, and must give the
Contractor written notice of its extension of the Contract for the two
(2) year extension on or before that day that is thirty (30) days prior
to the expiration of the ninety-day period. The Texas Lottery's
exercise of its rights under this Section shall not be construed as
obligating the Texas Lottery to repeat the procurement process for any
subsequent contract or conferring any right or expectation for GTECH to
continue operating under the Contract after the expiration of either a
ninety (90) day or two (2) year extension.
3.14 TERMINATION AT WILL
The Texas Lottery, at its sole discretion, may terminate the Contract
at will and without cause, upon no less than thirty (30) days advance
written notice. This section removes all limitations upon the Texas
Lottery's exercise of the termination power, on thirty (30) days
notice. No language in this Contract shall be interpreted to limit the
Texas Lottery's absolute right to terminate this Contract at will.
3.15 TERMINATION FOR CAUSE
The Texas Lottery reserves the right to terminate this Contract upon no
less than five (5) days notice, in whole or in part, upon the following
conditions:
(a) A receiver, conservator, liquidation, or trustee of GTECH, or
of any of its property is appointed by order or decree of any
court or agency or supervisory authority having jurisdiction;
or an order for relief is entered against GTECH, under the
Federal Bankruptcy Code; or GTECH is adjudicated bankrupt or
insolvent; or any portion of the property of GTECH is
sequestered by court order and such order remains in effect
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for more than thirty (30) days after GTECH obtains knowledge
thereof; or a petition is filed against GTECH under any state,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution, liquidation, or receivership law of any
jurisdiction, whether now or hereafter in effect, and such
petition is not dismissed within thirty (30) days, or
(b) GTECH files a case under the Federal Bankruptcy Code or seeks
or is seeking relief under any provision of any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution, receivership or liquidation law of any
jurisdiction, whether now or hereafter in effect, or consents
to the filing of any case or petition against it under any
such law, or
(c) GTECH makes an assignment for the benefit of its creditors, or
admits in writing its inability to pay its debts generally as
they become due, or consents to the appointment of a receiver,
trustee, or liquidator of GTECH or of all or any part of its
property; or judgment for the payment of money in excess of
$50,000.00 (which is not covered by insurance) is rendered by
any court or governmental body against GTECH, and GTECH does
not discharge the same or provide for its discharge in
accordance with its terms, or procure a stay of execution
thereof within thirty (30) days from the date of entry
thereof, and within said 30-day period or such longer period
during which execution of such judgment shall have been
stayed, appeal therefrom and cause the execution thereof to be
stayed during such appeal while providing such reserves
therefor as may be required under generally accepted
accounting principles; or a writ or warrant of attachment or
any similar process shall be issued by any court against all
or any material portion of the property of GTECH, and such
writ or warrant of attachment or any similar process is not
released or bonded within thirty (30) days after its entry, or
(d) A court of competent jurisdiction finds that GTECH has failed
to adhere to any laws, ordinances, rules, regulations or
orders of any public authority having jurisdiction, or
(e) GTECH fails to communicate with the Texas Lottery as required
by the Contract, or
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(f) GTECH fails to remove any person from work relating to the
Contract upon written notice from the Texas Lottery, or
(g) GTECH breaches the standard of confidentiality established in
the RFP and this Contract with respect to the RFP and this
Contract or the services provided thereunder, or
(h) The Texas Lottery makes a written determination that GTECH has
failed to substantially perform under the Contract, which
determination shall specify the events resulting in the Texas
Lottery's determination that GTECH has failed to substantially
perform under the Contract, or
(i) GTECH fails to comply with any of the terms, conditions or
provisions of the Contract, in any manner whatsoever, or
(j) If it is determined that GTECH would not be eligible for a
sales agent license under section 466.155 of the State Lottery
Act, or
(k) GTECH engages in any conduct which results in a negative
public impression including, but not limited to, creating even
an appearance of impropriety with respect to the Texas
Lottery, the Lottery Gaming System, GTECH, or the State of
Texas.
3.16 TERMINATION FOR IMPOSSIBILITY OF PERFORMANCE
The Texas Lottery reserves the right to terminate this Contract, in
whole or in part, upon no less than five (5) days notice upon any of
the following conditions:
(a) The failure of the legislature to appropriate funds to the
Texas Lottery for this Contract;
(b) Any act or omission by the legislature which renders
performance by the Texas Lottery impossible.
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3.17 TERMINATION WITHOUT PENALTY
Pursuant to Texas Government Code, Section 466.014(c), the Executive
Director is permitted to terminate this Contract, without penalty, if
an investigation reveals that GTECH would not be eligible for a sales
agent license under Texas Government Code Section 466.155.
3.18 EFFECT OF TERMINATION
Upon any termination or expiration of this Contract, the following
terms shall apply:
(a) The licenses granted under this Contract shall remain in full
force and effect.
(b) The Texas Lottery may, at its option, purchase the Lottery
Equipment at its depreciated value as determined by the lower
of the GAAP basis or the Federal Tax basis.
(c) In the event that the contracts and assets related to the
Lottery Network have not been assigned by GTECH to the Texas
Lottery, GTECH shall immediately assign all such contracts and
assets to the Texas Lottery. Upon such assignment, GTECH shall
provide a detailed inventory and network diagrams of the
Lottery Network, which shall include all components necessary
for the operation of the Lottery Network.
(d) GTECH shall immediately surrender to Texas Lottery all
memoranda, notes, records, drawings, manuals, computer
software, and other documents or materials (and all copies of
same) pertaining to the Works, reports, and other data or
materials generated or developed by GTECH or furnished by
Texas Lottery to GTECH, including all materials embodying any
Texas Lottery confidential information, regardless of whether
the works or materials are complete or incomplete; provided
however, that as - to memoranda, notes, records drawings,
manuals, computer software and other documents or materials
pertaining to Works, GTECH shall be required to provide only
copies thereof, and GTECH shall be entitled to retain copies
thereof to facilitate its exploitation of the Works as
permitted by this Contract. This section shall apply to all
materials made or compiled by GTECH, as well as to all
materials
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furnished to GTECH by the Texas Lottery or by anyone else that
pertain to the Works.
(e) If this Contract is terminated for cause by the Texas Lottery,
the Texas Lottery shall be entitled to receive delivery of the
source code for the Base Lottery Software from the source code
escrow established pursuant to the requirements contained this
Contract.
3.19 EFFECTIVE DATES OF CONTRACT OBLIGATIONS
The effective date of this Contract shall be October 10, 2001. This
Contract is subject to an implementation schedule that will provide for
a deadline of March 1, 2008 for implementation of the new central
computer system and backup system. The effective date of the
compensation rates established under this Contract is September 1,
2002. The contract between GTECH and the Texas Lottery dated March 7,
1992, as amended (as so amended, the "Existing Contract"), shall not be
superseded or replaced by this Contract, and shall remain in effect
until its expiration or termination in accordance with its terms;
provided however, that the provisions of the Existing Contract calling
for GTECH to provide and maintain a performance bond are hereby amended
to provide that the amount of the performance bond to be provided and
maintained under the Existing Contract shall be five million dollars
($5,000,000). Among other things, the payment rates and terms of the
Existing Contract shall remain in effect until the expiration of such
Existing Contract (i.e., August 31, 2002) or until such Existing
Contract is terminated, if earlier than August 31, 2002.
3.20 WARRANTIES
3.20.1 GTECH warrants, represents, informs, discloses and agrees that it is
lawfully organized and constituted under all federal, state and local
laws, ordinances and other authorities of
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its domicile and is otherwise in full compliance with all legal
requirements of its domicile.
3.20.2 GTECH warrants, represents, informs, discloses and agrees that it is
possessed of the legal authority and capacity to enter into and perform
this Contract resulting from its response to the RFP, and that it has
the financial ability to perform its obligations under this Contract.
3.20.3 GTECH warrants, represents, informs, discloses and agrees that it has
been duly authorized to operate and do business in all places where it
is or will be required to do business under this Contract; that it has
obtained or will obtain all necessary licenses and permits required in
connection with this Contract; and that it will fully comply with all
laws, decrees, labor standards and regulations of its domicile and
wherever performance occurs during the term of this Contract.
3.20.4 GTECH warrants, represents, informs, discloses and agrees that it has
no present interest and shall not acquire any interest which would
conflict in any manner with its duties and obligations under this
Contract.
3.20.5 GTECH warrants, represents, informs, discloses and agrees that all
systems analysis, systems design and programming pursuant to the RFP or
for use in GTECH's performance under this Contract has been and shall
be prepared or done in a high quality, professional and competent
manner using only qualified personnel.
3.20.6 GTECH further represents, informs, discloses and warrants that all
programs implemented in its performance under this Contract shall meet
the performance standards required under the RFP and this Contract and
shall correctly and accurately perform their intended functions on the
equipment supplied by the Texas Lottery or by GTECH hereunder.
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3.20.7 GTECH warrants, represents, informs, discloses and agrees that all
services provided by it under this Contract shall be performed in a
prompt, high quality, professional and competent manner using only
qualified personnel.
3.20.8 GTECH warrants, represents, informs, discloses and agrees that its
tickets, games, systems, goods and services shall in all respects
conform to, and function in accordance with, the approved
specifications and designs therefore.
3.20.9 GTECH warrants, represents, informs, discloses and agrees to pay any
amount paid by the Texas Lottery and any amount incurred by the Texas
Lottery as the result of a misprinted On-Line Ticket. Altered tickets
are not misprinted tickets. If an On-Line Ticket appears to be a
winner in all respects, but there is no computer record of the
ticket, GTECH warrants that it will pay and agrees to pay any amount
paid by the Texas Lottery and any amount incurred by the Texas
Lottery as a result of the ticket for which there is no computer
record.
3.20.10 GTECH warrants, represents, informs, discloses and agrees that it
will not take any action inconsistent with any of the terms,
conditions, agreements, or covenants set forth in this Contract
without the express written consent of the Texas Lottery.
3.20.11 GTECH warrants, represents, informs, discloses and agrees that it
shall keep all equipment in good condition and repair and shall not
permit anything to be done that may materially impair the value
thereof. GTECH shall use such equipment only in the ordinary course
of its performance under this Contract and shall not permit such
equipment to be used in violation of any applicable law, regulation
or policy of insurance. GTECH agrees to develop a maintenance and
replacement schedule subject to approval by the Texas Lottery and
agrees to comply with that schedule.
3.20.12 GTECH warrants, represents, informs, discloses and agrees that it
shall not sell, assign, lease, transfer, pledge, hypothecate, or
otherwise dispose of any component of any
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goods, system proposed in response to the RFP or any interest
therein, or permit any of it to become a fixture or accession to
other goods or property.
3.20.13 GTECH warrants, represents, informs, discloses and agrees that
(except to the extent expressly set forth herein) it shall at all
times own the terminals and other components of the systems proposed
for the RFP and used in providing the goods and services under this
Contract, except for licensed third-party software components, and
telecommunications and the buildings to house its facilities, which
it is permitted to lease, and shall keep the same free and clear of
any and all security interests, liens, charges, levies, assessments
or encumbrances. GTECH shall obtain approval by the Executive
Director prior to inclusion of third party licensed software
components in the Base Lottery Software or the Application Lottery
Software, and such software shall be licensed to the Texas Lottery
pursuant to Section 3.22.1. All contracts with vendors for third
party software components used in the Lottery Network will be
assignable to the Texas Lottery at the Texas Lottery's sole option.
3.20.14 GTECH warrants, represents, informs, and discloses that it is
eligible for a sales agent license under Texas Government Code
Section 466.155 (Chapter 466 is also known as the State Lottery Act).
3.20.15 GTECH warrants, represents, informs, discloses and agrees that the
Lottery Gaming System will be free from any code which would, or is
designed to, disable the Lottery Gaming System (or any component of
the Lottery Gaming System) automatically after the passage of time or
under the control of a person other than the Texas Lottery (such as a
back door, time bomb, or drop dead device), and free from any code
which would permit unauthorized access to the Lottery Gaming System
(or any component of the Lottery Gaming System) such as a virus or
trojan horse. GTECH's use of remote diagnostic software to disable
any portion of the Lottery Gaming System (other than as necessary for
support or maintenance) or to gain unauthorized access to the Lottery
Gaming System will be deemed a breach of this warranty.
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3.20.16 GTECH warrants, represents, informs, discloses and agrees that the
Lottery Gaming System delivered to the Texas Lottery under this
Contract will be free from any clock, counter, virus, or other
limiting design or routine which will cause the Lottery Gaming System
to be erased, made inoperable, or otherwise become incapable of being
used by The Texas Lottery after being used a certain number of times,
or after the lapse of a certain period of time, or after the
occurrence or lapse of any other triggering event.
3.20.17 GTECH warrants, represents, informs, discloses that the Lottery
Gaming System will maintain the integrity of the data that is used or
displayed by the Lottery Gaming System.
3.20.18 GTECH warrants, represents, informs, and discloses that the Lottery
Gaming System will operate in a secure manner and will be designed
and operated so as to prevent intrusions and unauthorized use. GTECH
warrants that it will immediately report to the Executive Director
any intrusions or unauthorized uses of the Lottery Gaming System.
3.20.19 GTECH warrants, informs, discloses and represents that it has good
and marketable title, and/or the right to license, all of the Gaming
System, free and clear of all liens, security interests, and other
encumbrances.
3.20.20 GTECH warrants, represents, informs, discloses and agrees that its
operations and the Lottery Gaming System are, and will continuously
be, in compliance with all applicable requirements of any applicable
law, statute, rule or regulation.
3.20.21 GTECH warrants, informs, discloses and represents that it has no
outstanding assignments, grants, licenses, encumbrances, obligations,
or agreements which relate to the Lottery Gaming System (whether
written, oral, or implied) and are inconsistent with this Contract or
the rights, duties, and obligations stated in this Contract.
3.20.22 Additional Warranties are provided for at sections 3.55 and 3.56.
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[TEXAS LOTTERY LOGO]
3.21 GTECH SITE VISITS
The Texas Lottery shall have the free and unrestricted right, acting by
itself or through its authorized representatives, to enter the premises
of GTECH or any subcontractor, and to enter any other sites involved in
operation or support of the Lottery, at all times to examine the system
and to inspect and copy the records of GTECH pertaining to the
operation thereof. GTECH agrees that it and its subcontractors will
implement all reasonable quality control and security procedures
requested by the Texas Lottery or representatives as designated by the
Texas Lottery.
3.22 INTELLECTUAL PROPERTY RIGHTS
3.22.1 LICENSES.
3.22.1.1 GTECH hereby grants the Texas Lottery an irrevocable, worldwide license
to use, modify, display, execute, and have modified, displayed, used,
and executed, the Base Lottery Software for operation of the Lottery,
for the term of the Contract (including any extensions and/or renewals
thereof) and a period of five (5) years after termination or expiration
of the Contract for any reason. GTECH hereby grants the Texas Lottery
an irrevocable, perpetual, worldwide license to use the Base Lottery
Software solely for the purpose of accessing archived data.
3.22.1.2 The Texas Lottery may only use contractors and consultants to exercise
its right under the foregoing paragraph to the extent that such
contractors and consultants sign non-disclosure agreements,
acknowledging the confidential and proprietary nature of the Lottery
System and agreeing to access and use the Lottery Gaming system solely
to perform their obligations.
3.22.2 Ownership. The Works, and all content and Intellectual Property Rights
therein, are and shall be owned jointly by the Texas Lottery and GTECH,
without a right of accounting.
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Each party may, without permission, use, modify and display, and
sublicense the right to use, modify and display, the Works, with the
sole exception that GTECH shall have no right to use, disclose or
permit any person to use or obtain the Works in any manner that, in the
Executive Director's sole opinion, is likely to threaten the operation
or security of the Texas Lottery. Notwithstanding anything herein to
the contrary, as between GTECH and the Texas Lottery, the Texas Lottery
shall own all right, title, and interest in and to all data generated
by, processed by, or stored by the Lottery Gaming System.
3.22.3 Further Actions. GTECH, upon request of the Texas Lottery and without
further consideration, shall perform any acts that may be deemed
necessary or desirable by the Texas Lottery to evidence more fully the
joint ownership rights of the Texas Lottery in the Works as described
in Section 3.22.2, including but not limited to the execution,
acknowledgement and delivery of such further documents in a form
determined by the Texas Lottery. In the event the Texas Lottery shall
be unable for any reason to obtain GTECH's authorized signature on any
document necessary for any purpose set forth in the foregoing sentence,
GTECH hereby irrevocably designates and appoints Texas Lottery and its
duly authorized officers and agents as GTECH's agent and GTECH's
attorney-in-fact to act for and in GTECH's behalf and stead to execute
and file any such document and to do all other lawfully permitted acts
to further any such purpose with the same force and effect as if
executed and delivered by GTECH.
3.22.4 Waiver of Moral Rights. GTECH hereby irrevocably and forever waives,
and agrees never to assert, any Moral Rights in or to the Works which
GTECH may now have or which may accrue to GTECH's benefit under U.S. or
foreign copyright laws, if such would be inconsistent with the Texas
Lottery's joint ownership rights in the Works described in Section
3.22.2. GTECH hereby also irrevocably and forever waives, and agrees
never to assert, all other residual rights and benefits which arise
under any other applicable law now in force or hereafter enacted, if
such would be inconsistent with the Texas Lottery's joint ownership
rights in the Works described in Section 3.22.2. The term "Moral
Rights" shall mean any and all rights of paternity or integrity of the
Works
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and the right to object to any modification, translation or use of the
Works, and any similar rights existing under the judicial or statutory
law of any country in the world or under any treaty, regardless of
whether or not such right is denominated or referred to as a moral
right.
3.22.5 Confidentiality. All Works shall be deemed the confidential information
of Texas Lottery, and GTECH shall not use, disclose, or permit any
person to use or obtain the Works, in any manner that might threaten
the operation or security of the Texas Lottery. Works shall be
disclosed only under a nondisclosure agreement binding on third parties
that imposes on such third parties this same duty and obligation to
protect and safeguard the confidentiality of the Works.
3.22.6 Injunctive Relief. This Contract is intended to protect Texas Lottery's
proprietary rights pertaining to the Works, and any misuse of such
rights would cause substantial and irreparable harm to Texas Lottery's
business. Therefore, GTECH acknowledges and stipulates to all of the
facts, including irreparable harm, necessary to establish the Lottery's
right to an order from a court of competent jurisdiction that would
immediately enjoin any material breach of the intellectual property,
licensing, and confidentiality provisions of this Contract or the RFP,
upon a request by Texas Lottery.
3.23 PRE-EXISTING AND THIRD PARTY RIGHTS
3.23.1 GTECH may only incorporate third-party software or rights ("Third Party
Materials") into Works with the prior express written consent of the
Executive Director. GTECH hereby grants the Texas Lottery a
non-exclusive license to use, execute, reproduce, display, perform, and
prepare derivative works from Third Party Materials, and to authorize
others to do any or all of the foregoing, for the term of the license
granted in Section 3.22.1. GTECH warrants that it has sufficient right,
title and interest to grant the foregoing license rights to any Third
Party Materials that GTECH includes in Works, and
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GTECH shall indemnify, defend, and hold harmless the Texas Lottery from
any losses, claims, damages, costs (including attorneys' fees) of
causes of action relating to any claim or assertion by any third party
that the Texas Lottery's use of the Works consistent with the foregoing
infringe third party rights.
3.23.2 GTECH agrees that it shall have and maintain, during performance of
this Contract, written agreements with all employees, contractors, or
agents engaged by GTECH in performance hereunder, granting GTECH rights
sufficient to support all performance and grants of rights by GTECH.
Copies of such agreements shall be provided to Texas Lottery promptly
upon request.
3.24 REMEDIATION
If the Works or the Intellectual Property Rights therein become the
subject of a lawsuit or claim of infringement, or GTECH becomes aware
that such items are likely to become the subject of a lawsuit or claim
or infringement, GTECH shall exercise one (1) of the following two (2)
options in order to provide the Texas Lottery with continued and
uninterrupted use of the Works and Intellectual Property Rights
therein: (a) obtain for the Texas Lottery the right to continue the use
of the alleged infringing Works at no additional cost to the Texas
Lottery, or (b) obtain alternative or substitute works for the
allegedly infringing Works, which are of equivalent or superior quality
to the allegedly infringing Works, at no additional cost to the Texas
Lottery, and subject to the acceptance of the Texas Lottery in its sole
discretion.
3.25 INTELLECTUAL PROPERTY SEARCH
GTECH, at its expense, shall conduct all appropriate intellectual
property searches (e.g., full trademark and service mark searches) for
all proposed Works, and hold the Texas Lottery harmless from the
infringement of such Works.
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3.26 ACCOUNTING RECORDS
GTECH is required to maintain its books, records, information and other
materials pertaining to this Contract in accordance with generally
accepted accounting principles. These records shall be available to the
Texas Lottery, its internal auditor or external auditors (and other
designees) and the Texas State Auditor at all times during the Contract
period and for five (5) full years after (i) the expiration date of
this Contract or (ii) final payment under this Contract, whichever is
later.
3.27 AUDIT REQUIREMENTS
GTECH must meet specific auditing obligations:
(a) GTECH will be required to have a complete financial audit
conducted annually. A copy of GTECH's audited financial statements
shall be provided to the Lottery annually.
(b) In addition, a complete internal control audit of GTECH's Texas
operations shall be conducted annually by an independent certified
public accounting firm. GTECH shall pay for all audit services.
This audit shall be conducted pursuant to Statement on Auditing
Standards No. 70, as issued by the American Institute of Certified
Public Accountants as it may be updated or amended from time to
time. The Texas Lottery reserves the right to specify the type of
report and the control objectives to be examined as well as the
accounting firm to perform the audit. The Texas Lottery reserves
the right to designate the annual period to be covered by the
report relating to the internal control audit. GTECH agrees (i) to
fully cooperate with any auditor retained to perform such audit;
(ii) to generally release and waive any and all claims against
auditor other than those based upon intentional misconduct
occurring during such audit, and (iii) to indemnify and hold
harmless any auditor retained to perform such audit. GTECH agrees
that any such auditor is a direct and intended third party
beneficiary of this provision.
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(c) The Texas Lottery's internal auditor or external auditors (and
other designees) and the Texas State Auditor will be given the
right to review the work papers of the audits conducted by any
independent certified public accounting firm, if considered
necessary or desirable by the Texas Lottery.
(d) The Texas Lottery's internal auditor and Executive Director shall
be given a copy of all reports including any management letters
issued as a result of the specified audits within ten (10) days of
issuance. Ten (10) additional copies of all reports must be made
available to the Texas Lottery upon request.
3.28 RIGHT TO ADDITIONALLY AUDIT GTECH'S TEXAS OPERATIONS
3.28.1 The Texas Lottery reserves the right to audit GTECH's records and
operations as they relate to Texas. GTECH's records are subject to
audit by the Texas Lottery and the state auditor. For the purpose of
this provision, the Texas Lottery or state auditor may examine all
books, records, papers, or other objects, as well as data and systems
that the Texas Lottery or state auditor determines are necessary for
conducting a complete examination. The Texas Lottery or state auditor
may also examine under oath any officer, director, or employee of
GTECH. The Texas Lottery or state auditor may conduct an examination at
the principal office or any other office of GTECH or may require GTECH
to produce the records at the office of the Texas Lottery or state
auditor. If GTECH refuses to permit an examination or to answer any
question during the course of an audit, GTECH is subject to sanctions
as provided in this Contract. This provision applies regardless of
whether GTECH is subject to audit by any other state agency.
3.28.2 GTECH agrees (i) to fully cooperate with any auditor retained to
perform such audit; (ii) to generally release and waive any and all
claims against auditor other than those based upon intentional
misconduct occurring during such audit, and (iii) to indemnify and hold
harmless any auditor retained to perform such audit. GTECH agrees that
any such auditor is a direct and intended third party beneficiary of
this provision.
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3.29 QUARTERLY CONTRACT COMPLIANCE STATEMENT
GTECH shall be required to provide to the Texas Lottery a quarterly
contract compliance statement signed by an authorized officer of GTECH
regarding performance under the Contract. The form of the compliance
statement will be provided by the Texas Lottery and will include a
statement that GTECH has performed in compliance with the Contract
during the prior quarter and that GTECH has complied with the terms of
the Contract in performance of its obligations thereunder. In the event
that GTECH has not fully complied with this Contract, the quarterly
compliance statement must list with reasonable specificity all Contract
terms or obligations with which GTECH is not in compliance. GTECH shall
include on the list any event or omission which was not in compliance
when the event or omission occurred. GTECH must also provide a
statement that it is in full compliance with the Contract except for
the terms or obligations specified on the list.. If there are no terms
or obligations in which GTECH is not in compliance, the statement shall
so state.
3.30 ANNUAL CONTRACT COMPLIANCE REVIEW
GTECH shall be required to provide the Texas Lottery with an annual
contract compliance report to be performed at the expense of GTECH by
an independent accounting firm. The resulting report is due to the
Texas Lottery on or before sixty (60) days after the Lottery's fiscal
year end (currently August 31 of each year).
3.31 QUARTERLY COST REVIEW
3.31.1 Within forty-five (45) days after the first anniversary of the
Contract, and quarterly (within twenty (20) days after the end of the
quarter) thereafter, GTECH must present the Texas Lottery with a
detailed summary of operational costs incurred during the year in a
format determined by the Texas Lottery. Each summary shall include a
line by line
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listing of the categories of expenses incurred and the actual amounts
expended by GTECH in the course of providing the goods and services
covered by each respective GTECH contract with the Texas Lottery. It
shall not be the responsibility of the Texas Lottery staff to request
this summary, but the Texas Lottery may obtain the information, at its
option, through an independent auditor or with its own personnel. All
overhead items must be identified separately in the summary. The Texas
Lottery reserves the right to conduct an independent audit of GTECH's
operations, or specific functions. GTECH agrees (i) to fully cooperate
with any auditor retained to perform such audit; (ii) to generally
release and waive any and all claims against an auditor other than
those based upon intentional misconduct occurring during such audit,
and (iii) to indemnify and hold harmless any auditor retained to
perform such audit. GTECH agrees that any such auditor is a direct and
intended third party beneficiary of this provision.
3.31.2 If the Texas Lottery decides an independent cost review is to be
performed, GTECH will pay for the review of its operations. The Texas
Lottery will be solely responsible for selecting the independent
auditors as well as directing the course of the review procedures.
3.31.3 It is possible that, over the life of this Contract, certain functions
performed by GTECH may not be performed to the satisfaction of the
Texas Lottery. It may be the desire of the Texas Lottery to assume
control over those functions. In addition, the Texas Lottery may
determine that functions not originally contemplated in the Contract
are required. The Texas Lottery may require GTECH to perform those
functions, subject to successful negotiation of an agreement regarding
compensation for the performance of functions clearly not covered by
the original Contract. Likewise, if the Texas Lottery assumes functions
formerly performed by GTECH based in part on the quarterly cost review,
compensation to GTECH may be reduced, subject to successful negotiation
of an agreement.
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3.31.4 The quarterly cost review will not be used to systematically eliminate
functions from this Contract. However, the quarterly cost review and
subsequent elimination of functions from this Contract may, at the
discretion of the Texas Lottery, be used to remove functions from the
Contract that are subject to excessive costs, according to industry
norms. GTECH must share equally with the Texas Lottery any cost savings
in GTECH's operating expenses identified by this quarterly cost review.
3.32 INDEMNIFICATION
3.32.1 GTECH shall indemnify and hold harmless the Texas Lottery, the State of
Texas, their officers, employees, auditors, and agents (the
"Indemnified Parties") from and against any and all claims,
liabilities, losses, damages, costs, or expenses, including any
liability of any nature or kind arising out of a claim or suit for or
on account of the operation of the games, and including reasonable
attorneys' fees, which may be incurred, suffered, or required in whole
or in part by an actual or alleged act or omission of GTECH, or a
subcontractor of GTECH, or any person directly or indirectly employed
by GTECH or a subcontractor of GTECH whether the claim, liability,
loss, damage, cost or expense is based on negligence, strict liability
or any other culpable conduct, whether frivolous or not.
3.32.2 GTECH's liability shall extend to and include all reasonable costs,
expenses and attorneys' fees incurred or sustained by the Indemnified
Parties in making any investigation and in prosecuting or defending any
and all lawsuits or causes of action instituted or asserted by any
individual, organization or entity arising out of or in connection with
the services and equipment provided under the RFP or this Contract
(including without any limitation any claim that all or any portion of
the Lottery Gaming System infringes the patent, copyright, trade
secret, trademark, confidential information, or other intellectual
property right of any third party) in obtaining or seeking to obtain a
release therefrom and in enforcing any of the provisions contained in
the RFP or this
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Contract. The Indemnified Parties, upon giving notice to GTECH, shall
have the right in good faith to pay, settle or compromise, or litigate
any claim, demand, loss, liability, cost, charge, suit, order, judgment
or adjudication resulting from such lawsuit or cause of action under
the belief that the lawsuit or cause of action is well founded, whether
it is or not, without the consent or approval of GTECH unless GTECH
protests in writing and, simultaneously with such protest deposits with
the Indemnified Parties collateral satisfactory to the Indemnified
Parties sufficient to pay and satisfy such claim and any penalty or
interest which may accrue as a result of such protest, on such claim,
demand, loss, liability, cost, charge, attorneys' fee, or judgments as
may result. The Texas Lottery and the Texas Attorney General's Office
must control the choice of attorney representing the Texas Lottery. To
the extent that GTECH makes any payments to or on behalf of the
Indemnified Parties under the Contract, and to the extent permissible
by law, they shall be fully subrogated to all rights and claims of the
Indemnified Parties in connection therewith. In any event, the
Indemnified Parties shall promptly notify GTECH of the occurrence or
service of any lawsuit or cause of action arising out of the Contract.
3.33 BONDS AND INSURANCE
All required bonds and insurance must be issued by companies or
financial institutions which are financially rated A or better as rated
by A.M. Best Company and duly licensed, admitted, and authorized to do
business in the State of Texas. The Texas Lottery shall be named as the
Obligee in each required bond and as an Additional Insured in each
required liability policy and the Lottery shall be named as a Loss
Payee in each required first party policy. Except as otherwise
expressly provided herein, required coverage must remain in effect
throughout the term of the Contract and provide adequate coverage for
incidents discovered after termination of the Contract. GTECH must
submit certificates of insurance pertaining to each contract of
insurance required under this Contract, and pertaining to any renewals
thereof, to the Texas Lottery no later than January 1 of each year,
except for the first year of the Contract in which the copies of the
certificates of
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insurance must be submitted within fifteen (15) days after contract
execution, or as otherwise provided herein. The Texas Lottery has the
right, upon its request, to examine or acquire copies of the insurance
policies.
3.34 SELF INSURANCE
GTECH may not elect to provide entirely or in part for the
insurance/bond protections described in the RFP or this Contract
through self-insurance. A deductible provision contained in an
insurance policy that meets the requirements of this Contract is not
considered as self-insurance unless the deductible amount exceeds ten
percent (10%) of the face amount of the insurance policy.
3.35 PERFORMANCE BOND
3.35.1 GTECH shall, within ten (10) days of the execution of this Contract, be
required to provide a performance bond in the amount of twenty million
dollars ($20,000,000) substantially in the form of Attachment E
attached hereto. Failure to have and keep a bond in place shall
constitute a breach of this Contract by GTECH.
3.35.2 The bond must be maintained in full force and effect for the initial
term and any and all renewal terms of this Contract. The bond shall be
forfeited to the Texas Lottery if GTECH fails to perform as required by
the Contract.
3.36 FIDELITY BOND
3.36.1 Upon execution of this Contract, GTECH shall submit to the Texas
Lottery a Fidelity Bond in the amount of five million dollars
($5,000,000). The Fidelity Bond shall cover any loss to the state due
to any fraudulent or dishonest act on the part of the officers
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and/or employees of GTECH. In addition, GTECH must require each
subcontractor, agent and/or assign of GTECH to carry a Fidelity Bond in
the amount of five million dollars ($5,000,000). The Bond shall cover
any loss to the state due to any fraudulent or dishonest act on the
part of the officers and/or employees of the subcontractor, agent, or
assign.
3.36.2 GTECH must provide evidence of all required coverage(s) under the
Fidelity Bond at the time of Contract execution.
3.36.3 GTECH will ultimately be responsible for payment of any losses of the
subcontractors, agents and/or assigns of GTECH and shall be the
collector of any amounts due the state from the bonding company.
3.37 GENERAL LIABILITY INSURANCE
GTECH must maintain general liability insurance coverage with limits of
not less than two million dollars ($2,000,000) for bodily injury to any
one person, two million dollars ($2,000,000) for any one occurrence of
property damage, and a combined single limit of four million dollars
($4,000,000). GTECH shall provide the Texas Lottery with proof of such
coverage upon execution of this Contract and thereafter no later than
January 1st of each year the Contract is in force.
3.38 PROPERTY INSURANCE
3.38.1 GTECH must maintain insurance on all buildings, furniture, fixtures,
computer and communications equipment used in operating and supporting
GTECH's operation covering and in an amount equal to or greater than
the actual replacement cost thereof. Coverage must include an All Risk
Property Floater to insure personal property including contents,
equipment, and mobile items against fire, theft, collision, flood, etc.
The Texas
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Lottery and its Retailers will not be responsible for insuring any
equipment or facilities included in or associated with GTECH's
operation.
3.38.2 The insurance for any facilities in which Instant Tickets are housed
must provide a revenue stop loss policy, with the Texas Lottery
designated as the beneficiary to cover any revenue lost to the Texas
Lottery as a result of the loss of the ticket inventory or partial
ticket inventory. Additionally, GTECH must provide insurance that
covers at least 100% of replacement cost and all incidental costs of
replacement of the ticket inventory.
3.39 ERRORS AND OMISSIONS INSURANCE
GTECH must maintain professional liability errors and omissions
insurance of not less than three million dollars ($3,000,000), to be in
force and effect during the term of the Contract including any
extension thereof and one year thereafter. Coverage is to include
wrongful acts by GTECH, including its officers, employees of the
insured, or subcontractors performing on behalf of the insured arising
out of performance of or failure to perform system services or in the
failure of hardware or software to perform the function or serve the
purpose intended (computer error, machine error, system down time,
hardware or software problems or errors, and any error or omission) for
which GTECH is legally liable. GTECH shall provide the Texas Lottery
with proof of such coverage upon execution of the Contract and
thereafter no later than January 1st of each year the Contract is in
force.
3.40 AUTOMOBILE LIABILITY INSURANCE
GTECH must maintain automobile liability insurance covering drivers and
vehicles employed by GTECH, any officer, director or employee of GTECH.
GTECH must require each subcontractor to carry the same coverage and
limits as those required of GTECH. The automotive liability insurance
must have limits of not less than two million
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dollars ($2,000,000) for bodily injury to each person, two million
dollars ($2,000,000) for property damage, and a combined single limit
of four million dollars ($4,000,000). GTECH shall provide the Texas
Lottery with proof of such coverage upon execution of the Contract and
thereafter no later than January 1st of each year the Contract is in
force.
3.41 CRIME INSURANCE
GTECH must maintain crime insurance with a limit of not less than one
million dollars ($1,000,000) protecting the Texas Lottery against
losses, including lost income, lost profits, extra expenses and other
consequential losses suffered by the Texas Lottery, resulting from loss
of property (including money, securities and Texas Lottery tickets) by
robbery, burglary, or theft, or the loss of money, securities or Texas
Lottery tickets because of destruction or disappearance. GTECH shall
provide the Texas Lottery with proof of such coverage upon execution of
the Contract and thereafter no later than January 1st of each year the
Contract is in force.
3.42 DISCLOSURE OF LITIGATION
GTECH warrants that it has disclosed, in response to the RFP, any
material civil or criminal litigation or indictment either threatened
or pending involving GTECH, and also has disclosed any material
litigation threatened or pending for subcontractors, consultants,
and/or lobbyists. "Material" both in the RFP and in this Contract
refers to any action or pending action that a reasonable person
knowledgeable in the gaming industry would consider relevant to any
gaming operation or any development such a person would want to be
aware of in order to stay fully apprised of the total mix of
information relevant to the gaming industry and its operations,
including the effect the information would have on the average person's
understanding or opinion of the integrity and security of the Lottery.
This is a continuing disclosure requirement to which GTECH, as Lottery
Operator, is bound. GTECH is required to file with the Texas
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Lottery comprehensive monthly reports regarding all threatened or
pending litigation involving GTECH's Texas Operations. Additionally,
all threatened or pending litigation that may be considered material to
the overall operations of GTECH must be disclosed to the Texas Lottery
in the comprehensive monthly reports.
3.43 FORCE MAJEURE / DELAY OF PERFORMANCE
3.43.1 Except as otherwise provided, neither GTECH nor the Texas Lottery shall
be liable to the other for any delay in, or failure of performance of,
any covenant contained herein caused by force majeure. The existence of
such causes of delay or failure shall extend the period of performance
in the exercise of reasonable diligence until after the causes of delay
or failure have been removed. Force majeure is defined as those causes
generally recognized under Texas law as constituting impossible
conditions. GTECH must inform the Texas Lottery in writing within three
(3) days of the existence of such force majeure or otherwise waive this
right as a defense.
3.43.2 GTECH shall immediately upon discovery notify the Executive Director in
writing of any delays in performance dates regardless of
responsibility, fault or negligence. If it is GTECH's contention that
the delay is the responsibility, fault or negligence of Texas Lottery
staff, GTECH must indicate that contention in the written notification
within five (5) calendar days of the occurrence, and to the extent
possible, identify the event or individual responsible so that the
Executive Director may take appropriate action to remedy the situation.
GTECH's failure to provide this notification to the Executive Director
within the five (5) calendar day time frame shall waive GTECH's right
to assert the Texas Lottery's action/inaction as a defense.
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3.44 SECURITY PROGRAM
3.44.1 Prior to operations under this Contract, GTECH shall establish a
physical and software security program, subject to the prior written
approval of the Texas Lottery. Section 8.6 of this Contract sets out
the Security Program Requirements.
3.44.2 The Texas Lottery reserves the right to require at any time such
further and additional security measures as deemed necessary or
appropriate to ensure the integrity of GTECH's operations of the
game(s).
3.45 TAXES, FEES AND ASSESSMENTS
3.45.1 The Texas Lottery shall have no responsibility whatsoever for the
payment of any federal, state or local taxes which become payable by
GTECH or its subcontractors, or their agents, officers or employees.
GTECH shall pay and discharge when due all such taxes, license fees,
levies, and other obligations or charges of every nature.
3.45.2 GTECH will be responsible for payment of all taxes attributable to this
Contract and any and all such taxes shall be identified under GTECH's
federal tax identification number. GTECH shall pay all federal, state
and local taxes of any kind, including without limitation income,
franchise, ad valorem personal property, sales, use, lease,
consumption, distribution and storage taxes, for the goods, services
and systems relating thereto provided by GTECH, whether or not such
taxes are in effect as of the date this Contract is signed or scheduled
to go into effect, or become effective during the initial term and any
and all renewal terms, if any.
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3.46 NEWS RELEASES
GTECH shall not issue any news releases or publish information to the
public pertaining to this Contract or the performance of any duties or
obligations under this Contract without prior written approval of the
Texas Lottery, and then only in cooperation with the Texas Lottery;
provided however, in regard to any disclosure or any public release of
information of any kind required under applicable law, regulation or
rule (including the applicable rules of any stock exchange), GTECH
shall give notice thereof to the Texas Lottery as soon as possible and
prior to the release of the information and shall consult with the
Texas Lottery as to the content of the release. In any case in which
the release of information is required under applicable law, regulation
or rule, the Texas Lottery shall not be construed as having endorsed
the release, agreed to the content of the release, opined as to the
accuracy of the information in the release, or as having made an
admission of any kind regarding any subject covered in the release.
3.47 ADVERTISING
3.47.1 GTECH agrees not to use the Texas Lottery's name, logos, images, nor
any data or results arising from this Contract as a part of any
commercial advertising, or to promote GTECH in another jurisdiction's
procurement process, without prior written approval by the Texas
Lottery.
3.47.2 Advertising and promotions may not be of a nature that unduly
influences any person to purchase a lottery ticket or number, as
outlined in section 466.110 of the Texas Government Code, and must be
pre-approved by the Texas Lottery.
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3.48 HIRING OF TEXAS LOTTERY PERSONNEL
GTECH will not engage the services of any State of Texas employee while
such person remains employed by the state, without the written consent
of the Texas Lottery.
3.49 HIRING OF LOBBYIST; SUPPLEMENTAL INFORMATION
GTECH warrants that it has, pursuant to the RFP, provided the name,
addresses and telephone numbers for all lobbyists and/or legislative
consultants who will perform services related to GTECH's operations or
interests in the State of Texas, pursuant to previously executed
contracts, or who have performed services related to GTECH's operations
or interests in the State of Texas during the preceding three (3) years
for GTECH or any subcontractors of GTECH. During the term of this
Contract, GTECH shall immediately notify the Texas Lottery in the event
of change of lobbyist or legislative consultant information relevant to
GTECH's operations or interests in the state of Texas.
3.50 REAL ESTATE LEASE COSTS
All rental payments under any real estate leases entered into in
connection with the Contract must be at area market rates based on
market studies prepared by an appraisal firm or other professional
acceptable to the Texas Lottery at the sole expense of GTECH.
3.51 END OF CONTRACT CONVERSION
3.51.1 The Texas Lottery shall be solely responsible for the identification of
and time for conversions (transfers) of retailer terminals, and GTECH
shall cooperate fully and in
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good faith in said conversion (transfer). Cooperation may include, but
not be limited to, sharing of liability files and cross-validation of
winning tickets.
3.51.2 GTECH further shall remove all equipment and materials relating solely
to GTECH's system from each Retailer location within fourteen (14)
calendar days after conversion (transfer) of the location to the new
system.
3.51.3 GTECH must cooperate fully with the Texas Lottery throughout the period
in which the administration of responsibilities under the Contract is
transitioned or turned over to the Texas Lottery or third party. GTECH
must continue the Contract services at a consistently high level
without interruption during the turnover period. GTECH must support the
successor, including the sharing of files, until the successor can
maintain contract services at a consistently high level without
interruption. GTECH shall provide promptly and without delay, at no
cost, copies of all current software specifications, data files, job
control language, program designs, procedures and all other elements
required to install and operate the games in machine readable form
and/or to perform the other services required of the successor.
Required technical, user and programmer documentation as the Texas
Lottery may require must also be provided promptly and without delay by
GTECH. The Texas Lottery will determine when GTECH transition services
are not necessary.
3.51.4 The current Lottery Operator shall cooperate fully, and in good faith,
assist to the extent reasonable and practical in the conversion to any
new system. For example, an Operator shall cooperate in the conversion
(transfer) process providing terminal hardware, software specifications
and access to the telecommunications network as required. Through the
conversion period, the Operator shall provide sufficient experienced
personnel, resources and facilities to assure that the system and
services called for by the Contract are maintained at a high level of
proficiency.
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3.52 NON-DISCLOSURE AGREEMENT
GTECH shall maintain as confidential, and shall not disclose to third
parties without the Texas Lottery's prior written consent, any Texas
Lottery information including, but not limited to, the Texas Lottery's
business activities, practices, systems, conditions, products,
services, public information and education plans, data and related
materials, and game and marketing plans.
3.53 USUFRUCT
If, for any reason other than material breach of Contract by the Texas
Lottery, GTECH should lose its ability to service this Contract, the
Texas Lottery shall acquire a usufruct in all Contractual items owned
by GTECH in conjunction with the Contract and which are necessary to
provide such services. Said usufruct shall be limited to the right of
the Texas Lottery to possess and make use of the Contractual items
solely for the use and benefit of the Texas Lottery in operating,
maintaining, altering, replacing and improving the programs and systems
being used by the Texas Lottery under the Contract. Such usufruct shall
be limited in time to the duration of the Contract and any extension
thereof, and in scope for programs, systems, and other items being used
by the Texas Lottery under the Contract.
3.54 TICKET PURCHASE
No member, officer or employee of GTECH or of any subcontractor(s) not
excepted by this section, or that officer's or employee's spouse,
child, stepchild, brother, stepbrother, sister, stepsister, parent or
stepparent who resides in the household of such officer or employee
shall purchase a Texas lottery ticket or be paid a prize in any Texas
lottery game. GTECH shall ensure that this requirement is made known to
each officer and employee of GTECH and any subcontractor not excepted
by this Section 3.54. This
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prohibition does not apply to subcontractors or vendors who are not
subsidiaries or affiliates of GTECH and who provide only goods and
services falling within the following categories: telecommunications,
courier services, consumables, office supplies, facilities, utilities,
vehicle leasing, travel, and instant dispenser supply.
3.55 EQUIPMENT
GTECH hereby represents and warrants that all equipment provided shall
be new (subject to Section 6.3.6), shall be free from defects in
materials and workmanship, shall be merchantable and fit for the
purpose for which it is intended, and shall meet or exceed the
performance standards and specifications required in this Contract. Any
equipment, or component thereof, used by GTECH pursuant hereto which
does not conform to the foregoing shall be repaired or replaced by
GTECH without cost to the Texas Lottery in addition to other amounts
the Texas Lottery may be entitled to in law or in equity, or as
specified in this Contract.
3.56 PROGRAMS
3.56.1 GTECH represents and warrants that all systems analysis, systems design
and programming prepared or done, or to be prepared or done, by GTECH,
its subcontractors, or its officers, employees or agents has been and
shall be prepared or done in a professional manner. GTECH further
hereby represents and warrants that all programs implemented in its
performance herein shall meet the performance standards required
hereunder, and shall correctly and accurately perform their intended
functions.
3.56.2 GTECH hereby warrants that all Lottery Software is maintainable and
reusable. GTECH warrants and represents that all software used by GTECH
in performance of any and all Contract requirements in the Lottery
Software shall be written in languages that can be maintained and
supported by the Texas Lottery and/or any third-party contractor.
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GTECH hereby warrants that all Lottery Software shall be documented.
GTECH hereby warrants that all Application Lottery Software and
modifications to the Base Lottery Software developed pursuant to this
Contract will be delivered in a format including both source code and
object code, such that such software can be readily modified, compiled,
and maintained by the Texas Lottery and/or any third party contractor;
provided however, that delivery of the source code format of the
Application Lottery Software, to the extent such Application Lottery
Software does not constitute Works, will be only into escrow pursuant
to Section 3.56.5, and delivery to the Texas Lottery will be subject to
the terms and conditions of the Source Code Escrow Agreement
contemplated by said Section 3.56.5.
3.56.3 Programming languages, tools, and methodologies used by GTECH must be
approved as supportable by the Texas Lottery prior to their use by
GTECH. GTECH shall support all Lottery Software for the term of the
Contract and any extension thereof. If the programming support software
is not available in the open normal data processing market, other than
the gaming industry, then GTECH shall be required to supply compilers
and all normal programming support software, which is available to
GTECH's software staff and training to persons designated by the Texas
Lottery.
3.56.4 GTECH shall deliver copies of all Works to the Lottery Commission
promptly after they are completed. If the Works include computer
software, GTECH is to deliver copies of source code as well as object
code of such software, in addition to technical documentation
sufficient for an average programmer to understand, modify, compile and
execute the software. GTECH shall clearly label the media containing
any Works to identify the works contained in the media.
3.56.5 GTECH shall enter into a source code escrow agreement with the Texas
Lottery Commission and an escrow agent acceptable to the Texas Lottery
Commission for the source code and system and/or technical
documentation for those portions of the Base Lottery Software and the
Application Lottery Software which do not constitute Works
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(the "Source Code Escrow Agreement"). GTECH shall be responsible for
all charges associated with the escrow of the source code. GTECH shall
continuously maintain and perform all of its respective obligations in
the Source Code Escrow Agreement in accordance with the terms of the
Source Code Escrow Agreement. At a minimum, the Source Code Escrow
Agreement shall provide for release of the source code to the Texas
Lottery Commission in the event of termination for cause of this
Contract and from any bankruptcy, insolvency, arrangement with
creditors, failure to do business in the ordinary course, default on
debt, of other indication of financial instability. The Source Code
Escrow shall not permit GTECH to give contrary instructions to the
escrow agent in the event that the Texas Lottery Commission sends the
agent a certified letter indicating that a release condition has
occurred. The Texas Lottery Commission shall have full rights of
inspection during the term of the Source Code Escrow Agreement. By
executing this Contract, GTECH hereby grants the Texas Lottery a
non-exclusive perpetual license to use, have used, modify, have
modified, compile, have compiled, execute, have executed, display, have
displayed, and operate and have operated the source code for the Base
Lottery Software and the Application Lottery Software as necessary to
operate the Lottery; it being understood, however, that the Lottery
shall only exercise its rights under this license with respect to
source code released from the source code escrow pursuant to the terms
and conditions of the escrow agreement. In such event, the Texas
Lottery may allow access to the source code to third party contractors,
but only if the Texas Lottery enters into a non-disclosure agreement
with such third party requiring the third party to maintain the source
code in confidence, not to use the source code for any purpose other
than to support the Texas Lottery, and naming GTECH as a third party
beneficiary of such non-disclosure agreement. The Parties intend that
the Texas Lottery shall have all rights afforded to licensees under
section 365(n) of the U.S. Bankruptcy Code (and any successor thereto)
in connection with any bankruptcy of GTECH.
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3.57 LOTTERY PURCHASE OPTION
In the event that the Lottery exercises its option to purchase the
Lottery Equipment pursuant to section 3.18(b) of this Contract, the
Lottery shall have an irrevocable, nonassignable, nontransferable and
nonexclusive license to use GTECH developed software received by the
Lottery from GTECH under this Contract in order to operate in Texas any
equipment to be provided under this Contract by GTECH.
3.58 SANCTIONS AND REMEDIES SCHEDULE
General. Section 2259.101 of the Texas Government Code requires that
all state contracts contain a remedies schedule, a graduated sanctions
schedule, or both. Pursuant to that statutory provision, sanctions and
remedies will apply for the incidents specified in this section. The
sanctions and remedies will be referred to as "sanctions." The
sanctions refer to sections of the RFP where appropriate.
3.58.1 Assessment of Sanctions. Once the Texas Lottery has determined that
sanctions are to be assessed, the Executive Director or Executive
Director's designee may notify GTECH of the assessment(s). Failure to
notify does not impact the Texas Lottery's assessment of sanctions and
is not a condition precedent thereto. The Texas Lottery will withhold
sanctions from payments to GTECH, or, if no payments are to be made,
the Texas Lottery will make demand of payment of sanctions. GTECH must
make payment within ten (10) days of the Texas Lottery's demand. In the
event GTECH fails to pay within the ten (10) day period, the Texas
Lottery may make a claim for payment against the Performance Bond, with
or without notice to GTECH.
3.58.2 Failure to Assess Sanctions. The failure of the Texas Lottery to assess
sanctions in any instance where the Texas Lottery is entitled to
sanctions pursuant to the terms of this
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Contract shall not constitute waiver in any fashion of the Texas
Lottery's rights to assess sanctions.
3.58.3 Severability of Individual Sanctions Clause. If any portion of this
sanctions provision is determined to be unenforceable, the other
portions of this provision shall remain in full force and effect.
3.58.4 Failure to Permit an Examination, Produce Requested Records,
Information, or Provide an Answer Timely. The failure of GTECH to
permit an examination, produce requested records, information, or
provide an answer timely as required by sections 3.27 and/or 3.28 of
this Contract may result in GTECH being assessed sanctions in the
amount of $5000 per day for each day the examination is not permitted,
the records are not produced or the answer is not provided.
3.58.5 Failure to Timely File Quarterly Accounting Reports. The Failure of
GTECH to timely file the quarterly summary of operational costs and
information required by section 3.31 of this Contract may result in
GTECH being assessed sanctions in the amount of $5000 a day for each
day the quarterly accounting report or information is not filed.
3.58.6 Failure to Timely File Quarterly Contract Compliance Statement. The
failure of GTECH to timely file a contract compliance statement as
required by section 3.29 of this Contract may result in GTECH being
assessed sanctions in the amount of $5000 a day for each day the
statement is not filed.
3.58.7 Failure to Timely File Annual Compliance Report. The failure of GTECH
to timely file an annual compliance report as required by section 3.30
of this Contract may result in GTECH being assessed sanctions in the
amount of $5000 a day for each day the report is not filed.
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3.58.8 Failure to Disclose Litigation. The Failure of GTECH to disclose
litigation as required by section 3.42 of this Contract may result in
GTECH being assessed sanctions in the amount of $1000 per incident.
3.58.9 Failure to Obtain Prior Written Approval before Issuing News Release.
The failure of GTECH to comply with the requirements of section 3.46 of
this Contract regarding the issuance of news releases may result in
GTECH being assessed sanctions in the amount of $100,000 per incident.
3.58.10 Failure to Notify Changes of Lobbyist Information. The Failure of GTECH
to inform the Texas Lottery of any change of lobbyist information
relevant to GTECH's Texas operations or interests as required by
section 3.49 of this Contract may result in GTECH being assessed
sanctions in the amount of $1000 per day for each day that the filing
is delayed.
3.58.11 Failure to Cooperate Fully and in Good Faith in the Conversion to any
New System. The failure of GTECH to cooperate fully, and in good faith,
to assist to the extent reasonable and practical in the conversion to
any new system as required by section 3.51 of this Contract may result
in GTECH being assessed sanctions of $500,000 a week for each week, and
pro rata for each day of the week, that GTECH fails to perform the
services and provide the resources required by section 3.51 of this
Contract.
3.58.12 Failure to Comply with the Terms of the Non-Disclosure Agreement. Any
failure of GTECH, its agents and/or employees to comply with the terms
of any non-disclosure agreement entered into as a result of this
Contract may result in GTECH being assessed sanctions in the amount of
$5000 per incident.
3.58.13 Purchase of Texas Lottery Tickets. Any failure of GTECH to comply with
the requirement of section 3.54 of this Contract regarding the purchase
of Texas Lottery
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tickets may result in GTECH being assessed sanctions in the amount of
$5000 per incident. While the prohibition against lottery purchases may
extend to subcontractors providing services related to the ICS and to
Central System repair and maintenance, GTECH will not be assessed
sanctions under this section for noncompliance on the part of these
subcontractors in cases where those subcontractors are not subsidiaries
or affiliates of GTECH.
3.58.14 Failure to Timely Provide Annual Inventory Reports. The failure of
GTECH to timely file an annual inventory report as required by section
6.2.2(b)(8) of the RFP may result in GTECH being assessed sanctions in
the amount of $1000 a day for each day that the report is not timely
filed.
3.58.15 Failure to Report Significant Incidents and Anomalies. The failure of
GTECH to report all significant incidents and anomalies to the
Executive Director or designee as required by section 3.64 of this
Contract may result in GTECH being assessed sanctions in the amount of
$1000 per day.
3.58.16 Failure to Attend a Promotional Event. The failure of GTECH to attend a
scheduled promotional event on time and fully prepared to conduct the
promotional event as required by sections 7.4 through 7.6 of the RFP
may result in GTECH being assessed sanctions in the amount of $5000 per
incident.
3.58.17 Failure to Maintain an Adequate Supply of On-Line Ticket and Mid-Range
Terminal Roll Stock at Retailer Locations. If GTECH fails to supply
sufficient paper for any Retailer terminal as required by section
7.23.4 and 7.13.12 of the RFP, it may result in GTECH being assessed
sanctions based at the rate of $25 per hour or fraction of an hour
until the paper supply is replenished. The sanction applies per
Retailer.
3.58.18 On-Line Terminal or Mid-Range Down Time in Excess of Time Permitted for
Service Response. If GTECH fails to respond to Retailer calls for
terminal maintenance and
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correct terminal problems that affect the ability to sell or validate
tickets, within four (4) hours of the time of the report, GTECH may be
assessed thirty one percent (31%) of the average sales per day
calculated over the last ten (10) like days. If GTECH fails to respond
within eight (8) hours of the time of the report, GTECH may be assessed
sixty two percent (62%) of the average sales per day calculated over
the last ten (10) like days. A "like" day is a day that most reasonably
approximates the expected sales level on the day the terminal problem
occurred, taking into account such factors as proximity to major
holidays, the size of the Lottery jackpot, and when the day falls
during the week.
3.58.19 Failure to Notify the Texas Lottery of Visitors to the Instant Ticket
Warehouse. The failure of GTECH to give the Texas Lottery 24 hours
notice prior to access by any visitors to the Instant Ticket warehouses
as required by section 8.4.5 of this Contract may result in GTECH being
assessed $1000 per incident in sanctions.
3.58.20 Failure to Submit a Detailed Conversion Plan. The failure of GTECH to
submit a detailed conversion plan to the Texas Lottery for approval no
later than ninety (90) days after the Contract Award, or earlier as
best efforts allow, may result in GTECH being assessed sanctions in the
amount of $10,000 a day for each day that the detailed conversion plan
is not submitted to the Texas Lottery. The detailed conversion plan
must include acceptance testing and a security plan.
3.58.21 Lottery Gaming System Inability to Cash Winning Tickets at a Retailer
Location. If the Lottery Gaming System will not cash tickets for any
game due to a Lottery Gaming System problem, sanctions may be assessed
at the rate of $1000 per minute after the first two (2) minutes such
circumstance exists (referred to as "grace time"); provided, however,
that GTECH will be granted a maximum of five (5) two-minute periods of
grace time per week. This calculation will be made for each On-Line
game affected and instant games. This sanction does not apply to a
problem in the System caused by landline telecommunications
subcontractors, or to subcontractors who are not
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subsidiaries or affiliates of GTECH and who provide only
telecommunications, facilities or utilities goods or services.
3.58.22 Lottery Gaming System Inability to Cash Winning Tickets at a Texas
Lottery Claim Center. If any Texas Lottery claim center is unable to
cash winning tickets and process a claim due to a Lottery Gaming System
problem, sanctions may be assessed at the rate of $2000 per minute
after the first two (2) minutes such circumstance exists (referred to
as "grace time"); provided, however, that GTECH will be granted a
maximum of five (5) two-minute periods of grace time per week. The
maximum sanctions for one day will be $50,000. This sanction does not
apply to a problem in the System caused by landline telecommunications
subcontractors, or to subcontractors who are not subsidiaries or
affiliates of GTECH and who provide only telecommunications, facilities
or utilities goods or services.
3.58.23 Inability of the Lottery Gaming System to Confirm or Activate Instant
Ticket Packs. If Texas Lottery Retailers are unable to confirm or
activate Instant Ticket packs, sanctions may be assessed at the rate of
$1000 per minute after the first two (2) minutes such circumstance
exists (referred to as "grace time"); provided, however, that GTECH
will be granted a maximum of five (5) two-minute periods of grace time
per week. The maximum sanctions for one day will be $50,000. This
sanction does not apply to a problem in the System caused by landline
telecommunications subcontractors, or to subcontractors who are not
subsidiaries or affiliates of GTECH and who provide only
telecommunications, facilities, utilities and instant dispenser goods
or services.
3.58.24 Inability of the Lottery Gaming System to Produce Accurate Terminal
Reports. If Texas Lottery Retailers are unable to produce accurate
terminal reports due to a Lottery Gaming System problem, sanctions may
be assessed. If reports are unavailable, the rate will be $1000 per
incident, for up to four (4) hours, thereafter $1000 per hour until the
problem is fixed. If reports are inaccurate, the rate will be $5000 per
incident, for up to four (4) hours, thereafter $5000 per hour until the
problem is corrected.
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3.58.25 Inability of the Lottery Gaming System to Conduct Retailer, Licensing,
Inventory, Reporting, or other Management Functions or Failure to
Provide Daily Management Reports. If any Lottery Management functions
are unavailable due to a vendor system problem, or daily system reports
are unavailable, sanctions may be assessed at the rate of $1000 per
hour. The first hour will be grace time, and GTECH shall be granted a
maximum of three (3) one-hour grace periods per week.
3.58.26 Inability of the Internal Control System to Update Lottery
Applications. If the Internal Control System fails to update Texas
Lottery downstream applications prior to start of the normal Texas
Lottery business day due to fault in the Lottery Gaming System or the
ICS, sanctions may be assessed at the rate of $1000 per incident. If
the problem exceeds four (4) hours, an additional $1000/hour for each
hour the update is late will be assessed. This sanction shall not apply
to a failure to update that occurs during implementation of a software
download, enhancement or other modification, central system hardware
change and/or Lottery Network change for which prior written approval
has been obtained from the Texas Lottery.
3.58.27 Improperly Processed Packs of Instant Tickets. If GTECH improperly
processes packs of Instant Tickets, GTECH may be assessed sanctions in
the amount of $100 per pack of improperly processed Instant Tickets.
3.58.28 Instant Ticket Packs not Delivered to Texas Lottery Retailers. If any
packs of Instant Tickets are not delivered to Texas Lottery Retailers
as required by section 7.23 of the RFP, sanctions may be assessed
against GTECH in the amount of $100 per pack of Instant Tickets not
delivered.
3.58.29 Instant Ticket Packs not Returned to the Warehouse. If GTECH fails to
return Instant Ticket packs to the warehouses as required by section
7.22.6 of the RFP, sanctions may be assessed against GTECH in the
amount of $100 per pack of Instant Tickets not returned to the
warehouse.
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3.58.30 Damaged or Stolen Instant Ticket Packs. If GTECH damages any packs of
Instant Tickets or if any tickets are stolen while tickets are in
GTECH's care or custody, sanctions may be assessed against GTECH in the
amount of $100 per pack.
3.58.31 Unassigned Packs of Instant Tickets Missing from the Warehouse. GTECH
may be assessed sanctions in the amount of the face value of each pack
of unassigned Instant Tickets missing from the warehouse.
3.58.32 LSR Failure to Visit Retailer. If GTECH fails to visit each Retailer as
required by section 7.13.1 of the RFP and section 7.3 of this Contract,
GTECH may be assessed sanctions in the amount of $50 for each missed
visit.
3.58.33 Failure to Provide New Reports or System Enhancements. If GTECH fails
to provide new reports, or management system enhancements as scheduled,
sanctions may be assessed at the rate of $1000 per day that the new
reports, or management system enhancements are late.
3.58.34 Failure to Provide New On-Line Games. If GTECH fails to implement any
new On-Line games as scheduled, sanctions may be assessed at the rate
of $100,000 per day that the new game is late in being implemented.
3.58.35 Failure to Notify the Texas Lottery of a Change in Financial Condition,
or Change of Ownership. If GTECH fails to notify the Texas Lottery of a
change in financial condition as required by section 4.3.2, or change
of ownership or control as required by section 4.6 of this Contract,
GTECH may be assessed sanctions in the amount of $1000 per incident.
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3.59 LIQUIDATED DAMAGES
3.59.1 It is agreed by the Texas Lottery and GTECH that:
(a) If GTECH does not provide or perform the requirements referred to
or listed in this Contract or fulfill the obligations of the
Contract, damage to the Texas Lottery will result.
(b) Establishing the precise value of such damages will be difficult
and/or impossible to calculate.
(c) The liquidated damage assessments herein represent a good faith
effort to quantify the damages that could reasonably be
anticipated at the time of the execution of the Contract. The
damages provided in this section are just and reasonable.
(d) Nothing in this section shall be construed as relieving GTECH from
performing all Contract requirements whether or not said
requirements are set forth herein. Moreover, the Texas Lottery
reserves the right to enforce or to seek other remedies, without
limitation, for failure to perform any contractual requirements.
(e) The Executive Director may, therefore, in the Executive Director's
sole discretion, deduct damages from the compensation otherwise
due to GTECH. All assessments of damages shall be within the sole
discretion of the Texas Lottery.
3.59.2 On-Line Game Unavailability. If any On-Line game is unavailable for
sales due to a Lottery Gaming System problem, liquidated damages may be
assessed. The first two (2) minutes of down time for sales will be
grace time, up to a maximum of ten (10) minutes per week. Forty percent
(40%) of the previous ten (10) week average per minute sales, for the
same day and the same affected game, will be multiplied by the number
of minutes of down time to compute liquidated damages. If the down time
is within ten (10) hours of that game's drawing, a sixty percent (60%)
factor will be used in lieu of forty percent. This calculation will be
made for each affected On-Line game.
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3.59.3 Inability of the Texas Lottery Retailer Terminals to Communicate with
the Lottery Gaming System. If Texas Lottery Retailer terminals are
unable to communicate with the Lottery Gaming System due to a problem
with GTECH's hardware or software, or the Lottery Gaming System is
down, liquidated damages may be assessed. The rate will be forty
percent (40%) of the average per minute sales of instant and On-Line
sales for that day over the previous ten (10) weeks, times the number
of minutes down. The first two (2) minutes will be grace time, up to a
maximum of ten (10) minutes per week.
3.59.4 Maximum Daily Total for Sanctions and Liquidated Damages for Sections
3.58.21 through 3.58.26 and Sections 3.59.2 and 3.59.3. The maximum
daily sanctions for any combination of the sanctions listed in sections
3.58.21 through 3.58.26 and liquidated damages in sections 3.59.2 and
3.59.3 will be $250,000.
3.60 DISPUTE RESOLUTION
The dispute resolution process provided for in Texas Government Code
Chapter 2260 and 16 Texas Administrative Code Sections
403.201-223 must be used by the Texas Lottery and GTECH to attempt to
resolve all disputes brought by GTECH arising under this Contract.
3.61 CERTIFICATIONS
3.61.1 Pursuant to Texas Government Code Section 466.103, the Executive
Director may not award a contract for the purchase or lease of
facilities, goods or services related to lottery operations to a person
who would be denied a license as a sales agent under Texas Government
Code Section 466.155. GTECH must read and be familiar with Texas
Government Code Section 466.155. A copy of Texas Government Code
Section 466.155 is attached hereto as Attachment D. GTECH certifies
that it has reviewed Texas Government Code Section 466.155 and would
not be denied a license as a sales agent pursuant to said section.
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3.61.2 Under Section 231.006 of the Texas Family Code, the vendor or
applicant, here, GTECH, certifies that the individual or business
entity named in this Contract, bid or application is not ineligible to
receive the specified grant, loan or payment and acknowledges that this
Contract may be terminated and payment may be withheld if this
certification is inaccurate.
3.62 CODE OF CONDUCT
The Texas Lottery is an extremely sensitive enterprise because its
success depends on preserving the public trust. Therefore, it is
essential that its operation, and the operation of other enterprises
which would be linked to it in the public mind, avoid not only
impropriety, but also the appearance of impropriety, including any
action that might diminish the average person's opinion or view of the
integrity or security of the Texas Lottery. Because of this, GTECH
shall:
(a) Offer goods and services only of the highest standards.
(b) Use its best efforts to prevent the industry from becoming
embroiled in unfavorable publicity.
(c) Make sales presentations in a responsible manner and when it is
felt necessary to point out the superiority of their goods or
services over those of their competitors, to do so in such a
manner as to avoid unfavorable publicity for the industry.
(d) Avoid activities, operations, and practices that could be
interpreted as improper and cause embarrassment to the Texas
Lottery and/or to the industry.
(e) Report security problems or potential security problems with any
system supplied pursuant to this Contract immediately and only to
the Texas Lottery.
(f) Otherwise comply with the State Lottery Act (TEXAS GOV'T CODE ch.
466) and Texas Lottery rules and procedures.
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CONTRACTUAL TERMS AND CONDITIONS
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3.63 CONTACT WITH TEXAS LOTTERY EMPLOYEES
3.63.1 Except when circumstances require otherwise, employees of the Texas
Lottery and employees, subcontractors and agents of GTECH should meet
only at Texas Lottery headquarters.
3.63.2 Employees, subcontractors and agents of GTECH may not offer a gift or
any other thing of value as defined by section 467.001 of the Texas
Government Code to a Texas Lottery employee.
3.63.3 Employees, subcontractors and agents of GTECH may not socialize with
any Texas Lottery employee.
3.64 INCIDENTS AND ANOMALIES
All significant incidents and anomalies shall be reported verbally to
the Executive Director or designee immediately and shall be reported in
writing to the Executive Director or designee within one workday of the
event. At a minimum, incident and anomaly reporting will include a
description of the incident, its cause, and corrective action taken for
each occurrence of system failure that affects the Texas Lottery,
Lottery Retailers, or players; and each occurrence of operator error,
deviation from established procedures and those items where sanctions
or liquidated damages are applicable.
3.65 TRADEMARK AND SERVICE MARK SEARCH
GTECH, at its expense, will conduct trademark and service mark searches
for all new On-Line game names used during the Contract term and any
extension of the Contract. GTECH, at its expense, will also timely
register the name of said games used by the Texas Lottery in the name
of the Texas Lottery.
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3.66 ATTACHMENT OF THIRD PARTY SYSTEMS, TERMINALS OR PRODUCTS
3.66.1 The Texas Lottery reserves the right to require GTECH to allow any
required access to, and to provide support to, the Texas Lottery and to
a Texas Lottery vendor or Retailer in attaching to the Lottery Gaming
System or otherwise installing terminals, terminal peripherals,
products, or systems other than those required by the Lottery Operator
RFP.
3.66.2 GTECH must supply to the Texas Lottery specifications to permit other
products other than products produced by GTECH to carry out all
functions and capabilities required by the Texas Lottery. GTECH must
provide required support and access to the Texas Lottery and to a Texas
Lottery vendor or Retailer for additional products including, but not
limited to, providing facilities and support to allow other parties to
attach, install and/or test products. The Texas Lottery will monitor
progress to ensure full cooperation.
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CONTRACTUAL TERMS AND CONDITIONS
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PART IV
REQUIRED INFORMATION
4.1 STATEMENT OF UNDERSTANDING
GTECH certifies that
(i) GTECH has read the Texas Lottery Commission's RFP prior to
proposal submission,
(ii) GTECH understands the information contained within the RFP
and in this Contract,
(iii) GTECH has had an opportunity to consult with any experts it
deems knowledgeable or helpful in any way,
(iv) GTECH is a sophisticated business entity capable of analyzing
the risks and potential benefits inherent in responding to the
Texas Lottery RFP and in entering into this Contract,
(v) GTECH has been and is represented by counsel of its choice,
(vi) GTECH has fully investigated any facts that it deems
relevant,
(vii) GTECH is not under duress to respond to the Proposal or to
enter into this Contract resulting from the Proposal, and
(viii) after careful consideration and investigation, and after
receiving the advice of counsel, GTECH has analyzed the risks
associated with responding to the Texas Lottery RFP and with
performing under this Contract resulting from the RFP, and GTECH
has decided to accept such risks of its own free will in order to
compete to obtain the benefits associated with this Contract.
GTECH further acknowledges that the exercise by the Texas Lottery
Commission of any of the rights or remedies specified hereunder, to
which GTECH has not objected and negotiated out from inclusion in this
Contract resulting from the Texas Lottery RFP based upon due process
concerns, shall not in any way violate GTECH's rights of due process.
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4.2 BACKGROUND INFORMATION AND EXPERIENCE
Section 4.3 of the RFP requires GTECH to disclose any personal or
business relationship between the GTECH, the principals or any
affiliate or subcontractor, with any employee or representative of the
Lottery or its vendors. The RFP also required GTECH to disclose any
such relationship that might be perceived or represented as a conflict.
GTECH represents and warrants that it has made and shall continue to
make all of these disclosures to the Texas Lottery for the entire term
of this Contract and any extension periods. Failure to disclose any
such relationship will be cause for contract termination.
4.3 FINANCIAL SOUNDNESS
4.3.1 The Texas Lottery reserves the right to require, at any time, any
additional information necessary to determine the financial integrity
and responsibility of the GTECH.
4.3.2 GTECH certifies that it will notify the Texas Lottery of a change in
financial condition. If GTECH experiences a substantial change in its
financial condition during the term of the Contract or any extension
thereof, the Texas Lottery must be notified of the change in writing at
the time the change occurs or is identified. Failure to notify the
Texas Lottery of such substantial change in financial condition during
the term of the Contract or any extension thereof will be sufficient
grounds for terminating the Contract. For the purposes of this section,
an example of a substantial change in financial condition may be any
loss, cash flow loss from operations, loss of a major contract, or
judgment in excess of $250,000.
4.4 BACKGROUND INVESTIGATIONS
GTECH agrees that, during the term of the Contract and any renewal
thereof, it shall be obligated to provide such information about its
officers, directors, employees and owners,
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REQUIRED INFORMATION
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as well as all information about its subcontractors' officers,
directors, employees and owners, as the Texas Lottery may prescribe.
GTECH also agrees that the Texas Lottery may conduct background
investigations of such persons at GTECH's expense.
4.5 STAFFING PLAN
The terms of the staffing plan provided in section 4.5 of GTECH's
Proposal are hereby fully incorporated into this Contract.
4.6 RESUMES
GTECH will immediately notify in writing the Texas Lottery of any
changes of its key management, to include key Texas staff, including
without limitation, the proposed site director, any subcontractors,
temporary firms, subsidiaries, officers, directors, independent
contractors to work on this Contract, and any shareholder holding more
than ten percent (10%) of the stock in GTECH. The notification must
include, without limitation, copies of resumes or job applications for
all new employees in relation to this Contract.
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REQUIRED INFORMATION
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PART V
HISTORICALLY UNDERUTILIZED
BUSINESS / MINORITY BUSINESS PARTICIPATION
5.1 INTRODUCTION
5.1.1 This section sets forth requirements that every proposal must meet in
order to comply with the laws of the State of Texas and the rules of
the Texas Lottery Commission regarding historically underutilized
businesses ("HUBs"). The Texas Lottery is committed to promoting full
and equal business opportunities for all businesses in State
contracting in accordance with the goals specified in the State of
Texas Disparity Study. The Texas Lottery has adopted administrative
rules and policies relating to Historically Underutilized Businesses
and minority businesses that encourage the use of HUBs/minority
businesses through race-ethnic and gender-neutral means (Attachment A).
Pursuant to the Texas Lottery's HUB rule, 16 Texas Administrative
Code Section 403.301 and pursuant to Sections 2161.181-182 of the
Texas Government Code and Section 466.107 of the Texas Government Code,
the Texas Lottery is required to make a good faith effort to utilize
HUBs and/or minority businesses in contracts for construction,
services, including professional and consulting services, and commodity
contracts.
5.1.2 The Statewide HUB participation goals, set by the General Services
Commission (GSC) as a result of State of Texas Disparity Study are
classified under the following categories:
(1) heavy construction other than building contracts 11.9%;
(2) building construction 26.1%;
(3) special trade construction contracts 57.2%;
(4) professional services contracts 20%;
(5) all other services contracts 33%; and (6) commodities
contracts 12.6%.
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HUB/MINORITY PARTICIPATION
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(6) commodities contracts 12.6%
5.1.3 The Texas Lottery and GTECH shall make a good faith effort to meet or
exceed the HUB/minority business participation goals listed above and
assist HUBs in receiving a portion of the total contract value of this
Contract.
5.1.4 The goods and/or services procured by this Contract are classified
under "all other services contracts." The goal for this procurement is
33%.
5.1.5 It is the policy of the Texas Lottery to accomplish this goal either
through contracting directly with HUBs/minority businesses or
indirectly through subcontracting opportunities. The Texas Lottery's
policy on the utilization of HUBs and minority businesses is related to
all contracts with an expected value of $100,000 or more, and whenever
possible, in contracts less than $100,000.
5.2 BUSINESS SUBCONTRACTING PLAN (BSP) PROCEDURES
5.2.1 The following procedures are specified by the Texas Lottery's rule
relating to HUBs, 16 Texas Administrative Code Section 403.301, which
adopts the General Services Commission's ("GSC's") rules relating to
HUBs. If there are any discrepancies between 16 TAC 403.301 and this
plan, the rule shall take priority.
5.2.2 The Texas Lottery determined that subcontracting opportunities are
probable under this Contract.
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HUB/MINORITY PARTICIPATION
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5.3 BUSINESS SUBCONTRACTING PLAN (BSP) INCORPORATED INTO CONTRACT
5.3.1 Because the Texas Lottery has determined that subcontracting
opportunities are probable, GTECH included a BSP with its response. The
criteria and procedures for developing the BSP were included in the RFP
as well as the evaluation criteria.
5.3.2 GTECH's BSP has been evaluated and accepted by the Texas Lottery. The
BSP is a part of this Contract.
5.3.3 No changes shall be made to an accepted subcontracting plan prior to
its incorporation into the contract.
5.4 CHANGES TO THE BSP AFTER A CONTRACT HAS COMMENCED
No changes shall be made to the subcontracting plan until after the
Contract has commenced, and then only as authorized by the Texas
Lottery. If at any time during the term of the Contract, GTECH desires
to make any changes to the approved BSP, such proposed changes must be
received in writing for prior review and approved by the Texas Lottery
before changes will be effective under the Contract. GTECH must comply
with provisions of the Contract, relating to developing and submitting
a subcontracting plan in order to substitute work or a subcontractor
prior to any alternative under the subcontracting plan. The Texas
Lottery shall approve changes by Contract amendments. The reasons for
amendments shall be recorded in the procurement file.
5.5 REPORTING AND COMPLIANCE WITH THE BSP
5.5.1 GTECH shall maintain payment documentation and business records
documenting its compliance with the BSP. During the term of this
Contract, the Texas Lottery shall
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determine whether the value of the subcontracts to HUBs/minority
businesses meets or exceeds the HUB/minority business subcontracting
provisions specified in the Contract.
5.5.2 Texas Lottery staff will monitor GTECH for compliance from the date of
award to the completion of the Contract. GTECH shall report to the
Texas Lottery on a monthly basis (10th day of each month), or as
requested, the identity and amount paid to each Historically
Underutilized Business (HUB) to whom GTECH has awarded a subcontract
for the purchase of services, supplies, materials and equipment,
provided that payment was made to a historically underutilized business
in the month to be reported. The Texas Lottery shall maintain
documentation of GTECH's efforts in the Texas Lottery's contract
compliance file. GTECH shall provide ATTACHMENTS C-1 AND C-2.
5.5.3 ATTACHMENT C-1 is the Progress Assessment Report (HUB-PAR)
Documentation of Work Subcontracted during the reporting period. This
attachment is used to report identification of subcontractors and the
amount paid to all subcontractors, including HUBs, in accordance with
the BSP. Identify HUBs by indicating Yes or No and include a copy of
the General Services Commission (GSC) HUB Certificate.
5.5.4 ATTACHMENT C-2 is the HUB/Minority Business Non-Subcontractor Affidavit
confirming that no subcontracting has occurred during the reporting
period. This attachment is used to affirm to the Commission that all
subcontracting opportunities are performed with GTECH's employees and
resources, and without any subcontractors, in accordance with the BSP.
If contractors have been used, GTECH must identify all subcontractors
used in the Contract.
5.5.5 If GTECH fails to fulfill the BSP specified in the Contract, the Texas
Lottery shall notify GTECH of any deficiencies. The Texas Lottery shall
give GTECH an opportunity to submit documentation and explain to the
Texas Lottery why the failure to fulfill the BSP should not be
attributed to a lack of good faith effort by GTECH. In determining
whether GTECH made the required good faith effort, the Texas Lottery
may not consider the
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HUB/MINORITY PARTICIPATION
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success or failure of GTECH to subcontract with HUBs/minority
businesses in any specific quantity. The Texas Lottery's determination
is restricted to considering factors indicating good faith including,
but not limited to, the following:
(a) Whether GTECH gave timely notice to its subcontractors regarding
the time and place of the subcontracted work.
(b) Whether GTECH facilitated access to the work-site, provided
electrical power and other necessary utilities.
(c) Whether documentation or information was provided that included
potential changes in the scope of contract work.
5.5.6 If a determination is made that GTECH failed to implement the BSP in
good faith, the Texas Lottery, in addition to any other available
remedies, may report nonperformance to the General Services Commission
in accordance with 1 Texas Administrative Code, Chapter 113, Subchapter
F (relating to "Vendor Performance and Debarment Program").
5.5.7 GTECH must rectify any deficiencies of the BSP prior to the next
reporting period.
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HUB/MINORITY PARTICIPATION
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PART VI
LOTTERY GAMING SYSTEM
6.1 PROVISIONS OF CONTRACT
6.1.1 The Lottery Gaming System and the Lottery Management System
capabilities, requirements and performance standards are addressed by
the RFP. Part VI of the RFP is made part of this Contract in its
entirety. The systems, specifications, and performance standards,
options and other requirements that are the subject of this Contract
are those that are described or invited, or otherwise referred to in
the RFP.
6.1.2 GTECH has committed to provide the System and functionality described
in its Proposal and to meet the Lottery's requirements. Part VI of
GTECH's Proposal is hereby incorporated in its entirety into this
Contract. GTECH is required to provide the goods, services, systems,
support, and options described in its Proposal according to the terms
and criteria explained therein, including any enhanced functionality
that exceeded the requirements of the RFP, unless specifically excused
in writing by the Executive Director.
6.2 RFP GOVERNS
In the event that there is a conflict between the terms of the RFP (as
defined in the Glossary of Terms to this Contract) and the GTECH
Proposal regarding the services, performance, requirements,
specification or any other matter relating to the Gaming System, the
terms of the RFP will control.
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LOTTERY GAMING SYSTEM
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6.3 EXCEPTIONS AND MODIFICATIONS
The System to be provided must meet the terms of the RFP and GTECH's
Proposal in all respects. The only respects in which the System may
differ from the RFP or the Proposal are those specifically provided for
in this section.
6.3.1 The initial number of Mid-Range Specialty Terminals of the type called
for in section 6.13 of the RFP and to be provided by GTECH as described
in its Proposal shall be two thousand five hundred (2,500). GTECH must
supply additional terminals for training, testing and spares as
appropriate.
6.3.2 Section 6.3.2 of the RFP is modified to accommodate the higher number
of terminals. The system must initially be capable of supporting
sixteen thousand five hundred (16,500) On-Line retailer terminals and
two thousand five hundred (2,500) Mid-Range Specialty Terminals.
6.3.3 Section 6.14 of the RFP is modified to provide that the Texas Lottery
has the right, at its sole option, to increase the total number of
On-Line terminals (16,500) by ten percent (10%) at no additional cost
to the Texas Lottery, installed within 90 days of a request for the
terminals by the Texas Lottery. Additional terminals will be available
on the basis specified in Part X of this Contract.
6.3.4 Terminal Optimization Plan.
6.3.4.1 The Texas Lottery and GTECH agree to develop a Terminal Optimization
Plan. The general purpose of the Terminal Optimization Plan is to
promote efficiency and reduce costs under this Contract while fully
meeting the Texas Lottery's need for such terminals as those needs are
expressed by the Texas Lottery. For instance, the plan will avoid
excess inventory levels by possibly delaying production of some of the
terminals required under this Contract until the Texas Lottery
determines that the
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terminals are needed. In no case will the Terminal Optimization Plan
allow excuse or delay in providing terminals to the Retailers or to the
Texas Lottery or otherwise excuse any failure to furnish terminals as
directed by the Texas Lottery according to the terms of this Contract.
6.3.4.2 It is in the Lottery's discretion to decide the terms upon which the
Terminal Optimization Plan will be implemented and to establish the
criteria for the Terminal Optimization Plan.
6.3.4.3 GTECH shall inform Retailers of the Plan and explain the benefits of
the plan to the Retailers.
6.3.5 Display Units/Retailer On-Line Terminal Attachments
6.3.5.1 The requirements of section 6.11.3.2 of the RFP are modified to require
that GTECH will install up to fifteen thousand (15,000) Accuview Vacuum
Fluorescent Display (VFD) on those retail terminals that face the
playing public. If there is any uncertainty regarding whether a
particular terminal faces the public, the Texas Lottery will make the
determination and has the final word on whether an Accuview VFD will be
installed.
6.3.5.2 GTECH will install, or reinstall, and maintain the Starlight LED
programmable message display for each On-line terminal for the term of
this Contract. Each On-line terminal will have a display unless the
Retailer rejects the display. GTECH may use the displays existing at
the time of Contract execution, of which there are approximately seven
thousand (7,000), to meet this requirement.
6.3.6 Central Computer System
GTECH must provide the Internal Control System, fully operational
according to section 6.7 of the RFP, by September 1, 2002. GTECH must
provide an entirely new Central Computer and Backup System, to be
finally implemented and operational not
CONTRACT FOR LOTTERY OPERATIONS AND SERVICES PART VI
LOTTERY GAMING SYSTEM
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later than March 1, 2008, and until that time, the central computer
system and backup system provided by GTECH pursuant to the terms of the
Existing Contract as of the date this Contract is executed by the
parties will continue to be provided. Not later than March 1, 2007,
GTECH must provide, for the Texas Lottery's review and approval, the
information required by sections 6.1.3, 6.1.4 and 6.1.5 of the RFP
pertaining to the Central Computer and Backup System to be installed.
At a minimum, the new Central Computer and Backup System must meet the
requirements of the RFP.
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LOTTERY GAMING SYSTEM
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PART VII
SALES AND MARKETING
7.1 PROVISIONS OF CONTRACT
7.1.1 The RFP requested a variety of services from each Proposer. The general
areas of responsibility and statements of goals were provided to
clarify the Texas Lottery's intent and to provide each Proposer with
guidance regarding the options that may exist for the performance of
the services requested. While GTECH is obligated to provide all of the
services requested in the RFP and described in its Proposal, it is in
the Lottery's sole discretion to determine which services will be
implemented.
7.1.2 Part VII of the RFP, including the areas of responsibility, services
and the goals stated therein are incorporated into this Contract into
their entirety.
7.1.3 Part VII of GTECH's Proposal is incorporated into the terms of this
Contract. GTECH is required by this Contract to implement any and all
of the plans to promote and market Lottery products and to provide the
support, equipment, options and other goods and services proposed in
its Proposal, on the terms proposed, at the time and manner that the
Texas Lottery may direct, in its discretion.
7.2 CONTRACT GOVERNS OVER RFP; RFP GOVERNS OVER PROPOSAL
In the event of a conflict or discrepancy between the terms of the RFP
(as defined in the Glossary of Terms to this Contract) and the
provisions of the Proposal, the terms of the RFP control. In the event
that a specific term of the Contract conflicts with a specific term of
the RFP, the specific term of the Contract controls.
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SALES & MARKETING
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7.3 EXCEPTIONS
GTECH is obligated to provide all of the services requested in the RFP
and described in its Proposal, but it is in the Lottery's sole
discretion to determine which services will be implemented. The only
respects in which GTECH's marketing services, support and functions may
differ from the RFP or the Proposal are those specifically provided for
in this section.
7.3.1 Section 7.13.1 of the RFP is amended to require that GTECH visit once
per month those Retailers who use only a Mid-Range Specialty Terminal.
All other requirements for Field Staff remain the same.
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SALES & MARKETING
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PART VIII
FACILITIES
8.1 FACILITIES
8.1.1 GTECH shall be responsible for the design and build out of its
operating facilities including Primary and Back-Up data centers,
Instant Ticket warehouses, other warehouses and field offices. The
primary and back-up data centers must have the appropriate power
protection, "conditioned" power, fire suppression, and HVAC suitable to
a high availability, high security data center. GTECH will also provide
the necessary level of security and environmental soundness.
8.1.2 All GTECH facilities must meet or exceed State and local building
codes, including but not limited to, specifications to meet the
Americans with Disabilities Act (ADA) requirements. GTECH will also
comply with the regulations of the National Fire Prevention Association
(NFPA) in planning and building facilities. GTECH is responsible for
obtaining all necessary permits and inspections.
8.1.3 Storage in Warehouses. Warehouse space must be provided to the Texas
Lottery as required in each district office for storage of promotional
items.
8.2 PRIMARY DATA CENTER REQUIREMENTS
8.2.1 The Primary Data Center is to be established in the Austin, Texas area.
All construction, operation, and maintenance costs of the Primary and
Back-Up Data Centers are GTECH's responsibility. GTECH shall not change
the location of any facility without the written consent of the Texas
Lottery. Approval of a selected site by the Texas Lottery shall not
confer any liabilities upon the Texas Lottery should the site
ultimately prove
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unsatisfactory. Within the primary site there must be dedicated secure
office space, approved by the Texas Lottery, for a minimum of two Texas
Lottery system administration staff, and for a minimum of one Texas
Lottery games compliance staff person. This office space must be fully
furnished with appropriate furniture (i.e. desks, file cabinets,
storage racks, office chairs, etc.). Any and all construction or build
out plans for both computer facilities must be approved by the Texas
Lottery in advance.
8.2.2 The safety, security and environmental components outlined in section
8.2.1 of GTECH's Proposal shall be provided and maintained for the
Primary and Backup facilities.
8.2.3 A written disaster recovery plan must be submitted for Texas Lottery
approval within ninety (90) days of the Contract Award. In the event of
a disaster at the Texas Lottery headquarters, the Primary Data Center
will be used to support basic ongoing Texas Lottery management
functions. GTECH must provide back up personal computer terminals for
use by the Texas Lottery in the event of disaster recovery. The
recovery environment must be incorporated within the primary site and
must support a minimum of fifteen (15) Texas Lottery staff.
8.3 BACK-UP DATA CENTER
GTECH's Back-Up Data Center will be located within the State of Texas
at a location approved by the Texas Lottery. The Back-Up Data Center is
to be established in a separate LATA from the primary site. The primary
and back-up data centers will each have the capability to provide full
support for all On-Line and instant game functions, including sales,
validations, reporting and Lottery Management functions. Once each
month the Lottery Gaming System must be operated from the Back-Up Data
Center. Otherwise, the Back-Up Data Center may be operated "lights
out."
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FACILITIES
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8.4 INSTANT TICKET WAREHOUSE
8.4.1 GTECH must fulfill warehousing requirements by providing a single
secured central distribution center located in Austin, Texas, and one
or two other warehouses located elsewhere in Texas. All shipping,
receiving and distribution functions for Instant Tickets must be
performed only from the central distribution center in Austin, unless
otherwise agreed to by the Texas Lottery in writing. Other secured
warehousing facilities are required in other areas of the state for
certain functions including possible storage of Instant Tickets, ticket
stock and playslips. The storage spaces available at these locations
will be accessible by lottery sales representatives and other
authorized GTECH and Lottery personnel. The storage and access will
ensure that the supplies needed by lottery Retailers are always at
hand.
8.4.2 At a minimum, the central distribution warehouse in Austin must be
adequate for the storage of one billion (1,000,000,000) instant game
tickets regardless of ticket size and a sixty (60) day supply of secure
On-Line Ticket stock and On-Line playslips at any one time. Tickets
will be stored in double-stacked pallets on the warehouse floor. The
warehouse will allocate more than 40,000 square feet for instant ticket
storage. Additionally the central distribution warehouse must contain a
minimum of 10,000 square feet of secured space for use by the Texas
Lottery, exclusive of warehouse space for storing Instant Tickets,
On-Line Ticket stock, On-Line playslips and other materials. Within
these 10,000 square feet there must be Texas Lottery secured caged
areas for returned partial packs and other returned tickets; storage of
closed game returned tickets; and dedicated secure office space,
approved by the Texas Lottery, for a minimum of two Texas Lottery games
compliance staff. This office space must be fully furnished with
appropriate furniture (i.e., desks, file cabinets, storage racks,
office chairs, etc.).
8.4.3 Tickets for all games may be required to be stored in segregated areas
depending on game status. At the Lottery's request, GTECH will
segregate the storage of certain instant game tickets depending on the
status of the tickets or other variable. GTECH will
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provide separate storage areas for returned tickets, lost or damaged
tickets, and tickets from closed games.
8.4.4 GTECH must implement physical inventory procedures to be used in the
Instant Ticket warehouse facility that assure a standard for inventory
control of 100% reconciliation by pack and ticket for Instant Tickets
and by roll stock identification number for On-Line stock, between
computer system and physical inventories at all ticket storage
warehouses.
8.4.5 The Texas Lottery must be given twenty-four (24) hours notice prior to
access by any visitors to the Instant Ticket warehouse. No filming or
pictures of the Instant Ticket warehouse's interior will be allowed
unless written approval is received from the Texas Lottery.
8.5 FIELD OFFICES (SALES AND SERVICE FACILITIES)
GTECH shall provide the facilities, the functions to be supported,
accommodations for proposed sales/service staff and warehousing
capacity that assure lottery Retailers excellent proximity to GTECH
sales personnel and to the supplies they need to maintain maximum sales
levels. GTECH must assure proper location and types of facilities that
would be required to support the field organization.
8.6 ACCESS SECURITY AT COMPUTER SITE AND OTHER FACILITIES
8.6.1 GTECH must submit a detailed security plan to the Texas Lottery for
approval no later than ninety (90) days after the Contract Award, or
earlier as best efforts allow. At a minimum, the security plan must
include the following sections:
(a) Business Impact Analysis
(b) Risk, Threat and Vulnerability Analysis
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(c) Security Strategy
(d) Personnel Security Practices
(e) Physical Security
(f) Data Security
(g) Telecommunications Operational and Physical Security
(h) Telecommunications Access Security
(i) Protection of Software and Other Copyrighted Material
(j) Plan Evaluation
(k) Security Awareness/Training
(l) Plan Maintenance
(m) Hours of Operations.
8.6.2 The security plan shall not be put into effect without Texas Lottery
approval. At any time at the request of the Lottery, the security plan
must be provided to the Texas Lottery in hard copy and electronic
format regardless of whether the plan has been approved by the Lottery.
8.6.3 The security plan will cover all facilities utilized for the benefit of
the Texas Lottery, including the primary and backup data centers, sales
offices, and warehouse and maintenance spaces.
8.7 ADDITIONAL NECESSARY ITEMS FOR GTECH'S FACILITIES
GTECH must provide any other significant services, procedures,
materials, supplies, programs, policies, equipment, facilities, etc.,
necessary for the successful daily operation of these requirements,
even though there are no specific requirements for those items listed
in the RFP or in this Contract. GTECH is not released from the
responsibility of providing all needed items to make the proposed
facilities successful.
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PART IX
CONVERSION PLAN
9.1 CONVERSION PLAN
9.1.1 Part IX of the RFP is made a part of this Contract in its entirety. The
Conversion Plan must minimize conversion risks and maintain good
Retailer relations.
9.1.2 GTECH will implement the "Modified Big Bang Conversion" that it
explained and recommended in Part IX of its Proposal, subject to final
approval of the plan by the Texas Lottery. All of Part IX of the GTECH
Proposal relating to the Modified Big Bang Conversion plan is hereby
incorporated into the terms of this Contract.
9.1.3 GTECH must provide a conversion plan and time chart (Gantt, PERT, or
similar) identifying the major milestones to be accomplished for the
construction, equipment delivery, software programming, installation
and testing of the new System.
9.1.4 GTECH must submit a finalized detailed conversion plan to the Texas
Lottery for review and approval no later than ninety (90) days after
the Contract Award, or earlier as best efforts allow. At a minimum, the
conversion plan must include acceptance testing and a security plan.
9.1.5 The final conversion plan is subject to approval by the Texas Lottery.
The Lottery may approve all or part of the plan. Any part of the
conversion plan, or any conversion plan, which is not approved by the
Lottery shall, within three weeks of the Lottery's disapproval, be
reformulated jointly by GTECH and the Lottery. If the contents of the
plan have not been accepted in whole or in part by the end of such
three week period, then the Texas Lottery may dictate any and all open
provisions or terms of the plan.
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9.1.6 The GTECH shall provide Texas Lottery with licensed copies of the
project management software to enable Texas Lottery staff to monitor
and maintain project management schedules.
9.2 INSTALLATION AND ACCEPTANCE TESTING
9.2.1 The Texas Lottery will conduct a series of acceptance tests. GTECH
shall fully support the Lottery's acceptance testing. To support
acceptance testing, GTECH must have the central site facilities,
computer hardware, communications hardware, software, and at least six
(6) test Retailer Terminals representing each planned retailer terminal
type with appropriate attachments, and six (6) Management Terminals,
installed and operational for integration, system and acceptance
testing prior to the scheduled conversion. The Back-up Data Center and
ICS must also complete successful acceptance testing before conversion.
9.2.2 GTECH shall conduct its own testing procedures and support the Texas
Lottery's acceptance testing in the manner specified in part IX of the
Proposal.
9.3 PROJECT REPORTING AND MONITORING
The project team structure and process that GTECH proposed to
facilitate Texas Lottery oversight of the conversion must be
implemented. Regular reporting, walkthroughs, and project status
meetings are required.
9.4 VALIDATION AFTER CONVERSION
GTECH must accommodate validation of winning tickets that have been
sold prior to the conversion, either by reading the bar code or by
accepting manual entry of the "old"
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winning ticket's serial number. The goal, both during conversion and
after, is to minimize confusion and effort for the customers and
Retailers.
CONTRACT FOR LOTTERY OPERATIONS AND SERVICES PART IX
CONVERSION PLAN
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PART X
COST
10.1 INTRODUCTION
GTECH's payment will be based on the specified percentages of Sales
processed by the Lottery Gaming System.
10.2 GENERAL
All Equipment referred to in this Part X must meet the requirements
spelled out in the RFP and the descriptions provided in the Proposal
for that type of equipment.
10.3 BASE SYSTEM AND SERVICES PRICING
The following items are available on the terms stated below as a
percentage of Sales. Sales are defined as sold tickets processed by the
Lottery Gaming System, less any tickets that have been canceled,
returned and less any promotional tickets or promotional coupons
subject to the exclusion set forth in section 10.6.3 of the RFP. "Base
System and Services" includes any and all requirements, goods and
services described in the Request for Proposals that are not specified
as an "option" in sections 10.6, 10.7 and 10.8 of the RFP.
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10.3.1 GTECH will receive no compensation under this Contract prior to a
successful conversion. This conversion period is expected to last
approximately twelve (12) months.
Price Quoted as a Percentage of Sales:
Years two (2) through six (6) of the base period: 2.6999%
10.3.2 Extension Periods - Four (4) One (1) Year Extensions
Price Quoted as a Percentage of Sales:
Year One (1) of the extension period: 2.6999%
Year Two (2) of the extension period: 2.6999%
Year Three (3) of the extension period: 2.6999%
Year Four (4) of the extension period: 2.6999%
10.4 TEXAS LOTTERY-SPECIFIED OPTIONS
The following options are available to the Texas Lottery on the terms
stated. The "unit cost" is a one-time fee that is for the use of the
terminal for the remainder of the Contract.
10.4.1 Additional On-Line Terminals including requirements described in
sections 6.10.1 and 6.11 of the RFP.
Per Unit Cost when ordered in batches of at least one hundred (100) =
$5,990.00
10.4.2 Additional Mid-Range terminals, including requirements described in
sections 6.10.1 and 6.13 of the RFP.
Per Unit Cost when ordered in batches of at least one hundred (100) =
$2,264.00
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10.4.3 Non-Terminal Transactions
Lottery transactions that do not involve Lottery terminals, such as
internet sales transactions, are available at the Lottery's option at
the price stated below. GTECH will not be paid under the Base System
and Services Pricing for these transactions.
Price: 2.6999% OF SALES
10.5 TEXAS LOTTERY-INVITED OPTIONS
The "unit cost" is a one-time fee that is for the use of the terminal
for the remainder of the Contract.
NOTE: TBD IS DEFINED AS "TO BE DETERMINED." GTECH WILL PROVIDE PRICING
ON THESE OPTIONS UPON RECEIVING COMPLETE REQUIREMENTS AND
SPECIFICATIONS.
10.5.1 Self-Service Validator Terminal as described in section 6.16 of the
RFP. Include installation and service.
Per Unit Cost when ordered in batches of at least five hundred
(500) = $4,305.00
10.5.2 In-Lane Terminals as described in section 6.15 of the RFP. Include
installation and service.
Per Unit Cost when ordered in batches of at least one hundred
(100) = $11,085.00
NOTE: Due to various upfront, one time costs (i.e. software),
orders in higher quantities will yield lower prices, please see
GTECH's Offered Options for higher quantity pricing.
10.5.3 Player-Activated Terminals as described in section 6.17 of the RFP.
Include installation and service.
Per Unit Cost when ordered in batches of at least fifty (50) =
$15,372.00
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10.5.4 Self-Service Outdoor Terminals as described in section 6.18 of the RFP.
Include installation and service.
Per Unit Cost when ordered in batches of at least fifty (50) =
$TBD
10.5.5 Smart Card Reader as described in section 6.11.2.9 of the RFP.
Per Unit Cost when ordered in batches of at least five hundred
(500) = $946.00
10.5.6 Hand Held Wireless Terminals as described in section 6.19 of the RFP.
Include installation and service.
Per Unit Cost when ordered in batches of at least twenty (20) =
$TBD
10.5.7 A scanner capable of reading up to A4 size documents as described in
section 6.11.2.15 of the RFP. Include installation and service.
Per Unit Cost when ordered in batches of at least five hundred
(500) = $N/A
Note: This device is available only on the Altura Terminal and is
included in the price for Altura under "Offered Options".
10.5.8 If the proposed On-Line terminal is not a PC based terminal, a PC based
terminal may be proposed as an invited option. Indicate the price
difference, if any, over the base terminal.
$TBD
10.5.9 The Lottery may permit the back-up data center, located in the State of
Texas, to be shared with other lotteries. If this option is exercised,
indicate the reduction in cost to the Texas Lottery. The Proposer may
express the price in terms it thinks appropriate.
$TBD
NOTE: GTECH has had discussions with several Lottery customers
regarding the co-location of their data centers with the back-up data
center in Texas, but has not received
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any commitments. GTECH will continue to explore the possibilities and
will discuss any cost reductions with the Texas Lottery when final
commitments are made.
10.6 OFFERED OPTIONS
GTECH is proposing the following offered options:
Altura Terminal (Ref. RFP Section 6.10 & 6.11) (per batches of 100) $7980.00 per unit
ITVMs (Ref. RFP Section 6.20) Per instant ticket sales through ITVMs 3.254% plus the base rate
Aladdin (Ref. RFP Section 6.20) $TBD
Magstripe/Smartcard Reader (Ref. RFP Section 6.20) $946.00 per unit
Next Vision (Ref. RFP Section 6.20) $TBD
Retailer Connect (Ref. RFP Section 7.16) $TBD
Internet Wagering (Ref. RFP Section 7.2.4) $TBD
Monitor Games (Keno & Hot Trax) (Ref. RFP Section 7) $TBD Hardware
$TBD Software
Auto Cashing (Ref. RFP 6.21.3) $TBD
1,000 EZ Express Units (Ref. RFP Section 6.17) $14,644.00
Includes Installation and Maintenance per unit
1,000 In-Lane terminals (Ref. RFP Section 6.15) $4,772.00
Includes Installation and Maintenance per unit
10.7 SUBCONTRACTING
GTECH will enter a subcontract with each of the following entities. The
name of the entity, the estimated dollar amount of the contract with
the entity, and the estimated percentage of the total contract amount
that the subcontract represents is given for each entity.
1. Name of Subcontractor: CONVENIENCE OFFICE SUPPLY
Estimated dollar amount of contract with the subcontractor/supplier:
$15,000.
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Estimated percentage amount of contract with subcontractor/supplier:
0.0034%
2. Name of Subcontractor: LASER RECHARGE OF TEXAS
Estimated dollar amount of contract with the subcontractor/supplier:
$2,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0005%
3. Name of Subcontractor: HURRICANE OFFICE SUPPLY
Estimated dollar amount of contract with the subcontractor/supplier:
$48,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0110%
4. Name of Subcontractor: ACTION LASER INC.
Estimated dollar amount of contract with the subcontractor/supplier:
$1,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0002%
5. Name of Subcontractor: WORTHINGTON PAPER CO. INC.
Estimated dollar amount of contract with the subcontractor/supplier:
$157,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0359%
6. Name of Subcontractor: BUSINESS ASSETS
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Estimated dollar amount of contract with the subcontractor/supplier:
$25,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0057%
7. Name of Subcontractor: JUST OFF THE SQUARE PRINTING
Estimated dollar amount of contract with the subcontractor/supplier:
$1,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0002%
8. Name of Subcontractor: PROFORMA DIVERSIFIED CORPORATE SOLUTIONS
Estimated dollar amount of contract with the subcontractor/supplier:
$5,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0011%
9. Name of Subcontractor: OCANAS PRINTING COMPANY
Estimated dollar amount of contract with the subcontractor/supplier:
$2,300,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.5263%
10. Name of Subcontractor: R C P S
Estimated dollar amount of contract with the subcontractor/supplier:
$3,300.
Estimated percentage amount of contract with subcontractor/supplier:
0.0008%
11. Name of Subcontractor: MELTON GRAPHIC MARKETING & PACKING
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Estimated dollar amount of contract with the subcontractor/supplier:
$15,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0034
12. Name of Subcontractor: HURRICANE OFFICE SUPPLY
Estimated dollar amount of contract with the subcontractor/supplier:
$4,800.
Estimated percentage amount of contract with subcontractor/supplier:
0.0011%
13. Name of Subcontractor: INTERNATIONAL AG ENTERPRISES
Estimated dollar amount of contract with the subcontractor/supplier:
$100,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0229%
14. Name of Subcontractor: BUSINESS ASSETS, INC.
Estimated dollar amount of contract with the subcontractor/supplier:
$2,400.
Estimated percentage amount of contract with subcontractor/supplier:
0.0005%
15. Name of Subcontractor: WORTHINGTON PAPER CO. INC.
Estimated dollar amount of contract with the subcontractor/supplier:
$156,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0357%
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16. Name of Subcontractor: TAPE SOLUTIONS, INC.
Estimated dollar amount of contract with the subcontractor/supplier:
$22,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0005%
17. Name of Subcontractor: NOW PACKAGING COMPANY
Estimated dollar amount of contract with the subcontractor/supplier:
$1,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0002%
18. Name of Subcontractor: MARTINEZ SALES
Estimated dollar amount of contract with the subcontractor/supplier:
$3,500.
Estimated percentage amount of contract with subcontractor/supplier:
0.0008
19. Name of Subcontractor: HURRICANE OFFICE SUPPLY
Estimated dollar amount of contract with the subcontractor/supplier:
$48,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0110%
20. Name of Subcontractor: VIA TECHNOLOGY
Estimated dollar amount of contract with the subcontractor/supplier:
$12,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0027%
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21. Name of Subcontractor: CSG/COMPUTER SUPPORT GROUP
Estimated dollar amount of contract with the subcontractor/supplier:
$25,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0057%
22. Name of Subcontractor: PROFORMA DIVERSIFIED CORPORATE SOLUTIONS
Estimated dollar amount of contract with the subcontractor/supplier:
$5,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0011%
23. Name of Subcontractor: CROWN COMPUTER SUPPLIES INC.
Estimated dollar amount of contract with the subcontractor/supplier:
$3,300.
Estimated percentage amount of contract with subcontractor/supplier:
0.0008%
24. Name of Subcontractor: APPLIED DATA RESOURCES
Estimated dollar amount of contract with the subcontractor/supplier:
$136,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0311%
25. Name of Subcontractor: CONVENIENCE OFFICE SUPPLY
Estimated dollar amount of contract with the subcontractor/supplier:
$5,000.
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Estimated percentage amount of contract with subcontractor/supplier:
0.0011%
26. Name of Subcontractor: CLASSIC AIRE
Estimated dollar amount of contract with the subcontractor/supplier:
$21,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0048%
27. Name of Subcontractor: ALVIN J. HALL
Estimated dollar amount of contract with the subcontractor/supplier:
$91,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0208%
28. Name of Subcontractor: RZ & ASSOC. INC.
Estimated dollar amount of contract with the subcontractor/supplier:
$44,000
Estimated percentage amount of contract with subcontractor/supplier:
0.0101%
29. Name of Subcontractor: M PRODUCTIONS
Estimated dollar amount of contract with the subcontractor/supplier:
$54,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0124%
30. Name of Subcontractor: AMERITEX GUARD SERVICES
Estimated dollar amount of contract with the subcontractor/supplier:
$137,000
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Estimated percentage amount of contract with subcontractor/supplier:
0.0314%
31. Name of Subcontractor: TEMPO SAFETY COMPLIANCE & SUPPLY
Estimated dollar amount of contract with the subcontractor/supplier:
$1,600
Estimated percentage amount of contract with subcontractor/supplier:
0.0004%
32. Name of Subcontractor: SILVER & ASSOC.
Estimated dollar amount of contract with the subcontractor/supplier: $
500.
Estimated percentage amount of contract with subcontractor/supplier:
0.0001%
33. Name of Subcontractor: TIDY TEMPORARIES.
Estimated dollar amount of contract with the subcontractor/supplier:
$21,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0048%
34. Name of Subcontractor: GAY GILLEN TRAVEL
Estimated dollar amount of contract with the subcontractor/supplier:
$155,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0355%
35. Name of Subcontractor: MARTINEZ JANITORIAL SERVICES
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Estimated dollar amount of contract with the subcontractor/supplier:
$2,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0005%
36. Name of Subcontractor: BRIGHTWAY BUILDING MAINTENANCE
Estimated dollar amount of contract with the subcontractor/supplier:
$10,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0023%
37. Name of Subcontractor: ROYAL JANITORIAL SERVICE
Estimated dollar amount of contract with the subcontractor/supplier:
$4,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0009%
38. Name of Subcontractor: AZTEC FACILITY SERVICES
Estimated dollar amount of contract with the subcontractor/supplier:
$13,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0030%
39. Name of Subcontractor: S & K CLEANINGS SPECIALISTS
Estimated dollar amount of contract with the subcontractor/supplier:
$23,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0053%
40. Name of Subcontractor: DSS SERVICES
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Estimated dollar amount of contract with the subcontractor/supplier:
$6,000.
Estimated percentage amount of contract with subcontractor/supplier:
0.0014%
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The Texas Lottery Commission and GTECH Corporation have executed this Contract
on this the 10th day of October, 2001.
TEXAS LOTTERY COMMISSION
by: ______________________________________
Linda Cloud, Executive Director
Texas Lottery Commission
P.O. Box 16630
Austin, Texas 78761-6630
GTECH CORPORATION
by: ______________________________________
David Calabro, Senior Vice President
GTECH Corporation
55 Technology Way
West Greenwich, Rhode Island 02817
CONTRACT FOR LOTTERY OPERATIONS AND SERVICES
[TEXAS LOTTERY LOGO] PAGE 96
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ATTACHMENT A
POLICY ON THE UTILIZATION OF HISTORICALLY UNDERUTILIZED
BUSINESSES (HUBS)/MINORITY BUSINESSES
In accordance with the Texas Lottery Commission's (Commission) adopted rules,
section 403.301, relating to Historically Underutilized Businesses (HUBs) and
sections 2161.181-182 and 466.107 of the Texas Government Code, state agencies
shall make a good faith effort to utilize HUBs or minority businesses in
contracts for construction, services, including professional and consulting
services, and commodity contracts. The Commission adopted the General Services
Commission's (GSC) HUB Rules as its own rules, which encourages the use of HUBs
by implementing these policies through race-ethnic-and gender-neutral means. The
Commission is committed to promoting full and equal business opportunities for
all businesses in State contracting in accordance with the goals specified in
the State of Texas Disparity Study:
(1) *11.9% for heavy construction other than building contracts;
(2) *26.1% for all building construction, including general contractors
and operative builders contracts;
(3) 57.2% for all special trade construction contracts;
(4) 20% for professional services contracts;
(5) 33% for all other services contracts; and,
(6) 12.6% for commodities contracts.
* - Heavy Construction and Building Construction categories/goals are not
applicable to the Lottery Commission's operations. Currently, the
Commission does not have programs or strategies related to these
categories.
The Commission and its contractors shall make a good faith effort to meet or
exceed these goals and assist HUBs in receiving a portion of the total contract
value of all contracts that the Commission expects to award in a fiscal year. It
is the policy of the Commission to accomplish these goals either through
contracting directly with HUBs or indirectly through subcontracting
opportunities. The Commission's policy on the utilization of HUBs and minority
businesses is related to all contracts with an expected value of $100,000 or
more, and whenever possible, in contracts less than $100,000.
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ATTACHMENT A (CONT.)
HISTORICALLY UNDERUTILIZED BUSINESSES (HUBS)/MINORITY BUSINESSES
The State Lottery Act defines a minority business as follows:
a) A business of which 51 percent is owned by minority group members,
or in the case of a Corporation, of which 51 percent of the shares
are owned by minority group members, and that is managed and, in
daily operations, is controlled by minority group members; and is a
domestic business entity with a home or branch office located in
this state and is not a branch or subsidiary of a foreign
corporation, firm or other business entity.
b) The definition of "minority group members" includes; African
Americans, American Indians, Asian Americans and Mexican Americans
and other Americans of Hispanic origin.
THE TEXAS GOVERNMENT CODE DEFINES A HUB AS A VENDOR WHO IS CERTIFIED BY THE
GENERAL SERVICES COMMISSION (GSC). IN ACCORDANCE THE GSC'S HUB RULES, A HUB IS
DEFINED AS FOLLOWS:
A business formed for the purpose of making a profit in which at
least 51 percent of the business is owned, operated, and controlled
by one or more AMERICAN WOMEN, BLACK AMERICANS, HISPANIC AMERICANS,
ASIAN PACIFIC AMERICANS, OR NATIVE AMERICANS who are economically
disadvantaged and who have been historically underutilized because
of their identification as members of these groups. The General
Services Commission will certify those eligible businesses that
apply for HUB certification under the following business'
definition, structure, and defined ownership:
a) corporation formed for the purpose of making a profit in which at
least 51 percent of the classes of stock or equitable securities are
owned, operated and controlled by such person(s) identified above;
b) a sole proprietorship formed for the purpose of making a profit in
which 100 percent is owned, operated and controlled by one person
identified above;
c) a partnership formed for the purpose of making a profit in which
such person(s) own at least 51 percent of the assets and interest
and actively participate in the partnership's control, operation,
and management identified above;
d) a joint venture in which each entity is a HUB;
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ATTACHMENT A (CONT.)
e) a supplier contracting with a prime vendor under which the HUB is
directly involved in the manufacture or distribution of the goods,
or otherwise warehouses and ships the goods; and
f) Other legally recognized business entities (i.e. Limited Liability
Companies/Corporations, Limited Liability Partnerships) under the
laws of the State of Texas formed for the purpose of making a profit
in which 51% of the assets and interest and 51% of any classes of
stock and equitable securities are owned by one or more persons
identified above.
To assist the Commission in receiving HUB Credit for HUB utilization in a state
contract, each HUB or minority-owned business should be certified or have
applied for certification with the State of Texas through the General Services
Commission, or meet the definition of a minority-owned business in the State
Lottery Act.
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ATTACHMENT B-1
BUSINESS SUBCONTRACTING PLAN LETTER OF TRANSMITTAL
(BUSINESS LETTERHEAD)
(Name of Official)
Texas Lottery Commission
P.O. Box 16630
Austin, Texas 78761-6630
Dear ______________:
I am pleased to forward this Business Subcontracting Plan (BSP) as an integral
part of our proposal in connection with your request for proposal
#__________________.
I have read and understand the Texas Lottery Commission's Policy on Utilization
of Historically Underutilized Businesses (HUBs) and minority businesses.
Further, I have read and understand the State of Texas' Annual Procurement
Utilization Goals set forth in 1 Texas Administrative Code Section 111.13, which
are as follows:
11.9% for heavy construction other than building contracts;
26.1% for all building construction, including general contractors and
operative builders contracts;
57.2% for all special trade construction contracts;
20.0% for professional services contracts;
33.0% for all other services contracts; and,
12.6% for commodities contracts
This BSP includes (NUMBER) Business Letter(s) of Intent. (Total of all D-2
Attachments). IN THE COST PROPOSAL I WILL SUBMIT THE APPROXIMATE DOLLAR VALUE OF
THE WORK TO BE SUBCONTRACTED AND THE PERCENTAGE OF THE TOTAL CONTRACT VALUE THAT
THE VALUE OF THE WORK TO BE SUBCONTRACTED REPRESENTS. I understand that that
information is required by both the Lottery Commission and the General Services
Commission as part of their efforts to promote full and equal business
opportunities for all businesses in state contracting. When a HUB is owned by a
minority woman, that HUB is classified as a minority-owned rather than
woman-owned.
For each of the listed HUBs, I have either attached a copy of their General
Services Commission (GSC) Certification document, a completed HUB Certification
application, or an approved certification document identifying the
minority-owned or woman-owned business is certified by GSC or another approved
governmental certifying agency to the HUB's D-2 Attachment.
Should we discover additional subcontractors or suppliers claiming HUB status
during the course of this contract, we will notify you of this. In addition, if
for some reason a HUB, identified as part of our BSP, is unable to fulfill its
contract with us, we will notify you immediately in order to take the
appropriate steps to amend this contractual obligation.
Sincerely,
(Signature)
(Printed Name)
(Printed Title)
================================================================================
CONTRACT FOR LOTTERY OPERATIONS AND SERVICES ATTACHMENTS
[TEXAS LOTTERY LOGO] PAGE 100
================================================================================
ATTACHMENT B-2
HUB/MINORITY BUSINESS SOLICITATION (HUB-S)
DETERMINATION OF GOOD FAITH EFFORT (DGFE)
(Attach additional pages as needed)
PROPOSER Name:_________________ Vendor Identification Number: __________________
Address:________________________________________________________________________
Phone: ____-____-______ Proposal Number: _____________ Contact Name: _________
IS YOUR COMPANY certified as a Texas HUB? ___Yes ___No;
If yes, please provide your General Services Commission (GSC) Vendor
Identification/Certificate Number: __________________________________
Specific Subcontract Solicited: ______________________________________________
Contractor's Estimate of Approximate Dollar Value of Subcontract Advertised: ___
IDENTIFY EACH HUB TO WHICH A NOTICE OF SOLICITATION WAS GIVEN. ATTACH A COPY OF
EACH SOLICITATION LETTER. EACH PROPOSER SHALL PROVIDE PHONE LOGS, FAX
TRANSMITTALS CONFIRMATIONS, E-MAIL CORRESPONDENCE CONFIRMATION, CERTIFIED MAIL
RECEIPTS TO DEMONSTRATE COMPLIANCE WITH THE NOTICE REQUIRED IN THIS SUBSECTION.
1. Name of HUB Subcontractor/Supplier: ______________________________________
Address: _________________________________________________________________
Phone: _____-_____- ______ Owner(s): ____________________________
If GSC certified, enter Vendor Identification Number: _______________.
If not GSC certified, please complete the following information:
[ ] Black American [ ] Male [ ] Female [ ] Native American [ ] Male
[ ] Female
[ ] Hispanic American [ ] Male [ ] Female [ ] Asian Pacific American
[ ] Male [ ] Female
[ ] American Woman (NON-MINORITY)
Certification with other Governmental Entities (i.e.,
City of Austin): ___________________
Date certification packet delivered to HUB subcontractor
(if applicable): ________________
================================================================================
CONTRACT FOR LOTTERY OPERATIONS AND SERVICES ATTACHMENTS
[TEXAS LOTTERY LOGO] PAGE 101
================================================================================
ATTACHMENT B-2 (CONT.)
HUB/MINORITY BUSINESS SOLICITATION (HUB-S)
DETERMINATION OF GOOD FAITH EFFORT (DGFE)
Contractor/Vendor Name:__________________ Vendor Identification Number: ________
2. Name of HUB Subcontractor/Supplier: ______________________________________
Address: _________________________________________________________________
Phone: _____-_____-______ Owner(s): ____________________________
If GSC certified, enter Vendor Identification Number: _______________.
If not GSC certified, please complete the following information:
[ ] Black American [ ] Male [ ] Female [ ] Native American [ ] Male
[ ] Female
[ ] Hispanic American [ ] Male [ ] Female [ ] Asian Pacific American
[ ] Male [ ] Female
[ ] American Woman (NON-MINORITY)
Certification with other Governmental Entities (i.e.,
City of Austin): ___________________
Date certification packet delivered to HUB subcontractor
(if applicable):________________
3. Name of HUB Subcontractor/Supplier: ______________________________________
Address: _________________________________________________________________
Phone: _____-_____- ______ Owner(s): ___________________________
If GSC certified, enter Vendor Identification Number: _______________.
If not GSC certified, please complete the following information:
[ ] Black American [ ] Male [ ] Female [ ] Native American [ ] Male
[ ] Female
[ ] Hispanic American [ ] Male [ ] Female [ ] Asian Pacific American
[ ] Male [ ] Female
[ ] American Woman (NON-MINORITY)
Certification with other Governmental Entities (i.e.,
City of Austin): ___________________
Date certification packet delivered to HUB subcontractor
(if applicable): ________________
4. Name of HUB Subcontractor/Supplier: ______________________________________
Address: _________________________________________________________________
Phone: _____-_____- ______ Owner(s): ___________________________
If GSC certified, enter Vendor Identification Number: _______________.
If not GSC certified, please complete the following information:
[ ] Black American [ ] Male [ ] Female [ ] Native American [ ] Male
[ ] Female
[ ] Hispanic American [ ] Male [ ] Female [ ] Asian Pacific American
[ ] Male [ ] Female
[ ] American Woman (NON-MINORITY)
Certification with other Governmental Entities (i.e., City of Austin): _________
Date certification packet delivered to HUB subcontractor (if applicable): ______
================================================================================
CONTRACT FOR LOTTERY OPERATIONS AND SERVICES ATTACHMENTS
[TEXAS LOTTERY LOGO] PAGE 102
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ATTACHMENT C-1
PROGRESS ASSESSMENT REPORT (HUB-PAR) DOCUMENTATION OF
WORK SUBCONTRACTED
Date of Award________ Contract/Requisition Number_______________________________
Object Code (Commission use): __________________________________________________
Prime Vendor's Name_____________________________________________________________
Vendor Identification (VID) Number _____________________________________________
Total Contract Amount Paid this Period to Contractor____________________________
Document HUB/and NON-HUB Subcontractors' Information, as applicable below:
The Successful Vendor will be required to submit a form similar to the one below
for each subcontractor utilized during the previous month to the Texas Lottery
by the 10TH OF EACH MONTH.
===================================================================================================================================
DOCUMENTATION OF WORK SUBCONTRACTED
- -----------------------------------------------------------------------------------------------------------------------------------
SUBCONTRACTOR/ HUB VENDOR DESCRIPTION OF TOTAL CONTRACT TOTAL $ AMOUNT TOTAL CONTRACT DATE
SUPPLIER'S NAME(S) CERTIFIED IDENTIFICATION GOOD AND $ AMOUNT FROM PAID THIS $ AMOUNT PAID RECEIVED
YES/NO NUMBER SERVICES LETTER OF MONTH TO YEAR TO DATE (AGENCY USE
(11 DIGIT) PROVIDED INTENT WITH SUBCONTRACTOR(S) ONLY)
SUBCONTRACTOR
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL HUB
DOLLARS SPENT
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL
NON-MINORITY
DOLLARS SPENT
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL MINORITY
DOLLARS SPENT
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL
SUBCONTRACTING
===================================================================================================================================
HUB STATUS: Yes/No
HUB TYPE: African (Black)
American- BL MINORITY TYPE: African (Black) American- BL
Hispanic-HI Hispanic-HI
Asian Pacific-AS Asian-AS
Native Americans - NA Native American-NA
American Women-WO
================================================================================
CONTRACT FOR LOTTERY OPERATIONS AND SERVICES ATTACHMENTS
[TEXAS LOTTERY LOGO] PAGE 103
================================================================================
ATTACHMENT C-2
HUB/MINORITY BUSINESS NON-SUBCONTRACTORS AFFIDAVIT
(NON-SUB-AFF)
(DOCUMENT COMPLETED AS A PROVISION OF THE CONTRACT AFTER THE CONTRACT HAS BEEN
AWARDED TO BE COMPLIANT WITH THE HUB SUBCONTRACTING PLAN).
In accordance with the Business Subcontracting Plan (BSP), I __________________,
an authorized representative of _________________ company certify that during
this reporting period, NO subcontractors have been used on this contract. If
subcontractors have been used, I have attached a copy of Attachment F-1, to
report to the identification of the Proposer's subcontractors and the amount
paid to all subcontractors, including HUBs.
- --------------------------------- --------------------------------
PRINTED NAME OF CONTRACTOR/VENDOR SIGNATURE OF CONTRACTOR/VENDOR
- --------------------------------------------------------------------------------
SUBSCRIBED AND SWORN BEFORE ME, THE UNDERSIGNED NOTARY PUBLIC, ON THIS ___ DAY
OF ___, _____.
(NOTARY PUBLIC SEAL)
NOTARY PUBLIC: _____________________________________
MY COMMISSION EXPIRES: _____________________________
================================================================================
CONTRACT FOR LOTTERY OPERATIONS AND SERVICES ATTACHMENTS
[TEXAS LOTTERY LOGO] PAGE 104
================================================================================
CONTRACT FOR LOTTERY OPERATIONS AND SERVICES
ATTACHMENTS
ATTACHMENT D
V.T.C.A., GOVERNMENT CODE SECTION 466.155
VERNON'S TEXAS STATUTES AND CODES ANNOTATED
GOVERNMENT CODE
TITLE 4. EXECUTIVE BRANCH
SUBTITLE E. OTHER EXECUTIVE AGENCIES AND PROGRAMS
CHAPTER 466. STATE LOTTERY
SUBCHAPTER D. LICENSING OF SALES AGENTS
Section 466.155. Denial of Application or Suspension or Revocation of License
(a) After a hearing, the director shall deny an application for a license
or the commission shall suspend or revoke a license if the director or
commission, as applicable, finds that the applicant or sales agent:
(1) is an individual who:
(A) has been convicted of a felony, criminal fraud, gambling or a
gambling-related offense, or a misdemeanor involving moral turpitude, if less
than 10 years has elapsed since the termination of the sentence, parole,
mandatory supervision, or probation served for the offense;
(B) is or has been a professional gambler;
(C) is married to an individual:
(i) described in Paragraph (A) or (B); or
(ii) who is currently delinquent in the payment of any state tax;
(D) is an officer or employee of the commission or a lottery operator; or
(E) is a spouse, child, brother, sister, or parent residing as a member of
the same household in the principal place of residence of a person described by
Paragraph (D);
(2) is not an individual, and an individual described in Subdivision (1):
(A) is an officer or director of the applicant or sales agent;
(B) holds more than 10 percent of the stock in the applicant or sales
agent;
(C) holds an equitable interest greater than 10 percent in the applicant
or sales agent;
(D) is a creditor of the applicant or sales agent who holds more than 10
percent of the applicant's or sales agent's outstanding debt;
(E) is the owner or lessee of a business that the applicant or sales agent
conducts or through which the applicant will conduct a ticket sales agency;
(F) shares or will share in the profits, other than stock dividends, of
the applicant or sales agent; or
(G) participates in managing the affairs of the applicant or sales agent;
(3) is currently delinquent in the payment of any state tax;
(4) is a person whose location for the sales agency is:
CONTRACT FOR LOTTERY OPERATIONS AND SERVICES ATTACHMENTS
[TEXAS LOTTERY LOGO] PAGE 105
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ATTACHMENT D
(CONTINUED)
V.T.C.A., GOVERNMENT CODE SECTION 466.155
(A) a location licensed for games of bingo under the Bingo Enabling Act
(Article 179d, Vernon's Texas Civil Statutes);
(B) on land that is owned by:
(i) this state; or
(ii) a political subdivision of this state and on which is located a
public primary or secondary school, an institution of higher education, or an
agency of the state; or
(C) a location for which a person holds a wine and beer retailer's permit,
mixed beverage permit, mixed beverage late hours permit, private club
registration permit, or private club late hours permit issued under Chapter 25,
28, 29, 32, or 33, Alcoholic Beverage Code; or
(5) has violated this chapter or a rule adopted under this chapter.
(b) If the director proposes to deny an application for a license or the
commission proposes to suspend or revoke a license under this section, the
applicant or sales agent is entitled to written notice of the time and place of
the hearing. A notice may be served on an applicant or sales agent personally or
sent by certified or registered mail, return receipt requested, to the person's
mailing address as it appears on the commission's records. A notice must be
served or mailed not later than the 20th day before the date of the hearing. The
commission shall provide for a formal administrative hearings process.
(c) At a hearing, an applicant or sales agent must show by a preponderance
of the evidence why the application should not be denied or the license
suspended or revoked.
(d) The director shall give an applicant or sales agent written notice of
a denial of an application or a suspension or revocation of a license.
(e) The director may not issue a license to a person who has previously
had a license under this chapter revoked unless the director is satisfied the
person will comply with this chapter and the rules adopted under this chapter.
The director may prescribe the terms under which a suspended license will be
reissued.
(f) The director may not issue a license to an applicant who fails to
certify to the director the applicant's compliance with the federal Americans
with Disabilities Act of 1990 (42 U.S.C. section 12101 et seq.). CREDIT(S)
1997 Electronic Pocket Part Update
CONTRACT FOR LOTTERY OPERATIONS AND SERVICES ATTACHMENTS
[TEXAS LOTTERY LOGO] PAGE 106
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ATTACHMENT E
MODEL PERFORMANCE BOND
Bond No. ________________
[company name, address], as Principal, and [surety company], a
corporation licensed to do business in the State of Texas and admitted to write
bonds, as Surety, are held and firmly bound unto the Texas Lottery Commission,
P.O. Box 16630, Austin, Texas 78761-6630, as Obligee, in the full sum of
[written amount] Dollars ($ ) for the payment of which said Principal and
Surety bind themselves, and their respective heirs, administrators, executors,
successors, assigns, jointly and severally, firmly by these presents.
WHEREAS, the Principal has entered into a written contract with Obligee
dated the ____ day of _______________, ______, for [type of services], which
contract is hereby referred to, as if fully and to the same extent as if copied
at length herein.
NOW THEREFORE, the condition of this obligation is such that, if during
the term of this contract (or annual bond), the Principal shall faithfully
perform such contract, or shall indemnify and save harmless the Obligee from all
cost and damage by reason of Principal's failure to do so, then this obligation
shall be null and void, otherwise it shall remain in full force and effect.
(If annual bond, add this paragraph.)
The term of this obligation is for the period commencing on ______________
and expiring at 12:00 a.m. on _____________. This bond may be renewed on an
annual basis at the option of the surety. If the surety does not choose to renew
this obligation, it will so notify the Obligee and Principal not later than 30
days prior to its expiration. Such notification, by itself, shall not constitute
a breach or default by GTECH under the Contract between GTECH and the Texas
Lottery referred to hereinabove.
IN WITNESS WHEREOF, the Principal and Surety have signed and sealed this
instrument this ____ day of __________________, ______.
Principal:
---------------------------------
(seal)
By:
---------------------------------
Surety:
(seal)
---------------------------------
By:
---------------------------------
Attorney-in-Fact
CONTRACT FOR LOTTERY OPERATIONS AND SERVICES ATTACHMENTS
[TEXAS LOTTERY LOGO] PAGE 107
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ATTACHMENT F
SECURITY BACKGROUND INFORMATION
CONSENT TO RELEASE PERSONAL INFORMATION
TO THE APPLICANT: All persons contracting with the Texas Lottery Commission must
meet the requirements of the Texas Government Code 466.155 (Print or type all
information in blue or black ink):
LAST NAME: FIRST NAME: MI:
I understand and agree that:
The Texas Lottery Commission shall conduct an investigation of and obtain
criminal history record information maintained by the Department of Public
Safety, the Federal Bureau of Investigation, Identification Division, or any
other law enforcement agency. The Executive Director may request that I provide
a complete set of legible fingerprints. I further understand that unless
otherwise indicated, failure to provide all of the information requested on this
questionnaire may prevent me from contracting with The Texas Lottery Commission.
I further hold harmless and release the Texas Lottery Commission, its agents,
officers or employees, from any and all liability for this investigation or
inquiry, and any action taken as a result of information obtained through this
investigation or inquiry. I further hold harmless and release any person
providing information in good faith to the Texas Lottery Commission or to any
person conducting an investigation or inquiry on their behalf.
I further understand that any person or employee who intentionally, knowingly,
or with criminal negligence makes a material incorrect or deceptive oral or
written statement to a person conducting an investigation commits a misdemeanor.
- ----------------------------------------
Applicant's Signature Date
STATE OF
------------------------
COUNTY OF
----------------------
Sworn and subscribed to before me this
day of ,200
----- ------- ----
-------------------------------------
Signature of Notary Public
(SEAL)
Printed Name of Notary Public My
Commission Expires:
--------------
CONTRACT FOR LOTTERY OPERATIONS AND SERVICES ATTACHMENTS
[TEXAS LOTTERY LOGO] PAGE 108
================================================================================
INTRODUCTION
Section 466.103 of the Texas Government Code states that the Executive Director
may not award a contract to a person who would be denied a license as a sales
agent under section 466.155 of the Texas Government Code. To verify a person's
eligibility for a license, the Director of Security Division or designee, has
the authority to conduct an examination of the qualifications of all prospective
persons proposing to contract with the Texas Lottery Commission for the purchase
or lease of facilities, goods, or services related to lottery operations as
defined in section 466.155 of the Texas Government Code.
The scope of the examination includes the ability to access criminal history
records and to require fingerprinting. This questionnaire is designed to fulfill
this requirement, and to explain the Executive Director's ability to adequately
determine the contractor's or prospective contractor's qualifications.
Completion of these forms is a mandatory condition of contracting. Unless
otherwise indicated, failure to provide all of the information requested on this
questionnaire may prevent you from contracting with the Texas Lottery
Commission.
INSTRUCTIONS
Read each question carefully before answering. Type or neatly print an answer
to each question. If a question does not apply, enter "N/A". If the space
provided is insufficient, please make photocopies of the blank page and attach
additional pages to the back of the form. Indicate number of duplicated pages.
(ex: Page _ of _ ).
Do not misstate or omit any material fact(s). The applicant is hereby advised
that she/he is seeking a contract with the Texas Lottery Commission and that it
is the applicant's responsibility to demonstrate that he/she has the required
qualifications.
Each page of this questionnaire, including attachments, must be initialed by the
applicant, or by a representative who has the authority to act on the
applicant's behalf and can attest to the accuracy of the information. The same
person must sign the disclosure. This questionnaire must also be notarized.
All applicants are advised that this Contractor Disclosure Questionnaire is an
official document of the Texas Lottery Commission, Security Division. Any
misrepresentation or failure to reveal information may be deemed sufficient
cause for the refusal or revocation of a contract with the Texas Lottery
Commission.
INITIALS:
CONTRACT FOR LOTTERY OPERATIONS AND SERVICES ATTACHMENTS
[TEXAS LOTTERY LOGO] PAGE 109
================================================================================
CONSENT TO RELEASE PERSONAL INFORMATION
TO THE APPLICANT: All persons contracting with the Texas Lottery Commission must
meet the requirements of the Texas Government Code Section 466.155 (Print or
type all information in blue or black ink):
LAST NAME: FIRST NAME: MI:
I understand and agree that:
I hereby give my voluntary consent to any investigation or any other inquiry
into information described above. Further, I hereby consent to the release of
any information, including credit reports, to the Texas Lottery Commission,
Security Division, or persons conducting an investigation or inquiry on their
behalf. I understand that certain information obtained through this
investigation or inquiry may prevent me from contracting with the Texas Lottery
Commission.
I further hold harmless and release the Texas Lottery Commission, its agents,
officers or employees, from any and all liability for this investigation or
inquiry, and for any action taken as a result of information obtained through
this investigation or inquiry. I further hold harmless and release any person
providing information in good faith to the Texas Lottery Commission or to any
person conducting an investigation or inquiry on their behalf.
I further understand that any person or employee who intentionally, knowingly,
or with criminal negligence makes a material incorrect or deceptive oral or
written statement to a person conducting an investigation commits a misdemeanor.
- ----------------------------------------
Applicant's Signature Date
STATE OF
----------------------
COUNTY OF
---------------------
Sworn and subscribed to before me this
day of ,200
---- -------- ------
-------------------------------
Signature of Notary Public
(SEAL)
Printed Name of Notary Public My
Commission Expires:
-------------
CONTRACT FOR LOTTERY OPERATIONS AND SERVICES ATTACHMENTS
[TEXAS LOTTERY LOGO] PAGE 110
==================================================================
TEXAS LOTTERY CONTRACTOR DISCLOSURE PAGE 1
BUSINESS INFORMATION
IF YOU NEED ADDITIONAL SPACE, PLEASE MAKE PHOTOCOPIES OF THIS BLANK PAGE AND
ATTACH ADDITIONAL PAGES TO THE BACK OF THIS FORM. INDICATE NUMBER OF DUPLICATED
PAGES: PAGE _OF__
NAME OF BUSINESS
TRADE NAME/ DBA
STREET ADDRESS OF BUSINESS CITY STATE ZIP TELEPHONE
STREET ADDRESS OF BUSINESS RECORDS CITY STATE ZIP TELEPHONE
TYPE OF BUSINESS
SOLE PROPRIETORSHIP CORPORATION TRUST
PARTNERSHIP JOINT VENTURE OTHER:
PRINCIPAL BUSINESS ACTIVITY
STATE OF INCORPORATION DATE OF INCORPORATION
(mm/dd/yy)
IF BUSINESS IS INCORPORATED IN A STATE OTHER THAN TEXAS, HAS THE CORPORATION
QUALIFIED AS A FOREIGN CORPORATION WITH THE SECRETARY OF STATE?
YES NO IF YES, ENTER FILE NUMBER HERE:
NAME OF PARENT COMPANY:
STREET ADDRESS OF PARENT COMPANY CITY STATE ZIP PHONE
NAME(S) AND ADDRESS(ES) OF ANY SUBSIDIARY OF THIS BUSINESS
IS COMPANY CLOSELY HELD
PUBLICLY HELD ******* IF PUBLICLY HELD , ATTACH MOST RECENT
REPORT (10K,10Q) ********
BUSINESS ORGANIZATIONAL CHARTS:
ATTACH A DIAGRAM DEPICTING DIRECT AND INDIRECT BUSINESS RELATIONSHIPS BETWEEN
THE BUSINESS AND PARENT COMPANIES. THE DIAGRAM MUST IDENTIFY ALL COMPANIES UNTIL
ULTIMATE OWNERSHIP HAS BEEN IDENTIFIED.
INITIALS:
CONTRACT FOR LOTTERY OPERATIONS AND SERVICES ATTACHMENTS
[TEXAS LOTTERY LOGO] PAGE 111
==================================================================
TEXAS LOTTERY CONTRACTOR DISCLOSURE PAGE 2
OFFICER LIST
IF BUSINESS IS A CORPORATION, LIST EACH OFFICER. IF YOU NEED ADDITIONAL SPACE,
PLEASE MAKE PHOTOCOPIES OF THIS BLANK PAGE AND ATTACH ADDITIONAL PAGES TO THE
BACK OF THIS FORM. INDICATE NUMBER OF DUPLICATED PAGES: PAGE _OF__
OFFICER NAME DATE OF BIRTH SOCIAL SECURITY NUMBER
RESIDENCE STREET ADDRESS CITY STATE ZIP PHONE
BUSINESS STREET ADDRESS CITY STATE ZIP PHONE
POSITION FIELD PERCENTAGE OF STOCK
HELD
SPOUSE'S NAME DATE OF BIRTH SOCIAL SECURITY NUMBER
OFFICER NAME DATE OF BIRTH SOCIAL SECURITY NUMBER
RESIDENCE STREET ADDRESS CITY STATE ZIP PHONE
BUSINESS STREET ADDRESS CITY STATE ZIP PHONE
POSITION FIELD PERCENTAGE OF STOCK
HELD
SPOUSE'S NAME DATE OF BIRTH SOCIAL SECURITY NUMBER
OFFICER NAME DATE OF BIRTH SOCIAL SECURITY NUMBER
RESIDENCE STREET ADDRESS CITY STATE ZIP PHONE
BUSINESS STREET ADDRESS CITY STATE ZIP PHONE
POSITION FIELD PERCENTAGE OF STOCK
HELD
SPOUSE'S NAME DATE OF BIRTH SOCIAL SECURITY NUMBER
BUSINESS ORGANIZATIONAL CHARTS:
ATTACH A CHART SHOWING ALL OFFICERS AND THEIR POSITIONS IN THE BUSINESS AND/OR
PARENT COMPANIES. THE CHART MUST IDENTIFY ALL OFFICERS.
INITIALS:
CONTRACT FOR LOTTERY OPERATIONS AND SERVICES ATTACHMENTS
[TEXAS LOTTERY LOGO] PAGE 112
==================================================================
TEXAS LOTTERY CONTRACTOR DISCLOSURE PAGE 3
DIRECTOR LIST
IF BUSINESS IS A CORPORATION, LIST EACH DIRECTOR. IF YOU NEED ADDITIONAL SPACE,
PLEASE MAKE PHOTOCOPIES OF THIS BLANK PAGE AND ATTACH ADDITIONAL PAGES TO THE
BACK OF THIS FORM. INDICATE NUMBER OF DUPLICATED PAGES: PAGE _OF__
DIRECTOR NAME DATE OF BIRTH SOCIAL SECURITY No.
RESIDENCE STREET ADDRESS CITY STATE ZIP PHONE
BUSINESS STREET ADDRESS CITY STATE ZIP PHONE
POSITION FIELD PERCENTAGE OF
STOCK HELD
SPOUSE'S NAME DATE OF BIRTH SOCIAL SECURITY
No.
DIRECTOR NAME DATE OF BIRTH SOCIAL SECURITY
No.
RESIDENCE STREET ADDRESS CITY STATE ZIP PHONE
BUSINESS STREET ADDRESS CITY STATE ZIP PHONE
POSITION FIELD PERCENTAGE OF
STOCK HELD
SPOUSE'S NAME DATE OF BIRTH SOCIAL SECURITY
No.
DIRECTOR NAME DATE OF BIRTH SOCIAL SECURITY
No.
RESIDENCE STREET ADDRESS CITY STATE ZIP PHONE
BUSINESS STREET ADDRESS CITY STATE ZIP PHONE
POSITION FIELD PERCENTAGE OF
STOCK HELD
SPOUSE'S NAME DATE OF BIRTH SOCIAL SECURITY
No.
BUSINESS ORGANIZATIONAL CHARTS:
ATTACH A CHART SHOWING ALL DIRECTORS AND THEIR POSITIONS IN THE BUSINESS AND/OR
PARENT COMPANIES. THE CHART MUST IDENTIFY ALL DIRECTORS.
INITIALS:
CONTRACT FOR LOTTERY OPERATIONS AND SERVICES ATTACHMENTS
[TEXAS LOTTERY LOGO] PAGE 113
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TEXAS LOTTERY CONTRACTOR DISCLOSURE PAGE 4
PARTNERS-SHAREHOLDERS
LIST ALL PARTNERS / SHAREHOLDERS WHO HOLD INTEREST IN THE BUSINESS OR CORPORATE
STOCK. IF A PUBLICLY HELD CORPORATION, LIST THE STOCKHOLDERS OWNING MORE THAN A
10% INTEREST. A COMPLETE CONTRACTOR DISCLOSURE IS REQUIRED FOR EACH ENTITY THAT
HOLDS A CONTROLLING INTEREST IN THE BUSINESS. IF YOU NEED ADDITIONAL SPACE,
PLEASE MAKE PHOTOCOPIES OF THIS BLANK PAGE AND ATTACH ADDITIONAL PAGES TO THE
BACK OF THIS FORM. INDICATE NUMBER OF DUPLICATED PAGES: PAGE _OF__
PARTNER/SHAREHOLDER NAME DATE OF BIRTH SOCIAL SECURITY
No.
RESIDENCE STREET ADDRESS CITY STATE ZIP PHONE
BUSINESS STREET ADDRESS CITY STATE ZIP PHONE
POSITION FIELD PERCENTAGE OF
STOCK HELD
SPOUSE'S NAME DATE OF BIRTH SOCIAL SECURITY
No.
PARTNER/SHAREHOLDER NAME DATE OF BIRTH SOCIAL SECURITY
No.
RESIDENCE STREET ADDRESS CITY STATE ZIP PHONE
BUSINESS STREET ADDRESS CITY STATE ZIP PHONE
POSITION FIELD PERCENTAGE OF
STOCK HELD
SPOUSE'S NAME DATE OF BIRTH SOCIAL SECURITY
No.
PARTNER/SHAREHOLDER NAME DATE OF BIRTH SOCIAL SECURITY
No.
RESIDENCE STREET ADDRESS CITY STATE ZIP PHONE
BUSINESS STREET ADDRESS CITY STATE ZIP PHONE
POSITION FIELD PERCENTAGE OF
STOCK HELD
SPOUSE'S NAME DATE OF BIRTH SOCIAL SECURITY No.
INITIALS:
CONTRACT FOR LOTTERY OPERATIONS AND SERVICES ATTACHMENTS
[TEXAS LOTTERY LOGO] PAGE 114
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TEXAS LOTTERY CONTRACTOR DISCLOSURE PAGE 5
CPA / ATTORNEY LIST
LIST BUSINESS CPA OR ACCOUNTANT AND ATTORNEY. IF YOU NEED ADDITIONAL SPACE,
PLEASE MAKE PHOTOCOPIES OF THIS BLANK PAGE AND ATTACH ADDITIONAL PAGES TO THE
BACK OF THIS FORM. LIST NUMBER OF DUPLICATED PAGES: PAGE _ OF _
NAME POSITION /TITLE:
BUSINESS STREET ADDRESS CITY STATE ZIP PHONE
COMPANY / FIRM NAME: CITY STATE ZIP PHONE
NAME POSITION /TITLE:
BUSINESS STREET ADDRESS CITY STATE ZIP PHONE
COMPANY / FIRM NAME: CITY STATE ZIP PHONE
NAME POSITION /TITLE:
BUSINESS STREET ADDRESS CITY STATE ZIP PHONE
COMPANY / FIRM NAME: CITY STATE ZIP PHONE
NAME POSITION /TITLE:
BUSINESS STREET ADDRESS CITY STATE ZIP PHONE
COMPANY / FIRM NAME: CITY STATE ZIP PHONE
NAME POSITION /TITLE:
BUSINESS STREET ADDRESS CITY STATE ZIP PHONE
COMPANY / FIRM NAME: CITY STATE ZIP PHONE
NAME POSITION /TITLE:
BUSINESS STREET ADDRESS CITY STATE ZIP PHONE
COMPANY / FIRM NAME: CITY STATE ZIP PHONE
INITIALS:
CONTRACT FOR LOTTERY OPERATIONS AND SERVICES ATTACHMENTS
[TEXAS LOTTERY LOGO] PAGE 115
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TEXAS LOTTERY CONTRACTOR DISCLOSURE PAGE 6
REGULATORY/ADMINISTRATIVE PROCEEDINGS
HAS THE BUSINESS OR ANY OFFICER, DIRECTOR OR STOCKHOLDER OF THE BUSINESS, OR IN
THE EVENT OF A PUBLICLY HELD CORPORATION, THOSE STOCKHOLDERS OWNING MORE THAN
10% INTEREST, EVER BEEN THE SUBJECT OF ANY INVESTIGATION CONDUCTED BY A
GOVERNMENTAL INVESTIGATORY AGENCY FOR ANY REASON?
[ ]YES [ ] NO
IF YES, PROVIDE THE INFORMATION REQUESTED BELOW ON A SEPARATE PIECE OF PAPER.
LIST THE STATUS OF THE INVESTIGATION, DEFENDANT(S) NAME, NATURE OF PROCEEDING,
DATE, RESPONDENT'S POSITION HELD IN BUSINESS, NAME AND ADDRESS OF GOVERNMENT
AGENCY, DOCKET OR CASE/FILE NUMBER AND/OR OTHER IDENTIFIER.
CRIMINAL PROCEEDINGS
HAS THE BUSINESS ENTITY, OR ANY OFFICER, DIRECTOR OR STOCKHOLDER OF THE BUSINESS
ENTITY, OR, IN THE EVENT OF A PUBLICLY HELD CORPORATION, THOSE STOCKHOLDERS
OWNING MORE THAN 10 % INTEREST EVER BEEN NAMED AS A DEFENDANT OR CO-CONSPIRATOR
IN ANY CRIMINAL PROCEEDING IN THIS STATE OR ANY OTHER JURISDICTION?
[ ]YES [ ] NO
IF YES, PROVIDE THE INFORMATION REQUESTED BELOW ON A SEPARATE PIECE OF PAPER.
LIST THE ORIGINAL CHARGE/ALLEGATIONS AS WELL AS ANY AMENDED CHARGES. INCLUDE
SPECIFICS AS TO THE CURRENT STATUS OF THE CRIMINAL PROCEEDINGS. ALSO LIST THE
DEFENDANT(S) NAME, NATURE OF PROCEEDING, DATE, POSITION HELD IN BUSINESS, NAME
AND ADDRESS OF PRESIDING COURT, DOCKET OR CASE/FILE NUMBER AND / OR OTHER
IDENTIFIER.
CIVIL PROCEEDINGS
HAS THE BUSINESS OR ANY OFFICER, DIRECTOR OR STOCKHOLDER OF THE BUSINESS (OR IN
THE EVENT OF A PUBLICLY HELD CORPORATION, THOSE STOCKHOLDERS OWNING MORE THAN
10% INTEREST) OR ANY SUBSIDIARY, EVER BEEN A DEFENDANT OR RESPONDENT IN ANY
CIVIL PROCEEDINGS?
[ ]YES [ ] NO
IF YES, PROVIDE SPECIFICS OF EACH INCIDENT AS WELL AS THE CURRENT
STATUS/DISPOSITION.
INSURANCE INFORMATION
HAS THE BUSINESS SUSTAINED A LOSS WHERE AN INSURANCE PAYMENT OF $50,000.00 OR
MORE WAS RECEIVED?
[ ]YES [ ] NO
IF YES PROVIDE SPECIFICS AND CURRENT STATUS DISPOSITION OF THE CLAIM. INCLUDE
THE NAME AND ADDRESS OF THE INSURANCE COMPANY THAT HANDLED THE CLAIM.
HAS THE BUSINESS OR ANY OFFICER, DIRECTOR OR STOCKHOLDER EVER SUSTAINED A LOSS
BY FIRE WHERE ARSON WAS SUSPECTED BY AN INSURANCE COMPANY OR LAW ENFORCEMENT
AGENCY? IN THE EVENT OF A PUBLICLY HELD CORPORATION, LIST ONLY THOSE
STOCKHOLDERS OWNING MORE THAN 10% INTEREST.
[ ]YES [ ] NO
IF YES, PROVIDE SPECIFICS OF THE INCIDENT. INCLUDE TITLE NAME AND ADDRESS OF THE
INVESTIGATING AGENCY AND ANY PERTINENT CASE OR FILE NUMBERS.
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LEGAL PROCEEDINGS
HAS THE BUSINESS, OR ANY OFFICER, DIRECTOR OR STOCKHOLDER OF THE BUSINESS OR,
IN THE EVENT OF A PUBLICLY HELD CORPORATION, THOSE STOCKHOLDERS OWNING MORE
THAN A 10% INTEREST, EVER BEEN DEEMED LEGALLY BANKRUPT OR FILED A PETITION FOR
ANY TYPE OF BANKRUPTCY OR INSOLVENCY, UNDER ANY BANKRUPTCY OR INSOLVENCY LAW?
[ ] YES [ ] NO
IF YES, PROVIDE THE INFORMATION REQUESTED ON A SEPARATE PIECE OF PAPER WITH A
DETAILED EXPLANATION OF THE ALLEGATIONS. INCLUDE SPECIFICS AS TO THE CURRENT
STATUS OF THE INVESTIGATION.
DATE DOCKET # NAME, ADDRESS PRESIDING COURT NAME, ADDRESS FILING PARTY NAME,
ADDRESS OF TRUSTEE
FINANCIAL INFORMATION
LIST ALL FINANCIAL INSTITUTIONS WITH WHICH YOUR BUSINESS / SUBSIDIARIES
CONDUCTS BUSINESS.
Date Business /
Opened Subsidiary Name Address Financial Institution Name and Address
FINANCIAL INFORMATION
ON A SEPARATE SHEET DESCRIBE THE NATURE, TYPE, TERMS, COVENANTS AND PRIORITIES
OF ANY OUTSTANDING PAYMENT BONDS, LOANS, MORTGAGES, TRUST DEEDS, NOTES, DEBTORS
OR OTHER FORMS OF INDEBTEDNESS ISSUED OR EXECUTED, OR TO BE ISSUED OR EXECUTED
BY THE CORPORATION, WHICH MATURE MORE THAN ONE YEAR FROM THE DATE OF ISSUANCE.
LIST ALL MORTGAGES OR OTHER HOLDERS OF LONG-TERM DEBT THAT THE BUSINESS OR ANY
SUBSIDIARY HAS OUTSTANDING.
LOBBYIST
LIST ANY TEXAS LOBBYIST WITH WHICH YOU ARE AFFILIATED.
LENGTH OF TIME AMOUNT OF
NAME OF LOBBYIST BUSINESS/COMPANY AFFILIATION AFFILIATED WITH CONTRIBUTIONS
LOBBYIST
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TEXAS LOTTERY CONTRACTOR DISCLOSURE PAGE 8
ATTACHMENT CHECK LIST
PLEASE ATTACH COPIES OF THE BELOW-LISTED DOCUMENTS TO YOUR DISCLOSURE PACKAGE.
PLACE "N/A" TO THE LEFT OF THE DOCUMENT NAME IF THE DOCUMENT DOES NOT APPLY.
FAILURE TO PROVIDE A REQUIRED DOCUMENT MAY BE DEEMED SUFFICIENT CAUSE FOR
REJECTING A BID.
[] Articles Of Incorporation
[] Annual Statement of Officers
[] Annual Statement of Directors
[] Annual Statement of Shareholders owning more than 10% interest
[] Corporate Certificate
[] Annual Statement of Domestic Stock
[] Annual Statement of Foreign Corporation
[] Partnership Agreement
[] Trust Agreement
[] Joint Venture Agreement
[] Charter
[] By Laws
[] Organization Chart
[] Annual Reports
[] Quarterly Reports
[] Interim Reports
[] Financial Statement
[] Three (3) years most current tax return statements
[] Bankruptcy Filings, Receivership Proceedings
[] Financial Statement (Unaudited statements acceptable)
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