4300151.pdf

STATE OF MICHIGAN

ENTERPRISE PROCUREMENT

Department of Technology, Management, and Budget 320 S. Walnut Street 2nd Floor Lansing, MI 48933

P.O. BOX 30026 LANSING, MICHIGAN 48909

CONTRACT CHANGE NOTICE

CONTRACT SUMMARY

Charitable Gaming Ticket Vending Machine

INITIAL EFFECTIVE DATE INITIAL EXPIRATION DATE INITIAL AVAILABLE OPTIONS EXPIRATION DATE

BEFORE

September 1, 2014 September 10, 2019 5 - 12 Months September 10, 2027

PAYMENT TERMS DELIVERY TIMEFRAME

ALTERNATE PAYMENT OPTIONS EXTENDED PURCHASING

MINIMUM DELIVERY REQUIREMENTS

No minimum order

P-Card Direct Voucher (PRC) Other Yes No

9340 Penfield Avenue

Chatsworth CA 91311

Bill Breslo

818-727-1690 bbreslo@diamondgame.com

CV0066888

DIAMOND GAME ENTERPRISES

C O

N

TR

A C

TO

R

517-335-6913

WellsR@michigan.gov

Alannah Doak

517-230-9424

DTMB

Ronald Wells MSL

DoakA@michigan.gov

C ontract

A dm inistrator Program M anagerSTA

TE

Per Order for DeliveryNet 30

Change Notice Number 6

Contract Number MA071B4300151C to

DESCRIPTION OF CHANGE NOTICE

OPTION EXTENSIONLENGTH OF OPTION LENGTH OF EXTENSION REVISED EXP. DATE

CURRENT VALUE VALUE OF CHANGE NOTICE ESTIMATED AGGREGATE CONTRACT VALUE

$4,290,175.00 $0.00 $4,290,175.00

DESCRIPTION

Effective 3/21/2025, the following attached amendment is incorporated into this contract.

All other terms, conditions, specifications and pricing remain the same. Per contractor and agency agreement, and DTMB Central Procurement approval.

Contract No.: 071B4300151C Vendor: Diamond Game Enterprises Contract CN No.: 6 GR No.: 250000001488

1. Diamond Game Enterprises will transfer from using UPS WorldShip Third Party Billing to using FedEx with Third Party Billing. Diamond Game Enterprises has been given access to the account and will be required to use FedEx Third Party Billing for shipping to all 18 of Charitable Gaming Locations.

a. Diamond Gaming is required to begin using FedEx shipping as soon as this contract change notice has been executed.

b. Diamond Game Enterprises must provide a shipping point of contact to Charitable Gaming – Nadia Sierzega within 3 (three) business days of executed contract change notice. This point of contact will work with Nadia on all shipping information. This person will also be responsible for reaching out to Nadia with any issues they may experience in the future. If the point of contact changes at any time during the term of the contract Nadia must be notified by email and phone within 3 (three) business days.

i. Email – SierzegaN@michigan.gov

ii. Office Number – (517)335-5787

iii. Cell Number – (517)388-0312

2. All other requirements will remain the same to include contract section 4.03 Damage during delivery, Relocation, or Installation.

mailto:SierzegaN@michigan.gov

ENTERPRISE PROCUREMENT

Department of Technology, Management, and Budget

525 W. ALLEGAN ST., LANSING, MICHIGAN 48913

P.O. BOX 30026 LANSING, MICHIGAN 48909

CONTRACT CHANGE NOTICE

CONTRACT SUMMARY

Charitable Gaming Ticket Vending Machine

INITIAL EFFECTIVE DATE INITIAL EXPIRATION DATE INITIAL AVAILABLE OPTIONS EXPIRATION DATE

BEFORE

September 11, 2014 September 10, 2019 5 - 12 Months September 10, 2027

PAYMENT TERMS DELIVERY TIMEFRAME

ALTERNATE PAYMENT OPTIONS EXTENDED PURCHASING

MINIMUM DELIVERY REQUIREMENTS

No minimum order

P-Card Direct Voucher (PRC) Other Yes No

9340 Penfield Avenue

Chatsworth CA 91311

Bill Breslo

818-727-1690 bbreslo@diamondgame.com

CV0066888

DIAMOND GAME ENTERPRISES

C O

N

TR

A C

TO

R

517-335-6913

WellsR@michigan.gov

Alannah Doak

(517) 230-9424

DTMB

Ronald Wells MSL

DoakA@michigan.gov

STA

TE

C ontract

A dm inistrator Program M anager

Per Order for DeliveryNet 30

Change Notice Number 5

Contract Number MA071B4300151C to

DESCRIPTION OF CHANGE NOTICE

OPTION EXTENSIONLENGTH OF OPTION LENGTH OF EXTENSION REVISED EXP. DATE

CURRENT VALUE VALUE OF CHANGE NOTICE ESTIMATED AGGREGATE CONTRACT VALUE

$4,290,175.00 $0.00 $4,290,175.00

DESCRIPTION

Effective 6/12/2024, the following attached amendment is incorporated into this contract.

All other terms, conditions, specifications and pricing remain the same. Per contractor and agency agreement, and DTMB Central Procurement approval.

MA 071B4300151 - Diamond Game Enterprises – Change Notice #5 – Effective 6/12/2024

1. After an audit of April 2023 – December 2023 UPS invoices there was discrepancy of $5,455.30 in what actual shipping costs are compared to what Charitable Gaming was being invoiced. After further review it was discovered that Charitable Gaming is being charged UPS published rate and not actual standard shipping costs.

A credit in the amount of $5,455.30 is to be issued on the first invoice following this executed change notice.

2. Charitable Gaming will be implementing a 3-month pilot program for shipping. Charitable Gaming will set up an account with UPS WorldShip Third Party Billing utilizing the State of Michigan contract pricing that Diamond Games will be given access to and will be required to use for shipping to all 19 of Charitable Gaming Locations.

a. Diamond Gaming must set up the account and begin utilizing with 5 (five) business days of executed contract change notice.

b. Diamond Gaming must provide a shipping point of contact to Charitable Gaming – Nadia Sierzega within 3 (three) business days of executed contract change notice.

This point of contact will work with Nadia and UPS to set up account. This person will also be responsible for reaching out to Nadia with any issues then may experience in the future. If the point of contact changes at anytime during the term of the contract Nadia must be notified by email and phone within 3 (three) business days.

i. Email – SierzegaN@michigan.gov

ii. Office Number – (517)335-5787

iii. Cell Number – (517)388-0312

c. If it is determined anytime during that 3-month period that the program is efficient and meets Charitable Gaming needs, we will remove the pilot program status and issued a contract change notice that includes the new shipping requirements.

d. All other requirements will remain the same to include contract section 4.03 Damage during delivery, Relocation, or Installation.

mailto:SierzegaN@michigan.gov

CENTRAL PROCUREMENT SERVICES

Department of Technology, Management, and Budget

320 S. WALNUT ST., LANSING, MICHIGAN 48933

P.O. BOX 30026 LANSING, MICHIGAN 48909

CONTRACT CHANGE NOTICE

Change Notice Number 4 to 071B4300151Contract Number wellsr@michigan.gov

Ron Wells

Alannah Doak bbreslo@diamondgame.com

Bill Breslo

Chatsworth, CA 91311

DIAMOND GAME ENTERPRISES

CV0066888

818-727-1690

9340 Penfield Avenue

(517) 230-9424

STA

TE

P ro g ra m

M a n a g e r

C o n tra ct

A d m in istra to r

C O

N T R A C T O

R

517-335-6913

DTMB

doaka@michigan.gov

$2,700,000.00

September 11, 2014 September 10, 2022

CHARITABLE GAMING TICKET VENDING MACHINE

September 10, 2019

INITIAL AVAILABLE OPTIONS EXPIRATION DATE

BEFORE

3 - 1 Year

PAYMENT TERMS DELIVERY TIMEFRAME

NET 30

ALTERNATE PAYMENT OPTIONS EXTENDED PURCHASING

☐ P-Card ☐ PRC ☐ Other ☐ Yes ☒ No

MINIMUM DELIVERY REQUIREMENTS

DESCRIPTION OF CHANGE NOTICE

OPTION LENGTH OF OPTION EXTENSION LENGTH OF EXTENSION REVISED EXP. DATE

☐ ☒ Five (5) Years and Five (5) one year optionsSeptember 10, 2027

CURRENT VALUE VALUE OF CHANGE NOTICE ESTIMATED AGGREGATE CONTRACT VALUE

No Minimum Order

$1,590,175.00 $4,290,175.00

Effective August 30, 2022, this contract is hereby extended 5 years and 5 additional 1-year options are also added. The new expiration date is September 10, 2027. An additional $1,590,175.00 is also added to the contract value. The Contract Administrator has been updated to Alannah Doak. Pricing is hereby updated per revised Attachment C - Pricing. Diamond Game also to provide up to three new game themes for the new term at no additional cost. Any additional game themes would be negotiable.

All other terms, conditions, specifications and pricing remain the same. Per Contractor and Agency agreement, DTMB Central Procurement Services approval, and Administrative Board approval on August 30, 2022.

INITIAL EXPIRATION DATEINITIAL EFFECTIVE DATE

Per Order for Delivery

DESCRIPTION

CONTRACT SUMMARY

MSL

Revised Schedule C - Pricing Pricing Effective

September 11, 2022 to September 10, 2027

Total Machines Monthly Fee Total Monthly Cost Annual Cost Contract Term of 5

Years 57 $260.00 $14,820.00 $177,840.00 $889,200.00

Total Tickets Cost Per 1,000 Total Monthly

1,350,000 $3.40 $22,500 $112,500.00 $562,500.00

Total Shipping (Per Deal Est) Cost Per (?) Total Monthly

Cost Annual Cost Contract Term of 5

955 $145.00 $2,307.92 $27,695.00 $138,475.00

Department of Technology, Management, and Budget

320 S. WALNUT ST., LANSING, MICHIGAN 48933

P.O. BOX 30026 LANSING, MICHIGAN 48909

CONTRACT CHANGE NOTICE

Change Notice Number 4 to 071B4300151Contract Number wellsr@michigan.gov

Ron Wells

Alannah Doak bbreslo@diamondgame.com

Bill Breslo

Chatsworth, CA 91311

DIAMOND GAME ENTERPRISES

CV0066888

818-727-1690

9340 Penfield Avenue

(517) 230-9424

STA

TE

P ro g n a g e r

C o n tra ct

A d m in istra to r

C O

N T R A C T O

R

517-335-6913

DTMB

doaka@michigan.gov

$2,700,000.00

September 11, 2014 September 10, 2022

CHARITABLE GAMING TICKET VENDING MACHINE

September 10, 2019

INITIAL AVAILABLE OPTIONS EXPIRATION DATE

BEFORE

3 - 1 Year

PAYMENT TERMS DELIVERY TIMEFRAME

NET 30

ALTERNATE PAYMENT OPTIONS EXTENDED PURCHASING

☐ P-Card ☐ PRC ☐ Other ☐ Yes ☒ No

MINIMUM DELIVERY REQUIREMENTS

DESCRIPTION OF CHANGE NOTICE

OPTION LENGTH OF OPTION EXTENSION LENGTH OF EXTENSION REVISED EXP. DATE

☐ ☒ Five (5) Years and Five (5) one year optionsSeptember 10, 2027

CURRENT VALUE VALUE OF CHANGE NOTICE ESTIMATED AGGREGATE CONTRACT VALUE

No Minimum Order

$0.00 $2,700,000.00

Effective August 30, 2022, this contract is hereby extended 5 years and 5 additional 1-year options are also added. The new expiration date is September 10, 2027. An additional $1,590,175.00 is also added to the contract value. The Contract Administrator has been updated to Alannah Doak. Pricing is hereby updated per revised Attachement C - Pricing. Diamond Game also to provide up to three new game themes for the new term at no additional cost. Any additional game themes would be negotiable.

All other terms, conditions, specifications and pricing remain the same. Per Contractor and Agency agreement, DTMB Central Procurement Services approval, and Administrative Board approval on August 30, 2022.

INITIAL EXPIRATION DATEINITIAL EFFECTIVE DATE

Per Order for Delivery

DESCRIPTION

Revised Schedule C - Pricing Pricing Effective

September 11, 2022 to September 10, 2027

Total Machines Monthly Fee Total Monthly

57 $260.00 $14,820.00 $177,840.00 $889,200.00

Total Tickets Cost Per 1,000 Total Monthly

1,350,000 $3.40 $22,500 $112,500.00 $562,500.00

Total Shipping (Per Deal Est) Cost Per (?) Total Monthly

Cost Annual Cost Contract Term of 5

955 $145.00 $2,307.92 $27,695.00 $138,475.00

Department of Technology, Management, and Budget

525 W. ALLEGAN ST., LANSING, MICHIGAN 48913

P.O. BOX 30026 LANSING, MICHIGAN 48909

CONTRACT CHANGE NOTICE

Change Notice Number 3 to 071B4300151Contract Number wellsr@michigan.gov

Ron Wells

Valerie Hiltz bbreslo@diamondgame.com

Bill Breslo

Chatsworth, CA 91311

DIAMOND GAME ENTERPRISES

CV0066888

818-727-1690

9340 Penfield Avenue

(517) 249-0459

STA

TE

P ro g n a g e r

C o n tra ct

A d m in istra to r

C O

N T R A C T O

R

517-335-6913

DTMB

hiltzv@michigan.gov

$2,700,000.00

September 11, 2014 September 10, 2022

CHARITABLE GAMING TICKET VENDING MACHINE

September 10, 2019

INITIAL AVAILABLE OPTIONS EXPIRATION DATE

BEFORE

3 - 1 Year

PAYMENT TERMS DELIVERY TIMEFRAME

NET 30

ALTERNATE PAYMENT OPTIONS EXTENDED PURCHASING

☐ P-Card ☐ PRC ☐ Other ☐ Yes ☒ No

MINIMUM DELIVERY REQUIREMENTS

DESCRIPTION OF CHANGE NOTICE

OPTION LENGTH OF OPTION EXTENSION LENGTH OF EXTENSION REVISED EXP. DATE

☐ ☐ September 10, 2022

CURRENT VALUE VALUE OF CHANGE NOTICE ESTIMATED AGGREGATE CONTRACT VALUE

No minimum requirements.

$0.00 $2,700,000.00

Effective July 9, 2021 this contract is being revised to reflect that the State's Program Manager is Ron Wells, wellsr@michigan.gov, 517-335-6913.

All other terms, conditions, specifications and pricing remain the same. Per Contractor and Agency agreement and DTMB Central Procurement Services approval.

INITIAL EXPIRATION DATEINITIAL EFFECTIVE DATE

Per Order for Delivery

DESCRIPTION

Department of Technology, Management, and Budget

525 W. ALLEGAN ST., LANSING, MICHIGAN 48913

P.O. BOX 30026 LANSING, MICHIGAN 48909

CONTRACT CHANGE NOTICE

Change Notice Number 2 to 071B4300151Contract Number

OviedoK@michigan.gov

Kathy Oviedo

Valerie Hiltz bbreslo@diamondgame.com

Bill Breslo

Chatsworth, CA 91311

DIAMOND GAME ENTERPRISES

CV0066888

818-727-1690

9340 Penfield Avenue

(517) 249-0459

STA

TE

Program anager

C ontract

A dm inistrator

C O

N

TR

A C

TO

R

MSL

517335-5778

DTMB

hiltzv@michigan.gov

$2,700,000.00

September 11, 2014 September 10, 2020

CHARITABLE GAMING TICKET VENDING MACHINE

September 10, 2019

INITIAL AVAILABLE OPTIONS EXPIRATION DATE

BEFORE

3 - 1 Year

PAYMENT TERMS DELIVERY TIMEFRAME

NET 30

ALTERNATE PAYMENT OPTIONS EXTENDED PURCHASING

☐ P-Card ☐ PRC ☐ Other ☐ Yes ☒ No

MINIMUM DELIVERY REQUIREMENTS

DESCRIPTION OF CHANGE NOTICE

OPTION LENGTH OF OPTION EXTENSION LENGTH OF EXTENSION REVISED EXP. DATE

☒ 2 year ☐ September 10, 2022

CURRENT VALUE VALUE OF CHANGE NOTICE ESTIMATED AGGREGATE CONTRACT VALUE

No Minimum

$0.00 $2,700,000.00

Effective June 25, 2020, the second and third option years available on this contract are hereby exercised. The new contract expiration date is 9/10/2022. Attachment A and B - Statement of Work language and Attachment C - Pricing is revised as attached. All other terms, conditions, specifications and pricing remain the same. Per Contractor and Agency agreement and DTMB Central Procurement Services approval.

INITIAL EXPIRATION DATEINITIAL EFFECTIVE DATE

Per Order for Delivery

DESCRIPTION

CN #2 Language and Pricing Changes, Effective 6/25/2020

CONTRACT #071B4300151

Language Revisions to Attachment A.

Section 1.02 Bill Acceptors, second paragraph originally read:

The DBA is capable of being modified to accept a voucher issued by the same Device or another Device located at the same facility. Such functionality, commonly referred to as “Ticket In Ticket Out” or “TITO”, requires licensing intellectual property from a third party provider. If TITO functionality is selected, the DBA will be configured to comply with any and all currency requirements associated with the TITO system.

Section 1.02 Bill Acceptors, second paragraph is deleted in its entirety and replace with the following:

The DBA is capable of being modified to accept a voucher issued by the same Device or another Device located at the same facility. Such functionality, commonly referred to as “Ticket In Ticket Out” or “TITO”, requires licensing intellectual property from a third party provider. If TITO functionality is selected, the DBA will be configured to comply with any and all currency requirements associated with the TITO system. Any licensing software agreements are held between the Contractor and their provider only. The cost of these licensing agreements, if any, will not be passed on to the State.

Language Revisions to Attachment B.

Section 2.9 originally read…

2.09 Modifications and Upgrades

As required by Section 2.09, Diamond Game agrees that modifications, game conversions, device relocations, and upgrades to Devices or Systems may become necessary throughout the term of the contract. As such, Diamond Game acknowledges and agrees to comply with the requirement to clear all modifications or upgrades with the State before beginning work and, if the modification or upgrade must occur at a facility where a Device or System is located, Diamond Game will schedule an available time with the facility. As specified, Diamond Game agrees that all such modifications will be subject to, and comply with, the non-operation requirements outlined in the RFP.

Section 2.9 is deleted in its entirety and replace with the following:

2.09 Modifications and Upgrades

As required by Section 2.09, Diamond Game agrees that modifications, game conversions, device relocations, and upgrades to Devices or Systems may become necessary throughout the term of the contract. As such, Diamond Game acknowledges and agrees to comply with the requirement to clear all modifications or upgrades with the State before beginning work and, if the modification or upgrade must occur at a facility where a Device or System is located, Diamond Game will schedule an available time with the facility. As specified, Diamond Game agrees that all such modifications will be subject to, and comply with, the non-operation requirements outlined in this Contract.

Ticket Vending and Validation Machines (CGTVVM) that do not currently have Ticket-in-Ticket (TiTo) functionality will be modified and upgraded free of charge by the Contractor.

The Contractor agrees to entirely waive license and monthly fees for TiTo functionality on all existing and any future CGTVVM procured under this contract.

CN #2 Language and Pricing Changes, Effective 6/25/2020

Revisions to Attachment C- Pricing

Attachment C will be revised to read as follows…

Device Purchase price includes all parts, functions, and services set forth in the Statement of Work and Attachment B, as well as internet service and installation of installation service where needed during the term of the Contract. Lease fee for Device includes all parts, functions, and services set forth in the Statement of Work and Attachment B, as well as Local System, internet service, and installation of internet service where needed during the lease.

Item Purchase Lease (monthly)

Device

$16,950 for the first two orders placed within 4 months

$17,500 after the first two orders or after 4 months

$1,000

TITO Functionality License Fee No Charge No Charge

Department of Technology, Management, and Budget

525 W. ALLEGAN ST., LANSING, MICHIGAN 48913

P.O. BOX 30026 LANSING, MICHIGAN 48909

CONTRACT CHANGE NOTICE

Change Notice Number 1 to 071B4300151Contract Number

OviedoK@michigan.gov

Kathy Oviedo

Valerie Hiltz bbreslo@diamondgame.com

Bill Breslo

Chatsworth, CA 91311

DIAMOND GAME ENTERPRISES

CV0066888

818-727-1690 xtn 203

9340 Penfield Avenue

(517) 249-0459

STA

TE

Program anager

C ontract

A dm inistrator

C O

N

TR

A C

TO

R

MSL

517-335-5778

DTMB

hiltzv@michigan.gov

$2,500,000.00

September 11, 2014 September 10, 2019

CHARITABLE GAMING TICKET VENDING MACHINE

September 10, 2019

INITIAL AVAILABLE OPTIONS EXPIRATION DATE

BEFORE

3 - 1 Year

PAYMENT TERMS DELIVERY TIMEFRAME

Net 30

ALTERNATE PAYMENT OPTIONS EXTENDED PURCHASING

☐ P-Card ☐ PRC ☐ Other ☐ Yes ☒ No

MINIMUM DELIVERY REQUIREMENTS

DESCRIPTION OF CHANGE NOTICE

OPTION LENGTH OF OPTION EXTENSION LENGTH OF EXTENSION REVISED EXP. DATE

☒ One (1)- One Year Options ☐ September 10, 2020

CURRENT VALUE VALUE OF CHANGE NOTICE ESTIMATED AGGREGATE CONTRACT VALUE

No Minimum Order

$200,000.00 $2,700,000.00

Effective September 10, 2019. This contract is exercising the first of its available option years, and adding additional funding for the first option year. The new contract expiration date is 9/10/2020.

The Contractor's contacts are changed as follows: Legal Notices to: Debbie Schween, Pollard Bank Note Ltd., 140 Otter Street, Winnepeg, MB, Canada, R3T0M8, dschween@pbl.ca; Contract Administrator: Bill Breslo, President, bbreslo@diamondgame.com, 818-727-1690 extn. 203; and the Program Manger: Chris Robertson, crobertson@diamondgame.com, 818-727-1690 extn, 208. The State's Contract Administrator is changed to Valerie Hiltz, DTMB Central Procurement Services.

All other terms, conditions, specifications and pricing remain the same. Per Contractor and Agency agreement and DTMB Central Procurement Services approval.

INITIAL EXPIRATION DATEINITIAL EFFECTIVE DATE

Per Order for Delivery

DESCRIPTION

Form No. DTMB-3522 (Rev. 4/2012) AUTHORITY: Act 431 of 1984 COMPLETION: Required PENALTY: Contract will not be executed unless form is filed

DEPARTMENT OF TECHNOLOGY, MANAGEMENT AND BUDGET

PROCUREMENT

P.O. BOX 30026, LANSING, MI 48909

OR

530 W. ALLEGAN, LANSING, MI 48933

NOTICE OF

CONTRACT NO. 071B4300151

between

THE STATE OF MICHIGAN

and

NAME & ADDRESS OF CONTRACTOR: PRIMARY CONTACT EMAIL

Diamond Game Enterprises Oji Nwankwo onwankwo@diamondgame.com

9340 Penfield Avenue TELEPHONE CONTRACTOR #, MAIL CODE

Chatsworth, CA 91311 818-727-1690 x224

STATE CONTACTS AGENCY NAME PHONE EMAIL

Program Manager Lottery Kathy Oviedo 517-335-5778 OviedoK@michigan.gov

Contract Administrator DTMB Melissa Sambiagio 517-284-7016 SambiagioM@michigan.gov

CONTRACT SUMMARY:

DESCRIPTION: Charitable Gaming Ticket Vending Machine

Purchase and/or lease of Charity Game Ticket Vending and Validation Machines (“Devices”); Local Administrative Systems (“Local Systems”), Central Administrative Systems (“Central Systems”), Charity Game Tickets sold through Devices (“Tickets”), Vouchers printed by Devices (“Vouchers”), paper stock used for Vouchers, and related services such as delivery, installation, repair, maintenance, and training.

INITIAL TERM EFFECTIVE DATE INITIAL EXPIRATION DATE AVAILABLE OPTIONS

5 years 9/11/2014 9/10/2019 3, 1 year options

PAYMENT TERMS F.O.B SHIPPED SHIPPED FROM

Net 30 Yes (and see ***) ALTERNATE PAYMENT OPTIONS: AVAILABLE TO MiDEAL PARTICIPANTS

P-card Direct Voucher (DV) Other YES NO

MINIMUM DELIVERY REQUIREMENTS:

See Statement of Work

MISCELLANEOUS INFORMATION:

N/A

ESTIMATED CONTRACT VALUE AT TIME OF EXECUTION: $2,500,000

AUTHORITY: Act 431 of 1984 COMPLETION: Required PENALTY: Contract will not be executed unless form is filed

DEPARTMENT OF TECHNOLOGY, MANAGEMENT AND BUDGET

PROCUREMENT

P.O. BOX 30026, LANSING, MI 48909

OR

530 W. ALLEGAN, LANSING, MI 48933

CONTRACT NO. 071B4300151

between

THE STATE OF MICHIGAN

and

NAME & ADDRESS OF CONTRACTOR: PRIMARY CONTACT EMAIL

Diamond Game Enterprises Oji Nwankwo onwankwo@diamondgame.com

9340 Penfield Avenue TELEPHONE CONTRACTOR #, MAIL CODE

Chatsworth, CA 91311 818-727-1690 x224

STATE CONTACTS AGENCY NAME PHONE EMAIL

Program Manager Lottery Kathy Oviedo 517-335-5778 OviedoK@michigan.gov

Contract Administrator DTMB Melissa Sambiagio 517-284-7016 SambiagioM@michigan.gov

CONTRACT SUMMARY:

DESCRIPTION: Charitable Gaming Ticket Vending Machine

Purchase and/or lease of Charity Game Ticket Vending and Validation Machines (“Devices”); Local Administrative Systems (“Local Systems”), Central Administrative Systems (“Central Systems”), Charity Game Tickets sold through Devices (“Tickets”), Vouchers printed by Devices (“Vouchers”), paper stock used for Vouchers, and related services such as delivery, installation, repair, maintenance, and training.

INITIAL TERM EFFECTIVE DATE INITIAL EXPIRATION DATE AVAILABLE OPTIONS

5 years 9/11/2014 9/10/2019 3, 1 year options

PAYMENT TERMS F.O.B SHIPPED SHIPPED FROM

Net 30 Yes (and see ***) ALTERNATE PAYMENT OPTIONS: AVAILABLE TO MiDEAL PARTICIPANTS

P-card Direct Voucher (DV) Other YES NO

MINIMUM DELIVERY REQUIREMENTS:

See Statement of Work

MISCELLANEOUS INFORMATION:

N/A

ESTIMATED CONTRACT VALUE AT TIME OF EXECUTION: $2,500,000

THIS IS NOT AN ORDER: This Contract Agreement is awarded on the basis of our inquiry bearing the solicitation #0071141114B0000771. Orders for purchase will be issued directly by the Michigan Lottery through the issuance of a Purchase Order Form. Orders for delivery, relocation and installation of Equipment will be in writing and delivered by U.S.

mail, facsimile, or email. No order will be placed verbally.

*** Tickets and voucher paper – shipping costs paid by State; Equipment Delivery and Relocation – standard shipping costs paid by the State

Notice of Contract #: 071B4300151

FOR THE CONTRACTOR:

Authorized Agent Signature Date James Breslo, President Diamond Game Enterprises

FOR THE STATE:

Sharon Maynard/Sourcing Director Date State of Michigan DTMB Procurement

This STANDARD CONTRACT (“Contract”) is agreed to between the State of Michigan (the “State”) and Diamond Game Enterprises (“Contractor”), a California corporation. This Contract is effective on September 11, 2014 (“Effective Date”), and unless terminated, expires on September 10, 2019.

This Contract may be renewed for up to three additional one-year periods. Renewals must be by written instrument of the parties.

The parties agree as follows:

1. Duties of Contractor. Contractor must perform the services and provide the deliverables described in this Contract (the

“Contract Activities”). An obligation to provide delivery of any commodity is considered a service and is a Contract Activity.

Contractor must furnish all labor, equipment, materials, and supplies necessary for the performance of the Contract Activities, and meet operational standards.

Contractor must: (a) perform the Contract Activities in a timely, professional, safe, and workmanlike manner consistent with standards in the trade, profession, or industry; (b) meet or exceed the performance and operational standards, and specifications of the Contract; (c) provide all Contract Activities in good quality, with no material defects; (d) not interfere with the State’s operations; (e) obtain and maintain all necessary licenses, permits or other authorizations necessary for the performance of the Contract; (f) cooperate with the State, including the State’s quality assurance personnel, and any third party to achieve the objectives of the Contract; (g) return to the State any State-furnished equipment or other resources in the same condition as when provided when no longer required for the Contract; (h) not make any media releases without prior written authorization from the State; (i) assign to the State any claims resulting from state or federal antitrust violations to the extent that those violations concern materials or services supplied by third parties toward fulfillment of the Contract; (j) comply with all State physical and IT security policies and standards which will be made available upon request; and (k) provide the State priority in performance of the Contract except as mandated by federal disaster response requirements. Any breach under this paragraph is considered a material breach.

Contractor must also: (a) be clearly identifiable while on State property by wearing identification issued by the State; and (b) clearly identify themselves whenever making contact with the State.

2. Notices. All notices and other communications required or permitted under this Contract must be in writing and will be considered given and received: (a) when verified by written receipt if sent by courier; (b) when actually received if sent by mail without verification of receipt; or (c) when verified by automated receipt or electronic logs if sent by facsimile or email.

If to State: If to Contractor:

Melissa Sambiagio

DTMB Procurement PO Box 30026 525 W. Allegan St.

Lansing, MI 48909 SambiagioM@michigan.gov 517-284-7016

James Breslo, President Diamond Game Enterprises 9340 Penfield Avenue Chatsworth, CA 91311 notices@diamondgame.com

(818) 727—1690 x216

3. Contract Administrator. The Contract Administrator for each party is the only person authorized to modify any terms and conditions of this Contract:

State: Contractor:

Melissa Sambiagio

DTMB Procurement PO Box 30026 525 W. Allegan St.

Lansing, MI 48909 SambiagioM@michigan.gov 517-284-7016

Oji Nwankwo, General Counsel Diamond Game Enterprises 9340 Penfield Avenue Chatsworth, CA 91311 onwankwo@diamondgame.com

(818) 727—1690 x224

STANDARD CONTRACT TERMS

mailto:SambiagioM@michigan.gov mailto:notices@diamondgame.com mailto:SambiagioM@michigan.gov mailto:onwankwo@diamondgame.com

4. Program Manager. The Program Manager for each party will monitor and coordinate the day-to-day activities of the Contract.

State: Contractor:

Kathie Oviedo Michigan Lottery 101 E. Hillsdale P.O. Box 30023 Lansing, MI 48909 OviedoK@michigan.gov 517-335-5778

Stacey McKinney PMO Director Diamond Game Enterprises 9340 Penfield Ave. Chatsworth, CA. 91311 smckinney@diamondgame.com 818-435-8719

5. Insurance Requirements. Contractor must maintain the insurances identified below and is responsible for all deductibles. All required insurance must: (a) protect the State from claims that may arise out of, are alleged to arise out of, or result from Contractor's or a subcontractor's performance; (b) be primary and non-contributing to any comparable liability insurance (including self-insurance) carried by the State; and (c) be provided by an company with an A.M. Best rating of "A" or better and a financial size of VII or better.

Insurance Type Additional Requirements

Commercial General Liability Insurance

Minimal Limits:

$1,000,000 Each Occurrence Limit $1,000,000 Personal & Advertising Injury Limit $2,000,000 General Aggregate Limit $2,000,000 Products/Completed Operations

Deductible Maximum:

$50,000 Each Occurrence

Contractor must have their policy: (1) endorsed to add “the State of Michigan, its departments, divisions, agencies, offices, commissions, officers, employees, and agents” as additional insureds using endorsement CG 20 10 11 85, or both CG 2010 07 04 and CG 2037 07 04; (2) include a waiver of subrogation; and (3) for a claims-made policy, provide 3 years of tail coverage.

Motor Vehicle Insurance

Minimal Limits:

$500,000 Per Occurrence

Workers' Compensation Insurance

Minimal Limits:

Coverage according to applicable laws governing work activities.

Waiver of subrogation, except where waiver is prohibited by law.

Employers Liability Insurance

Minimal Limits:

$100,000 Each Accident $100,000 Each Employee by Disease $500,000 Aggregate Disease.

If Contractor's policy contains limits higher than the minimum limits, the State is entitled to coverage to the extent of the higher limits. The minimum limits are not intended, and may not be construed to limit any liability or indemnity of Contractor to any indemnified party or other persons.

Contractor must: (a) provide insurance certificates to the Contract Administrator, containing the agreement or purchase order number, at Contract formation and within 20 calendar days of the expiration date of the applicable policies; (b) require that subcontractors maintain the required insurances contained in this Section; (c) notify the Contract Administrator within 5 business days if any insurance is cancelled; and (d) waive all rights against the State for damages covered by insurance. Failure to maintain the required insurance does not limit this waiver.

6. Reserved

7. Reserved

8. Independent Contractor. Contractor is an independent contractor and assumes all rights, obligations and liabilities set forth in this Contract. Contractor, its employees, and agents will not be considered employees of the State. No partnership or joint venture relationship is created by virtue of this Contract. Contractor, and not the State, is responsible for the payment of wages, benefits and taxes of Contractor’s employees and any subcontractors. Prior performance does not modify Contractor’s status as an independent contractor.

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9. Subcontracting. Contractor may not delegate any of its obligations under the Contract without the prior written approval of the

State. Contractor must notify the State at least 90 calendar days before the proposed delegation, and provide the State any information it requests to determine whether the delegation is in its best interest. If approved, Contractor must: (a) be the sole point of contact regarding all contractual matters, including payment and charges for all Contract Activities; (b) make all payments to the subcontractor; and (c) incorporate the terms and conditions contained in this Contract in any subcontract with a subcontractor. Contractor remains responsible for the completion of the Contract Activities, compliance with the terms of this Contract, and the acts and omissions of the subcontractor. The State, in its sole discretion, may require the replacement of any subcontractor.

10. Staffing. The Contract Administrator may require Contractor to remove or reassign personnel by providing good-faith reasons in a notice to Contractor.

11. Background Checks. Upon request, Contractor must perform background checks on all employees and subcontractors and its employees prior to their assignment. The scope is at the discretion of the State and documentation must be provided as requested. Contractor is responsible for all costs associated with the requested background checks. The State, in its sole discretion, may also perform background checks.

12. Assignment. Contractor may not assign this Contract, to any other party, without the prior approval of the State. Upon notice to

Contractor, the State, in its sole discretion, may assign in whole or in part, its rights or responsibilities under this Contract to any other party. If the State determines that a novation of the Contract to a third party is necessary, Contractor will agree to the novation, provide all necessary documentation and signatures, and continue to perform, with the third party, its obligations under the Contract.

13. Change of Control. Contractor will notify, at least 90 calendar days before the effective date, the State of a change in

Contractor’s organizational structure or ownership. For purposes of this Contract, a change in control means any of the following:

(a) a sale of more than 50% of Contractor’s stock; (b) a sale of substantially all of Contractor’s assets; (c) a change in a majority of Contractor’s board members; (d) consummation of a merger or consolidation of Contractor with any other entity; (e) a change in ownership through a transaction or series of transactions; (f) or the Board (or the stockholders) approves a plan of complete liquidation. A change of control does not include any consolidation or merger effected exclusively to change the domicile of Contractor, or any transaction or series of transactions principally for bona fide equity financing purposes.

In the event of a change of control, Contractor must require the successor to assume this Contract and all of its obligations under this Contract.

14. Ordering. Contractor is not authorized to begin performance until receipt of an authorizing document as identified in Attachment

A, Statement of Work.

15. Acceptance. Contract Activities are subject to inspection and testing by the State within 30 calendar days of the State’s receipt of them (“State Review Period”), unless otherwise provided in Attachment A. If the Contract Activities are not fully accepted by the State, the State will notify Contractor by the end of the State Review Period that either: (a) the Contract Activities are accepted, but noted deficiencies must be corrected; or (b) the Contract Activities are rejected. If the State finds material deficiencies, it may: (i) reject the Contract Activities without performing any further inspections; (ii) demand performance at no additional cost; or (iii) terminate this Contract in accordance with Section 16, Delivery.

Within 10 business days from the date of Contractor’s receipt of notification of acceptance with deficiencies or rejection of any Contract Activities, Contractor must cure, at no additional cost, the deficiency and deliver unequivocally acceptable Contract Activities to the State. If acceptance with deficiencies or rejection of the Contract Activities impacts the content or delivery of other non-completed Contract Activities, the parties’ respective Program Managers must determine an agreed to number of days for re-submission that minimizes the overall impact to the Contract. However, nothing herein affects, alters, or relieves Contractor of its obligations to correct deficiencies in accordance with the time response standards set forth in this Contract.

If Contractor is unable or refuses to correct the deficiency, within the time response standards set forth in this Contract, the State may cancel the order in whole or in part. The State, or a third party identified by the State, may perform the Contract Activities and recover the difference between the cost to cure and the Contract price plus an additional 10% administrative fee.

16. Delivery. Contractor must deliver all Contract Activities F.O.B. destination, within the State premises with transportation and handling charges paid by Contractor, unless otherwise specified in Attachment A. All containers and packaging becomes the State’s exclusive property upon acceptance.

17. Risk of Loss. Until final acceptance, risk of loss or damage remains with Contractor. Contractor is responsible for filing, processing, and collecting all damage claims. The State will record and report to Contractor any evidence of visible damage. If the State rejects the Contract Activities, Contractor must remove them from the premises within 10 days after notification of rejection.

The risk of loss of rejected or non-conforming Contract Activities remains with Contractor. Rejected Contract Activities not removed by Contractor within 10 days will be deemed abandoned by Contractor, and the State will have the right to dispose of it as its own property. Contractor must reimburse the State for costs and expenses incurred in storing or effecting removal or disposition of rejected Contract Activities.

18. Terms of Payment. Invoices must conform to the requirements communicated from time-to-time by the State. All undisputed amounts are payable within 30 days of the State’s receipt as set forth in Attachment A. Contractor may only charge for Contract Activities performed as specified in Attachment A. Invoices must include an itemized statement of all charges. The State is exempt from State sales tax for direct purchases and may be exempt from federal excise tax, if Contract Activities purchased under the Contract are for the State’s exclusive use.

The State has the right to withhold payment of any disputed amounts until the parties agree as to the validity of the disputed amount. The State will notify Contractor of any dispute within a reasonable time. Payment by the State will not constitute a waiver of any rights as to Contractor’s continuing obligations, including claims for deficiencies or substandard Contract Activities.

Contractor’s acceptance of final payment by the State constitutes a waiver of all claims by Contractor against the State for payment under this Contract, other than those claims previously filed in writing on a timely basis and still disputed.

The State will only disburse payments under this Contract through Electronic Funds Transfer (EFT). Contractor must register with the State at http://www.michigan.gov/cpexpress to receive electronic fund transfer payments. If Contractor does not register, the State is not liable for failure to provide payment.

The State may set-off, from any payment due to Contractor, any amount owed by Contractor.

19. Liquidated Damages. Liquidated damages, if applicable, will be assessed in accordance with Section 6 of Attachment A.

20. Stop Work Order. The State may suspend any or all activities under the Contract at any time. The State will provide Contractor a written stop work order detailing the suspension. Contractor must comply with the stop work order upon receipt. Within 90 days, or any longer period agreed to by Contractor, the State will either: (a) issue a notice authorizing Contractor to resume work, or (b) terminate the Contract or purchase order. The State will not pay for Contract Activities; Contractor’s lost profits; or any additional compensation during a stop work period.

21. Termination for Cause. The State may terminate this Contract for cause, in whole or in part, if Contractor, as determined by the

State: (a) materially endangers the value, integrity, or security of any location, data, or personnel; (b) becomes insolvent, petitions for bankruptcy court proceedings, or has an involuntary bankruptcy proceeding filed against it by any creditor; (c) engages in any conduct that may expose the State to liability; (d) breaches any of its material duties or obligations; or (e) fails to cure a material breach within the time stated in a notice of breach. Any reference to specific breaches being material breaches within this Contract will not be construed to mean that other breaches are not material.

If the State terminates this Contract under this Section, the State will issue a termination notice specifying whether Contractor must: (a) cease performance immediately, or (b) continue to perform for a specified period.

If the State, in its sole discretion, determines that a breach under this section is curable, then the State will provide the Contractor with written notice of the breach and a time period of not less than 30 days to cure the breach. Providing an opportunity to cure a breach on one occasion does not obligate the State to do so for any similar successive or repeated breaches, regardless of whether they are capable of being cured. If the State determines, in its sole discretion, that a breach: poses an imminent threat to the health or safety of any person; violates any federal, state, or local law; or poses imminent risk of loss, damage, or destruction to any real or personal property, the State may immediately terminate the Contract in whole or in part without any notice or opportunity to cure.

The State will only pay for amounts due to Contractor for Contract Activities accepted by the State on or before the date of termination, subject to the State’s right to set-off any amounts owed by the Contractor for the State’s reasonable costs in terminating this Contract. The Contractor must pay all reasonable costs incurred by the State in terminating this Contract for cause, including administrative costs, attorneys’ fees, court costs, transition costs and any costs the State incurs to procure the Contract Activities from other sources.

If it is later determined that Contractor was not in breach of the Contract, the termination will be deemed to have been a Termination for Convenience, effective as of the same date, and the rights and obligations of the parties will be limited to those provided in that Section.

22. Termination for Convenience. Subject only to the Lease Cancellation Fee set forth in Section 5.01.04 of Attachment A, the State may immediately terminate this Contract in whole or in part without penalty and for any reason including but not limited to appropriation or budget shortfalls. The termination notice will specify whether Contractor must: (a) cease performance of the Contract Activities immediately, or (b) continue to perform the Contract Activities in accordance with Section 23, Transition Responsibilities. The State will pay all reasonable costs, as determined by the State, for State approved “Transition Responsibilities.”

23. Transition Responsibilities. Upon termination or expiration of this Contract for any reason, Contractor must, for a reasonable period of time specified by the State (not to exceed 90 days), provide all reasonable transition assistance requested by the State, to allow for the expired or terminated portion of the Contract Activities to continue without interruption or adverse effect, and to facilitate the orderly transfer of such Contract Activities to the State or its designees. Such transition assistance may include but is http://www.michigan.gov/cpexpress not limited to: (a) continuing to perform the Contract Activities under the established Contract rates; (b) taking all reasonable and necessary measures to transition performance of the work, including all applicable Contract Activities, training, equipment, software, leases, reports and other documentation, to the State or the State’s designee; (c) taking all necessary and appropriate steps, or such other action as the State may direct, to preserve, maintain, protect, or return to the State all materials, data, property, and confidential information provided directly or indirectly to Contractor by any entity, agent, vendor, or employee of the State; (d) transferring title in and delivering to the State, at the State’s discretion, all completed or partially completed deliverables prepared under this Contract as of the Contract termination date; and (e) preparing an accurate accounting from which the State and Contractor may reconcile all outstanding accounts (“Transition Responsibilities”). This Contract will automatically be extended through the end of the transition period.

Contractor will not be required, as part of any Transition Responsibilities, to disclose to any third party any confidential or proprietary information of Contractor, and (ii) Contractor will not be required to transfer title to any deliverables that are being leased from Contractor (title of which will, at all times, remain solely with Contractor).

24. General Indemnification. Contractor must defend, indemnify and hold the State, its departments, divisions, agencies, offices, commissions, officers, and its employees harmless, without limitation, from and against any and all actions, claims, losses, liabilities, damages, costs, attorney fees, and expenses (including those required to establish the right to indemnification), arising out of or relating to: (a) any breach by Contractor (or any of its employees, agents, subcontractors, or by anyone else for whose acts any of them may be liable) of any of the promises, agreements, representations, or warranties contained in this Contract; (b) any bodily injury, death, or damage to real or tangible personal property occurring wholly or in part due to action or inaction by Contractor (or any of its employees, agents, subcontractors, or by anyone else for whose acts any of them may be liable); and (c) any acts or omissions of Contractor (or any of its employees, agents, subcontractors, or by anyone else for whose acts any of them may be liable).

The State will notify Contractor in writing if indemnification is sought; however, failure to do so will not relieve Contractor, except to the extent that Contractor is materially prejudiced. Contractor must, to the satisfaction of the State, demonstrate its financial ability to carry out these obligations.

The State is entitled to: (a) regular updates on proceeding status; (b) participate in the defense of the proceeding; (c) employ its own counsel; and (d) retain control of the defense if the State deems necessary. Contractor will not, without the State’s written consent (not to be unreasonably withheld), settle, compromise, or consent to the entry of any judgment in or otherwise seek to terminate any claim, action, or proceeding. To the extent that any State employee, official, or law may be involved or challenged, the State may, at its own expense, control the defense of that portion of the claim.

Any litigation activity on behalf of the State, or any of its subdivisions under this Section and Section 25, Intellectual Property Indemnification, must be coordinated with the Department of Attorney General. An attorney designated to represent the State may not do so until approved by the Michigan Attorney General and appointed as a Special Assistant Attorney General.

25. Intellectual Property Indemnification. Contractor must defend, indemnify and hold the State, its departments, divisions, agencies, offices, commissions, officers, and its employees harmless, without limitation, from and against any claims arising out of or relating to copyright, patent, trademark, or trade secret infringement. Notwithstanding the foregoing, Contractor has no obligation to pay any costs, damages or attorneys’ fees related to any infringement claim that arises out of: (a) compliance with designs, plans, or specifications furnished by or on behalf of the State as to any piece of equipment, software, commodity, or service; (b) use of the equipment, software, commodity or service in a manner for which the same was neither designed nor contemplated; or (c) the combination, operation or use of the equipment, software or commodity with equipment, software or commodities not supplied by Contractor under this Contract.

If, in either party’s opinion, any piece of equipment, software, commodity or service supplied by Contractor or its subcontractors, or its operation, use or reproduction, is likely to become the subject of a copyright, patent, trademark, or trade secret infringement claim, Contractor must, at its expense: (a) procure for the State the right to continue using the equipment, software, commodity, or service, or if this option is not reasonably available to Contractor, (b) replace or modify the same so that it becomes non-infringing;

or (c) accept its return by the State with appropriate credits to the State against Contractor’s charges and reimburse the State for any losses or costs incurred as a consequence of the State ceasing its use and returning it.

26. Limitation of Liability. Neither party shall be liable for consequential, incidental, indirect, or special damages, regardless of the nature of the action.

27. Disclosure of Litigation, or Other Proceeding. Contractor must notify the State within 14 calendar days of receiving notice of any litigation, investigation, arbitration, or other proceeding (collectively, “Proceeding”) involving Contractor, a subcontractor, or an officer or director of Contractor or subcontractor, that arises during the term of the Contract, including: (a) a criminal Proceeding;

(b) a parole or probation Proceeding; (c) a Proceeding under the Sarbanes-Oxley Act; (d) a civil Proceeding involving: (1) a claim that might reasonably be expected to adversely affect Contractor’s viability or financial stability; or (2) a governmental or public entity’s claim or written allegation of fraud; or (e) a Proceeding involving any license that Contractor is required to have to perform under this Contract.

28. State of Michigan Data. All data and information provided to Contractor by or on behalf of the State, and all data and information derived therefrom, is the exclusive property of the State (“State Data”); this definition is to be construed as broadly as possible.

Upon request, Contractor must provide to the State, or a third party designated by the State, all State Data within 10 calendar days of the request and in the format requested by the State. Contractor will assume all costs incurred in compiling and supplying State Data. No State Data may be used for any marketing purposes.

29. Confidentiality. All information of the parties, except information that is; (a) disclosable under the Michigan Freedom Of

Information Act (FOIA); (b) otherwise available to the public without breach of this Contract; (c) released in…