Sample Business Contracts

Distribution Agreement - Autotote Systems Inc. and Elettronica Ingegneria Sistemi

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                               FEBRUARY 19, 1998


Autotote Systems, Inc., a corporation with its main offices at 100 Bellevue
Road, P.O. Box 6009, Newark, DE 19714 (hereinafter "Autotote"), duly represented
by its Vice President, Richard WEIL,


Elettronica Ingegneria Sistemi,  a corporation with its main offices at Via
Tiburtina Valeria Km. 13,700, 00131 Rome, Italy (hereinafter "EIS"), duly
represented by its General Manager and Managing Director, Vincenzo ZANNI,

a)   Autotote is engaged in the design, development, manufacture and sale of
     terminal and computer systems;
b)   EIS is active in Italy in the field of computer hardware and software
     systems and has been appointed as exclusive distributor of Autotote's
     products in Italy;
c)   Autotote and EIS have agreed about the particular conditions of the
     distribution of each of Autotote's products in Italy;
d)   Sisal Sport Italia Spa (hereinafter "Sisal") is active in Italy in the
     field of betting and is looking for a new, updated and effective computer
     hardware and software system;
e)   Autotote and Sisal have agreed that Autotote shall assist Sisal in the
     development of a new, effective terminal and computer system. EIS agrees

     that Autotote will be permitted to supply the prototypes and 200 pre-
     production Terminals directly to Sisal. The production Terminals will be
     supplied to Sisal through EIS.
f)   Sisal and EIS have agreed, in a separate document, to the terms and
     conditions of the supply of the Terminals from EIS to Sisal, a copy of
     which will be provided by EIS to Autotote;
g)   Autotote and EIS, in this document, agree to all the particular terms and
     conditions of the supply of such  Terminals from Autotote to EIS;

Now therefore, in consideration of the mutual covenants and agreements set forth
herein, Autotote and EIS agree as follows:


1.1. a)          EIS hereby orders the manufacture and supply of nineteen
                 thousand eight hundred (19,800) computer hardware and
                 firmware systems (as understood in the trade), hereinafter
                 defined as Terminal, having the features, characteristics and
                 functions described in Exhibit 1. These Terminals are to be
                 supplied to Sisal and Autotote agrees to manufacture, sell
                 and deliver said Terminals through EIS.

1.1. b)          Notwithstanding the above, EIS shall have the one time
                 option, based on the final decision of Sisal to be
                 communicated in writing to Autotote and EIS, to confirm to
                 Autotote, after 7,000 Terminals have been supplied by
                 Autotote, the order for the precise amount of Terminals, over
                 9,800, to be manufactured by Autotote.

1.2.             Autotote has granted to Sisal a perpetual, irrevocable, non
                 exclusive, apart from what is provided in art. 7, royalty
                 free license to use the Autotote "Software" (defined in
                 Exhibit 1)

                 and Autotote firmware solely in connection with the Terminals.
                 Autotote or EIS shall provide Sisal with any upgrades to said
                 Software made available to its customers generally. No license
                 has been granted with respect to Autotote's source code for the
                 Software. Autotote or EIS, if the parties agree, shall supply
                 software enhancements, training and support .

1.3.             Autotote has sublicensed to Sisal Autotote's license interest
                 in, under and to each and every third party Software.

1.4.             EIS has received a copy of the agreement between Autotote and
                 Sisal and agrees to perform all obligations of EIS defined

The parties shall exchange all information necessary in order to facilitate the
     manufacture of the Terminals and shall keep strictly confidential all

3     TERMS
Autotote shall deliver the Terminals ordered by EIS, as per art. 1.1, within the
     following dates, at the Autotote's factory indicated:

     DATE                                   QUANTITY        FACTORY
        a)    July 10 - July 31, 1998        100/week           Ireland
        b)    from August 7, 1998           *200/week           Ireland

*         it is agreed that if Sisal wishes to increase or decrease the weekly
          quantity by no more than 20 percent, Sisal will inform Autotote and
          EIS, and

          Autotote will comply within fifteen (15) days upon receiving such
          request in writing.

4     PRICES

 4.1 EIS shall pay as the price for the supply of the Terminals ordered as per
art. 1.1, the following amounts of US $ per Terminal:

     -  in case EIS orders 9,800 Terminals: US $ 3,250,.00;
     - in case EIS orders 12,500 Terminals: US $ 3,092.50 on Terminals between
          9,801 and 12,500;
     - in case EIS orders 15,000 Terminals:  US $ 3,065.00 on Terminals between
          9,801 and 15,000;
     - in case EIS orders 17,500 Terminals: US $ 3,037.50 on Terminal between
          9,801 and 17,500;
     - in case EIS orders 19,800 Terminals: US $ 3,010 on Terminal between 9,801
          and 19,800.

4.2   EIS shall pay the price provided in art. 4.1 as  follows:

      *   US $ 3,000,000.00 within 15 days from the execution of the present
          Agreement; Sisal may elect to pay directly to Autotote said deposit on
          behalf of EIS;

      *   the remainder of the price for the first 9,800 Terminals, equal,
          taking into consideration the advance payment provided in the previous
          point, to the price provided in art. 4.1 less 306 US $ per Terminal
          (save more precise adjustement), 60 days after the shipment of
          specific Terminals from Autotote's factory;

       *  after 60 days from the communication of Sisal provided in art. 1.1.
          b), the 10% of the whole compensation for the Terminals ordered over
          9,800, calculated taking into account the prices provided in art.
          4.1.; Sisal may elect to pay directly to Autotote said deposit on
          behalf of EIS;

        * the remainder of the price for the further Terminals ordered over
          9,800, 60 days after the shipment of specific Terminals from
          Autotote's factory. 4.3 Autotote retains a right of property, as
          provided in art. 1523 of the Italian Civil Code, in the Terminals
          until the full price thereof is paid by EIS.

4.3   Autotote retains a right of property, as provided in art. 1523 of the
      Italian Civil Code, in the Terminals until the full price thereof is paid
      by EIS.

4.4   Prices do not include any taxes or duties, now or hereafter enacted,
      applicable to the Terminals or to this transaction, all of which taxes and
      duties shall be the responsibility of EIS, except for Autotote's franchise
      taxes and Autotote's income taxes.

4.5   Liability for loss or damages shall pass to EIS when Autotote shall put
      the Terminals into possession of a carrier for shipment to EIS, the
      carrier beeing deemed to be an agent for EIS.

Accordingly, freight and insurance for the shipment shall be the
      responsibility of  EIS.

4.6   EIS and Sisal shall agree about the final price and other conditions of
      the supply of Terminals to Sisal by EIS.


EIS is informed that, subject to the requirements of law and/or any applicable
     regulatory review ("Government Approval"), Autotote shall, in the future,
     not supply Terminals in Italy  or destined to Italy  to any third party,
     unless Sisal agrees. This provision does not apply to such firmware and/or
     software which Autotote has currently supplied in Italy.


6.1   Autotote shall be the sole owner of the intellectual property rights on
      Terminal. EIS is informed that Sisal is entitled to use the ideas, patents
      and other rights embodied in the Terminal and has the right, as owner of
      the Terminals bought from Autotote or from EIS, to use, adapt and make
      available in Italy the Terminals

      supplied by Autotote or by EIS and to sell them after use, also in other
      countries. This clause shall be amended to comply with any required
      Government Approval.

6.2   EIS is informed that Sisal shall remain the sole owner of the Trademarks
      in Italy. Autotote shall have the right to approve the Trademarks, which
      approval shall not be denied unless for good and serious reasons.

6.3   If EIS, for any reason, is not able to perform under the Agreement, then
      Autotote may deal directly with Sisal. If Autotote is unable, for any
      reason, to perform to Sisal's satisfaction, Sisal can terminate the
      Agreement and demand that Autotote provide to Sisal, on a strictly
      confidential basis, with all the documents, instructions, schematics,
      necessary in order to allow Sisal to manufacture such Terminals.


Autotote shall deliver the Terminals ordered by EIS  strictly complying with a
     three (3) months rolling forecasts of shipments to be provided by Sisal in
     accordance to the terms provided in art.1.

All parties shall strictly comply with such shipment requirements.  Autotote
     shall not be liable for any delay in performance or for non-performance, in
     whole or in part, caused by the occurrence of any contingency beyond the
     control of Autotote, including, but not limited to, acts of God.


EIS is informed that Sisal shall perform inspection and final acceptance testing
     within 30 days after receipt of shipment. If, within 30 days after receipt
     of  shipment, Autotote does not receive notification of non-conformity,
     then said shipment shall be deemed to have been accepted. Sisal has the
     option to substitute for the above mentioned procedure, a procedure where
     Sisal, upon reasonable notice, shall be allowed to conduct

     acceptance testing at Autotote's plant for a period not exceeding one (1)


9.1   Autotote warrants all Terminals against defects in material and
      workmanship under normal use and service for a period of thirteen (13)
      months from the date of shipment, provided, however, that Autotote's
      liability under said warranty shall be limited, at Autotote's cost, to,
      within three (3) weeks of determination of entitlement to a warranty
      remedy, replacing or commencing repair, at Autotote's option, Terminals or
      parts thereof (including subassemblies) which shall be disclosed to be
      defective in the form in which it was shipped by Autotote, prior to its
      use in further manufacture or assembly. This warranty is applicable only
      if Autotote receives written notice of such defect mailed to its office
      within said thirteen (13) month period and is given adequate opportunity
      to verify the existence of a claimed defect. This warranty shall not apply
      to Terminals of parts thereof that have been (a) subjected to misuse,
      neglect, accident, damage in transit, abuse or unusual hazard; (b)
      repaired, altered or modified by anyone other than Autotote unless EIS or
      Sisal are authorised by Autotote to make repair; (c) used in violation of
      instructions furnished by Autotote.

9.2  Where Autotote, following acceptance of the working prototype, fails to
     make delivery or repudiates or breaches any other material provisions of
     this agreement (other than the warranty against patent infringement),
     including, without limitation, Autotote's obligations with respect to
     nonconforming items, Autotote's liability to both Sisal and EIS,
     collectively, shall not exceed the amount of U.S.$3,300.00 per Terminal.
     The foregoing are in lieu of all warranties, express, implied or statutory,

     including, but not limited to, any implied warranty of merchantability or
     fitness for a particular purpose and any other warranty obligation on the
     part of Autotote. Autotote's warranties
     extend to EIS or Sisal and to no other person or entity. In no event will
     Autotote be liable to anyone for incidental or consequential damages for
     breach of any of the provisions of this Agreement, such excluded damages to
     include, without limitation, loss of goodwill, loss of profits or loss of


10.1  Autotote shall defend any suit or proceeding brought against EIS or Sisal
      to the extent that such suit or proceeding is based on a claim that
      Terminals manufactured and sold by Autotote constitute direct infringement
      on any valid Italian patent and Autotote shall pay all damages and costs
      awarded by final judgement (from which no appeal may be taken) against EIS
      or Sisal, on condition that Autotote (i) shall be promptly informed and
      furnished a copy of each communication, notice or other action relating to
      the alleged infringement, (ii) shall be given authority, information and
      assistance necessary to defend or settle such suit or proceeding, (iii)
      shall be in control of the defense (including the right to select
      counsel), and shall have the sole right to compromise and settle such suit
      or proceeding. Autotote shall not be obligated to defend or be liable for
      costs and damages if the infringement arises out from a combination with,
      an addition to, or modification of, the Terminals after delivery by
      Autotote, or from a misuse of the Terminals, or any part thereof.

10.2  If any Terminal manufactured and supplied by Autotote shall be held to
      directly infringe any valid Italian patent and Sisal or EIS are enjoined
      from using the same, or if Autotote believes such

      infringement is likely, Autotote shall, at its option and at its expense,
      have the right: (i) to procure for Sisal or EIS the right to use such
      Terminals free of liability for patent infringement, or (ii) to replace
      (or modify) such Terminals with a non-infringing substitute otherwise
      complying substantially with all the requirements provided by this
      agreement, or (iii), if (i) and (ii) are not reasonably available, upon
      return of the goods, refund the purchase price and the transportation cost
      of such Terminals.

10.3  The foregoing states the sole and exclusive liability of Autotote hereto
      for infringement of patents, whether direct of contributory, and is in
      lieu of all warranties, express, implied or statutory in regard thereto.

10.4  Autotote represents that it conducts its business operations so as not to
      infringe upon any third party proprietary rights.


EIS is informed that, with reference to the provisions of arts. 7, 8, 9, 10, 15,
     Autotote shall be directly responsible to Sisal  for all the obligations
     and warranties provided in such articles, including for the Terminals
     supplied to Sisal by EIS.

EIS shall be responsible to Autotote for all the violations of its obligations
     provided in this Agreement or the violation of EIS' obligations described
     in the General Agreement of even date herewith.


Neither the execution of this agreement and the performance by the Parties of
     their obligations, nor the use of the Terminals will violate, conflict
     with, result in any breach of, or constitute a default (or an event which,
     with notice or lapse of time or both, would constitute a default) under any
     contract or judgement to which Autotote or EIS are  party or by which it is

     bound, or violate any applicable law, statute, rule, ordinance or
     regulation of any Governmental Body.

Each party specifically acknowledges that the other party is subject to the
     gaming and licensing requirements of various jurisdictions and is obliged
     to take reasonable efforts to determine the suitability of its business
     associates. Each party agrees to cooperate fully with the other party by
     providing it with any information, of whatever nature, that the other party
     deems necessary or appropriate in assuring itself that the party furnishing
     information possesses the good character,  honesty, integrity and
     reputation applicable to those engaged in the gaming industry and
     specifically represents that there is nothing in each party's background,
     history, or reputation that would be deemed unsuitable under the standards
     applicable to the gaming industry. This agreement is subject to the
     approval  of Autotote Corporation's Corporate  Compliance Committee and
     EIS's Compliance Committee or equivalent body. If, during  the term of the
     agreement, a party is notified by any regulatory agency that the conduct of
     business with the other party will jeopardize the first party's  license or
     ability to be licensed or if a party concludes, on the basis of serious
     evidence,  that the other party fails to meet the above criteria, this
     agreement shall terminate upon written notice by the complaining party.


14.1  Except as specifically provided in this art.14, this agreement shall not
      be terminated by EIS  without the prior written consent of Autotote.

14.2  Autotote may, by written notice to EIS, terminate this agreement if EIS
      does not conform to the payment terms

      hereunder. EIS shall have thirty (30) days to cure any default hereunder.

14.3  In case of termination of this agreement, Autotote will directly supply
      Sisal with the Terminals requested by Sisal from EIS.


All notices or communications required by the provisions of this agreement or
     desired to be given thereunder shall be in writing and given by registered
     mail, return receipt requested to the addreess stated above or such other
     duly notified address.


Autotote or EIS shall not assign this agreement or any portion of this
     agreement, or any interest hereunder, to any third party, except to one of
     their affiliates, to be considered as corporation or other business entity
     controlling, controlled or under common control of a party, without the
     advance written consent of the other Party.


This agreement constitutes the final written expression of all  terms of the
     agreement relating to the transactions described herein and a complete and
     exclusive statement of those terms.  This agreement supersedes all previous
     communications, representations, agreements, promises or statements, either
     oral or written, with respect to such transactions and no communications,
     representations, agreements promises or statements of any kind made by any
     representative of  the Parties which are not stated herein, shall be
     binding on a Party.  No addition to or modificaton of any provision of this
     agreement will be binding unless made in writing and signed by an
     authorized representative. No course of dealing

     or usage of trade or course of performance will be deemed relevant to
     explain or supplement any term expressed in this agreement.

This agreement shall be governed by the Italian Law.


19.1  All disputes between the Parties arising out of or in relation to this
      agreement (including any questions as to the validity and enforceability
      of this arbitration clause), shall be exclusively and finally resolved
      through arbitration in compliance with the law and in accordance with the
      Arbitration Rules of the International Chamber of Commerce by three
      arbitrators, the first of whom shall be appointed by the Party initiating
      the arbitration proceedings simultaneously with its demand of arbitration,
      the second of whom shall be appointed by the other Party within 15
      (fifteen) days from the date on which it received notice of the demand for
      arbitration, and the third of whom (who shall act as Chairman of the
      Arbitration Panel) will be designated by agreement of the first two
      arbitrators within 20 (twenty) days from the appointment of the second
      arbitrator or, falling such agreement, by the Court of Arbitration of the
      International Chamber of Commerce of Paris acting as appointing authority
      for purposes of such Rules. Such Court shall also designate the second
      arbitrator (or any arbitrator who may die, resign, or otherwise cease to
      be an arbitrator) in the same manner, if the party required to make such
      designation does not do so within the period indicated.

19.2  The arbitration proceedings shall take place in Paris, France, and shall
      be conducted in the English language.

19.3  The expenses of the arbitration proceedings shall be borne by the Parties
      in accordance with the determination of the Arbitration Panel.

      EIS agrees that this agreement is not in violation of any current
     agreement between EIS and Autotote.

IN WITNESS WHEREOF, the Parties hereto have caused this agreement to be executed
by their duly empowered representatives as follows, on February 19, 1998.

Autotote Systems, Inc.      Elettronica Ingegneria Sistemi

By :  _______________       By:  __________________
Name:  Richard M.WEIL       Name:  Vincenzo ZANNI
Title:  Vice President      Title: General Manager
                                     & Managing Director