Sample Business Contracts

General Agreement - Autotote Systems Inc. and Sisal Sport Italia SpA

Sponsored Links

                               GENERAL AGREEMENT

                               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,
Sisal Sport Italia SpA, a corporation with its main offices at 6 Via Paleocapa,
20121 Milano, Italy (hereinafter "Sisal"), duly represented by its Managing
Director, Mr. Giorgio SANDI,


*  Autotote is engaged in the design, development, manufacture and sale of
   terminal and computer systems;

*  Sisal is active in Italy in the field of betting and is looking for a new,
   updated and effective computer hardware and software system;

*  Autotote has agreed to assist Sisal in the development of a new computer
   hardware and software system, in the manufacture of the entire Terminal
   requirements of Sisal and in directly suppling to Sisal prototypes and a pre-
   production amount of such equipment;

*  Autotote and Sisal have agreed that a larger, production amount of such
   equipment shall be supplied to Sisal by the exclusive distributor in Italy of
   Autotote's products, Elettronica Ingegneria Sistemi SpA (hereinafter "EIS");

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

-  -----------
As used in this Agreement, the following capitalized terms shall have the
     meanings set forth below:
        2.1 "Affiliate" of any party shall mean any corporation or other
             business entity controlling, controlled or under common control
             with such party;
        2.2 "Agreement" shall mean this Agreement and all Exhibits hereto;
        2.3 "Business" shall mean the business, operations and activities of
             Sisal relating to the field of betting;
        2.4 "Information" shall mean all information regarding the know-how of
             Autotote in computer hardware and software systems and the
             requirements, needs, activities, organization, and programs of
             Sisal related to the Business;
        2.5 "System" shall mean equipment and related software and/or firmware;
        2.6 "Intellectual Property Rights" shall mean all the rights for the
             complete and absolute ownership of the project, ideas and patents
             related to the Terminal (including prototypes);
        2.7 "Terminal" shall mean the computer hardware, to be utilized for the
             exploitation of the Business, having the main features,
             characteristics and functions listed in Exhibit 1 of the Agreement;
             the Terminal shall consist of hardware and firmware (as understood
             in the trade) as described in Exhibit 1;

        2.8 "Territory" shall mean the Republic of Italy, San Marino and
             Vatican State;
        2.9 "Trademarks" shall mean the trademarks developed by Sisal and
             registered in Italy by Sisal to distinguish the Terminals used in
             the Territory.

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

2.1.a.          Subject to the terms and conditions of this Agreement,
                Autotote shall develop and manufacture for Sisal five (5)
                laboratory prototypes of the Terminal and one (1) working
                prototype in final assembly form. The laboratory prototype
                shall perform the appropriate functions (except the scanner
                shall be 3.25 inches wide without printer) and shall not be
                in final assembly form. Autotote will own the Intellectual
                Property Rights to all said prototypes.
2.1.b.          The working prototype of the Terminal  shall be deemed
                accepted by Sisal if said working prototype performs all
                the material functions and has the features, charateristics
                and  functions  described in Exhibit 1.
2.2.            Autotote grants to Sisal the right to use the ideas, patents and
                other rights embodied in the Terminal. The Terminals, except for
                the pre-production amount, shall be supplied to Sisal by the
                exclusive distributor in Italy of Autotote's products, EIS.
                Sisal shall have the rights, as owner of the Terminals bought
                from Autotote or EIS, to use, adapt and make available such
                Terminals for the exploitation of the Business in the Territory
                and to sell them also in other countries.
2.3.            Autotote grants to Sisal hereby 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 warrants that Sisal shall be provided with any upgrades
                to said Software made available to its customers generally. No
                license is granted with respect to Autotote's source code for
                the Software. Autotote, if the parties agree, shall have Sisal
                supplied with software enhancements, training and support.
2.4.            Autotote sublicenses to Sisal Autotote's license interest
                in, under and to each and every third party Software, which
                sublicense shall be subject to the terms hereof.
2.5.            Sisal, prior to acceptance of the working prototype and of
                this date, hereby orders the manufacture and supply of two
                hundred (200) pre-production Terminals, having the
                features, characteristics and functions described in
                Exhibit 1, and Autotote agrees to manufacture and directly
                supply and deliver the said amount of Terminals to Sisal.
                Sisal shall directly order to EIS the supply of nineteen
                thousand eight hundred (19,800) Terminals and Autotote
                shall manufacture and make available such Terminals to
                Sisal, through EIS. Autotote shall be directly responsible
                to Sisal for the obligations and warranties for the entire
                twenty thousand (20,000) Terminals, as per the provisions
                of this Agreement. Sisal shall have on all the Terminals
                supplied by Autotote or by EIS all of the rights provided
                in this art. 2.
                Notwithstanding what is provided in this art. 2.5., Sisal
                shall have the one-time option, after 7,000 Terminals have
                been supplied by Autotote, to confirm, by written notice to
                Autotote, the order for the precise amount of Terminals,
                over 10,000, to be manufactured by Autotote and supplied
                through EIS.

           2.6  Sisal will provide Autotote with a copy of Sisal's
                agreement with EIS.

--  -------------------------------
The parties shall exchange all Information necessary in order to make possible
     and facilitate the development of the prototypes of the Terminal and the
     manufacture of the Terminals and shall keep strictly confidential all

--  -----
           4.1.  Autotote shall develop and make available for Sisal a quantity
                 of five (5) laboratory prototypes of the Terminal by February
                 23, 1998, based on the foam model and the design of the
                 Terminal already approved by Sisal.
           4.2.  Autotote shall make available to Sisal one (1) working
                 prototype of the Terminal by May 1, 1998.
           4.3.  The Parties shall complete the check provided in art. 2.1.b
                 and execute a confirmatory acknowledgement within 10 days
                 from the delivery of the working prototype of the Terminal
                 to Sisal. Such approval notification shall not be
                 unreasonably withheld by Sisal.
           4.4.  In case of non-acceptance of said prototype, Autotote shall
                 be allowed to remedy the defects within 10 days from the
                 notification of Sisal and Sisal shall check if the
                 prototype, after the remedy, is acceptable within 10 days
                 from the delivery of the mended working protype.
           4.5.  Autotote shall deliver the pre-production Terminals ordered
                 by Sisal, as per art. 2.5, within the following date, at the
                 Autotote's factory indicated:

              DATE                              QUANTITY           FACTORY
              .  May 29, 1998                       200            Delaware

              It is agreed that the Terminals to be supplied by EIS shall
              be delivered by Autotote to EIS within the following dates,
              at the Autotote's factory indicated:

              DATE                              QUANTITY            FACTORY
              .   July 10 - July 31, 1998         100/week          Ireland
              .   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 Autotote and
              EIS will comply within fifteen (15) days upon receiving such
              request in writing.

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

        5.1.  To compensate the activity of Autotote provided by art. 2.1,
              Sisal has paid in advance to Autotote the sum of
              U.S.$50,000.00 (consisting of U.S.$8,000.00 for each of 5
              laboratory prototypes and U.S.$10,000.00 for 1 working
              prototype), U.S.$700,000.00 for development and tooling and
              U.S.$175,000.00 for firmware as described in Exhibit 1,
              sec.XX, items A. through N.;
        5.2.  Sisal shall pay as the price for the supply of the 200
              pre-production Terminals ordered as per art. 2.5, the
              following amount per Terminal:   U.S.$4,600.00
        5.3.  Sisal shall pay the compensation provided in art. 5.2 as
              *  5% (total of U.S.$46,000.00) within 15 days from the
                 execution of the present Agreement;
              *  the remainder, 60 days after the shipment of specific
                 Terminals from Autotote's factory less the 5% deposit;
        5.4.  Autotote retains a right of property, as provided in art.
              1523 of the Italian Civil Code, in the Terminals ordered as
              per art. 2.5. until the full price thereof is paid by Sisal.
        5.5.  Prices do not include any taxes or duties, now or hereafter
              enacted, applicable to the Terminals supplied by Autotote or
              to this transaction, all of which taxes and duties shall be
              the responsibility of Sisal, except for Autotote's franchise

              and Autotote's income taxes.
        5.6.  Liability for loss or damages shall pass to Sisal when
              Autotote shall put the Terminals ordered as per art. 2.5.
              into possession of a carrier for shipment to Sisal, the
              carrier beeing deemed to be an agent for Sisal.
              Accordingly, freight and insurance for the shipment shall be
              the responsibility of Sisal.
        5.7.  Final price and other conditions of the supply of the
              remaining 19,800 Terminals from EIS to Sisal, will be
              directly agreed to between EIS and Sisal.

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

In case Autotote will not be able to develop or deliver the laboratory
     prototypes or the working prototype of the Terminal as per the features,
     characteristics and functions listed in Exhibit 1, Autotote shall:
i)   reimburse to Sisal 75% of the total sum advanced as per art. 5.1  within 30
     days from the notification of definitive non acceptance provided in art.
     4.3. - 4.4.;
ii)  repay at the same time the down payment (5%) specified in art. 5.3.;
iii) repay at the same time any down payment received for the manufacture of
     19,800 Terminals, as per art. 2.5., to either EIS or Sisal, depending upon
     which entity made the down payment.

These shall be Autotote's only obligations for failure, for any reason, to
     deliver the Terminals because the prototypes have not been accepted.

--  -----------
Subject to the requirements of law and/or any applicable regulatory review
     ("Government Approval"), and except for sales by Autotote to EIS
     contemplated by this agreement, Autotote shall, in the future, not supply
     Terminals in the Territory or destined to the Territory to any third party,

     or grant rights on Terminal for use in the Territory, unless Sisal agrees
     and Autotote and Sisal regulate all the conditions of such a supply or
     grant of rights in a written agreement duly signed by the parties.  This
     clause does not apply to such firmware and/or software which Autotote has
     currently supplied in the Territory.

--  ----------------------------
          8.1.  Autotote shall be the sole owner of the Intellectual
                Property Rights. Sisal shall have the rights provided in
                art. 2.2., 2.3., 2.4. This clause shall be amended to
                comply with any required Government Approval.
          8.2.  Sisal shall remain the sole owner of the Trademarks in the
                Territory. Autotote shall have the right to approve the
                Trademarks, which approval shall not be denied unless for
                good and serious reasons.
          8.3.  If EIS for any reason, is not able to perform under the
                Agreement, then Sisal may deal directly with Autotote. If
                Autotote in unable, for any reason, to perform to Sisal's
                satisfaction, Sisal can terminate the Agreement and demand
                that Autotote provide to Sisal, on astrictly confidential
                basis, with all the documents, instructions, schematics,
                necessary in order to allow Sisal to manufacture such

--  ----------------------------
Autotote shall strictly comply with the delivery terms provided in art. 4.5.
     Sisal shall provide EIS and Autotote with three (3) months rolling
     forecasts of shipments. 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, and non performance by Sisal of any of its obligations under
     the present Agreement.

--- ----------
Sisal shall perform inspection and final acceptance testing within 30 days after
     receipt of shipment of Terminals supplied directly by Autotote or by EIS.
     If, within 30 days after receipt of  shipment, Autotote or EIS do not
     receive notification of non-conformity, then said shipment shall be deemed
     to have been accepted. Sisal shall have 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) week.

--- ----------
         11.1.  Autotote warrants all Terminals directly supplied by
                Autotote or supplied by EIS 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, directly or through EIS, 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 or EIS unless Sisal is authorised by Autotote to make
                repair; (c) used in violation of instructions furnished by
         11.2.  Where Autotote or EIS, 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, 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 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 use.

         12.1.  Autotote shall defend any suit or proceeding brought
                against Sisal to the extent that such suit or proceeding is
                based on a claim that Terminals manufactured and sold by
                Autotote or by EIS to Sisal 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 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.
         12.2.  If any Terminal manufactured and supplied by Autotote or by
                EIS to Sisal shall be held to directly infringe any valid
                Italian patent and Sisal is 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 the right to use 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.
         12.3.  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.
         12.4.  Autotote represents to Sisal that it conducts its business
                operations so as not to infringe upon any third party
                proprietary rights.

Autotote and Sisal confirm that the provisions of arts. 9., 10., 11., 12.,
     16., may be enforced by Sisal directly against Autotote with respect to all
     Terminals, including the Terminals supplied by EIS, and Sisal may directly
     claim from Autotote all the possible damages incurred by Sisal covered
     under said articles.

Neither the execution of this Agreement and the performance by the Parties of
     their obligations, nor the use of the Terminals for the exploitation of the
     Business 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 Sisal is party or by which it is bound, or violate any
     applicable law, statute, rule, ordinance or regulation of any Governmental

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 Sisal'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.

--- -----------
16.1. (a)  Except as specifically provided in this art.16., this Agreement and
           the agreement with EIS for the supply of 19,800 Terminals shall not
           be terminated by Sisal or EIS without the prior written consent of
           Autotote. If Sisal defaults, Autotote, in addition to its other legal
           remedies, shall be reimbursed for all its documented, non-cancelable
           costs (reduced by Autotote's resale of inventory items undertaken in
           good faith) incurred to fill the order.
      (b)  Notwithstanding the above, in case Sisal, directly or through EIS,
           has already ordered at the moment of the cancellation more than
           10,000 Terminals, Autotote shall not be entitled to claim any
           reimboursment or remedy for non-cancellable costs incurred or others
16.2.      Sisal may, by written notice to Autotote, terminate, respectively
           this Agreement in whole or, from time to time, in part if any one of
           the following occurs:
           a)      Autotote repeatedly fail to meet delivery dates;
           b)      Terminals do not conform to the requirements
                   specified in Exhibit 1;
           c)      Autotote fail to comply with any material obligations

                   contained in this Agreement;
           d)      Autotote become insolvent or commits an act of
                Autotote shall have thirty (30) days to cure any default
                hereunder.  In case of failure, Sisal shall be entitled to
                manufacture, directly or through a third party, the Terminals
                and to use, adapt, make them available in the Territory and
                to sell them also in other countries. In case EIS becomes
                insolvent or repeatedly fails to comply with it's material
                obligations Autotote shall directly supply Sisal with the
                Terminals ordered by EIS. In case of failure the above
                provision shall apply.
16.3.           Autotote may, by written notice to Sisal, terminate this
                Agreement if Sisal does not conform to the payment terms
                hereunder. Sisal shall have thirty (30) days to cure any
                default hereunder.

---  -------
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 Sisal 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, 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.

---  -----------
   21.1.  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.

21.2.     The arbitration proceedings shall take place in Paris, France, and
          shall be conducted in the English language.
21.3.     The expenses of the arbitration proceedings shall be borne by the
          Parties in accordance with the determination of the Arbitration Panel.

     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.            Sisal Sport Italia SpA

     By :__________________             By:__________________
     Name:  Richard M.Weil             Name:  Giorgio Sandi
     Title: Vice President             Title: Managing Director