Exhibit 10.28
AGREEMENT
FEBRUARY 19, 1998
between
Autotote Systems, Inc., a corporation with its main offices at 000 Xxxxxxxx
Xxxx, X.X. Xxx 0000, Xxxxxx, XX 00000 (hereinafter "Autotote"), duly represented
by its Vice President, Xxxxxxx XXXX,
and
Elettronica Ingegneria Sistemi, a corporation with its main offices at Xxx
Xxxxxxxxx Xxxxxxx Xx. 00,000, 00000 Xxxx, Xxxxx (hereinafter "EIS"), duly
represented by its General Manager and Managing Director, Xxxxxxxx XXXXX,
whereas:
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. OBJECT OF THE AGREEMENT
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
therein.
2 INFORMATION - CONFIDENTIALITY
The parties shall exchange all information necessary in order to facilitate the
manufacture of the Terminals and shall keep strictly confidential all
information.
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.
5 EXCLUSIVITY
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 INTELLECTUAL PROPERTY RIGHTS
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.
7 DELIVERY AND FORCE MAJEURE
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.
8 ACCEPTANCE
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)
week.
9 WARRANTIES
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
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Autotote be liable to anyone for incidental or consequential damages for
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breach of any of the provisions of this Agreement, such excluded damages to
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include, without limitation, loss of goodwill, loss of profits or loss of
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use.
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10 PATENT INDEMNITY
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.
11 GENERAL PROVISIONS
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.
12 NO CONFLICT
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.
13 COMPLIANCE
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 TERMINATION
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.
15 NOTICES
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.
16 ASSIGNMENT
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.
17 ENTIRE AGREEMENT
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.
18 GOVERNING LAW
This agreement shall be governed by the Italian Law.
19 ARBITRATION
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.
20. PRIOR AGREEMENT
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: Xxxxxxx X.XXXX Name: Xxxxxxxx XXXXX
Title: Vice President Title: General Manager
& Managing Director
