STOCK TRANSFER AGREEMENT

 

                                                                   EXHIBIT 10.25

                            STOCK TRANSFER AGREEMENT

   
         AGREEMENT dated October 25, 1996 by and between American Wagering, Inc.
a Nevada corporation ("Buyer"), and Autotote Corporation, a Delaware corporation
("Seller").
    

         WHEREAS, Seller is the beneficial and record owner of all of the issued
and outstanding shares of capital stock ("Shares") of Autotote CBS, Inc.
("Company"); and

         WHEREAS, Buyer desires to purchase all of the Shares, and Seller
desires to sell the Shares, to Buyer;

         NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto agree as follows:

SECTION 1. SALE, TRANSFER AND PURCHASE OF SHARES.

                  1.1 Sale and Purchase of Shares.

                  For the consideration provided for in Section 2 hereof and
subject to the terms and conditions of this Agreement, Buyer hereby agrees to
purchase from Seller at the Closing (defined herein) and Seller hereby agrees to
sell, transfer, convey, assign and deliver to Buyer at the Closing the Shares
and Buyer will accept delivery and assume ownership of the Shares at the
Closing.

SECTION 2. CONSIDERATION FOR THE SHARES.

                  2.1 Purchase Price.

                      (a) In payment for the sale, transfer and delivery to it 
of the Shares and rights under the Technology License (defined herein) in full
consideration therefor, Buyer shall pay to Seller at the Closing the aggregate
sum of U.S. $3,000,000.00 ("Purchase Price") which shall be allocated as
described in Exhibit A.

                      (b) The Purchase Price shall be payable by Buyer to Seller
on the Closing Date, by delivery to Seller of a certified or bank cashier's
check payable to the order of Seller or, at Seller's option, by bank wire
transfer in immediately available funds to Bankers Trust Company for account of
Seller, Account No. 00-311-714, ABA # 021 001 033, Chips #103, Swift Code Bk TR
US 33.

SECTION 3. CLOSING DATE.

                  The consummation of the purchase and sale contemplated herein
("Closing Date" or "Closing") shall be held at the office of Buyer at 675 Grier
Drive, Las Vegas, NV 89119 at 10:00 a.m. on October 24, 1996 or at such other
place, time or date as shall be provided herein or mutually agreed by the
parties hereto; provided, however, that either party may terminate this
Agreement if the Closing has not occurred on or before October 30, 1996.

SECTION 4. REPRESENTATIONS AND WARRANTIES OF SELLER.

                  Seller represents and warrants to Buyer as follows:

                  4.1 Organization and Standing of Seller; Right to Sell and
Corporate Authority of Seller.

                  Seller is a corporation duly organized, validly existing and
in good standing under the laws of Delaware. Seller has full corporate power and
authority to own the Shares. Seller has full corporate authority to enter into
this Agreement and perform and consummate the transactions contemplated hereby.
This Agreement is a valid and binding obligation of Seller enforceable in
accordance with its terms. There are no provisions of the certificate of
incorporation or of the by-laws of Seller or of any agreements to which Seller
is a party or bound which prohibit, limit or otherwise affect the right, power
and authority of Seller to execute this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by Seller and the consummation of the transactions contemplated
hereby have been duly authorized and approved by the Board of Directors of
Seller. Except as disclosed in Schedule 1, no consents or approvals of any
stockholder of any class or of any other party, person, governmental agency or
authority or courts to which Seller is subject is necessary for the execution of
this Agreement or consummation of the transactions contemplated by this
Agreement.

                  4.2 Organization and Standing of Company.

                  Company is a corporation duly organized, validly existing and
in good standing under the laws of Nevada and in all jurisdictions as to which
its failure to be in good standing would adversely affect the validity of the
transaction contemplated by this Agreement. Company has the power to carry on
its business as it is now being conducted. Copies of Company's certificate of
incorporation, as amended to date (certified by an officer of Company), and of
its by-laws, as amended to date (certified by an officer of Company), will be
certified and delivered to Buyer and will be complete and correct as at the
Closing Date. The Company has no subsidiaries other than MegaSports, Inc., a
Nevada corporation, of which the authorized, issued and outstanding shares are
held 50% by Company and 50% by International Games Technology.

                  4.3 Capitalization.

                  Schedule 2 sets forth the authorized, issued and outstanding
capital Shares of Company. All of such Shares are duly authorized, validly
issued and are fully paid and non-assessable. Company has no other classes of
stock authorized or outstanding and the Company does not have any outstanding
warrants, options, calls, convertible instruments, subscriptions or other rights
which will give any party the right to acquire Shares in the Company.

                  4.4 Ownership of Shares.

                  Seller is the record and beneficial owner of the Shares, which
Shares constitute all of the issued and outstanding shares of capital stock of
Company. Except for any pledge interest(s) held by Seller's senior lenders
(which shall be removed prior to Closing), all of the Shares are free and clear
of all liens, encumbrances or restrictions, and by the sale and transfer of said
Shares to Buyer pursuant to this Agreement, Buyer will acquire good title to all
of the issued and outstanding shares of capital stock of Company free of all
liens, debts, pledges, security interests, encumbrances and restrictions.

                  4.5 Financial Condition and Liabilities.

                      (a) Seller will certify and deliver to Buyer, at the 
Closing, financial statements for Company consisting of an unaudited balance
sheet as of September 28, 1996 ("Latest Balance Sheet") and an unaudited income
statement for the period November 1, 1995 through September 28, 1996; all of
which financial statements ("Company Financial Statements") will be certified by
Kim Lighthart, Controller of Company. The Company Financial Statements will be
correct and complete in all material respects and will present fairly the
financial position of Company on the dates indicated, and shall be prepared
consistently with prior financial statements, if any. The Company Financial
Statements will be prepared in accordance with generally accepted accounting
principles consistently applied except as described in Schedule 3.

                      (b) (i) Except as disclosed in Schedule 4, all tax returns
and reports of Company, Seller, or any member of Seller's Consolidated Group
required by law to be filed by Closing, have been duly filed, and all taxes,
assessments, fees and other governmental charges upon Company or Seller Group
(other than those payable for current periods without interest or penalties)
upon, or measured by, any of the properties, franchises, income or receipts of
Company, which are due and payable, have been paid or accrued. Except as
provided in Schedule 4, items described in Schedule 4 shall be the
responsibility of Seller. None of the Tax Returns contain, or are required to
contain, a disclosure statement under Section 6662 of the Code, or any similar
provision of state, local or foreign law, with respect to any items that relate
to the Company in order to avoid a penalty for any taxable year. Except for
non-material events, no extension of time within which to file any Tax Return
with respect to the Company, or any member of 

the Seller's Group has been requested, which Tax Return has not since been
filed. All Tax Returns of Company are true, correct and complete in all material
respects.

                  (ii)     There are no pending or threatened actions or
proceedings for the assessment or collection of Taxes for which the Company may
become liable in its own right or as a member of the Seller's Group, or as a
transferee of the assets of, or successor to, any entity. There are no
deficiencies in Taxes against any member of the Seller's Group. There are no Tax
liens on any assets of the Company, except with respect to Taxes which are not
yet due and payable.

                  (iii)    No consent under Section 341(f) of the Code has been
filed with respect to the Company.

                  (iv)     The Company does not owe any amounts pursuant to any
tax sharing agreement or arrangement, nor will it have any liability after the
date hereof in respect to any tax sharing agreement or arrangement executed or
agreed to prior to the date hereof, whether any such agreement or arrangement is
written or unwritten.

                  (v)      All Taxes required to be withheld, collected or
deposited in connection with the operations and activities of the Company, or
any member of the Seller's Group have been timely withheld, collected or
deposited and, to the extent required, have been paid to the relevant taxing
authority.

                  (vi)     The Company properly accrued all current or contested
Taxes on its books and records, and its books and records reflect reserves that
are adequate for the payment of all Taxes not yet due and payable that are
properly accruable thereon through the close of business on the Closing Date
except for any Federal income tax liabilities, which liabilities, if any, are
recorded at the parent company level (including Taxes being contested). The
Company has no liability for any Taxes in excess of amounts accrued or the
reserves established including any liability for Taxes resulting from being a
member of or leaving the Seller's Group. There are no outstanding waivers or
agreements extending the statute of limitations for any period with respect to
any Tax to which the Company may be liable either directly or as a member of the
Seller's Group.

                  (vii)    Seller and Company have made available to Buyer
correct and complete copies of all Tax Returns of the Company, for all periods
which are not closed by the statute of limitations.

                  (viii)   Seller and Company have delivered to Buyer a true and
complete copy of any tax sharing or allocation agreement or arrangement
involving the Company and a true and complete description of any such agreement
or arrangement that is unwritten or informal.

                  (ix)     Seller shall furnish Buyer on or before the Closing
Date an affidavit stating, under penalties of perjury, Seller's U.S. taxpayer
identification number 

and address, and the fact that Seller is not a foreign person pursuant to
Section 1445(b)(2) of the Code ("Tax Affidavit").

                  (x) For purposes of this Agreement, the following definitions
shall apply:

                           (x) The term "Seller Group" shall mean, individually
         and collectively, (i) The Company, (ii) Seller, and (iii) any
         corporation, partnership or any other entity as to which Company is
         liable for Taxes incurred by such entity either as a transferee, or
         pursuant to Treasury Regulations Section 1.1502-6, or pursuant to any
         other provision of federal, territorial, state, local or foreign law or
         regulations.

                           (y) The term "Taxes" shall mean all taxes, however
         denominated, including any interest , penalties or other additions to
         tax that may become payable in respect thereof, imposed by any federal,
         state, local or foreign government or any agency or political
         subdivision of any such government, which taxes shall include, without
         limiting the generality of the foregoing, all income or profits taxes
         (including, but not limited to, federal income taxes and state income
         taxes), payroll and employee withholding taxes, unemployment insurance
         taxes, social security taxes, sales and use taxes, ad valorem taxes,
         excise taxes, franchise taxes, gross receipts taxes, business license
         taxes, occupation taxes, real and personal property taxes, stamp taxes,
         environmental taxes, transfer taxes, workers' compensation, Pension
         Benefit Guaranty Corporation premiums and other governmental charges,
         and other obligations of the same or of a similar nature to any of the
         foregoing, which the Group is required to pay, withhold or collect.

                           (z) The term "Returns" shall mean all reports,
         estimates, declarations of estimated tax, information statements and
         returns relating to, or required to be filed in connection with, any
         Taxes, including information returns or reports with respect to backup
         withholding and other payments to third parties.

                  (c) Except as set forth in Schedule 3 or to the extent
reflected or reserved against in the Company Financial Statements, Company, as
of September 28, 1996, had no material liabilities of any nature, whether
accrued, absolute or contingent, including, without limitation, liabilities for
Taxes, which were required to be disclosed or provided for under generally
accepted accounting principles or which would have a Material Adverse Effect.
For purposes of this Agreement, Material Adverse Effect shall mean a material
adverse effect on the Business, assets, operations or financial condition of the
Company. Except as set forth in Schedule 3, since the date of the balance sheet
contained in the Company Financial Statements, Company has not incurred or
become subject to any material obligations or liabilities of any nature, whether
accrued, absolute, 

contingent or otherwise, other than obligations and liabilities incurred in the
normal and ordinary course of business consistent with past practices.

                  (d)      Seller will render all reasonable assistance which
may be requested by Buyer or its accountants in connection with Buyer's filing
as a result of this transaction of audited financial statements meeting the
requirements of the Securities and Exchange Commission. Seller and Buyer will
allocate responsibility for the furnishing of Buyer's accountants with a
management representation letter as described in Annex A.

         4.6      Patents, Trademarks, Trade Secrets and Tradenames;
Intellectual Property.

                  (a)      Except as provided in Schedule 5 or as described
herein, there is no infringement of any patent, formula, process, know-how,
trade secret, trade-name, trademark, copyright or any other rights of any person
in connection with, or related to, Company. Seller will execute all further
documents, papers, forms and authorizations which may be necessary for
receiving, completing or absolutely vesting full right, title and interest to
the intellectual property in favor of Company.

                  (b)      (i)      Ownership and Title. Except for any 
interests that may be owned by IGT, Seller, ASI and Company collectively own the
entire right, title and interest in and to the Transferred Software and CBS
Software (as defined herein), including all intellectual property rights therein
under copyright, patent, trademark, trade secret and other applicable law, free
and clear of all title defects, liens, restrictions, claims, charges, security
interests, or other encumbrances of any nature whatsoever.

                           (ii)     Procedures for Copyright Protection. In no
instance has the eligibility of the Transferred Software or the CBS Software for
protection under U.S. copyright law been forfeited to the public domain by
omission of any required notice or any other action.

                           (iii)    Trade Secret Protection. The source code for
the Transferred Software and CBS Software have at all times been maintained in
confidence; however, copies of said source code have been furnished to LVDC
(defined herein) and to customers and consultants in connection with ASI's
normal business activities and in accordance with appropriate confidentiality
contractual protections.

                           (iv)     Noninfringement. The use of the Transferred
Software and CBS Software does not infringe on or otherwise violate any patent,
copyright, or trade secret rights of any third party anywhere in the world.
Neither Seller, ASI nor Company has received a claim that the Transferred
Software or the CBS Software or the use thereof infringes any intellectual
property right of any third party anywhere in the world or that any third party
has any proprietary interest in or to the Transferred Software or the CBS
Software. Seller shall execute all further documents, papers, forms and
authorizations 

which may be necessary for receiving, completing and absolutely vesting full
right, title and interest to the Transferred Software or the CBS Software in
favor of Company.

                  (c) The representations herein are subject to the following:
ASI transferred to Las Vegas Dissemination Company ("LVDC") ownership of
computer programs used in the operation of the Las Vegas Hub. The scope of said
transfer of ownership is presently unclear. Seller believes that, at most, LVDC
acquired title to a copy of Seller's or ASI's Totalisator software. Such title
of LVDC will not affect Seller's representations herein. To the extent LVDC
asserts a stronger title, Seller's liability will be limited as provided in
Section 12.19 (d).

         4.7      Litigation; Claims.

         (a)      Except as specified in Schedule 6, there is no action, suit,
investigation or proceeding pending or, to the knowledge of the Seller or
Company, threatened against Company or MegaSports, Inc. before any court,
arbitrator or administrative or governmental body as to which there is a
reasonable possibility that it might result in any material adverse change in
the business of the Company.

         (b)      Seller hereby agrees to assume all responsibility with respect
to the case of Autotote CBS v. Ralph Overman, Las Vegas Dissemination Company
and John Gaughan, (Civil Action No. 8343844) ("Overman Case"). Buyer shall, and
shall assure that Company shall, cooperate in all reasonable ways to assist in
Seller's conduct of the case. In particular, as soon as reasonably practical,
Vic Salerno will furnish Seller with a deposition as to his knowledge of the
case.

         4.8      Title to Properties.

         Company has good and marketable title to and owns outright and
absolutely all of its properties and assets, real and personal, described in the
Latest Balance Sheet as being owned by it, free and clear of all liens,
mortgages, pledges, leases, easements, conditional sales agreements, security
interests or other encumbrances, charges, liabilities or claims of any nature or
kind whatsoever, except as noted in such Latest Balance Sheet or disclosed in
Schedule 7 hereto. Schedule 7 also lists any real property leases. Company is in
compliance with the material terms and provisions of said leases and neither
Seller nor Company has received any notice of default under any lease.

         4.9      Performance of Contracts.

         (a) Except as disclosed in Schedule 8 hereto, Company has performed all
material obligations required to be performed by it, and Company is not in
material default under any contract, lease, license or other agreement to which
it is party or to which any of its assets are subject, and the Seller does not
know of any event which, with the passage of time or the giving of notice, or
both, would constitute a material default under any thereof. Except as disclosed
in Schedule 8, all such contracts, leases, 

licenses and other documents are in full force and effect and constitute legal,
valid and binding obligations of the respective parties thereto.

                  (b) Except as set forth in Schedule 8, Company is not a party
to or bound by any written or oral (i) employment agreement or arrangement
relating to continued employment (including, without limitation, any collective
bargaining contract or union agreement), or consulting agreement or other
contract for personal services that may not be terminated within 30 days without
penalty, other than customary severance and employee benefit arrangements (or
any relating augmentation or acceleration of benefits) and other than the
Callaghan Letter Agreement; (ii) provider work agreements, pension or retirement
plan or arrangement; (iii) real property lease or license, or personal property
lease or license requiring annual payments by Company in excess of $5,000; or
(iv) any other contract which relates to its business or to the assets of
Company and the breach of which would have a Material Adverse Effect.

                  (c) Except as disclosed in Schedule 8 or as expressly provided
for by this Agreement, neither Seller nor any affiliate of Seller (other than
Company and MegaSports, Inc.), officer or director of Seller, of any affiliate
of Seller or of Company has entered into any contract or agreement with Company
or any of its subsidiaries in excess of $10,000, which will be binding on
Company or MegaSports, Inc. following the Closing, except for contracts or
agreements that are cancelable at will by Company or MegaSports, Inc. without
penalty.

         4.10     Directors and Officers, Banks.

         Schedule 9 hereto sets forth (i) the names of all directors and
officers of Company, as of the date hereof; and (ii) the name and address of
each bank in which Company has one or more accounts or safe deposit boxes and
the names of all persons authorized to draw thereon or to have access thereto
and the nature of such authorization.

         4.11     Insurance.

         Schedule 10 hereto sets forth all material insurance policies of Seller
applicable to Company. After the Closing Date hereof, Buyer shall be required to
secure all insurance with respect to Company.

         4.12     Certain Transactions.

                  (a) From October 31, 1995 to the date hereof, Company has not
(a) issued or agreed to issue any stock, bonds, or other corporate securities,
including securities convertible into stock; (b) declared or made any payment,
dividend or distribution to stockholders or purchased or redeemed any shares of
its capital stock except for the dividend described herein in subsection (iii)
and except for treatment of intercompany accounts described in subsection (i)
below; (c) mortgaged, pledged or subjected to lien, charge or any other
encumbrance any of its assets, tangible or 

intangible, except as described in this Agreement or in the Schedules; (d)
suffered any damage or loss, whether or not covered by insurance, materially
affecting its property or business; (e) sold or transferred any of its assets
except in the ordinary and usual course of its business, or except as required
by this Agreement or described in this Agreement or in the Schedules; (f) paid
to any officer, employee or any other person any extra compensation or bonus
(except as disclosed by Seller), or made any arrangement or commitment therefor,
or increased the salary or other compensation of any officer or other executive
employee except in the ordinary course of business; (g) sold, assigned or
transferred any patent, trademark, trade name, copyright or other intangible
asset except as described in the Technology License Agreement; or (h) incurred
any obligation or liabilities, absolute or contingent, except in the ordinary
and usual course of business or pursuant to existing contracts and agreements
described in this Agreement or in the Schedules; provided, however, that Seller
will cause prior to the Closing Date:

                           (i)      Subject to subsection (b) hereof, the
difference between the amount of Company's intercompany accounts payable and
intercompany accounts receivable to be eliminated solely by recording an
increase or decrease in stockholders' equity, as appropriate;

                           (ii)     removal of all cash from the Company (except
for cash representing deposits by customers for orders to be completed after
Closing, as described on Annex B). In the alternative, Buyer shall increase the
Purchase Price by the amount of retained cash;

                           (iii)    Buyer acknowledges and agrees that Company
shall, in the form of a dividend from Company to Seller paid on or before
Closing, irrevocably transfer, grant, convey, assign and quitclaim to Seller the
entire right, title and interest of Company in and to the Pari-mutuel Tote
Software (defined herein), including both tangible and intangible property
constituting the Pari-mutuel Tote Software as follows:

                                    (a)      all copyright and patent interest
throughout the world owned or claimed by Company in the Pari-mutuel Tote
Software, together with the right to sue for, settle, or release any past,
present or future infringements;

                                    (b)      title to and possession of two (2)
copies of the media and documentation that constitute the component parts and
copies of the Pari-mutuel Tote Software; and

                                    (c)      all right, title and interest owned
or claimed by Company in and to the inventions, discoveries, improvements,
ideas, trade secrets, know-how, confidential information, and all other
intellectual property owned or claimed by Company pertaining to the Pari-mutuel
Tote Software, but not to the CBS Software (defined herein).

                  (b) Nothing in this Agreement shall negate the obligation of
Company or any successor to make payments to Seller or any affiliate or the
obligation of Seller or any affiliate to make payment to the Company for goods
delivered or services performed or for reimbursement for payments made on its
behalf.

         4.13     IGT Sports Wagering Software.

                  Company is the assignee of Autotote Systems, Inc. ("ASI")
which entered into an agreement with International Games Technology with respect
to the joint development of Pari-Mutuel Sports Wagering Software ("MegaSports
Software")("IGT Agreement"). All rights and obligations of ASI under the IGT
agreement were assigned to Company on April 27, 1994. To the extent that said
agreement did not transfer Intellectual Property rights to Company, Seller will
or will cause ASI to assign, transfer and convey such rights to Company at the
Closing.

         4.14     Callaghan Situation.

                  Brian Callaghan is not eligible for any employment bonus. Any
stock options of Seller have previously been delivered.

         4.15     Employment Benefit Plans.

                  Company has no obligation to contribute to any multi-employer
plans within the meaning of Section 3(37) of ERISA. Each of the Company Plans
has been operated in all material respects in accordance with ERISA and other
applicable law, and has not engaged in any prohibited transaction (as such term
is defined in Section 406 of ERISA) for which an exemption is not available. No
Company Plan provides employees with medical or life insurance coverage after
termination of employment, except as required by Section 4980B of the Code, and
Company has made no promises or representations to current or former employees
concerning such coverage. Each Company Plan that is intended to be qualified
under Section 401(a) of the Code has received a favorable determination letter
from the Internal Revenue Service. There is no trade or business that is
aggregated with Company under Section 414(b), (c), (m) or (o) of the Code that
has any liability for an accumulated funding deficiency under Section 302 of
ERISA, withdrawal liability under Section 4201 or ERISA, or excise tax liability
under Section 4980B of the Code. For purposes of this Section 4.15, a "Company
Plan" is any employee benefit plan within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974 ("ERISA") and any dependent
care, tuition reimbursement, cafeteria, bonus, stock option, stock purchase or
other incentive compensation plan that covers employees or former employees of
Company. All contributions to Company plans with respect to Company employees
have been paid for all prior plan years and no employer contributions will be
payable to the Autotote Systems 401(k) Retirement Plan for non-union employees
for the calendar year 1996 if the Company ceases to be a subsidiary of Seller
prior to December 31, 1996.

         4.16     Environmental.

                  To the best knowledge of Seller, there does not exist any
violation by Company of any material Environmental Law (which shall be defined
as any Federal, state, local or statutory or common law, and any regulation,
code, plan, order, decree, judgment, permit, grant , franchise, concession,
restriction, agreement, requirement, and injunction issued, entered,
promulgated, or approved thereunder, relating to the environment, or human
health or safety relating to occupational or environmental matters, including,
without limitation, any law relating to emissions, discharges, releases or
threatened releases of hazardous materials into the environment (including,
without limitation, air, surface water, groundwater and land), or relating to
the presence, manufacture, generation, refining, processing, distribution, use,
sale, treatment, recycling, receipt, storage, disposal, transport, arranging for
transportation, treatment or disposal, or handling of hazardous materials,
including, but not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time ("CERCLA"),
the Resource Conservation and Recovery Act of 1976, as amended from time to time
("RCRA"), the Federal Insecticide, Fungicide and Rodenticide Act, as amended
from time to time ("FIFRA"), the Toxic Substances Control Act, as amended from
time to time, and the Occupational Safety and Health Act of 1970, as amended
from time to time).

         4.17     IGT - North America.

                  Upon consummation of the transactions contemplated hereby,
neither Seller nor any of its affiliates will be under common ownership with, or
will own any business jointly with, (i) IGT-North America ("IGT") or any of its
affiliates or (ii) Buyer or Company or any of their affiliates.

         4.18     Permits, Licenses and Franchises; Regulatory authorities.

                  (a) Except with respect to matters described below, Company
has all permits, licenses, franchises and other authorizations necessary to, and
has complied in all material respect with all laws applicable to, the conduct of
its respective businesses and operations in the manner and in the area in which
such businesses and operations are presently being conducted, and all such
permits, licenses, franchises and authorizations are in full force and effect
and, to the knowledge of the Seller or Company, valid. The Nevada Gaming
authorities have the discretion to require licensing with respect to current
operations. Based on various applications filed by Seller, said authorities have
commenced a background investigation of Seller and affiliates. Seller and
affiliates intend to seek to withdraw a previously submitted application for
license filed with the Nevada Gaming authorities. MegaSports has not commenced
operations.

                  (b) Seller acknowledges that it and certain officers of Seller
are currently applicants before the Nevada State Gaming Control Board and Nevada
Gaming Commission ("Nevada Regulators"). To Seller's knowledge and belief the
Seller has 

cooperated in each respective application investigation. Furthermore, the Seller
understands that it is within the sole discretion of the State Gaming Control
Board to allow a withdrawal of the pending applications related to the Seller.

SECTION 5.        REPRESENTATIONS AND WARRANTIES OF BUYER.

                  Buyer represents and warrants to Seller as follows:

                  5.1 Organization and Standing of Buyer; Right to Buy and
Corporate Authority of Buyer.

                  Buyer is duly organized and validly existing corporation under
the laws of the State of Nevada. There are no provisions of the certificate of
incorporation or By-Laws of Buyer or of any agreements to which Buyer is a party
which prohibit Buyer from executing this Agreement or consummating the
transactions contemplated hereby and no approvals or consents of any persons
other than Buyer are necessary in connection therewith. The execution and
delivery of this Agreement and other documents by Buyer and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
all requisite corporate actions and are valid and binding obligations of the
Buyer enforceable in accordance with their terms. The consummation of the
transactions contemplated in this Agreement will not result in or constitute a
breach or default of any agreement or certificate to which Buyer is a party or
is otherwise subject.

SECTION 6.        CONDITIONS PRECEDENT.

                  6.1 Conditions of Buyer's Purchase.

                  The obligations of Buyer to purchase and pay for the Shares
pursuant to this Agreement are subject to the fulfillment at the Closing Date of
the following conditions, any one or more of which may be waived in writing in
whole or in part by the Buyer:

                      (a) Representations, Warranties and Covenants of the 
Seller. The representations and warranties of the Seller herein and in any
Schedule, Exhibit or Annex shall be true and complete in all material respects
as of the Closing with the same effect as though made at such time, except to
the extent that a different earlier time is specifically stated in any such
representation or warranty; the Seller shall have performed and complied in all
material respects and with all covenants and conditions required by this
Agreement to be performed or complied with by the Seller at or prior to the
Closing Date; and the Seller shall deliver to Buyer at the Closing an officer's
certificate dated the Closing Date certifying to the foregoing effects.

                      (b) No Material Adverse Change.  Since August 24, 1996, 
whether or not in the ordinary course of business, there shall not have occurred
or arisen any event, condition or state of facts which materially and adversely
effects the business or financial condition of the Company taken as a whole.

                  (c) Release of Existing Pledge. The pledge to Banker's Trust
of the Shares shall have been released by Banker's Trust and the Shares shall be
free and clear of all liens and encumbrances.

                  (d) Due Diligence. Buyer shall have completed its due
diligence of Company and shall have found no condition or conditions as to
Company constituting a Material Adverse Effect as to which Buyer shall have
given notice to Company and Seller prior to closing and which Company and/or
Seller shall not have cured as of the Closing Date.

                  (e) Required Approvals. The Nevada Regulators shall have
approved this transaction or Buyer shall have received an opinion of its legal
counsel (a copy of which shall be forwarded to Seller) that no approval of the
Nevada Regulators is required for the completion of the transaction contemplated
herein. In any event, notice shall be given to the Nevada Regulators.

         6.2      Conditions of Sale.

         The obligations of Seller to sell the Shares pursuant to this Agreement
are subject to the fulfillment at the Closing Date of the following conditions
which may be waived in writing in whole or in part by the Seller:

                  (a) All representation and warranties of Buyer shall be true
and correct as at the Closing Date as though made on and as of such date.

                  (b) Buyer shall have executed or secured the execution of all
necessary documentation to effect the following transactions ("Special
Transaction Documentation").

                      (i)    All contracts, agreements and accounts receivable 
relating to Company's business operations in Tijuana and Juarez, Mexico shall be
assigned by Company to Seller or an affiliate (with Seller or its affiliates
undertaking all negotiations with respect thereto);

                      (ii)   Except for the Overman Case, Buyer or Company will
specifically assume all responsibility for the cases described in Schedule 6;

                      (iii)  Buyer or Company will grant a power of attorney or
other document to Seller with respect to the Overman Case;

                      (iv)   Buyer or Company will have secured the release of 
Seller from the guaranty by Seller of the mortgage on the Building described in
Section 12.9; provided, however, that in order to effect the Closing, Seller may
elect to temporarily waive this condition if a suitable back-up guarantee for
Seller is secured with respect to 

Seller's obligation as guarantor of the mortgage, with Buyer agreeing to use all
reasonable efforts to secure both such back-up guarantor and the release of
Seller as guarantor.

                           (v)      Buyer by appropriate documentation
("Callaghan Transfer") will have specifically assumed all responsibility for the
employment agreement of Seller with Mr. Brian Callaghan other than for the
payment of any bonus or stock options which shall remain the obligation of
Seller.

         6.3      Condition of Purchase and Sale.

                  (a)      If required, the Nevada Gaming Commission shall have
approved this transaction ("Nevada Approval"). In any event, notice will be
given to said governmental agency. Each party shall cooperate with the other
parties as reasonably necessary to permit compliance with any amendments to this
Agreement requested by the Nevada gaming authorities related to compliance with
laws and administrative regulations that may be applicable to this Agreement.

                  (b)      The Dividend Transaction shall have been completed.

                  (c)      The Agreements attached as Exhibit B shall have been
executed by the parties thereto ("Exhibit B Agreements").

                  (d)      Documents required to be delivered by each party at
Closing will be deemed a condition of Closing.

SECTION 7.        CONDUCT PENDING CLOSING.

         7.1      Seller's Conduct.

                  (a)      Up to the time of the Closing Date, and as a
condition to the obligations of Buyer hereunder, Seller, except for activities
in the ordinary course of business and except for activities outside the
ordinary course of business when so notified to Buyer and approved by Buyer
shall or shall cause Company to:

                           (i)      operate and maintain the Company's business
in the regular and ordinary course and in accordance with all applicable laws,
rules and regulations;

                           (ii)     maintain and keep the properties and
facilities used in the conduct of the Company's business in as good condition
and working order as at present, except for ordinary wear and tear;

                           (iii)    perform obligations under contracts relating
to or affecting the assets of Company;

                           (iv)     not make any material change in the
Company's business or method of operations except as provided in this Agreement;

                           (v)      use all reasonable efforts to maintain
Company's relationships with its employees, licensors, suppliers, customers and
others having business relationships with it; and

                           (vi)     continue to pay its bills in due course and
in the ordinary course of its business.

                  (b)      Seller will give to Buyer and its representatives
full access at reasonable times throughout the period prior to the Closing Date
to the assets of Company, and to its books and records and will furnish to Buyer
during such period all requested information ("Information") concerning the
affairs of Company as Buyer may reasonably request. Buyer agrees:

                  (i)      to use such Information only for the purposes
previously stated, i.e., for the evaluation of the Company business;

                  (ii)     to hold in the strictest confidence any and all
Information and refrain from disclosing in any manner, directly or indirectly,
such Information to any entity, person, partnership, corporation or business
organization;

                  (iii)    to return such Information received in any tangible
form or representation to Seller in the event that the transaction is not
completed, and to retain no copies or reproductions thereof.

Buyer's duty of nondisclosure shall not extend to Information which is already
known to Buyer prior to disclosure by Seller, or is rightfully received from a
third party by Buyer or is in the public domain.

         (c)      Until the Closing Date, without prior written consent of Buyer
in each instance, Seller will not except for activities in the ordinary course
of business and except for activities outside the ordinary course of business
when so notified to Buyer in writing and approved by Buyer or as otherwise
provided in this Agreement:

                  (i)      enter into any new transaction or agreement with
respect to the business or assets of Company;

                  (ii)     sell or otherwise dispose of any of the assets of
Company except for inventory held for sale in the ordinary course of business
and items which may be discarded or disposed of in connection with the normal
replacement thereof; and

                  (iii)    subject or suffer or permit any of the assets of
Company to become subject to any lien, charge or encumbrance or take any action
or by inaction 

permit any event to occur which would result in any representations or
warranties of Seller hereunder not being true and correct immediately after the
occurrences of such transaction or event.

SECTION 8.        CLOSING.

         8.1      Delivery by Seller to Buyer.

         At the Closing, Seller will deliver to Buyer:

                  (a) a certificate representing the Shares, duly endorsed for
transfer to Buyer;

                  (b) a certificate of the Secretary or an Assistant Secretary
of Seller certifying to resolutions adopted by the Board of Directors (or
Executive Committee thereof) of Seller authorizing this Agreement and the
consummation of the transactions contemplated thereby;

                  (c) a Certificate of Incumbency for Seller, Company and
Autotote Systems, Inc.;

                  (d) Latest Balance Sheet and Latest Income Statements
(certified by a representative of Company);

                  (e) The minute books, corporate seal, stock record books and
copies of all other corporate records of Company;

                  (f) Any required consents;

                  (g) Certified copies of certificate of incorporation and
by-laws of Seller and Company;

                  (h) Officers Certificate relating to Section 6.1(a);

                  (i) Resignation of Officers and Directors of Company;

                  (j) Certified copy of resolutions, certificate of
incorporation and by-laws of Autotote Systems, Inc;

                  (k) Special Transaction Documentation;

                  (l) Certified copy of IGT Agreement;

                  (m) Release of any pledge in Shares held by senior bank
lenders;

                  (n) Tax Affidavit;

                  (o) Copies of real estate leases;

                  (p) Technology License (defined herein);

                  (q) Exhibit B Agreements; and

                  (r) UCC-3 with respect to release of security interests in
software of Seller or assets of Company, or other satisfactory arrangement.

         8.2      Delivery by Buyer to Seller.

                  At the Closing, Buyer will deliver to Seller:

                  (a) Certified or bank cashier's check to the order of Seller
or bank wire transfer in immediately available funds as Seller may require in
the aggregate sum of $3,000,000.00 plus retained cash, if any;

                  (b) a certificate of the Secretary or Assistant Secretary of
Buyer certifying to resolutions adopted by the Board of Directors (or Executive
Committee thereof) of Buyer authorizing this Agreement and the consummation of
the transactions contemplated thereby;

                  (c) a Certificate of Incumbency;

                  (d) Officers Certificate relating to Section 6.2(a);

                  (e) Certified Certificate of Incorporation and By-Laws of
Buyer;

                  (f) Confirmation of Purchase Order for 101 Probe terminals;

                  (g) Special Transaction Documentation; and

                  (h) Health Plan Implementation.

SECTION 9.        POST CLOSING ADJUSTMENTS.

         9.1      Certain Accounts Receivable.

         Payments of accounts receivable in transit (based on postmark) as of
the Closing Date hereof and received by Buyer after the Closing Date hereof
shall be the property of Seller and the amount of such items shall be paid by
Buyer to Seller. Seller shall pay income taxes with respect to amounts received
hereunder.

SECTION 10.       EMPLOYEE RELATIONS.

         10.1     Benefits. Schedule 11 sets forth the name, position and
compensation of all officers of Company currently in the employ of Company,
excluding those employees continuing in the employ of Seller. Buyer shall be
responsible for all severance obligations owing with respect to any employee
terminated after the Closing Date. Seller and Company shall not be required to
terminate the services of any employee.

         10.2     Employee Benefit Plans. Buyer acknowledges that Company will
terminate the participation of Company's employees in Seller's benefit plans as
of Closing. As of the Closing, Buyer shall cause Company to provide a group
health plan for all employees of Company covered by Seller's group health plans
and shall not impose any waiting period or pre-existing condition limitations.
Such group health plan shall provide equivalent benefits to the benefits
provided to employees of the Company under Seller's group health plan
immediately prior to Closing ("Health Plan Implementation)". Company has the
right to amend or terminate any such plan following Closing.

SECTION 11.       CERTAIN SELLER EMPLOYEES.

         11.1     Limited Contact.

                  Buyer agrees, for a period of one (1) year from the Closing
Date, not to offer employment to any persons who are employees of Seller or its
affiliates other than those employees of Seller described in Schedule 12. Seller
and its affiliate shall similarly be restricted from offering employment to
employees of Buyer or Company.

SECTION 12.       GENERAL PROVISIONS.

         12.1     Benefit of Agreement.

                  The provisions of this Agreement are for the benefit of Buyer
and Seller and their respective permitted assigns. They are not intended to and
do not give rise to any 

benefit to any third party not a party of this Agreement. No such third party
shall have any right to sue hereunder nor have any rights of any kind or nature.

         12.2     Expenses.

                  Except as otherwise provided, Seller and Buyer, respectively,
will each pay their own costs and expenses of performance of and compliance with
all agreements and conditions contained in this Agreement.

         12.3     Brokerage.

                  Each of the Parties represents that all negotiations relating
to this Agreement and the transactions contemplated hereby have been carried on
by the officers or employees of such party or its counsel directly with the
officers and employees or counsel of the other party without the intervention of
any other person and that no broker or other person is entitled to any
commission, finder's fee, or like payment in connection with this Agreement or
any of the transactions contemplated by this Agreement.

         12.4     Transfer Taxes.

                  Buyer and Seller shall share equally all state or local,
sales, documentary transfer, use, excise, personal property, value added or
foreign registry taxes which may be assessed, levied, imposed or based upon the
transfer of the Shares by Seller to Buyer or upon this Agreement or the
performance thereof.

         12.5     Use of Names.

                  (a) After fifteen (15) days following the Closing Date, except
as provided in Section (b) below, Buyer shall not use the corporate name of
Autotote Corporation or Autotote CBS, Inc. or any of their respective affiliates
or any derivatives or abbreviations thereof, except for "CBS". As soon as
reasonably possible following the Closing Date, Buyer shall cause to be placed
upon letterheads, catalogs, brochures, sales literature, promotional and other
selling material relating to the products which bear such name a conspicuous
legend indicating that the Buyer is the seller of the products or services
referred to therein, and Buyer will cause to be placed upon all Seller's
quotation, purchase order, acknowledgment, invoice and similar forms a
conspicuous legend indicating that Buyer is the real party in interest and that
no agency relationship exists between Seller and Buyer.

                  (b) Seller hereby grants to Buyer and Company a non-exclusive,
non-transferable, limited license to use Seller's trademarks, copyrights and
name (collectively, the "Trademarks") used in connection with the marketing of
Seller's products. Buyer and Company shall not use, or permit others to use, the
Trademarks in any way other than the manner permitted here. Buyer and Company
recognize the value of the goodwill associated with the Trademarks, and that
they have acquired a secondary meaning in the 

mind of the public. Buyer and Company will not disparage or attack the title or
any rights of Seller in and to the Trademarks and shall assist Seller in the
protection and/or defense thereof as Seller may reasonably request. Finally,
Buyer and Company understand that nothing herein shall be construed to prevent
Seller from granting any other licenses for use of the Trademarks or from using
the Trademarks in any manner whatsoever. Buyer shall ensure the compliance
herewith by Company.

         12.6     Counterparts.

                  This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.

         12.7     Cooperation.

                  Buyer and Seller will jointly prepare a letter or other
appropriate communication to persons and entities dealing with Seller in order
to advise Seller's customers, suppliers and the like of this transaction and to
effectuate this Agreement and Seller, with Buyer's consent, which consent will
not be unreasonably withheld, will prepare and issue a press release describing
the transactions contemplated by this Agreement.

         12.8     Non-Competition.

                  (a) For a period of five (5) years after the Closing Date and
thereafter during the continuation of the Authorized Exclusive Distributorship
Agreement, neither Seller nor any Subsidiary or Affiliate of Seller shall,
directly or indirectly compete with Buyer or Company in the operation of its
pari-mutuel racing businesses which have been and will be conducted in Nevada:

                  (b) Except for the Seller's and ASI's operations in Mexico,
neither Seller nor any Subsidiary or Affiliate of Seller shall, directly or
indirectly, compete with the Buyer or the Company anywhere in the world using
any software provided to the Seller or ASI pursuant to the Technology License
unless permitted under the International Cooperation Agreement:

                  (c) For a period of five (5) years after the Closing Date, and
thereafter during the continuation of the Authorized Exclusive Distributorship
Agreement, neither Seller nor any Subsidiary or Affiliate of Seller shall
directly or indirectly:

                      (i)    Compete with Buyer or Company in the operation of 
its Race and Sports Book or MegaSports businesses ("Business"), anywhere in the
world; or

                           (ii)     Engage, whether as a principle, agent,
investor, distributor, representative, stockholder, employee, consultant,
volunteer or otherwise with or without pay in any business venture which is
competitive with the Businesses anywhere in the world; or

                           (iii)    Solicit or entice or endeavor to solicit or
entice away any of the clients or customers of the Buyer or the Company; or

                           (iv)     Employ any person who is a director, officer
or employee of the Buyer or the Company or any person who is likely to be in
possession of any confidential information or trade secrets relating to the
business of the Buyer or the Company; or

                           (v)      At any time during such period take any
action or make any statement the effect of which would be, directly or
indirectly, to materially impair the goodwill of the Company or the Buyer or
otherwise be materially detrimental to the Company or the Buyer.

                  (d)      Notwithstanding the provisions of paragraph (a) and
(b) above, nothing herein shall prevent the Seller from:

                           (i)      Outside the State of Nevada, manufacturing
and selling devices that perform functions similar to the functions performed by
Seller's current products, provided, however, that such devices or products
cannot use or incorporate Transferred Software or CBS Software unless permitted
under the International Cooperation Agreement; or

                           (ii)     Utilizing the Totip software or any similar
lottery-type software in its business wherever conducted; or

                           (iii)    Owning less than 20 percent of any publicly
owned company; or

                           (iv)     Continuing to engage after the Closing in
any business activity in Tijuana and Juarez, Mexico being conducted by the
Company at the time of the Closing in order to fulfill Seller's or its
affiliate's obligations under all contracts and agreements relating to the
Company's business operations in Tijuana and Juarez, Mexico, which agreements
have been assigned by the Company to Seller prior to the Closing Date; or

                           (v)      As provided in the International Cooperation
Agreement.

                  (e)      Except for Company's planned operation of the Nevada
Hub its performance under the Authorized Exclusive Distributorship Agreement,
and the Manufacturing Agreement, Buyer shall ensure that Company will not, and
it (and any 

affiliate) will not, compete with Seller or its affiliates in the pari-mutuel
racing (totalisator, simulcasting), and video games and lottery business using
any software provided to Company pursuant to the Technology License and will not
compete in said business in any manner for five (5) years from the date hereof
or the expiration of the Exclusive Authorized Distributorship Agreement. Aqua
Caliente, SA de C.V. ("Caliente") will be considered an exclusive account in
Mexico for the benefit of Seller and Affiliates and Buyer and its Affiliates
will not, and Buyer will insure that Company will not, compete with Seller or
its Affiliates with respect to that account in Mexico. Buyer, the Company and
their affiliates shall have the right to compete with Seller and its Affiliates
in Mexico for accounts other than Caliente.

                  (f) For purposes hereof "Race and Sports Book" (and
derivations thereof) shall mean: a system of wagering (including sports parlay
card wagers) where the "house" books a bet and may sustain a gain or loss; and
"Pari-mutuel Race Wagering" (and derivations thereof) shall mean: a system of
wagering on horse races where the odds and payouts are determined by the size of
the betting pool. For purposes of this agreement and ancillary documentation,
MegaSports (although based on Pari-mutuel sports wagering) will be considered as
part of the Race and Sports Book business.

         12.9     No Waiver.

                  A waiver to be effective must be in writing and signed by an
Officer of the party granting the waiver. The waiver by Seller or Buyer of any
breach of or failure to comply with any provision of this Agreement by the other
party shall not be construed as, or constitute, a continuing waiver of such
provision, or a waiver of any other breach of, or failure to comply with, any
provision of this Agreement.

         12.10    Entire Agreement; Modification.

                  This Agreement and the other documents contemplated hereby
embody the entire agreement between the parties and there have been and are no
agreements, representations or warranties between the parties other than those
set forth herein or provided for herein. It may not be modified except by a
writing signed by an officer of each of the parties thereto.

         12.11    Notices.

                  All notices, requests, demands and other communications herein
shall be in writing unless otherwise specified and shall be deemed to have been
duly given if delivered or mailed by registered or certified mail, postage
prepaid, return receipt requested or by telefax with receipt confirmation,
addressed:

                           (a)      if to Seller, to:

                                    Autotote Corporation
                                    750 Lexington Avenue
                                    New York, NY 10022
                                    Attn:   Chairman and Chief Executive

                                    with a copy to:

                                    Office of the General Counsel
                                    Autotote Corporation
                                    750 Lexington Avenue
                                    New York, NY  10022

                           (b)      if to Buyer, to:

                                    President
                                    American Wagering, Inc.
                                    675 Grier Drive
                                    Las Vegas, NV  89119

                                    Attn: Vic Salerno

                                    with a copy to:

                                    Gordon & Silver
                                    3800 Howard Hughes Parkway
                                    14th Floor
                                    Las Vegas, NV  89105

                                    Attn:  Lisa Miller-Roche, Esq.

                                    and:

                                    Schnader Harrison Segal & Lewis
                                    1600 Market Street
                                    Philadelphia, PA 19103

                                    Attn:  Edward Baxter, Esq.

         12.12    Successors and Assigns.

                  This Agreement shall inure to the benefit of the parties and
their respective authorized legal representatives, successors, assigns and shall
be binding upon Buyer and Seller and their authorized successors and assigns.

         12.13    Governing Law.

                  This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Nevada without regard to
conflict of laws principles. Any dispute that may arise hereunder shall be
determined by a court of competent jurisdiction located in Clark County, Nevada.

         12.14    Headings.

                  The Section and other headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning and
interpretation of this Agreement.

         12.15    Severability.

                  In the event that any one or more provisions contained in this
Agreement should for any reason be held to be unenforceable in any respect under
the laws of or by any governmental agency or any government, such
unenforceability shall not affect any other provisions of this Agreement, but
this Agreement shall be construed as if such unenforceable provisions had not
been contained herein.

         12.16    Termination.

                  (a) Notwithstanding anything herein or elsewhere to the
contrary, this Agreement may be terminated and the transactions contemplated
hereby abandoned at any time prior to the Closing Date:

                      (i)    by written consent of all the parties hereto;

                      (ii)   by Seller, if events shall occur that render
         impossible of satisfaction one (1) or more of the conditions set forth
         in Section 6.2 and such condition(s) shall not be waived by Seller;

                      (iii)  by Buyer, if events shall occur that render
         impossible of satisfaction one (1) or more of the conditions set forth
         in Section 7.2 and such condition(s) shall not be waived by Buyer;

                      (iv)   by either party if the Closing does not occur on
         or before October 30, 1996.

                  (b) In the event of the termination of this Agreement and the
abandonment of the transactions contemplated hereby, this Agreement shall become
void and have no effect and the parties hereto shall have no obligation or
liability hereunder, except that nothing herein will relieve any party from
liability for any willful breach of this Agreement.

         12.17    Cooperation.

                  Each party will execute appropriate documentation to effect
the purposes of this Agreement.

         12.18    Tax Matters.

                  (a) Tax Returns. The applicable income, deductions and credits
of the period beginning November 1, 1995 up to and including the Closing Date
(the "Short Period") will be included in the consolidated Federal income tax
returns of Seller for the fiscal year ending October 31, and Seller shall pay
all Federal and State income Taxes (excluding any deferred Taxes), if any,
attributable to such period. The income, deductions and credits of the Company
for the Short Period will be determined on the basis of the appropriate
permanent books and records (including a closing of the books), or if the
portion of any item of income or deduction cannot be determined from the
permanent records, in accordance with Treasury Regulations 1.1502-76(b)(2)(ii).
Seller agrees that, subject to extensions duly obtained, it shall make timely
payment of the Company's Taxes for all taxable periods ending on or before the
Closing Date (a "Pre-Closing Period"). The Buyer and the Company shall be
responsible for filing all Tax Returns for periods ending after the Closing Date
(a "Post Closing Period").

                  (b) Seller's Indemnification. (a) From and after the Closing
Date, Seller shall indemnify and hold harmless Buyer and Company from any and
all Taxes (1) for any taxable period ending on or prior to the Closing Date, (2)
resulting by reason of the several liability of Company pursuant to Treasury
Regulations Section 1.1502-6 or any analogous state, local or foreign law or
regulation or by reason of Company having been a member of, or ceasing to be a
member of, the Seller Group, (3) where under any applicable law the tax year of
the Company does not close on the Closing Date, any state or local taxes for any
period beginning before the Closing Date and ending after the Closing Date but
only with respect to the portion of such period up to an including the Closing
Date, and (4) resulting from the breach of Seller's Representation and
Warranties set forth in Section 4.5(b).

                  (c) Tax Proceedings. In the event the Buyer or the Company
receives notice, whether orally or otherwise, of any pending Tax examination,
claim, settlement, proposed adjustment or related matter that may affect the
Seller, or in the event the Seller receives any such notice which may affect the
Buyer or the Company, the party receiving such notice shall notify the other
party in writing as soon as reasonably 

practicable. Seller shall be entitled, at its expense, to contest, control,
compromise, settle or appeal all proceedings with respect to the Company's Taxes
for periods ending on or before the Closing Date, provided that Buyer shall have
the right to participate any such proceeding at its expense, that the Buyer
reasonably believes may cause the Company or Buyer to incur any liability for
payment of Taxes and Seller shall consult in good faith with the Buyer with
regard to any such proceeding. The buyer agrees that it will cooperate fully and
will cause the Company to cooperate fully with Seller in the defense against or
compromise of any claim asserted in any such proceeding.

                  (d) Tax-Sharing Agreement. Effective on the Closing Date, all
Tax Sharing Agreements (as defined below), whether or not written, to which the
Company and the Seller are parties, shall be terminated with respect to the
Company for all periods ending after the Closing Date.

                  (e) No Adverse Action. The Seller shall not (i) exercise its
authority as agent of the Company under Treasury Regulation Section 1.1503-77
(or any comparable provision of state, local or foreign Tax law), or (ii) file
any election or take any other similar action, including without limitation,
amending any Tax Return or agreeing to any determination or audit, for any
period ending after the Closing Date without first received the consent of the
Buyer, which consent shall not be unreasonably withheld.

                  (f) Loss Carrybacks. If subsequent to the Closing, the Company
incurs a net operating loss or capital loss that is available to be carried back
to the consolidated Tax Return of Seller, Seller shall cooperate with the Buyer
and the Company, at the Buyer's expense, in effecting such carryback and shall
pay to the Company all tax refunds (including interest) within five days of the
receipt thereof.

                  (g) Timing Differences. As used in this Section 12.19, the
term "Seller Tax Period" shall mean any tax period ending on or prior to the
Closing Date, and the term "Buyer Tax Period" shall mean a taxable period ending
after the Closing Date. If as a result of an audit or other proceeding
concerning the liability of the Company for Taxes, there is an adjustment as a
result of which there should be both a net tax benefit for the Seller Tax
Periods and a net tax detriment for Buyer's Tax Periods or both a net tax
detriment for Seller's Tax Periods and a net tax benefit for Buyer's Tax
Periods, then Seller shall pay to the Buyer or the Buyer shall pay to Seller, as
the case may be, the amount of net tax benefits actually derived as a result of
such adjustments up to an amount equal to the net tax detriment actually
incurred by Seller or the Buyer, as the case may be. A net tax benefit shall be
deemed actually derived when the party entitled to such net tax benefit receives
an actual refund of tax or a reduction of tax otherwise due and payable. A net
tax detriment shall be deemed actually incurred when the party liable for such
net tax detriment makes an additional or increased tax payment or suffers a
reduction in an actual tax refund payment. Payments under this section shall be
made without interest within 30 days after the later of the date the net tax
benefit is actually derived or the date the net tax detriment is actually
incurred.

         12.20    Indemnification.

                  (a)      Indemnity of Seller. Subject to the provisions of
this Section, Seller shall indemnify and hold harmless Buyer and Company from
and against any and all damages, losses, liabilities, obligations, penalties,
claims, litigation, demands, defenses, judgments, amounts paid in settlement,
suits, proceedings, costs, disbursements or expenses (including, without
limitation, reasonable attorneys' fees and experts' fees and disbursements) of
any kind or nature whatsoever ("Damages") suffered or incurred directly or
indirectly by them as a result of or arising out of:

                           (i)      any misrepresentation or breach of warranty
made by Seller or ASI in this Agreement or any document referred to herein
("Transaction Document"); or

                           (ii)     any failure of Seller to completely and
timely perform any covenant or obligation to be performed by it under this
Agreement or any Transaction Document; or

                           (iii)    any failure of Seller to timely and
completely satisfy any obligation or liability of Seller or ASI; or

                           (iv)     Taxes provided in Section 12.19(b); or

                           (v)      any Damages incurred by Company or Buyer on
or after Closing with respect to the Company Plans; or

                           (vi)     Overman Case.

                  (b)      Indemnity of Buyer. Subject to the provisions of this
Section, Buyer shall indemnify and hold harmless Seller from and against any and
all Damages suffered or incurred directly or indirectly by it as a result of or
arising out of:

                           (i)      any misrepresentation or breach of warranty
made by Buyer in this Agreement or any Transaction Document;

                           (ii)     any failure of Buyer to completely and
timely perform any covenant or obligation to be performed by it under this
Agreement or any Transaction Document; or

                           (iii)    any failure of Buyer to timely and
completely satisfy any obligation or liability of Buyer.

                  (c)      Procedure for Indemnification. In the event that any
party hereto shall incur any Damages in respect of which indemnity may be sought
by such 

party pursuant to this Section, the party from whom such indemnity may
be sought (the "Indemnifying Party") shall be given written notice thereof by
the party seeking such indemnity (the "Indemnified Party"), which notice shall
specify the amount and nature of such Damages and include the request of the
Indemnified Party for indemnification of such amount. No claim for
indemnification shall be made by any of the parties hereto unless and until
aggregate Damages for all claims for indemnification then or previously made by
such party shall have exceeded $10,000, at which time such party shall be
entitled to indemnification for all Damages, without regard to such $10,000
threshold. The Indemnifying Party shall within 30 days pay to the Indemnified
Party the amount of the Damages so specified. Upon receipt of such notice from
the Indemnified Party of any claim made by a third party, the Indemnifying Party
shall be entitled to participate in the defense of such claim at its own
expense.

                  (d)      EXCEPT AS PROVIDED HEREIN, SELLER'S MAXIMUM LIABILITY
UNDER THIS AGREEMENT SHALL NOT EXCEED $3 MILLION; PROVIDED, HOWEVER, SELLER'S
MAXIMUM LIABILITY HEREUNDER SHALL NOT EXCEED $1.5 MILLION IF:

                           (i)      SELLER UNKNOWINGLY BREACHES ANY
REPRESENTATION, WARRANTY OR OBLIGATION OF SELLER UNDER THIS AGREEMENT;

                           (ii)     THE SELLER OR ITS AFFILIATES DO NOT HAVE
GOOD TITLE FREE AND CLEAR OF ANY CLAIMS OF LVDC, TO THE SOFTWARE BEING LICENSED
TO THE COMPANY PURSUANT TO THE TECHNOLOGY LICENSE; OR

                           (iii)    LIABILITY FOR MONETARY DAMAGES IS IMPOSED
UPON THE COMPANY IN CONNECTION WITH THE OVERMAN CASE.

For purposes of this Agreement, a "knowing breach" shall mean a breach with
"knowledge" of Seller and without knowledge of Buyer. "Knowledge" of Seller
shall mean the actual knowledge (without investigation) of officers of Seller,
ASI and Company, and Fred Sylvanus (only with respect to software
representations), and knowledge of Buyer shall mean the actual knowledge
(without investigation) of the officers of Buyer and Victor Salerno and Robert
Ciunci as of the date hereof and shall not refer to any knowledge of the facts
of the Overman Case or any imputed knowledge, as for example, knowledge arising
from past use of consultants.

         12.20    Survival. Except as otherwise expressly provided in this
Agreement, the liabilities and obligations of each party with respect to any and
all of its representations, warranties, covenants, indemnifications and
agreements set forth in this Agreement and/or in any document incorporated into
it shall not be merged into, affected or impaired by the Closing under this
Agreement; provided, however, that, except as set forth in the next succeeding
sentence, the representations and warranties contained in this 

Agreement shall survive the Closing for one (1) year, so that an action for
breach of a representation or warranty set forth herein may not be commenced
after the first anniversary of the Closing Date unless, prior to such time, a
claim shall have been made against and given in writing to the party against
whom such claim is made. Notwithstanding the foregoing, and without limiting the
generality thereof, representations and warranties with respect to Taxes shall
remain in full force and effect until such time as the applicable statute of
limitations expires.

         12.21    Regulatory Jurisdiction.

                  (a) By virtue of this Agreement and ancillary agreements
herein described, Seller, for itself and affiliates, hereby acknowledges and
agrees that it and any and all said entities may be subjected to the
jurisdiction of the Nevada State Gaming Control Board and the Nevada Gaming
Commission, and that it and its affiliates will cooperate with any requests for
information made by the same or any requirement to file any gaming applications
in Nevada. Seller will have the right for a reasonable period to attempt to cure
any problems with such gaming authorities with respect to this Agreement or
ancillary agreements.

                  (b) Seller acknowledges that following Closing, and
irrespective of any allowed withdrawal of its current Nevada gaming
applications, by virtue of a continuing business relationship with the Buyer as
evidenced by the Exhibit B Agreements, and the Technology License Agreement,
Seller will continue to be subject to the jurisdiction of the Nevada Regulators.
Until such time as the current Nevada gaming applications have been formally
acted upon by the Nevada Regulators, including consideration of withdrawal of
same by the State Gaming Control Board, Seller shall cooperate with the Nevada
Regulators including, but not limited to, responding to all reasonable requests
for information from the Board, continued disclosure of material information,
and final payment of investigatory fees.

         12.22    Caliente. At the expense of Seller or any Affiliate, after
Closing, Buyer will cause Company to perform requested services relating to the
operation of Seller or its Affiliates in Mexico.

SECTION 13.       ASSIGNMENT OF CERTAIN SOFTWARE; INTENT; 
                  TECHNOLOGY LICENSE AGREEMENT.

         13.1     Assignment of Transferred Software. Seller, for itself and its
subsidiary, Autotote Systems, Inc., as of Closing, irrevocably transfers,
grants, conveys, assigns and quitclaims to Company its entire right, title and
interest in and to the Transferred Software, including both tangible and
intangible property constituting the Transferred Software as follows:

                  (a) all copyright and patent interests throughout the word
owned or claimed by Seller in the Transferred Software, together with the right
to sue for, settle, or release any past, present or future infringements;

                  (b) title to and possession of two (2) copies of the media
documentation that constitute the component parts and copies of the Transferred
Software; and

                  (c) all right, title and interest owned or claimed by Seller
in and to the inventions, discoveries, improvements, ideas, trade secrets,
know-how, confidential information, and all other intellectual property owned or
claimed by Seller pertaining to the Transferred Software, but not the
Pari-mutuel Tote Software (defined herein).

         13.2     Intent to Parties. The parties intend that the Pari-mutuel
Tote Software shall be capable of performing all of the features (defined
herein) and functions that were performed by the version of the pari-mutuel tote
software package operated by Seller as of the date hereof. Accordingly, the
parties have used their best efforts to itemize in Attachments B and C to the
Autotote Software Directory a complete list of the directories, modules and
subroutines required to implement such functions, whether in Pascal, DCL, or
assembly language, and build files therefor. It is the parties' intent that the
directories, modules and subroutines listed in Attachment B are those that are
directed in whole to the implementation of such features and functions, and
those listed in Attachment C are those that are directed in part to the
implementation of such features and functions. It is also the parties' intent
that the directories, modules and subroutines set forth in Attachment A are
those directed exclusively to the implementation of the race, sports book and
MegaSports features and functions, whether in Pascal, DCL, or assembly language,
and build files therefor. The directories, modules and subroutines set forth in
Attachments A, B and C are intended to be mutually exclusive.

         13.3     Technology License Agreement. Seller shall, as a condition to
Closing, have executed and have caused ASI and Company to execute a Technology
License Agreement ("Technology License") in the form of Attachment D hereto.

SECTION 14.       CERTAIN DEFINITIONS.

         14.1     "Affiliate" shall have the meaning contained in Rule 12b-2 of
the Securities Exchange Act of 1934, as amended, and the Rules and Regulations
promulgated thereunder.

         14.2     "Autotote Software Directory" means the document executed by
the parties as of even date herein that lists the directories, modules and
subroutines comprising the Pari-mutuel Tote Software and the CBS Software.

         14.3     "CBS Modules" means, for each of the Probe Terminal Software,

the Mark II Terminal Software, the Dual Port Terminal Software, and the Central
System Software, all of the applications software directories, modules and
subroutines set forth in Attachment A to the Autotote Software Directory,
executed by the parties as of even date herewith, in both source code and object
code form, whether released or work in process, and all documentation and
written materials therefor, together with all corrections, upgrades, updates,
modifications, additions, improvements, and substitutions thereto.

         14.4     "CBS Software" means, collectively, the CBS Modules contained
in the:

                  (a)      Probe Terminal Software;
                  (b)      Mark II Terminal Software;
                  (c)      Dual Port Terminal Software; and
                  (d)      Central System Software.

         For purposes of this Agreement, the term "CBS Software" shall exclude
the Pari-mutuel Tote Software and all inventions, discoveries, improvements,
ideas, trade secrets, know-how, confidential information, and all other
intellectual property pertaining to the Pari-mutuel Tote Software.

         14.5     "Central System Software" means the following VAX-based
applications software packages:

                  (a) the software package known as the "Race and Sports Book
Software" that is operated by Company as of the date of Closing, and

                  (b) the software package known as the "Pari-mutuel Sports
Betting Software" (also referred to as "MegaSports"),

collectively comprised of the directories, modules and subroutines listed in
each of the Attachments to the Autotote Software Directory under the category
labeled "Central System Software."

         14.6     "Dual Port Terminal Software" means the software installed in
Dual Port terminals manufactured by ASI as of the date of the Closing,
collectively comprised of the directories, modules and subroutines listed in
each of the Attachments to the Autotote Software Directory under the category
labeled "Dual Port Terminal Software".

         14.7     "Mark II Terminal Software" means the software installed in
Mark II terminals manufactured by ASI as of the date of the Closing,
collectively comprised of the directories, modules and subroutines listed in
each of the Attachments to the Autotote Software Directory under the category
labeled "Mark II Terminal Software."

         14.8     "Pari-mutuel Tote Modules" means, for each of the Probe
Terminal 

Software, the Mark II Terminal Software, the Dual Port Terminal Software, and
the Central System Software, all of the applications software directories,
modules and subroutines set forth in Attachments B and C to the Autotote
Software Directory, executed by the parties as of even date herewith, in both
source code and object code form, whether released or work in process, and all
documentation and written materials therefor, together with all directions,
upgrades, updates, modifications, additions, improvements, and substitutions
thereto.

         14.9     "Pari-mutuel Tote Software" means, collectively, the
Pari-mutuel Tote Modules contained in the

                  (a)      Probe Terminal Software;
                  (b)      Mark II Terminal Software;
                  (c)      Dual Port Terminal Software; and
                  (d)      Central System Software.

         For purposes of this Agreement, the term "Pari-mutuel Tote Software"
shall exclude the CBS Software and the Transferred Software and all inventions,
discoveries, improvements, ideas, trade secrets, know-how, confidential
information, and all other intellectual property pertaining to the CBS Software
or the Transferred Software.

         14.10    "Probe Terminal Software" means the software installed in
Probe terminals manufactured by ASI as of the date of the Closing, collectively
comprised of the directories, modules and subroutines listed in each of the
Attachments to the Autotote Software Directory under the category labeled "Probe
Terminal" Software.

         14.11    "Transferred Software" means all software, together with
corrections, upgrades, updates, modifications, additions, improvements, and
substitutions thereto, in both source code and object code form, as may have
been developed by Seller or ASI for any of the CBS Modules, but not for the
Pari-mutuel Tote Modules. For purposes of this Agreement, the term "Transferred
Software" shall exclude the Pari-mutuel Tote Software and all inventions,
discoveries, improvements, ideas, trade secrets, know-how, confidential
information, and all other intellectual property pertaining to the Pari-mutuel
Tote Software.

                  IN WITNESS WHEREOF, the undersigned parties have duly executed
this Agreement as of the day and year first above written.

                                      AUTOTOTE CORPORATION

   
                                      By:  /s/ William Luke
                                         -----------------------------
                                           Name:  William Luke
                                           Title: VP Finance & CFO
    

                                      AMERICAN WAGERING, INC.

   
                                      By:  /s/ Victor Salerno
                                         -----------------------------
                                           Name:  Victor Salerno
                                           Title: President 

Basic Info X:

Name: STOCK TRANSFER AGREEMENT
Type: Stock Transfer Agreement
Date: Sept. 12, 1997
Company: SCIENTIFIC GAMES CORP
State: Nevada

Other info:

Date:

  • October 25 , 1996
  • October 24 , 1996
  • September 28 , 1996
  • October 31 , 1995
  • April 27 , 1994
  • December 31 , 1996
  • August 24 , 1996
  • October 30 , 1996
  • November 1 , 1995

Organization:

  • Corporate Authority of Seller
  • Board of Directors of Seller
  • Organization and Standing of Company
  • Financial Condition and Liabilities
  • Controller of Company
  • Seller 's Group
  • Treasury Regulations Section 1.1502-6
  • Pension Benefit Guaranty Corporation
  • Company Financial Statements
  • Securities and Exchange Commission
  • Procedures for Copyright Protection
  • Trade Secret Protection
  • Las Vegas Hub
  • Las Vegas Dissemination Company
  • Civil Action No
  • Latest Balance Sheet
  • Company or MegaSports , Inc.
  • IGT Sports Wagering Software
  • International Games Technology
  • Internal Revenue Service
  • Comprehensive Environmental Response
  • Corporate Authority of Buyer
  • Conditions of Buyer
  • No Material Adverse Change
  • Banker 's Trust
  • Material Adverse Effect
  • Company and Seller
  • Condition of Purchase
  • Board of Directors or Executive Committee thereof of Seller
  • Resignation of Officers and Directors of Company
  • Board of Directors or Executive Committee thereof of Buyer
  • h Health Plan Implementation
  • Use of Names
  • Autotote CBS , Inc.
  • Seller and Buyer
  • Buyer or Company
  • International Cooperation Agreement
  • Exclusive Authorized Distributorship Agreement
  • SA de C.V.
  • General Counsel Autotote Corporation
  • American Wagering , Inc.
  • Gordon & Silver 3800 Howard Hughes Parkway 14th Floor Las Vegas
  • Schnader Harrison Segal & Lewis
  • the State of Nevada
  • Federal and State
  • Indemnity of Seller
  • b Indemnity of Buyer
  • Nevada State Gaming Control Board
  • Nevada Gaming Commission
  • Assignment of Transferred Software
  • Autotote Systems , Inc.
  • Probe Terminal Software
  • Autotote Software Directory
  • VP Finance & CFO AMERICAN WAGERING

Location:

  • Delaware
  • U.S.
  • FIFRA
  • North America
  • Inc
  • Tijuana
  • Juarez
  • Lexington Avenue New York
  • Las Vegas
  • Philadelphia
  • Esq
  • Clark County
  • Nevada
  • Mexico
  • Pascal

Money:

  • $ 5,000
  • $ 3,000,000.00
  • $ 10,000
  • $ 3 MILLION
  • $ 1.5 MILLION

Person:

  • Kim Lighthart
  • Ralph Overman
  • John Gaughan
  • Brian Callaghan
  • Vic Salerno
  • Lisa Miller-Roche
  • Edward Baxter
  • Fred Sylvanus
  • Robert Ciunci
  • William Luke Title
  • Victor Salerno

Time:

  • 10:00 a.m.

Percent:

  • 50 %
  • 20 percent