<PAGE>   1

                                                                   EXHIBIT 10.50


                            STOCK PURCHASE AGREEMENT

                           dated as of April 15, 1997

                                 by and between

                        Scientific Games Holdings Corp.

                                      and

                              Autotote Corporation

                              with respect to all

                          outstanding capital stock of

                Tele Control Kommunikations und Computersysteme
                              Aktien Gesellschaft
<PAGE>   2

                               TABLE OF CONTENTS

         This Table of Contents is not part of the Agreement to which it is
attached but is inserted for convenience only.

<TABLE>
<CAPTION>

                                                                                  Page
                                                                                   No.
                                                                                  ----
<S>              <C>                                                              <C>
ARTICLE I

SALE OF SHARES AND CLOSING .........................................................1
         1.01    Purchase and Sale .................................................1
         1.02    Purchase Price.....................................................1
         1.03    Closing; Letter of Credit..........................................1
         1.04    Post-Closing Adjustment of Purchase Price..........................4

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF SELLER............................................6
         2.01    Organization of Seller.............................................6
         2.02    Authority..........................................................6
         2.03    Organization of the Company........................................6
         2.04    Capital Stock......................................................7
         2.05    No Subsidiaries....................................................7
         2.06    No Conflicts.......................................................7
         2.07    Governmental Approvals and Filings; Other Approvals................7
         2.08    Books and Records..................................................8
         2.09    Financial Statements; Other Filings................................8
         2.10    Absence of Changes.................................................9
         2.11    No Undisclosed Liabilities........................................11
         2.12    Taxes.............................................................11
         2.13    Legal Proceedings.................................................12
         2.14    Compliance With Laws and Orders...................................13
         2.15    Employees; Labor Relations........................................13
         2.16    Benefit Plans.....................................................14
         2.17    Real Property.....................................................14
         2.18    Tangible Personal Property; Investment Assets.....................15
         2.19    Intellectual Property Rights......................................16
         2.20    Contracts.........................................................17
         2.21    Governmental Licenses.............................................19
         2.22    Insurance.........................................................20
         2.23    Affiliate Transactions............................................20
         2.24    Environmental Matters.............................................21
         2.25    Substantial Customers and Suppliers...............................22
</TABLE>



                                      -i-
<PAGE>   3


<TABLE>
<S>      <C>     <C>                                                                 <C>
         2.26    Bank and Brokerage Accounts; Investment Assets......................22
         2.27    No Powers of Attorney...............................................22
         2.28    Accounts Receivable.................................................22
         2.29    Inventory...........................................................24
         2.30    Product Claims......................................................24
         2.31    Brokers.............................................................24
         2.32    Disclosure..........................................................25
         2.33    Conduct of Business.................................................25
         2.34    Contracts with Certain Customers....................................25
         2.35    Resignations of Directors and Officers..............................25
         2.36    Operative Agreements................................................25
         2.37    IDJ Confirmation....................................................25
         2.38    IDJ Claims..........................................................26

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PURCHASER..........................................26
         3.01    Organization........................................................26
         3.02    Authority...........................................................26
         3.03    No Conflicts........................................................26
         3.04    Governmental Approvals and Filings..................................27
         3.05    Legal Proceedings...................................................27
         3.06    Brokers.............................................................27

ARTICLE IV

COVENANTS OF SELLER..................................................................27
         4.01    Books and Records...................................................27
         4.02    Non-Competition.....................................................27
         4.03    Know-How License Agreement; Inspection Rights Agreement.............29
         4.04    Subsequent Transactions.............................................29

ARTICLE V

CONDITIONS TO OBLIGATIONS OF PURCHASER...............................................29
         5.01    Officers' Certificates..............................................30
         5.02    Opinion of Counsel..................................................30
         5.03    Proceedings.........................................................30

ARTICLE VI

CONDITIONS TO OBLIGATIONS OF SELLER..................................................30
         6.01    Officers' Certificates..............................................30
         6.02    Opinion of Counsel..................................................30
</TABLE>



                                     -ii-
<PAGE>   4

<TABLE>
<S>      <C>                                                                         <C>
         6.03    Proceedings.........................................................30

ARTICLE VII

TAX MATTERS AND POST-CLOSING TAXES...................................................31
         7.01    Tax Sharing Agreements..............................................31
         7.02    Allocation of Tax Liability.........................................31
         7.03    Returns and Payments................................................31
         7.04    Cooperation and Exchange of Information.............................32

ARTICLE VIII

SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS....................33
         8.01    Survival of Representations, Warranties, Covenants and Agreements...33
         8.02    Limitations on Indemnity............................................33

ARTICLE IX

INDEMNIFICATION......................................................................34
         9.01    Indemnification.....................................................34
         9.02    Method of Asserting Claims..........................................35
         9.03    Method of Asserting Tax Claims......................................37
         9.04    Method of Calculating Losses........................................38
         9.05    Source of Funds to Satisfy Claims for Indemnification...............38

ARTICLE X

DEFINITIONS..........................................................................38
         10.01   Definitions.........................................................38

ARTICLE XI

MISCELLANEOUS........................................................................47
         11.01   Notices.............................................................47
         11.02   Entire Agreement....................................................49
         11.03   Expenses............................................................49
         11.04   Public Announcements................................................49
         11.05   Confidentiality.....................................................50
         11.06   Further Assurances; Post-Closing Cooperation........................51
         11.07   Waiver..............................................................52
         11.08   Amendment...........................................................52
         11.09   No Third Party Beneficiary..........................................52
         11.10   No Assignment; Binding Effect.......................................53
</TABLE>



                                     -iii-
<PAGE>   5

<TABLE>
         <S>     <C>                                                                 <C>
         11.11   Headings............................................................53
         11.12   Invalid Provisions..................................................53
         11.13   Governing Law.......................................................53
         11.14   Counterparts........................................................53
         11.15   Arbitration.........................................................54
         11.16   Consent to Jurisdiction and Service of Process......................54
         11.17   Construction........................................................55
         11.18   Time................................................................55
</TABLE>



                                     -iv-
<PAGE>   6


                                    EXHIBITS

EXHIBIT A               Assignment and Assumption Agreement
EXHIBIT B               Letter of Credit
EXHIBIT C               Escrow Agreement
EXHIBIT D               Balance Sheet Data
EXHIBIT E               Exclusive License Agreement
EXHIBIT F               Inspection Rights and License Agreement
EXHIBIT G               Right of First Refusal Agreement
EXHIBIT H               Secretary's Certificate of Seller
EXHIBIT I               Certificate of the Managing Director of the Company
EXHIBIT J               Opinion of U.S. Counsel to Seller
EXHIBIT K               Opinion of Austrian Counsel to Seller
EXHIBIT L               Secretary's Certificate of Purchaser
EXHIBIT M               Opinion of U.S. Counsel to Purchaser
EXHIBIT N               Opinion of Austrian Counsel to Purchaser



                                      -v-
<PAGE>   7

         This STOCK PURCHASE AGREEMENT dated as of April 15, 1997 is made and
entered into by and between SCIENTIFIC GAMES HOLDINGS CORP., a Delaware
corporation ("SGHC" or the "Purchaser"), and AUTOTOTE CORPORATION, a Delaware
corporation ("Seller"). Capitalized terms not otherwise defined herein have the
meanings set forth in Section 10.01.

         WHEREAS, Seller owns one thousand (1,000) shares of common stock,
nominal value one thousand (1,000) Austrian Schillings per share, of Tele
Control Kommunikations und Computersysteme Aktien Gesellschaft, an Austrian
stock company, constituting all the issued and outstanding shares of capital
stock of the Company (such shares being referred to herein as the "Shares");

         WHEREAS, Seller desires to sell, and Purchaser desires to purchase,
the Shares on the terms and subject to the conditions set forth in this
Agreement;

         NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:

                                   ARTICLE I

                           SALE OF SHARES AND CLOSING

         1.01     Purchase and Sale. Seller agrees to sell to Purchaser or its
assignee as permitted by Section 11.10 (any such assignee also hereinafter
being referred to as the Purchaser), and Purchaser agrees to purchase from
Seller, all of the right, title and interest of Seller in and to the Shares at
the Closing on the terms and subject to the conditions set forth in this
Agreement.

         1.02     Purchase Price. The aggregate purchase price for the Shares
and for the covenant of Seller contained in Section 4.02 is $25,000,000 (the
"Purchase Price"), payable in immediately available United States funds at the
Closing in the manner provided in Section 1.03, all of which is allocable to,
and deemed to be in consideration of, the Shares. The Purchase Price shall be
subject to adjustment as provided in Section 1.04, and Section 1.04 of the
Disclosure Schedule , but in no event shall the Purchase Price, as adjusted,
exceed the sum of $25,000,000 plus 18,975,692 Austrian Schillings, which amount
is subject to further reduction as described in Section 1.04 of the Disclosure
Schedule (such 18,975,692 amount being hereinafter referred to as the "Maximum
Purchase Price Adjustment Increase"). Seller agrees that Purchaser may, in its
sole and absolute discretion, make an election under section 338(g) of the Code
to treat the transaction as an acquisition of assets for purposes of the Code
as provided in such section.


         1.03     Closing; Letter of Credit. (a) The Closing will take place at
the offices of Smith, Gambrell & Russell, LLP, Suite 3100, Promenade II, 1230
Peachtree Street, N.E., Atlanta, Georgia 30309-3592 or at such other place as
Purchaser and Seller mutually agree, at 10:00 A.M. local time, on the Closing
Date; provided, however, the Closing shall not, in any event, be held in
Austria.



                                       1
<PAGE>   8

Notwithstanding anything in this Agreement to the contrary, the Closing
contemplated by this Agreement will be deemed to occur only after execution of
the Assignment and Assumption Agreement, substantially in the form of Exhibit A
hereto. At the Closing, Purchaser will pay the Purchase Price by wire transfer
of immediately available federal funds to such account in the United States as
Seller may direct by written notice delivered to Purchaser by Seller at least
two (2) Business Days before the Closing Date. Concurrently, Seller will assign
and transfer to Purchaser good and unrestricted title in and to the Shares,
free and clear of all Liens, by delivering to Purchaser a certificate or
certificates representing the Shares, in genuine and unaltered form, duly
endorsed in blank or accompanied by duly executed stock powers endorsed in
blank. At the Closing, there shall also be delivered to Seller and Purchaser
the opinions, and certificates and other Contracts, documents and instruments
to be delivered under Articles IV, V and VI;

         (b)      Concurrently at Closing, Seller shall provide Purchaser with
a letter of credit (the "Letter of Credit") in the original principal amount of
$2,500,000 naming SGHC and such other Persons as SGHC may designate as
beneficiaries thereunder to secure the obligations of Seller under this
Agreement and the Operative Agreements. Notwithstanding any assignment by SGHC
to any assignee permitted by Section 11.10 of this Agreement or the Operative
Agreements in accordance with the terms thereof, Seller agrees that SGHC may
enforce the rights granted to Purchaser hereunder on behalf of any such
assignee and that SGHC may continue to be named as the beneficiary of such
Letter of Credit, notwithstanding any such assignment. Such Letter of Credit
shall be in the form of Exhibit B hereto, shall be issued by a commercial bank
of recognized standing, chartered in the United States, with capital, surplus
and undivided profit aggregating in excess of $250 million, and be confirmed by
a commercial bank satisfactory to Purchaser, and shall provide that it may be
drawn upon by the beneficiaries thereof, in accordance with the terms thereof,
without further action by Seller.

         Purchaser shall have the right at any time to draw under the Letter of
Credit the full amount of any claim (or the full amount of the Loss or Purchase
Price Adjustment ) asserted in good faith by Purchaser under this Agreement or
the Operative Agreements up to the then available balance under the Letter of
Credit without regard to any other limitation imposed on such claim by this
Agreement or the Operative Agreements, pending a determination of the
materiality or the merits of such claim or the amount of Purchaser's Loss or
the amount of the Purchase Price Adjustment owed to Purchaser under or with
respect to this Agreement or the Operative Agreements.


         Purchaser shall endeavor in good faith to give Seller ten (10) days
prior notice of any intent to draw under the Letter of Credit with respect to
the good faith assertion of any claim under this Agreement or the Operative
Agreements, provided, however, that a shorter period of notice, or no notice at
all, may be given with respect to any draw under the Letter of Credit within
ten (10) days of the scheduled reduction dates set forth therein. Following any
draw under the Letter of Credit as to which no prior notice or less than ten
(10) day prior notice has been given, Purchaser will deposit the funds drawn
into the Escrow Account and the release of such funds from the Escrow Account
shall thereafter be governed by the terms of the Escrow Agreement. Purchaser
agrees that the Initial Set Aside Period as defined in the Escrow Agreement
shall be extended by ten (10) days if no notice of Purchaser's intent to draw
under the Letter of Credit has been given prior to a draw



                                       2
<PAGE>   9

under the Letter of Credit or, if less than ten (10) days notice has been
given, by a number of days equal to the difference between ten (10) days and
the number of days notice of Purchaser's intent to draw under the Letter of
Credit which are actually given. Promptly after any draw under the Letter of
Credit by Purchaser which is made without prior notice to Seller, Purchaser
shall provide Seller with notice of such draw and the claim upon which such
draw was based.

         If Purchaser has furnished Seller with ten (10) days prior written
notice of its intent to draw under the Letter of Credit and Seller has not,
within such period, given Purchaser written notice that Seller, in good faith,
disputes the validity of Purchaser's claim under the Stock Purchase Agreement
or the Operative Agreements to the funds, or the applicable portion thereof,
which are the subject of Purchaser's notice of its intent to draw under the
Letter of Credit, then Purchaser may draw such funds under the Letter of Credit
without any obligation to deposit such funds in the Escrow Account and Seller
thereafter shall have no claim to such funds or with respect to the validity of
the claim on which such draw was based. In the event Seller furnishes Purchaser
with the foregoing written notice disputing Purchaser's claim or the amount
thereof, then Purchaser shall deposit the Disputed Amounts into the Escrow
Account established by the Escrow Agreement and the release of such funds from
the Escrow Account shall thereafter be governed by the terms of the Escrow
Agreement.

         Seller shall pay all costs of issuance and confirmation of the Letter
of Credit. Unless claims for indemnification by the Purchaser shall have been
asserted under or in respect of Section 9.02 or Post-Closing Adjustments in
favor of Purchaser shall have been asserted under or in respect of Section
1.04, or unless Purchaser has attempted to draw under the Letter of Credit and
such draw has not been paid in accordance therewith (in which case, any
reductions contemplated herein or therein which have not previously occurred
shall not occur until resolution of the claim or payment of the draw, as the
case may be, the principal amount of the Letter of Credit will be reduced in
accordance with the terms of the Letter of Credit itself.

         If the amount of any unresolved and unpaid claim or claims or
adjustment or adjustments asserted by Purchaser are for an unspecified amount,
then Seller may, in good faith at any time, draw against the full amount then
available under the Letter of Credit in any period in which such unliquidated
claims or adjustments are pending.


         (c)      If an amount is paid under the Letter of Credit and deposited
as a Disputed Amount under the Escrow Agreement and it is subsequently
determined that no payment or a smaller payment was due with respect to such
claim or adjustment (the "Original Claims or Adjustments"), and the Purchaser
has asserted other claims or adjustments in excess of the amount available
under the Letter of Credit for payment of such amounts or claims (the "Excess
Claims and Adjustments") at the time when such Original Claims or Adjustments
were asserted and such Excess Claims and Adjustments have not been fully paid,
then, Purchaser and Seller will direct the Escrow Agent to apply such excess
funds and use their best efforts to cause the Escrow Agent to apply such excess
funds: first, to satisfy any undisputed claims or adjustments due to Purchaser,
second, upon notice to the Escrow Agent by Purchaser that such funds represent
funds available to satisfy Excess Claims and Adjustments, shall be retained by
the Escrow Agent and treated as a draw under the Letter of Credit, based on the
availability thereunder when such funds were initially drawn, subject to



                                       3
<PAGE>   10

withdrawal from the Escrow Account by Purchaser or Seller in accordance with
the terms thereof, and third, retained in the Escrow Account and treated as
available for payment of further claims or adjustments by Purchaser, but only
to the extent such funds would otherwise then be available under the Letter of
Credit if such funds had never been drawn thereunder; provided, however, that,
if Seller requests, Purchaser and Seller shall direct the Escrow Agent to
release such funds to Bankers Trust Company, as issuer of the Letter of Credit
pursuant to instructions to Bankers Trust Company to reinstate such funds as
funds which are available under the Letter of Credit, and to acknowledge
promptly such reinstatement in writing to Purchaser and Seller.

         Without limiting the generality of the foregoing proviso, for purposes
of this Agreement and the Operative Agreements, neither the Purchaser nor the
Company shall be obligated to estimate the amount of any indemnification claim
where the underlying claim includes a demand for unspecified damages or where
the amount of the underlying claim is determinable only following the passage
of time or the completion of action, provided, however, that if Purchaser and
Company can estimate the maximum potential amount payable under any claim they
will endeavor in good faith to use reasonable efforts to do so.
Contemporaneously with the Closing Date, Seller and Purchaser shall enter into
the Escrow Agreement with the Escrow Agent named therein in the form attached
as Exhibit C hereto.

         The Seller's rights and remedies under this Section 1.03 and the
Letter of Credit are in addition to and not in limitation of all other remedies
provided under this Agreement, the Operative Agreements or by law.

         1.04     Post-Closing Adjustment of Purchase Price.

         (a)      As promptly as practicable following the Closing Date (and in
any case within thirty (30) days thereafter), the Seller shall prepare, at
Seller's expense, and the Purchaser's accountants shall audit, at Purchaser's
expense, a balance sheet of the Company as of the close of business on the
Closing Date (the "Closing Balance Sheet"). The Closing Balance Sheet shall be
(i) prepared in accordance with AAP and, to the extent consistent with AAP, in
the same manner as the Audited Financial Statements, and (ii) reasonably
satisfactory to Purchaser in all respects. The Purchaser shall provide the
Seller with such assistance and access to the Company's Books and Records as
shall be reasonably necessary to permit the preparation of the Closing Balance
Sheet within thirty (30) days following the Closing Date. The Seller shall
provide full access to all information reasonably available to Seller which is
requested by Purchaser's accountants for the audit of the Closing Balance
Sheet. The Purchaser's accountants shall use commercially reasonable efforts to
complete the audit of the Closing Balance Sheet within forty-five (45) days
following receipt from Seller of the Closing Balance Sheet. The Purchaser shall
deliver the audited Closing Balance Sheet to the Seller promptly upon its
completion. The Seller and its accountants shall be given full access upon
request to all work papers or other materials used by the Purchaser and its
accountants in the audit of the Closing Balance Sheet.


         (b)      Within thirty (30) days after receiving the audited Closing
Balance Sheet, the Seller shall deliver to the Purchaser a detailed statement
describing the Seller's objections, if any, to the



                                       4
<PAGE>   11

Closing Balance Sheet. If no objections are delivered to the Purchaser within
such 30 day period, the audited Closing Balance Sheet shall become final and
binding upon the parties. If the Purchaser does receive a statement of
objections from the Seller, the parties will endeavor to reconcile any
differences and agree upon a final Closing Balance Sheet. If the parties are
unable to agree upon a final Closing Balance Sheet within ten (10) days
following Purchaser's receipt of Seller's list of objections, then, at the
request of Purchaser, the outstanding matters shall be submitted for resolution
by an independent certified public accounting firm of recognized standing in
the United States and Austria (which shall not otherwise be engaged by
Purchaser or Seller) selected by the Purchaser with the consent of the Seller,
which consent shall not be unreasonably withheld. Each of the parties shall
bear one-half of the fees and expenses of the accounting firm so selected. Such
accounting firm shall be instructed to use commercially reasonable efforts to
make a final determination of all issues and prepare a final Closing Balance
Sheet in accordance with AAP within thirty (30) days after such firm is
retained and, in any event, as promptly as practicable and both parties agree
to cooperate fully with such accounting firm. The Closing Balance Sheet
prepared by such accounting firm shall be final and binding upon the parties.

         (c)      To the extent the amount of the statutory net assets shown on
the final Closing Balance Sheet (total assets less total liabilities, excluding
from the beginning and closing balance sheets: (i) intercompany accounts
receivable, except for the amount equal to the 1997 Dividend Withholding Tax
Receivable; (ii) Deferred Revenue, (iii) intercompany accounts payable, and
(iv) cash in an amount equal to 5,345,000 Austrian Schillings) is less than
32,430,847 Austrian Schillings, the Seller shall, within five (5) days
following determination of the final Closing Balance Sheet pursuant to
subsection (b) above, pay to the Purchaser the full amount by which the
statutory net asset value, as computed above, is less than 32,430,847 Austrian
Schillings. The unaudited adjusted balance sheet in Austrian Schillings of the
Company, as of October 31, 1996, is set forth as Exhibit D hereto.

         (d)      To the extent the amount of the statutory net assets shown on
the final Closing Balance Sheet (total assets less total liabilities, excluding
from the beginning and closing balance sheets: (i) intercompany accounts
receivable except for the amount equal to the 1997 Dividend Withholding Tax
Receivable, (ii) Deferred Revenue, (iii) intercompany accounts payable, and
(iv) cash in an amount equal to 5,345,000 Austrian Schillings) is more than
32,430,847 Austrian Schillings, the Purchaser shall, within five (5) days
following final determination of the Closing Balance Sheet pursuant to
subsection (b) above, pay to the Seller the full amount by which the statutory
net asset value, as computed above, exceeds 32,430,847 Austrian Schillings;
provided, however, that notwithstanding anything to the contrary herein, the
aggregate amount payable by the Purchaser pursuant to such post-closing
adjustment shall not exceed the Maximum Purchase Price Adjustment Increase
(18,975,692 Austrian Schillings as of the date of this Agreement, subject to
further reduction in accordance with Section 1.02 of this Agreement as provided
in Section 1.04 of the Disclosure Schedule).

         (e)      Any adjustment to the Purchase Price payable by the Seller
pursuant to Section 1.04(c), or by the Purchaser pursuant to Section 1.04(d),
shall be paid by wire transfer in U.S. Dollars, Austrian Schillings or German
Deutschmarks, as determined by Purchaser, in its sole and



                                       5
<PAGE>   12

absolute discretion. In the case of any payments due to Purchaser, Purchaser
shall notify Seller of the currency selected for payment at least three (3)
Business Days prior to the date on which the purchase price adjustment is
scheduled for payment in the event Seller will be required to make such payment
in other than U.S. dollars.

                                   ARTICLE II

                    REPRESENTATIONS AND WARRANTIES OF SELLER

         Seller hereby represents, warrants and covenants to Purchaser as
follows:

         2.01     Organization of Seller. Seller is a corporation validly
existing and in good standing under the Laws of the State of Delaware. Seller
has full corporate power and authority to execute and deliver this Agreement
and the Operative Agreements to which it is a party and to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby, including without limitation to own, hold,
sell and transfer the Shares pursuant to this Agreement.

         2.02     Authority. The execution and delivery by Seller of this
Agreement and the Operative Agreements to which it is a party, and the
performance by Seller of its obligations hereunder and thereunder, have been
duly and validly authorized by the Board of Directors of Seller, no other
corporate action on the part of Seller or any class or series of its security
holders (equity or debt) is necessary and such Board has concluded that the
consideration to be received by Seller upon consummation of the transactions
contemplated hereby is fair to Seller from a financial point of view. This
Agreement and the Operative Agreements have been duly and validly executed and
delivered by Seller and constitute legal, valid and binding obligations of
Seller enforceable against Seller in accordance with their respective terms.

         2.03     Organization of the Company. The Company is a stock
corporation duly registered on the company register of the Commercial Court of
Vienna, and duly organized and validly existing under the Laws of Austria, and
has full corporate power and authority to conduct its business as and to the
extent now conducted and to own, use and lease its Assets and Properties.
Included in Section 2.03 of the Disclosure Schedule is a copy of the report by
the auditor of the formation of the Company as a stock company. The registered
office of the Company is Klitschgasse 4, 1130 Wien, Austria. The Company is
duly qualified, licensed or admitted to do business in those jurisdictions
specified in Section 2.03 of the Disclosure Schedule, which are the only
jurisdictions in which the ownership, use or leasing of its Assets and
Properties, or the conduct or nature of its business, makes such qualification,
licensing or admission necessary. The name of each member of the management
board and supervisory board of the Company on the date hereof, and the position
with the Company held by each (whether as a member of the executive board, the
supervisory board or otherwise), are listed in Section 2.03 of the Disclosure
Schedule. Contemporaneously with the execution of this Agreement, Seller has
delivered to Purchaser true and complete copies of the articles of association
of the Company as in effect on the date hereof, along with a certified abstract
from the Commercial Register.



                                       6
<PAGE>   13

         2.04     Capital Stock. The authorized capital stock of the Company
consists solely of one thousand (1,000) shares of common stock, all of which
have been issued. The Shares are duly authorized, validly issued, outstanding,
fully paid and nonassessable. Seller owns the Shares, beneficially and of
record, free and clear of all Liens (including Permitted Liens). Except for
this Agreement, there are no outstanding Options with respect to the Company.
The delivery of a certificate at the Closing representing the Shares in the
manner provided in Section 1.03 will transfer to Purchaser good and
unrestricted title to the Shares, free and clear of all Liens.

         2.05     No Subsidiaries. Except as disclosed in Section 2.05 of the
Disclosure Schedule, since the date of the Audited Financial Statements, the
Company has not and, on and prior to the Closing Date, will not, have any
subsidiaries or own directly or indirectly any capital stock or other equity or
ownership or proprietary interest in or have any investment in, any
corporation, partnership, joint venture, limited liability company, limited
liability partnership, association or other Person.

         2.06     No Conflicts. The execution and delivery by Seller of this
Agreement and the Operative Agreements do not, and the performance by Seller of
its obligations under this Agreement and the Operative Agreements and the
consummation of the transactions contemplated hereby and thereby will not:

         (a)      conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the Certification of Incorporation and
by-laws of the Seller or the articles of association of the Company;

         (b)      subject to the matters set forth in Section 2.06 of the
Disclosure Schedule, conflict with or result in a material violation or
material breach of any term or provision of any Law or Order applicable to
Seller or the Company or any of their respective Assets and Properties; or

         (c)      subject to the matters set forth in Section 2.06 of the
Disclosure Schedule, (i) materially conflict with or result in a material
violation or material breach of, (ii) constitute (with or without notice or
lapse of time or both) a material default under, (iii) require Seller or the
Company to obtain any material consent, approval or action of, make any
material filing with or give any notice to any Person as a result or under the
terms of, (iv) result in or give to any Person any right of termination,
cancellation, acceleration or modification in or with respect to, (v) result in
or give to any Person any additional material rights or entitlement to
increased, additional, accelerated or guaranteed payments under, or (vi) result
in the creation or imposition of any Lien upon the Company or any of its Assets
and Properties under, any Contract or Governmental License to which Seller or
the Company is a party or by which any of their respective Assets and
Properties is bound.

         2.07     Governmental Approvals and Filings; Other Approvals. Except
as disclosed in Section 2.07 of the Disclosure Schedule, no consent, approval
or action of, filing with or notice to any Governmental or Regulatory Authority
or any other Person (including, without limitation, (i) any lenders or agents
under any financing or bank credit agreement of the Seller or the Company or
(ii) IDJ (whether under customer contracts for the implementation of lottery
systems where IDJ



                                       7
<PAGE>   14

is the prime contractor and the Company is the subcontractor with respect
thereto or otherwise)) on the part of Seller or the Company is required in
connection with the execution, delivery and performance of this Agreement or
any of the Operative Agreements to which either of them is a party or the
consummation of the transactions contemplated hereby or thereby. For the
avoidance of doubt, Seller further represents and warrants that the Company (a)
does not and, for the most recently completed calendar year and fiscal year,
did not: hold assets located in the United States (other than investment
assets, voting or non-voting securities of another person, and assets included
pursuant to 16 C.F.R. ss. 801.40(c)(2)), having an aggregate book value of $15
million or more, and (b) has not made aggregate sales in or into the United
States of $25 million or more in its most recent fiscal year.

         2.08     Books and Records. The minute books and other similar records
of the Company as made available to Purchaser prior to the execution of this
Agreement contain a true and complete record, in all material respects, of all
corporate action taken at all meetings and by all written consents in lieu of
meetings of the stockholders and the board of directors of the Company. The
stock transfer ledgers and other similar records of the Company as made
available to Purchaser prior to the execution of this Agreement accurately
reflect all record transfers prior to the execution of this Agreement in the
capital stock of the Company. Except as set forth in Section 2.08 of the
Disclosure Schedule, the Company does not have any of its Books and Records
recorded, stored, maintained, operated or otherwise wholly or partly dependent
upon or held by any means (including any electronic, mechanical or photographic
process, whether computerized or not) which (including all means of access
thereto and therefrom) are not under the exclusive ownership and direct control
of the Company. Except as set forth in Section 2.08 of the Disclosure Schedule,
since the date of the Audited Financial Statements, the Books and Records of
the Company have been maintained in the usual, regular and ordinary manner in
accordance with AAP.

         2.09     Financial Statements; Other Filings. (a) Prior to the
execution of this Agreement, Seller has delivered to Purchaser true and
complete copies of the following financial statements, which financial
statements have been prepared on a basis consistent with the Audited Financial
Statements.

         (i)      the audited balance sheets of the Company as of October 31,
1995 and 1996, and the related audited statements of operations and cash flows
for each of the fiscal years then ended, together with a true and correct copy
of the report on such audited information by KPMG Vienna; and

         (ii)     the unaudited balance sheets of the Company and the related
unaudited statements of operations, and cash flows for each month subsequent to
October 31, 1996, to the extent reasonably available and, if prepared by the
Company or Seller, for any quarter subsequent to October 31, 1996.


         Except as disclosed in Section 2.09 of the Disclosure Schedule, (A)
all such financial statements (i) were prepared in accordance with AAP, (ii)
fairly present the financial condition and results of operations of the Company
as of the respective dates thereof and for the respective periods covered
thereby, and (iii) were compiled from the Books and Records of the Company
regularly



                                       8
<PAGE>   15

maintained by management and used to prepare the financial statements of the
Company and (B) except for correspondence internal to KPMG Peat Marwick, copies
of which, to Seller's Knowledge, have been made available for inspection by the
Purchaser, there are no letters with respect to results of the audits referred
to in Section 2.09(a)(i). The Company has maintained its Books and Records in a
manner sufficient to permit the preparation of financial statements in
accordance with AAP, such Books and Records fairly reflect, in all material
respects, the income, expenses, assets and liabilities of the Company and the
Books and Records provided a fair and accurate basis for the preparation of the
Audited Financial Statements and the Unaudited Financial Statements.

         (b)      Seller has delivered to Purchaser true and complete copies of
such other financial statements, reports and analyses (other than financial
reports and analyses by or at the direction of the Seller constituting analyses
of the transaction contemplated by this Agreement) as have been prepared by or
for Seller or the Company relating to the business or operations of the Company
since the date of the Audited Financial Statements.

         (c)      Seller has delivered to Purchaser copies of all material
Governmental License applications and other filings made by the Company after
the date of the Audited Financial Statements with any Governmental or
Regulatory Authority (other than routine, recurring filings made in the
ordinary course of business consistent with past practice).

         2.10     Absence of Changes. Since the Audited Financial Statement
Date there has not been any material adverse change, or any event or
development which, individually or together with other such events, would
reasonably be expected to result in a material adverse change, in the Business
or Condition of the Company, other than (i) those occurring as a result of
general economic or financial conditions or other developments which are not
unique to the Company, but also generally affect other persons who participate
or are engaged in the lines of business in which the Company participates or is
engaged, or (ii) as disclosed by Seller in its filings with the Securities and
Exchange Commission pursuant to Section 13 of the Securities Exchange Act of
1934, as amended. Without limiting the foregoing, except for the execution and
delivery of this Agreement, the Operative Agreements and the transactions to
take place pursuant hereto on or prior to the Closing Date, or as disclosed in
Section 2.10 of the Disclosure Schedule, there has not occurred between the
Audited Financial Statement Date and the date hereof nor has the Company
entered into any Contract to do or engage in:

                  (i)      any declaration, setting aside or payment of any
         dividend or other distribution in respect of the capital stock of the
         Company or any direct or indirect redemption, purchase or other
         acquisition by the Seller or the Company of any such capital stock of
         or any Option with respect to the Company;

                  (ii)     any authorization, issuance, sale or other
         disposition by the Company or the Seller of any shares of capital
         stock of, or Option with respect to, the Company, or any modification
         or amendment of any right of any holder of any outstanding shares of
         capital stock of, or Option with respect to, the Company;



                                       9
<PAGE>   16

                  (iii)    (x) any increase in excess of $10,000 in the salary,
         wages or other compensation of any officer, employee or consultant of
         the Company whose annual salary is, or after giving effect to such
         change would be, $100,000 or more; (y) any establishment or
         modification of (A) targets, goals, pools or similar provisions in
         respect of any fiscal year under any Benefit Plan, employment-related
         Contract or other employee compensation arrangement or (B) salary
         ranges, increase guidelines or similar provisions in respect of any
         Benefit Plan, employment-related Contract or other employee
         compensation arrangement; or (z) any adoption, entering into or
         becoming bound by any Benefit Plan, employment-related Contract or
         collective bargaining agreement, or amendment, modification or
         termination (partial or complete) of any Benefit Plan,
         employment-related Contract or collective bargaining agreement;

                  (iv)     (A) incurrences by the Company of Indebtedness in an
         aggregate principal amount exceeding $25,000 (net of any amounts
         discharged during such period), or (B) any voluntary purchase,
         cancellation, prepayment or complete or partial discharge in advance
         of a scheduled payment date with respect to, or waiver of any right of
         the Company under, any Indebtedness of or owing to the Company;

                  (v)      any physical damage, destruction or other casualty
         loss (whether or not covered by insurance) affecting any of the plant,
         real or personal property or equipment of the Company in an aggregate
         amount exceeding $50,000;

                  (vi)     any material change in (x) any pricing, investment,
         accounting, financial reporting, inventory, credit, allowance or Tax
         practice or policy of the Company, or (y) any method of calculating
         any bad debt, contingency or other reserve of the Company for
         accounting, financial reporting or Tax purposes, or any change in the
         fiscal year of the Company;

                  (vii)    any write-off or write-down of or any determination
         to write off or write down any of the Assets and Properties of the
         Company in an aggregate amount exceeding $10,000;

                  (viii)   any acquisition or disposition of, or incurrence of
         a Lien (other than a Permitted Lien) on, any Assets and Properties of
         the Company, other than in the ordinary course of business consistent
         with past practice;

                  (ix)     other than the reincorporation of the Company as a
         stock company from a limited liability company, (A) any amendment of
         the articles of association of the Company (B) any amendment of the
         certificate of incorporation or by-laws of the Seller, (C) any
         recapitalization, reorganization, liquidation or dissolution of the
         Company, or (D) any merger or other business combination involving the
         Seller or the Company and any other Person;


                  (x)      any entering into, amendment, modification,
         termination (partial or complete) or granting of a waiver under or
         giving any consent with respect to (A) any Contract which



                                      10
<PAGE>   17

         is required (or had it been in effect on the date hereof would have
         been required) to be disclosed in the Disclosure Schedule pursuant to
         Section 2.20(a), (B) any material Governmental License held by the
         Company (or the Seller, if such Governmental License is to be
         assigned, sub-licensed or otherwise conveyed to the Purchaser) or (C)
         any irrevocable powers of attorney or comparable delegations of
         authority;

                  (xi)     capital expenditures or commitments for additions to
         property, plant or equipment of the Company constituting capital
         assets in an aggregate amount exceeding $60,000;

                  (xii)    any commencement or termination by the Company of
         any line of business or any termination by the Seller of Seller's
         Lottery Business or any portion thereof;

                  (xiii)   any transaction in excess of $10,000 by the Company
         with Seller, any officer, director, Affiliate (other than the Company)
         or Associate of Seller or any Associate of any such officer, director
         or Affiliate (A) outside the ordinary course of business consistent
         with past practice or (B) other than on an arm's-length basis, other
         than pursuant to any Contract in effect on the Audited Financial
         Statement Date and disclosed pursuant to Section 2.20(a)(vii) of the
         Disclosure Schedule; or

                  (xiv)    any other transaction involving or development
         affecting the Company outside the ordinary course of business
         consistent with past practice.

         2.11     No Undisclosed Liabilities. Except as reflected or reserved
against in the balance sheet included in the Audited Financial Statements or as
disclosed in Section 2.11 of the Disclosure Schedule or any other section of
the Disclosure Schedule, there are no Liabilities against, relating to or
affecting the Company or any of its Assets and Properties, which, in the
aggregate, are material to the Business or Condition of the Company, other than
Liabilities incurred in the ordinary course of business consistent with past
practice, which will be recorded on the Closing Balance Sheet.

         2.12     Taxes.

         (a)      The Company has accurately filed all Tax Returns that it was
required to file and provided all information required to be furnished under
applicable Tax laws or requested by applicable Tax authorities in a timely
manner (taking into account all extensions of due dates), and has paid in a
timely manner all Taxes shown thereon as owing (or has established adequate
reserves therefor as reflected on the Financial Statements), except for Taxes
which are being contested in good faith as disclosed on Section 2.12(a) of the
Disclosure Statement. All information provided in such Tax Returns is true,
correct and complete in all material respects as to the Company or as to any
liability for Taxes for which it could be liable. The Company is in compliance
with and retains in its records all information and documents necessary to
comply in all material respects with all applicable Tax or information
reporting and any Tax withholding requirements under federal, state and local
Tax laws.



                                      11
<PAGE>   18

         (b)      Section 2.12 of the Disclosure Schedule lists all Tax Returns
filed with respect to the Company or any of its properties, income or
operations for taxable periods since September 30, 1993. Section 2.12 of the
Disclosure Schedule lists all Tax Returns filed with respect to the Company for
any period for which there is any claim or assessment pending, or where, to the
Seller's Knowledge, such a claim or assessment is threatened, or where an audit
or investigation with respect to any liability of the Company exists. The
Seller has delivered to the Purchaser correct and complete copies of all Tax
Returns (including amendments thereto), and all examination reports, and
statements of deficiencies assessed against or agreed to by or on behalf of the
Company since September 30, 1993. All Taxes due with respect to completed and
settled examinations or concluded litigation regarding Tax Returns have been
paid or accrued.

         (c)      Except as set forth in Section 2.12(c) of the Disclosure
Schedule, the Company has not waived any statute of limitations in respect of
Taxes or agreed to any extension of time with respect to a Tax assessment or
deficiency.

         (d)      Except as set forth in Section 2.12(d) of the Disclosure
Schedule, the Company is not a party to any Tax allocation or sharing
agreement.

         (e)      Except as disclosed on Schedule 2.12(e) of the Disclosure
Schedule, the Company has not been a member of an affiliated group for Tax
purposes.

         (f)      Except as set forth in Section 2.12(f) of the Disclosure
Schedule, the depreciation and write-offs reflected in the Audited Financial
Statements and the Unaudited Financial Statements do not exceed the rates
permissible for Tax purposes.

         (g)      All material Taxes payable by the Company on an annual basis
for 1997 and all material exemptions, deductions or credits to which the
Company is entitled for 1997 are described in Section 2.12(g) of the Disclosure
Schedule.

         2.13     Legal Proceedings. Except as disclosed in Section 2.13 of the
Disclosure Schedule (with paragraph references corresponding to those set forth
below and except as limited by revocatory actions under the Austrian Insolvency
Code and the Settlement and Recomposition of Debts Act):


         (a)      there are no Actions or Proceedings pending or, to the
Knowledge of Seller, threatened against, relating to or affecting Seller or the
Company or any of their respective Assets and Properties which (i) could
reasonably be expected to result in the issuance of an Order restraining,
enjoining or otherwise prohibiting or making illegal the consummation of any of
the transactions contemplated by this Agreement or any of the Operative
Agreements or otherwise reasonably result in a diminution of the benefits
contemplated by this Agreement or any of the Operative Agreements to Purchaser,
or (ii) if determined adversely to Seller or the Company, could reasonably be
expected to result in (x) any injunction or other equitable relief against the
Company



                                      12
<PAGE>   19


that would interfere in any material respect with its business or operations or
(y) Losses by the Company individually or in the aggregate with Losses in
respect of other such Actions or Proceedings exceeding $50,000;

         (b)      there are no facts or circumstances Known to Seller that
could reasonably be expected to give rise to any Action or Proceeding that
would be required to be disclosed pursuant to clause (a) above; and

         (c)      there are no material Orders outstanding against the Company.

         Prior to the execution of this Agreement, Seller has delivered to
Purchaser all responses of counsel for the Company or the Seller (in each case,
to the extent such responses exist) to auditors' requests for information
delivered in connection with the Audited Financial Statements (together with
any updates provided by such counsel) regarding Actions or Proceedings pending
or threatened against, relating to or affecting the Company.

         2.14     Compliance With Laws and Orders. Except as disclosed in
Section 2.14 of the Disclosure Schedule, the Company is not, nor has it, at any
time within the last five (5) years been, nor has it received any notice that
it is (or alleging that it is) or has at any time within the last five (5)
years been, in violation of or in default under, in any material respect, any
Law or Order applicable to the Company or any of its Assets and Properties.

         2.15     Employees; Labor Relations. (a) Section 2.15 of the
Disclosure Schedule contains a list of the name of each officer and employee of
the Company having an annual base salary or wages of at least $20,000 at the
date hereof, together with each such person's position or function, annual base
salary or wages and any incentive or bonus arrangement with respect to such
person in effect on such date. Seller has not received any information that
would lead it to believe that a material number of such persons will or may
cease to be employees, or will refuse offers of employment from Purchaser,
because of the consummation of the transactions contemplated by this Agreement
or the Operative Agreements.

         (b)      Except as disclosed in Section 2.15 of the Disclosure
Schedule and other than Austrian statutory requirements, (i) no employee of the
Company is presently a member of a collective bargaining unit and, to the
Knowledge of Seller, there are no threatened or contemplated attempts to
organize for collective bargaining purposes any of the employees of the
Company, and (ii) no unfair labor practice complaint or sex, age, race or other
discrimination claim has been brought during the last five (5) years against
the Company before any applicable Governmental or Regulatory Authority. Since
September 10, 1993, the Company has never suffered a material work stoppage,
strike or other concerted action by employees of the Company. The Company has
complied, and is in compliance, in all material respects with all applicable
Laws relating to the employment of labor, including, without limitation those
relating to wages, hours and collective bargaining.



                                      13
<PAGE>   20

         2.16     Benefit Plans

         (a)      Except as disclosed in Section 2.16(a) of the Disclosure
Schedule, the Company has no Benefit Plans. Section 2.16(a) of the Disclosure
Schedule (i) contains a true and complete list and description of each of the
Benefit Plans listed therein, the Persons entitled to participate therein, all
accrued rights thereunder, and a description of any dispute with regard to the
benefits described therein. The Company has not scheduled or agreed upon future
increases of benefit levels (or creations of new benefits) with respect to any
Benefit Plan, and no such increases or creation of benefits have been proposed,
made the subject of representations to employees or requested or demanded by
employees under circumstances which make it reasonable to expect that such
increases will be granted, nor will any benefits be established or become
accelerated, vested, funded or payable by reason of any transaction
contemplated by this Agreement. As of the date of this Agreement, there are no
works or other agreements with employees' representatives or trade unions,
practices or customs under which employees might raise claims exceeding those
listed in Sections 2.15 and 2.16 of the Disclosure Schedule. Sufficient
reserves have been accrued for all the employees' claims and such reserves are
reflected on the Company's Financial Statements.

         (b)      Since the date of the Audited Financial Statements, neither
Seller nor the Company has made any material increase in the salary, wages or
other compensation or other terms and conditions of engagement of any officer,
employee or consultant of the Company whose annual salary is or, after giving
effect to such change, would be $20,000 or more;

         (c)      Except as disclosed in Section 2.16(c) of the Disclosure
Schedule, since the date of the Audited Financial Statements, neither Seller
nor the Company has established or modified any (i) targets, goals, pools or
similar provisions in respect of any fiscal year under any employment-related
Contract or other employee compensation arrangement or (ii) salary ranges,
increase guidelines or similar provisions in respect of any employment-related
Contract or other employee compensation arrangement.

         2.17    Real Property.

                 (a)       Section 2.17(a) of the Disclosure Schedule contains
a true and correct list of (i) each parcel of real property owned by the
Company; (ii) each parcel of real property leased by the Company (as lessor or
lessee), if any; and (iii) all Liens, other than Permitted Liens, relating to
or affecting any parcel of real property referred to in clause (i).


                  (b)     Except as disclosed in Section 2.17(a) of the
Disclosure Schedule, the Company has good and unrestricted title to each parcel
of real property owned by it, free and clear of all Liens, other than Permitted
Liens. The Company is in possession of each parcel of real property owned by
it, if any, together with all buildings, structures, facilities, fixtures and
other improvements thereon. To Seller's knowledge, none of such real property,
buildings, structures, facilities, fixtures or other improvements, or the use
thereof, contravenes or violates any building,



                                      14
<PAGE>   21

zoning, administrative, occupational safety and health or other applicable Law
in any material respect (whether or not permitted on the basis of prior
nonconforming use, waiver or variance).

                  (c)      The Company has a valid and subsisting leasehold
estate in and the right to quiet enjoyment of the real properties leased by it
for the full term of the lease thereof. Each lease referred to in clause (ii)
of paragraph (a) above is a legal, valid and binding agreement, enforceable in
accordance with its terms, of the Company and of each other Person that is a
party thereto, and except as set forth in Section 2.17(c) of the Disclosure
Schedule, there is no material default, and the Company has not received notice
of any default (or any condition or event which, after notice or lapse of time
or both, would constitute a default) thereunder and the sale of the Shares will
not result in any escalation of, or change in, any payments due thereunder. The
Company has adequate rights of ingress and egress with respect to the real
property listed in Section 2.17(c) of the Disclosure Schedule and all
buildings, structures, facilities, fixtures and other improvements thereon. To
Seller's Knowledge, none of such real property, buildings, structures,
facilities, fixtures or other improvements, or the use thereof, contravenes or
violates any building, zoning, administrative, occupational safety and health
or other applicable Law in any material respect (whether or not permitted on
the basis of prior nonconforming use, waiver or variance). The Company does not
owe any brokerage commissions with respect to any such leased space.

                  (d)      Seller has delivered to Purchaser prior to the
execution of this Agreement true and complete copies of (i) all land registers,
deeds, leases, mortgages, deeds of trust, certificates of occupancy, title
insurance policies, title reports, surveys and similar documents, and all
amendments thereof, with respect to the real property owned, if any, by the
Company; and (ii) all leases (including any amendments and renewal letters)
and, to the extent reasonably available, all other documents referred to in
clause (i) of this paragraph (d) with respect to the real property leased by
the Company.

                  (e)      Except as disclosed in Section 2.17(e) of the
Disclosure Schedule, no tenant or other party in possession of any of the real
properties owned, if any, by the Company, has any right to purchase, or holds
any right of first refusal to purchase, such properties.

                  (f)      Except as disclosed in Section 2.17(f) of the
Disclosure Schedule, the improvements on the real property identified in
Section 2.17(a) and Section 2.17(c) of the Disclosure Schedule are in good
operating condition and in a state of good maintenance and repair, ordinary
wear and tear excepted, are adequate and suitable for the purposes for which
they are presently being used and, to the Knowledge of Seller, there are no
condemnation or appropriation proceedings pending or threatened against any of
such real property or the improvements thereon.

         2.18     Tangible Personal Property; Investment Assets. (a) The
Company is in possession of and has good and unrestricted title to, or has
valid leasehold interests in or valid rights under Contract to use, all
tangible personal property used in or reasonably necessary for the conduct of
its business, including all tangible personal property reflected on the balance
sheet included in the



                                      15
<PAGE>   22

Unaudited Financial Statements and tangible personal property acquired since
the Unaudited Financial Statement Date other than property disposed of since
such date in the ordinary course of business consistent with past practice. All
such tangible personal property is free and clear of all Liens, other than
Permitted Liens and Liens disclosed in Section 2.18(a) of the Disclosure
Schedule, and is in good working order and condition, ordinary wear and tear
excepted, and its use complies in all material respects with all applicable
Laws.

                  (b)      Section 2.18(b) of the Disclosure Schedule describes
each Investment Asset owned by the Company on the date hereof. Except as
disclosed in Section 2.18(b) of the Disclosure Schedule, all such Investment
Assets are owned by the Company free and clear of all Liens other than
Permitted Liens.

         2.19     Intellectual Property Rights. (a) The Company has interests
in or uses only the Intellectual Property disclosed in Section 2.19 of the
Disclosure Schedule, each of which, as specified in such Section 2.19, the
Company either has all right, title and interest in or a valid and binding
right under Contract to use, and, to the extent applicable (and as of the dates
indicated in Section 2.19 of the Disclosure Schedule), such Intellectual
Property if registered, applied for filing, or issued, has been duly registered
in, applications have been filed in, or patents or certificates of registration
have been issued by, those jurisdictions set forth in Section 2.19 of the
Disclosure Schedule. For purposes of this Section 2.19, the term "use" includes
all variations of exploitation of Intellectual Property rights.

         (b)      Except as disclosed in Section 2.19 of the Disclosure
Schedule, (i) no other Intellectual Property is used or, to Seller's Knowledge,
necessary in the ordinary conduct of the business of the Company; (ii) the
Company has the exclusive right to use the Intellectual Property disclosed in
Section 2.19 of the Disclosure Schedule, (iii) except as expressly set forth in
Schedule 2.19 of the Disclosure Schedule, all patents, certificates and
registrations with and applications to Governmental or Regulatory Authorities
in respect of the Intellectual Property owned by the Company and set forth in
Section 2.19 of the Disclosure Schedule are valid and in full force and effect
and are not subject to the payment of any Taxes or maintenance fees or the
taking of any other actions by the Company to maintain their validity or
effectiveness, (iv) there are no material restrictions on the direct or
indirect transfer of any Contract, or any interest therein, held by the Company
in respect of the Intellectual Property set forth in Section 2.19 of the
Disclosure Schedule, (v) the Assets and Property of the Company include all
documentation with respect to any invention, process, design, computer program
or other know-how or trade secret included in such Intellectual Property, which
documentation is accurate in all material respects and reasonably sufficient in
detail and content to identify and explain such invention, process, design,
computer program or other know-how or trade secret and to facilitate its full
and proper use without reliance on the special knowledge or memory of any
Person other than Persons of the type customarily employed by the Company with
respect thereto, (vi) the Company and the Seller have taken reasonable security
measures to protect the secrecy, confidentiality and value of their trade
secrets, (vii) the Company is not in material default, nor has it received any
notice that it is, in default (or with the giving of



                                      16
<PAGE>   23

notice or lapse of time or both, would be in default) under any Contract to use
the Intellectual Property set forth in Section 2.19 of the Disclosure Schedule,
and (viii) to the Knowledge of Seller, no Intellectual Property set forth in
Section 2.19 of the Disclosure Schedule is being infringed by any other Person.
Neither Seller nor the Company has received notice that the Company is
infringing any Intellectual Property of any other Person or challenging the
right of Seller or the Company, as applicable, to use any of the Intellectual
Property set forth in Section 2.19 of the Disclosure Schedule or any rights
thereunder. The current use of the Intellectual Property set forth in Section
2.19 of the Disclosure Schedule in the operations of the Company's business
does not, to the Knowledge of Seller and the Company, conflict with, infringe
upon or violate any intellectual property rights, including any patent,
copyright, trademark or trade name of any other Person.

         (c)      Except as set forth on Schedule 2.19 of the Disclosure
Schedule, neither Seller nor the Company has granted any licenses or other
rights, and neither Seller nor the Company has any obligation to grant licenses
or other rights to any of the Intellectual Property owned by the Company and
set forth in Section 2.19 of the Disclosure Schedule to any other Person.
Seller and the Company have taken all reasonable and prudent steps to protect
the Intellectual Property owned by the Company and set forth in Section 2.19 of
the Disclosure Schedule from infringement by any other Person. Neither Seller
nor the Company has made any claim of a violation or infringement by others of
its rights to or in connection with the Intellectual Property owned by the
Company and set forth in Section 2.19 of the Disclosure Schedule. There have
not been and are not pending, or to the Knowledge of Seller, threatened, any
suits, claims, actions or proceedings involving Seller or the Company
concerning the infringement or misappropriation of any intellectual property
rights of any other Person or otherwise concerning Seller's or the Company's
ownership in any of the Intellectual Property owned by the Company and set
forth in Section 2.19 of the Disclosure Schedule. There are no interferences or
other contested proceedings, either pending or, to the Knowledge of Seller,
threatened in the United States Copyright Office, the United States Patent and
Trademark Office the Austrian Patent Office (or with respect to the Austrian
copyright register) or any federal, state or local court or before any other
governmental entity, in the United States, Austria or otherwise, relating to
any pending application with respect to any of the Intellectual Property owned
by the Company and set forth in Section 2.19 of the Disclosure Schedule. Except
as affected by this Agreement and the Operative Agreements, the consummation of
the transactions contemplated by this Agreement and the Operative Agreements
will not alter, impair or modify Seller's or the Company's rights or
obligations with respect to the Intellectual Property and set forth in Section
2.19 of the Disclosure Schedule.

         2.20     Contracts. (a) Section 2.20(a) of the Disclosure Schedule
(with paragraph references corresponding to those set forth below) contains a
true and complete list of each of the following Contracts or other arrangements
(true and complete copies or, if none, reasonably complete and accurate written
descriptions of which, together with all material amendments and supplements
thereto and all material waivers of any terms thereof, have been delivered to
Purchaser prior to the execution of this Agreement), to which the Company is a
party or by which any of its respective Assets and Properties is bound:



                                      17
<PAGE>   24

         (i)      (A) all Contracts (excluding Benefit Plans) providing for a
commitment of employment or consultation services for a specified or
unspecified term or otherwise relating to employment or the termination of
employment, the name, position and rate of compensation of each Person party to
such a Contract and the expiration date of each such Contract; and (B) any
written or unwritten representations, commitments, promises, communications or
courses of conduct (excluding Benefit Plans and any such Contracts referred to
in clause (A)) involving an obligation of the Company to make payments in any
year, other than with respect to salary or incentive compensation payments in
the ordinary course of business, in each case, to any employee or consultant
exceeding $100,000 or any group of employees or consultants exceeding $250,000
in the aggregate;

         (ii)     all Contracts with any Person containing any provision or
covenant prohibiting or limiting the ability of the Company to engage in any
business activity or compete with any Person or, except as provided in Section
4.02, prohibiting or limiting the ability of any Person to compete with the
Company.

         (iii)    all partnership, joint venture, shareholders' or other
similar Contracts with any Person;

         (iv)     all Contracts relating to Indebtedness of the Company in
excess of $50,000 or to preferred stock issued by the Company;

         (v)      all Contracts with distributors, dealers, manufacturer's
representatives, sales agencies or franchisees involving amounts individually
or in the aggregate in excess of $50,000;

         (vi)     all Contracts relating to (A) the future disposition or
acquisition of any Assets and Properties, other than dispositions or
acquisitions in the ordinary course of business consistent with past practice,
and (B) any merger or other business combination;

         (vii)    all Contracts between or among the Company, on the one hand,
and Seller, any officer, director, Affiliate (other than the Company) or
Associate of Seller or any Associate of any such officer, director or
Affiliate, on the other hand;

         (viii)   all collective bargaining or similar labor Contracts;

         (ix)     all Contracts that (A) limit or contain restrictions on the
ability of the Company to declare or pay dividends on, to make any other
distribution in respect of or to issue or purchase, redeem or otherwise acquire
its capital stock, to incur Indebtedness, to incur or suffer to exist any Lien,
to purchase or sell any Assets and Properties, to change the lines of business
in which it participates or engages or to engage in any Business Combination or



                                      18
<PAGE>   25

         (B) require the Company to maintain specified financial ratios or
         levels of net worth or other indicia of financial condition;

                  (x)      all Contracts with respect to the licensing of
         technology to which the Company is a party, either as licensor or
         licensee; and

                  (xi)     all other Contracts (other than Benefit Plans,
         leases listed in Section 2.17(a) of the Disclosure Schedule and
         insurance policies listed in Section 2.22 of the Disclosure Schedule)
         that (A) involve the payment or potential payment, pursuant to the
         terms of any such Contract, by or to the Company of more than $50,000
         annually and (B) cannot be terminated within thirty (30) days after
         giving notice of termination without resulting in any material cost or
         penalty to the Company.

         (b)      Each Contract required to be disclosed in Section 2.20(a) of
the Disclosure Schedule is in full force and effect and constitutes a legal,
valid and binding agreement of, and is enforceable in accordance with its terms
against, the Company and, to Seller's Knowledge, against each other party
thereto with respect to the rights of the Company therein or thereunder; and
except as disclosed in Section 2.20(b) of the Disclosure Schedule, neither the
Company nor, to the Knowledge of Seller, any other party to such Contract is,
or has received notice that it is, in violation or breach of or default under
any such Contract (or with notice or lapse of time or both, would be in
violation or breach of or default under any such Contract) in any material
respect. Except as separately identified in Schedule 2.20(b) of the Disclosure
Schedule, no approval or consent of any person is needed in order that the
Contracts as set forth on Schedule 2.20(a) or on any other Schedule continue in
full force and effect following the consummation of the transactions
contemplated by this Agreement.

         2.21     Governmental Licenses. Section 2.21 of the Disclosure
Schedule contains a true and complete list of all Governmental Licenses used in
and material, individually or in the aggregate, to the business or operations
of the Company (and all pending applications for any such Governmental
Licenses), setting forth the grantor, the grantee, the function and the
expiration and renewal date of each. Prior to the execution of this Agreement,
Seller has delivered to Purchaser true and complete copies of all such material
Governmental Licenses. Except as disclosed in Section 2.21 of the Disclosure
Schedule:

                  (i)      the Company owns or validly holds all material
         Governmental Licenses that are material, individually or in the
         aggregate, to its business or operations;

                  (ii)     each material Governmental License listed in Section
         2.21 of the Disclosure Schedule is valid, binding and in full force
         and effect; and



                                      19
<PAGE>   26

                  (iii)    the Company is not, nor has it received any notice
         that it is, in violation of, breach of, or default under (or with the
         giving of notice or lapse of time or both, would be in violation of,
         breach of, or default under) any such material Governmental License.

         2.22     Insurance. Section 2.22 of the Disclosure Schedule contains a
true and complete list (including the names and addresses of the insurers, the
names of the Persons to whom such Policies have been issued, the expiration
dates thereof, the annual premiums and payment terms thereof, whether it is a
"claims made" or an "occurrence" policy and a brief description of the
interests insured thereby) of all liability, property, workers' compensation,
directors' and officers' liability and other insurance policies currently in
effect that insure the business, operations or employees of the Company or
affect or relate to the ownership, use or operation of any of the Assets and
Properties of the Company and that (i) have been issued to the Company, or (ii)
have been issued to any Person (other than the Company) for the benefit of the
Company. The insurance coverage provided by any of the policies described in
clause (i) above will not terminate or lapse by reason of the transactions
contemplated by this Agreement. Each policy listed in Section 2.22 of the
Disclosure Schedule is valid and binding and in full force and effect, no
premiums due thereunder have not been paid and neither the Company nor the
Person to whom such policy has been issued has received any notice of
cancellation or termination in respect of any such policy or is in default
thereunder. The insurance policies listed in Section 2.22 of the Disclosure
Schedule in light of the respective business, operations and Assets and
Properties of the Company are in amounts and have coverages that are reasonable
and customary for Persons engaged in such businesses and operations and having
such Assets and Properties. Neither the Company nor, to Seller's Knowledge, the
Person to whom such policy has been issued has received notice that any insurer
under any policy referred to in this Section is denying liability with respect
to a claim thereunder or defending under a reservation of rights clause. All
benefits under such policies paid or payable since September 10, 1993 under
such policies with respect to the business, operations, employees or Assets and
Properties of the Company have been paid to the Company.

         2.23     Affiliate Transactions. Except as disclosed in Section 2.20(a)
(vii) or Section 2.23(a) of the Disclosure Schedule, (i) there are no
intercompany Liabilities or Contracts which could give rise to an intercompany
liability between the Company, on the one hand, and Seller, any officer,
director, Affiliate (other than the Company) or Associate of Seller or any
Associate of any such officer, director or Affiliate, on the other, (ii)
neither Seller nor any such officer, director, Affiliate or Associate provides
or causes to be provided any assets, services or facilities to the Company,
(iii) the Company does not provide or cause to be provided any assets, services
or facilities to Seller or any such officer, director, Affiliate or Associate,
and (iv) the Company does not beneficially own, directly or indirectly, any
Investment Assets issued by Seller or any such officer, director, Affiliate or
Associate. Except as disclosed in Section 2.23(b) of the Disclosure Schedule,
each of the Liabilities and transactions listed in Section 2.23(a) of the
Disclosure Schedule was incurred or engaged in, as the case may be, on an
arm's-length basis. Except as disclosed in Section 2.23(c) of the Disclosure
Schedule, since the Audited Financial Statement Date, (i) all settlements of
intercompany Liabilities between the Company, on the one hand, and Seller or
any such officer,



                                      20
<PAGE>   27

director, Affiliate or Associate, on the other, have been made, and all
allocations of intercompany expenses have been applied, in the ordinary course
of business consistent with past practice, and (ii) none of the Contracts or
Liabilities pertaining to Affiliate Transactions listed in Section 2.23 of the
Disclosure Schedule has been amended or modified since the Audited Financial
Statement Date, except as specifically disclosed in such Section.

         2.24     Environmental Matters. Each of the Company and the Seller, as
the case may be, has obtained all material Governmental Licenses which are
required under applicable Environmental Laws in connection with the conduct of
the business or operations of the Company. Each of such material Governmental
Licenses is in full force and effect, will remain in full force and effect
notwithstanding the consummation of the transaction contemplated by this
Agreement and the Company is in compliance in all material respects with the
terms and conditions of all such material Governmental Licenses and with any
applicable Environmental Law. In addition, except as set forth in Section 2.24
of the Disclosure Schedule (with paragraph references corresponding to those
set forth below):

         (a)      No Order has been issued, no Environmental Claim has been
filed, no penalty has been assessed and no investigation or review is pending
or, to the Knowledge of Seller, threatened by any Governmental or Regulatory
Authority with respect to any alleged failure by the Company to have any
material Governmental License required under applicable Environmental Laws in
connection with the conduct of the business or operations of the Company or
with respect to any generation, treatment, storage, recycling, transportation,
discharge, disposal or Release of any Hazardous Material generated (i) by the
Company, or (ii) by any other Person on any Property owned or leased by or to
the Company, and, to the Knowledge of Seller, there are no facts or
circumstances in existence which could reasonably be expected to form the basis
for any such Order, Environmental Claim, penalty or investigation.

         (b)      The Company does not own, operate or lease a treatment,
storage or disposal facility requiring a permit under any applicable
Environmental Law; and, without limiting the foregoing, (i) no polychlorinated
biphenyl is or has been present, (ii) no asbestos or asbestos-containing
material is or has been present, (iii) there are no underground storage tanks
or surface impoundments for Hazardous Materials, active or abandoned, and (iv)
no Hazardous Material has been Released in a quantity reportable under, or in
violation of, any applicable Environmental Law or otherwise Released, in the
cases of clauses (i) through (iv), at, on or under any site or facility now or
previously owned, operated or leased by the Company.

         (c)      No Hazardous Material generated by the Company has been
recycled, treated, stored, disposed of or Released by the Company at any
location.

         (d)      No oral or written notification of a Release of a Hazardous
Material has been filed by or on behalf of the Company and no site or facility
now or previously owned, operated or leased



                                      21
<PAGE>   28

by the Company is listed or proposed for listing by any governmental authority
of any applicable jurisdiction as a site requiring investigation or clean-up.

         (e)      There have been no environmental investigations, studies,
audits, tests, reviews or other analyses conducted by, or that are in the
possession of, the Company or the Seller in relation to any site or facility
now or previously owned, operated or leased by the Company which have not been
delivered to Purchaser prior to the execution of this Agreement.

         2.25     Substantial Customers and Suppliers. Section 2.25(a) of the
Disclosure Schedule lists the ten (10) largest customers of the Company on the
basis of revenues for goods sold or services provided for the most
recently-completed fiscal year. Section 2.25(b) of the Disclosure Schedule
lists the ten (ten) largest suppliers of the Company on the basis of cost of
goods or services purchased for the most recently-completed fiscal year. Except
as disclosed in Section 2.25(c) of the Disclosure Schedule, no such customer or
supplier has ceased or materially reduced its purchases from, use of the
services of, or sales to or provision of services to, the Company since the
Audited Financial Statement Date, or, to the Knowledge of Seller, has
threatened to cease or materially reduce such purchases, use, sales or
provision of services since October 31, 1996. Except as disclosed in Section
2.25(d) of the Disclosure Schedule, to the Knowledge of Seller, no such
customer or supplier is threatened with bankruptcy or insolvency.

         2.26     Bank and Brokerage Accounts; Investment Assets. Section 2.26
of the Disclosure Schedule sets forth (a) a true and complete list of the names
and locations of all banks, trust companies, securities brokers and other
financial institutions at which the Company has an account or safe deposit box
or maintains a banking, custodial, trading or other similar relationship; (b) a
true and complete list and description of each such account, box and
relationship, indicating in each case the account number and the names of the
respective officers, employees, agents or other similar representatives of the
Company having signatory power with respect thereto; and (c) a list of each
Investment Asset, the name of the record and beneficial owner thereof, the
location of the certificates, if any, therefor, the maturity date, if any, and
any stock or bond powers or other authority for transfer granted with respect
thereto.

         2.27     No Powers of Attorney. Except as set forth in Section 2.27 of
the Disclosure Schedule, neither the Company nor the Seller with respect to the
Assets and Properties of the Company have any powers of attorney or comparable
delegations of authority outstanding.

         2.28     Accounts Receivable. Except as set forth in Section 2.28 of
the Disclosure Schedule, the accounts and notes receivable of the Company
reflected on the balance sheet included in the Unaudited Financial Statements,
and all accounts and notes receivable arising subsequent to the Unaudited
Financial Statement Date, (i) arose from bona fide sales transactions in the
ordinary course of business and are payable on ordinary trade terms, (ii) are
legal, valid and binding obligations of the respective debtors enforceable in
accordance with their terms, (iii) are not subject to any valid set-off or
counterclaim, (iv) do not represent obligations for goods sold on consignment,



                                      22
<PAGE>   29

on approval or on a sale-or-return basis or subject to any other repurchase or
return arrangement, (v) are not the subject of any Actions or Proceedings
brought by or on behalf of the Company, and (vi) are collectible, on or before
the following dates, net of any applicable reserves reflected in the Closing
Balance Sheet:

         (a)      in the case of receivables attributable to IBM Oestereich
G.M.b.H. in the amount of 238,128 Austrian Schillings as of February 28, 1997,
within one hundred twenty (120) days of the Closing Date;

         (b)      with respect to payments in connection with the Zahlungsplan
fur alle dutschen Vertrage (the "IDJ Down Payment Plan"), in the aggregate
amount of 3,144,311 German Marks, after services are rendered thereunder in due
course and a request for payment is made by the Company;

         (c)      as to monies payable under the IDJ Down Payment Plan in the
aggregate amount of 10,219,174 German Marks as of February 28, 1997, no later
than July 31, 1997;

         (d)      as to monies payable under the IDJ Down Payment Plan in the
amount of 150,727 German Marks as of February 28, 1997, no later than December
15, 1997;

         (e)      with respect to the separate IDJ account receivable in the
aggregate amount of 11,523,056 Austrian Schillings as of February 28, 1997, no
later than one hundred twenty days (120) after the Closing Date;

         (f)      with respect to all other accounts receivable of the Company,
within ninety (90) days following the Closing Date, in the recorded amounts
thereof, net of any applicable reserve reflected in the Closing Balance Sheet.

         With respect to payments on Accounts Receivable which are the subject
of this Section 2.28, the Company will, with respect to any payments collected
after the Closing Date, apply such payments: first, to the account or accounts
designated by, and in the order designated by, the Person making such payment;
and second, or if no such designation is made, to the oldest account or
accounts of the Person making such payment, or on whose behalf such payment was
made, as the case may be.

         Section 2.28 of the Disclosure Schedule sets forth a description of
any security arrangements and collateral securing the repayment or other
satisfaction of receivables of the Company. All steps necessary to render all
such security arrangements legal, valid, binding and enforceable, and to give
and maintain for the Company a perfected security interest in the related
collateral, have been taken. To the extent any receivable is not collected by
the Company and a claim is made against Seller with respect thereto under this
Section 2.28 and such claim has been paid by Seller, Purchaser will assign its
rights in, and to collect, such receivable to Seller, but only to the extent of
such payment.



                                      23
<PAGE>   30

         2.29     Inventory. All inventory of the Company reflected on the
balance sheet included in the Unaudited Financial Statements consisted, and all
such inventory acquired since the Unaudited Financial Statement Date consists,
of a quality and quantity usable and salable in all material respects in the
ordinary course of business consistent with past practice, subject to normal
and customary allowances in the industry for spoilage, damage and outdated
items. The mix of particular components of inventory is consistent in all
material respects with the past practice of the Company. Except as disclosed in
Section 2.29 of the Disclosure Schedule, all items included in the inventory of
the Company are the property of the Company, free and clear of any Lien other
than Permitted Liens, have not been pledged as collateral, are not held by the
Company on consignment from others and conform in all material respects to all
standards applicable to such inventory or its use or sale imposed by applicable
Governmental or Regulatory Authorities.

         2.30     Product Claims. Since September 10, 1993, to Seller's
Knowledge, the Company has not given or made any warranties to third parties
with respect to Products sold by or through the Company except for limited
warranties stated in customer contracts listed in Section 2.30 of the
Disclosure Schedule, copies of which contracts have been made available by
Seller to Purchaser. Except as set forth in Section 2.30 of the Disclosure
Schedule, to Seller's Knowledge no claims are pending or threatened against the
Company with respect to Products sold by or through the Company. Seller
represents and warrants that it has established reserves sufficient to pay
warranty or other contractual claims under Seller's existing Contracts,
consistent with the Company's reasonable and customary practices and consistent
with AAP, and with respect to Products in existence as of the Closing Date, and
agrees to indemnify and hold harmless Purchaser from all claims with respect to
Seller's Products in excess of the amount of such reserves as reflected on the
Closing Balance Sheet. Seller further represents and warrants that the
limitations on liability of the Company, whether as obligor, guarantor or
otherwise, contained in the Contracts are valid and fully enforceable in a
court or other forum of competent jurisdiction and Seller agrees to indemnify
and hold harmless Purchaser from all claims for liability in excess of such
contractual limitations. Seller shall not be entitled to receive any payment
from the Company or any Affiliate of the Company based on any payment by Seller
under the Guarantee identified in Section 2.32 of the Disclosure Schedule,
unless the Company shall have admitted the validity of the underlying claim or
claims on which any such payment was made or unless such claim or claims shall
have been adversely determined against the Company pursuant to a final,
non-applicable adjudication. Nothing herein shall preclude Seller from
asserting any cross claim against the Company in any proceeding in which both
Seller and the Company are named with respect to any purported obligations of
the Company for which the Seller also is sought to be held liable by virtue of
the Guarantee.

         2.31     Brokers. All negotiations relative to this Agreement, the
Operative Agreements and the transactions contemplated hereby and thereby have
been carried out by Seller directly with Purchaser without the intervention of
any Person on behalf of Seller in such manner as to give rise to any valid
claim by any Person against Purchaser or the Company for a finder's fee,
brokerage commission or similar payment.



                                      24
<PAGE>   31

         2.32     Disclosure. To Seller's Knowledge, all material facts
relating to the Business or Condition of the Company have been disclosed to
Purchaser in or in connection with this Agreement and the Operative Agreements.
To Seller's Knowledge, no representation or warranty contained in this
Agreement or the Operative Agreements, and no statement contained in the
Disclosure Schedule or in any certificate, list or other writing furnished to
Purchaser pursuant to any provision of this Agreement (including without
limitation the Financial Statements) or the Operative Agreements, contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements herein or therein, in the light of the
circumstances under which they were made, not misleading.

         2.33     Conduct of Business. Since the date of the Audited Financial
Statements, Seller has caused the Company to conduct business only in the
ordinary course consistent with past practice. Without limiting the generality
of the foregoing and except as disclosed in Section 2.25 of the Disclosure
Schedule, Seller has caused the Company to (i) preserve intact the business
organization and reputation of the Company, (ii) kept available (subject to
dismissals and retirements in the ordinary course of business consistent with
past practice) the services of the officers, employees and consultants of the
Company employed by the Company as of such date, other than Bruce Longhurst,
whom the Seller caused to resign from all positions with the Company effective
concurrently with the Closing Date, (iii) maintained the Assets and Properties
of the Company in good working order and condition, ordinary wear and tear
excepted, (iv) maintained the good will of customers, suppliers, lenders and
other Persons to whom the Company sells goods or provides services or with whom
the Company otherwise has significant business relationships, and (v) continued
all sales, marketing and promotional activities relating to the business and
operations of the Company.

         2.34     Contracts with Certain Customers. All contracts and business
arrangements between the Company and any Person for the provision of on-line
lottery services, on-line banking services, off track betting services or
credit card processing services are in full force and effect, and except as
disclosed in Section 2.25 of the Disclosure Schedule, neither Seller, the
Company nor their respective Affiliates, or Associates has been notified by any
one of such customers of the termination or proposed termination of such
contract or business arrangement.

         2.35     Resignations of Directors and Officers. The members of the
board of directors and the officers of the Company, designated in the written
notice delivered by Purchaser to Seller, have tendered, effective at the
Closing, their resignations as such directors and officers.

         2.36     Operative Agreements. Seller has caused the Operative
Agreements to which it is a party to have been executed and delivered.

         2.37     IDJ Confirmation. Prior to execution of this Agreement,
Seller has furnished Purchaser with the written confirmation of accounts from
IDJ, a true and correct copy of which fully executed confirmation is attached
to Section 2.37 of the Disclosure Schedule.



                                      25
<PAGE>   32

         2.38     IDJ Claims. The Company has no obligation to IDJ with respect
to the amounts asserted for claims identified in the last paragraph of that IDJ
confirmation letter dated as of April 9, 1997 and shall assume the defense of
any claims asserted with respect thereto.

                                  ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF PURCHASER

         Purchaser hereby represents and warrants to Seller as follows:

         3.01     Organization. Purchaser is a corporation validly existing and
in good standing under the Laws of Delaware or its jurisdiction of
organization. Purchaser has full corporate power and authority to execute and
deliver this Agreement and the Operative Agreements to which it is a party, to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby.

         3.02     Authority. The execution and delivery by Purchaser of this
Agreement and the Operative Agreements to which it is a party, and the
performance by Purchaser of its obligations hereunder and thereunder, have been
duly and validly authorized by the Board of Directors or other governing body
of Purchaser, including, if the Purchaser is an Austrian corporate entity, the
supervisory board thereof, no other corporate action on the part of Purchaser
or its stockholders being necessary. This Agreement and the Operative
Agreements have been duly and validly executed and delivered by Purchaser and
constitute legal, valid and binding obligations of Purchaser enforceable
against Purchaser in accordance with their respective terms.

         3.03     No Conflicts. The execution and delivery by Purchaser of this
Agreement and the Operative Agreements do not, and the performance by Purchaser
of its obligations under this Agreement and such Operative Agreements and the
consummation of the transactions contemplated hereby and thereby will not:

         (a)      conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the certificate of incorporation or
by-laws (or other comparable corporate charter documents of Purchaser) of
Purchaser;

         (b)      subject to obtaining the consents, approvals and actions,
making the filings and giving the notices disclosed in Schedule 3.03 hereto,
conflict with or result in a violation or breach of any term or provision of
any Law or Order applicable to Purchaser or any of its Assets and Properties;
or

         (c)      except as disclosed in Schedule 3.03 hereto, (i) conflict
with or result in a violation or breach of, (ii) constitute (with or without
notice or lapse of time or both) a default under, or (iii) require Purchaser to
obtain any consent, approval or action of, make any filing with or give any



                                      26
<PAGE>   33

notice to any Person as a result or under the terms of any Contract or License
to which Purchaser is a party or by which any of its Assets and Properties is
bound.

         3.04     Governmental Approvals and Filings. Except as disclosed in
Schedule 3.04 hereto, no consent, approval or action of, filing with or notice
to any Governmental or Regulatory Authority on the part of Purchaser is
required in connection with the execution, delivery and performance of this
Agreement or the Operative Agreements or the consummation of the transactions
contemplated hereby or thereby.

         3.05     Legal Proceedings. There are no Actions or Proceedings
pending or, to the Knowledge of Purchaser, threatened against, relating to or
affecting Purchaser or any of its Assets and Properties which could reasonably
be expected to result in the issuance of an Order restraining, enjoining or
otherwise prohibiting or making illegal the consummation of any of the
transactions contemplated by this Agreement or any of the Operative Agreements.

         3.06     Brokers. All negotiations relative to this Agreement and the
Operative Agreements and the transactions contemplated hereby have been carried
out by Purchaser directly with Seller without the intervention of any Person on
behalf of Purchaser in such manner as to give rise to any valid claim by any
Person against Seller or the Company for a finder's fee, brokerage commission
or similar payment.


                                   ARTICLE IV

                              COVENANTS OF SELLER

         Seller covenants and agrees with Purchaser that, as of the date hereof
and, with respect to any covenant or agreement by its terms to be performed in
whole or in part after the Closing, for the period specified herein or, if no
period is specified herein, then for the longest applicable statute of
limitations under which a claim could be brought, Seller will comply with all
covenants and provisions of this Article IV, except to the extent Purchaser may
otherwise consent in writing.

         4.01     Books and Records. Seller has delivered or made available to
Purchaser at the offices of the Company all of the Books and Records, and if,
at any time after the Closing, Seller discovers in its possession or under its
control any other Books and Records (without regard to the materiality
thereof), it will forthwith deliver such Books and Records to Purchaser.

         4.02     Non-Competition. (a) Seller shall, for a period of three (3)
years from the Closing Date, refrain from, either alone or in conjunction with
any other Person, or directly or indirectly through its present or future
Affiliates:



                                      27
<PAGE>   34

                  (i)      employing, engaging or seeking to employ or engage
         any Person (other than Bruce Longhurst) who has been an officer or
         employee of the Company at Closing or six months prior thereto, unless
         such officer or employee (A) resigns voluntarily (without any
         solicitation from Seller or any of its Affiliates), or (B) is
         terminated by the Company after the Closing Date;

                  (ii)     causing or attempting to cause (A) any client,
         customer or supplier of the Company to terminate or materially reduce
         its business with the Company, or (B) any officer, employee or
         consultant of the Company to resign or sever a relationship with the
         Company;

                  (iii)    disclosing (unless compelled by judicial or
         administrative process) or using any confidential or secret
         information relating to the Company or any of its respective clients,
         customers or suppliers; or


                  (iv)     participating or engaging in, directly or indirectly
         (whether through distributorships, representative agreements, sales
         agencies or otherwise, other than through the ownership of five
         percent (5%) or less of any class of securities of any Person whose
         securities are publicly traded on any internationally recognized stock
         exchange, as to which the companies listed thereon have an aggregate
         market value of not less than five billion U.S. dollars) or by
         otherwise lending assistance (financial or otherwise) to any Person
         participating or engaging in directly or indirectly (x) the on-line
         lottery business, or (y) any of the lines of business in which the
         Company is participating or engaged on the Closing Date in any
         jurisdiction other than in the United States and Canada and other than
         with respect to the customers or proposed customers listed in the
         jurisdictions listed in Section 4.02 of the Disclosure Schedule. The
         foregoing exception for competitive activities in jurisdictions listed
         in Section 4.02 of the Disclosure Schedule shall be limited to
         competition involving (A) existing customers of Seller identified in
         Section 4.02 of the Disclosure Schedule (which lists all existing
         customers of Seller or any of its subsidiaries, in respect of any
         business in competition with the business of the Company or
         constituting an on-line lottery business outside the United States or
         Canada, the date and parties to the contract and which describes the
         nature and scope of the business conducted with such customer and the
         jurisdiction in which it is conducted), or (B) proposed customers who
         become actual customers as the direct and proximate result of the
         proposals identified in Section 4.02 of the Disclosure Schedule (which
         lists all jurisdictions in which the Seller or any of its subsidiaries
         has an outstanding, good faith proposal as of January 14, 1997 in
         respect of any business in competition with the business of the
         Company or constituting an on-line lottery business outside the United
         States or Canada, the nature and scope of the business proposed to be
         conducted and the jurisdiction in which it is proposed to be
         conducted). The limitations of this Section 4.02(a)(iv) on Seller's
         right to compete shall not apply to business activities consisting of
         (C) the totalisator business as operated at horse (thoroughbred and
         harness) race tracks, dog race tracks, off-track betting
         establishments, jai



                                      28
<PAGE>   35

         alai frontons and casino/sports betting facilities, (D) simulcasting
         such activities in connection with gaming thereon so long as such
         activities are not engaged in a manner so as to be a lottery, as such
         term is customarily understood in the gaming industry, and (E) the
         manufacture, operation, sale and use of Terminals for lottery
         application, or other wagering terminals for non-lottery application,
         anywhere except to existing customers of the Company.

         (b)      The parties hereto recognize that the Laws and public
policies of the various states of the United States and other jurisdictions may
differ as to the validity and enforceability of covenants similar to those set
forth in this Section. It is the intention of the parties that the provisions
of this Section be enforced to the fullest extent permissible under the Laws
and policies of each jurisdiction in which enforcement may be sought, and that
the unenforceability (or the modification to conform to such Laws or policies)
of any provisions of this Section shall not render unenforceable, or impair,
the remainder of the provisions of this Section. Accordingly, if any provision
of this Section shall be determined to be invalid or unenforceable, such
invalidity or unenforceability shall be deemed to apply only with respect to
the operation of such provision in the particular jurisdiction in which such
determination is made and not with respect to any other provision or
jurisdiction.

         (c)      The parties hereto acknowledge and agree that any remedy at
Law for any breach of the provisions of this Section would be inadequate, and
Seller hereby consents to the granting by any court of an injunction or other
equitable relief, without the necessity of actual monetary loss being proved,
in order that the breach or threatened breach of such provisions may be
effectively restrained.

         4.03     Know-How License Agreement; Inspection Rights Agreement. As
of the Closing, Seller (and its subsidiaries and Affiliates, as appropriate)
shall execute and deliver to the Company (a) the Exclusive License Agreement
set forth as Exhibit E hereto, and (b) the Inspection Rights and License
Agreement set forth as Exhibit F hereto and perform its obligations thereunder
in accordance with the terms thereof.

         4.04     Subsequent Transactions. As of the Closing, Seller shall
execute and deliver to the Company the Right of First Refusal Agreement in the
form set forth as Exhibit G and perform its obligations thereunder in
accordance with the terms thereof.

                                   ARTICLE V

                     CONDITIONS TO OBLIGATIONS OF PURCHASER





                                      29
<PAGE>   36

         The obligations of Purchaser hereunder to purchase the Shares are
subject to the fulfillment, at or before the Closing, of each of the following
conditions (all or any of which may be waived in whole or in part by Purchaser
in its sole discretion):

         5.01     Officers' Certificates. Seller shall have delivered to
Purchaser certificates, dated the Closing Date and executed by the Secretary or
any Assistant Secretary of Seller and the Managing Director of the Company,
substantially in the form and to the effect of Exhibits H and I hereto.

         5.02     Opinion of Counsel. Purchaser shall have received the opinion
of Rosenman & Colin LLP, and Austrian counsel to Seller and the Company, dated
the Closing Date, substantially in the form and to the effect of Exhibits J and
K hereto.

         5.03     Proceedings. All proceedings to be taken on the part of
Seller in connection with the transactions contemplated by this Agreement and
the Operative Agreements and all documents incident thereto shall be reasonably
satisfactory in form and substance to Purchaser, and Purchaser shall have
received copies of all such documents and other evidences as Purchaser may
reasonably request in order to establish the consummation of such transactions
and the taking of all proceedings in connection therewith.


                                   ARTICLE VI

                      CONDITIONS TO OBLIGATIONS OF SELLER

         The obligations of Seller hereunder to sell the Shares are subject to
the fulfillment, at or before the Closing, of each of the following conditions
(all or any of which may be waived in whole or in part by Seller in its sole
discretion):

         6.01     Officers' Certificates. Purchaser shall have delivered to
Seller a certificate, dated the Closing Date and executed by the Secretary or
any Assistant Secretary of Purchaser, substantially in the form and to the
effect of Exhibit L hereto.

         6.02     Opinion of Counsel. Seller shall have received the opinion of
Smith, Gambrell & Russell, LLP, and Austrian counsel to Purchaser, dated the
Closing Date, substantially in the form and to the effect of Exhibit M and N
hereto.

         6.03     Proceedings. All proceedings to be taken on the part of
Purchaser in connection with the transactions contemplated by this Agreement,
the Operative Agreements and all documents incident thereto shall be reasonably
satisfactory in form and substance to Seller, and Seller shall have received
copies of all such documents and other evidences as Seller may reasonably
request in order to establish the consummation of such transactions and the
taking of all proceedings in connection therewith.



                                      30
<PAGE>   37

                                  ARTICLE VII

                       TAX MATTERS AND POST-CLOSING TAXES

         7.01     Tax Sharing Agreements. Since September 10, 1993, there have
not been and, as of the Closing Date, there are no Tax sharing agreements
between the Company and any other Person.

         7.02     Allocation of Tax Liability. In the case of Taxes that are
payable with respect to a taxable period that begins before the Closing Date
and ends after the Closing Date, the portion of any such Tax that is allocable
to the portion of the period ending on the Closing Date shall have been paid or
reserved by the Company on or prior to the Closing Date and: (i) in the case of
Taxes that are either (x) based upon or related to income or receipts or (y)
imposed in connection with any sale, other transfer or assignment or any deemed
sale, transfer or assignment of property (real or personal, tangible or
intangible), shall be deemed equal to the amount that would be payable if the
taxable year ended on the Closing Date, (ii) in the case of Taxes imposed on a
periodic basis with respect to the assets of the Company, or otherwise measured
by the level of any item, shall be deemed to be the amount of such Taxes for
the entire Taxable period (or, in the case of such Taxes determined on an
arrears basis, the amount of such Taxes for the immediately preceding period)
multiplied by a fraction the numerator of which is the number of calendar days
in the portion of such period ending on the Closing Date and the denominator of
which is the number of calendar days in the entire Taxable period, and (iii) in
the case of Taxes, exemptions, deductions or credits that cannot otherwise be
allocated to the periods before and after the Closing Date shall be determined
by the amount of the Tax, exemption, deduction or credit that would be
allowable if the taxable year of the Company ended on the Closing Date.

         7.03     Returns and Payments.

         (a)      From and after the Closing Date, the Seller shall prepare and
file or otherwise furnish to the appropriate party (or cause to be prepared and
filed or so furnished) in a timely manner all Tax Returns with respect to the
Company, for any taxable period ending on or before the Closing Date, and the
Purchaser shall do the same for any taxable period ending after the Closing
Date. With respect to any Tax Return required to be filed with respect to the
Company after the Closing Date and as to which an amount of Tax, if any, is
allocable to the Seller under Section 7.02, the Purchaser shall provide the
Seller and its authorized Representatives with a copy of such completed Tax
Return and a statement (including all necessary supporting schedules and
information required to support such statement) that certifies and sets forth
the calculation of the amount of Tax shown on such Tax Return that is allocable
to the Seller pursuant to Section 7.02 at least thirty (30) days prior to the
due date (including any extension thereof) for the filing of such Tax Return,
and the Seller and its authorized Representatives shall have the right to
review such Tax Return and statement (including any supporting Schedules or
other documents relevant thereto) prior to the filing of such Tax Return. The
Seller and the Purchaser agree to consult and to attempt in good faith to
resolve any issues arising as a result of the review of such Tax Return and
statement by the Seller or its authorized



                                      31
<PAGE>   38

Representatives. If the Seller and Purchaser are unable to resolve any such
issues, they shall be submitted to arbitration by a nationally recognized
accounting firm (which shall be mutually acceptable to the parties) and the
decision of such firm shall be binding on the parties.

         (b)      The Seller and the Purchaser shall each pay or cause to be
paid when due and payable all Taxes that have not been paid or reserved on the
financial statements of the Company as of the Closing Date that are allocable
to them pursuant to the provisions of Section 7.02.

         (c)      Payment of any amounts due under this Article VII shall be
made (i) with respect to agreed amounts, at least three (3) calendar days
before the payment of any such Tax is due, provided that no such payment shall
be due prior to ten (10) business days following receipt of written notice that
payment of such tax is due, or (ii) within ten (10) business days following
either an agreement between the Seller and the Purchaser that an amount is
payable by the Seller or the Purchaser to the other or within ten (10) business
days of a final "determination". Seller may contest such determination at its
sole cost and expense but shall indemnify the Company against any Loss due to
such contest or a failure to pay such Taxes as of the determination date.

         7.04     Cooperation and Exchange of Information. The Seller and the
Purchaser will provide each other with such cooperation and information as
either of them reasonably may request of the other in filing any Tax Return,
amended return or claim for refund, determining a liability for Taxes or a
right to a refund of Taxes or participating in or conducting any audit or other
proceeding in respect of Taxes. Such cooperation and information shall include
providing copies of the relevant Tax Return or portions thereof, together with
accompanying schedules and related work papers and documents relating to
rulings or other determinations by taxing authorities, but in no event shall
the Seller or the Purchaser be required to disclose to the other any
information relating to the operations of either, as the case may be, other
than information relating to a liability for Taxes of the Company. The Seller
and the Purchaser shall make their respective employees available on a mutually
convenient basis to provide explanations of any documents or information
provided hereunder. The Seller and the Purchaser will retain all Tax Returns,
schedules and work papers and all material records or other documents relating
to Tax matters of the Company for its taxable period first ending after the
Closing Date and for all prior taxable periods until the expiration of the
statute of limitations of the taxable periods to which such returns and other
documents relate, without regard to extensions (but taking into account any
extended statute of limitations applicable to a year in which a net operating
loss is reported) except to the extent notified by the other party in writing
of such extensions for the respective Tax periods. After such time, before the
Purchaser shall dispose of any such books and records, at least ninety (90)
calendar days prior written notice to such effect shall be given by the
Purchaser to the Seller, and the Seller shall be given an opportunity, at its
cost and expense, to remove and retain all or any part of such books and
records as the Seller may select. Any information obtained under this Section
7.04 shall be kept confidential, except as may be otherwise necessary in
connection with the filing of returns or claims for refund or in conducting an
audit or other proceeding.



                                      32
<PAGE>   39

                                  ARTICLE VIII

                    SURVIVAL OF REPRESENTATIONS, WARRANTIES,
                            COVENANTS AND AGREEMENTS

         8.01     Survival of Representations, Warranties, Covenants and
Agreements. Notwithstanding any right of Purchaser (whether or not exercised)
to investigate the affairs of the Company or any right of any party (whether or
not exercised) to investigate the accuracy of the representations and
warranties of the other party contained in this Agreement and the Operative
Agreements, Seller and Purchaser have the right to rely fully upon the
representations, warranties, covenants and agreements of the other contained in
this Agreement and the Operative Agreements. Except as may otherwise be
provided by the term of the Operative Agreements as to such Operative
Agreements, the representations, warranties, covenants and agreements of Seller
and Purchaser contained in this Agreement and the Operative Agreements will
survive the Closing (a) indefinitely with respect to the representations and
warranties contained in Section 2.04 (but only insofar as it relates to the
capital stock of the Company), (b) until sixty (60) days after the expiration
of all applicable statutes of limitation (including all periods of extension,
whether automatic or permissive) with respect to matters covered by Section
2.12 and Article VII of this Agreement, (c) until the date which is thirty (30)
months after the Closing Date, in the case of all other representations and
warranties and any covenant or agreement to be performed in whole or in part on
or prior to the Closing, or (d) with respect to each other covenant or
agreement contained in this Agreement or the Operative Agreements, until sixty
(60) days following the last date on which such covenant or agreement is to be
performed or, if no such date is specified, for a period equal to the longest
statute of limitations applicable to a claim based thereon, except that any
representation, warranty, covenant or agreement that would otherwise terminate
in accordance with clause (b), (c) or (d) above will continue to survive if a
Claim Notice or Indemnity Notice (as applicable) shall have been timely given
under Article IX on or prior to such termination date, until the related claim
for indemnification has been satisfied or otherwise resolved as provided in
Article IX.

         8.02     Limitations on Indemnity. The Seller's liability for Losses
under this Agreement shall be limited as follows:

         (a)      The maximum liability of the Seller in respect of Losses to
which the Purchaser Indemnified Parties shall be entitled to indemnification
hereunder shall not exceed $25,000,000; and

         (b)      Except as provided in Section 11.06(e) of this Agreement or
with respect to a claim based on a breach of Seller's obligations under
Sections 1.03(c), 1.04 or 2.38 of this Agreement or in connection with the
asserted tax liability identified on Schedule 2.12(a) in the last paragraph
thereof, the Seller shall have no liability to the Purchaser Indemnified
Parties under this Agreement until and unless the amount of all Losses incurred
by them, individually or in the aggregate, exceeds the sum of $150,000 (but in
such event, the Purchaser Indemnified Parties shall be indemnified for the full
amount of their Loss and not merely that in excess of $150,000).



                                      33
<PAGE>   40

                                   ARTICLE IX

                                INDEMNIFICATION

         9.01     Indemnification.

                  (a)      Subject to the other Sections of this Article IX,
Seller shall indemnify the Purchaser Indemnified Parties in respect of, and
hold each of them harmless from and against, any and all Losses suffered,
incurred or sustained by any of them or to which any of them becomes subject,
resulting from, arising out of or relating to

                           (i)      any misrepresentation, breach of warranty
                  or nonfulfillment of or failure to perform any covenant or
                  agreement on the part of Seller contained in this Agreement
                  or the Operative Agreements; and

                           (ii)     all Taxes (A) imposed on the Company with
                  respect to any taxable period or portion thereof that ends on
                  or before the Closing Date, (B) imposed on the Seller or any
                  member of an Affiliated Group with which Seller files a
                  consolidated or combined income tax return (other than the
                  Company) with respect to any taxable period that ends on or
                  before the Closing Date or includes the Closing Date which
                  have not been reserved for and which reserve is not reflected
                  on the Audited Closing Balance Sheet, (C) imposed on the
                  Company arising out of, or resulting from, (a) the payment of
                  any dividends to Seller by the Company subsequent to the date
                  of the Audited Financial Statements, which Taxes are in
                  excess of the 1997 Withholding Taxes, or (b) the offset or
                  cancellation of the management fees identified in Section
                  1.04 of the Disclosure Schedule; or (D) resulting from,
                  arising out of, relating to, in the nature of, or caused by
                  any Liability of the Company for Taxes of any Person other
                  than the Company (i) under Reg. ss. 1.1502-6 under the Code
                  (or any similar provision of U.S. or Austrian federal, state,
                  local law or any applicable foreign law), (ii) as a
                  transferee or successor, (iii) by contract, or (iv)
                  otherwise.

         (b)      Subject to the other Sections of this Article IX, Purchaser
shall indemnify the Seller Indemnified Parties in respect of, and hold each of
them harmless from and against, any and all Losses suffered, incurred or
sustained by any of them or to which any of them becomes subject, resulting
from, arising out of or relating (i) to any misrepresentation, breach of
warranty or nonfulfillment of or failure to perform any covenant or agreement
on the part of Purchaser contained in this Agreement or the Operative
Agreements, or (ii) all Taxes imposed on the Company with respect to their
income, business, property or operations for any taxable period or portion
thereof that begins after the Closing Date,



                                      34
<PAGE>   41

         9.02     Method of Asserting Claims. All claims for indemnification by
any Indemnified Party under Section 9.02 (other than Tax claims asserted
pursuant to Section 9.03 below) will be asserted and resolved as follows:

         (a)      In the event any claim or demand in respect of which an
Indemnified Party might seek indemnity under Section 9.02 is asserted against
or sought to be collected from such Indemnified Party by a Person other than
Seller, the Company, Purchaser or any Affiliate of Seller or Purchaser (a
"Third Party Claim"), the Indemnified Party shall deliver a Claim Notice with
reasonable promptness to the Indemnifying Party. If the Indemnified Party fails
to provide the Claim Notice with reasonable promptness after the Indemnified
Party receives notice of such Third Party Claim, the Indemnifying Party will
not be obligated to indemnify the Indemnified Party with respect to such Third
Party Claim to the extent that the Indemnifying Party's ability to defend has
been irreparably prejudiced by such failure of the Indemnified Party. The
Indemnifying Party will notify the Indemnified Party as soon as practicable
within the Dispute Period whether the Indemnifying Party disputes its liability
to the Indemnified Party under Section 9.02 and whether the Indemnifying Party
desires, at its sole cost and expense, to defend the Indemnified Party against
such Third Party Claim.

                  (i)      If the Indemnifying Party notifies the Indemnified
         Party within the Dispute Period that the Indemnifying Party desires to
         defend the Indemnified Party with respect to the Third Party Claim
         pursuant to this Section 9.02(a), then the Indemnifying Party will
         have the right to defend, with counsel reasonably satisfactory to the
         Indemnified Party, at the sole cost and expense of the Indemnifying
         Party, such Third Party Claim by all appropriate proceedings, which
         proceedings will be vigorously and diligently prosecuted by the
         Indemnifying Party to a final conclusion or will be settled at the
         discretion of the Indemnifying Party (but only with the consent of the
         Indemnified Party in the case of any settlement that provides for any
         relief other than the payment of monetary damages), the Indemnifying
         Party will have full control of such defense and proceedings,
         including any compromise or settlement thereof; provided, however,
         that the Indemnified Party may, at the sole cost and expense of the
         Indemnified Party, at any time prior to the Indemnifying Party's
         delivery of the notice referred to in the first sentence of this
         clause (i), file any motion, answer or other pleadings or take any
         other action that the Indemnified Party reasonably believes to be
         necessary or appropriate to protect its interests; and provided
         further, that if requested by the Indemnifying Party, the Indemnified
         Party will, at the sole cost and expense of the Indemnifying Party,
         provide reasonable cooperation to the Indemnifying Party in contesting
         any Third Party Claim that the Indemnifying Party elects to contest.
         The Indemnified Party may participate in, but not control, any defense
         or settlement of any Third Party Claim controlled by the Indemnifying
         Party pursuant to this clause (i), and except as provided in the
         preceding sentence, the Indemnified Party will bear its own costs and
         expenses with respect to such participation. Notwithstanding the
         foregoing, the Indemnified Party may take over the control of the
         defense or settlement of a Third Party Claim at any time if it
         irrevocably waives its right to indemnity under Section 9.02 with
         respect to such Third Party Claim.



                                      35
<PAGE>   42

                  (ii)     If the Indemnifying Party fails to notify the
         Indemnified Party within the Dispute Period that the Indemnifying
         Party desires to defend the Third Party Claim pursuant to Section
         9.02(a), or if the Indemnifying Party gives such notice but fails to
         prosecute vigorously and diligently or settle the Third Party Claim,
         or if the Indemnifying Party fails to give any notice whatsoever
         within the Dispute Period, then the Indemnified Party will have the
         right to defend, at the sole cost and expense of the Indemnifying
         Party, the Third Party Claim by all appropriate proceedings, which
         proceedings will be prosecuted by the Indemnified Party in a
         reasonable manner and in good faith or will be settled, if the claim
         is solely for monetary damages, at the discretion of the Indemnified
         Party (with the consent of the Indemnifying Party, which consent will
         not be unreasonably withheld). The Indemnified Party will have full
         control of such defense and proceedings, including, if the claim is
         solely for monetary damages, any compromise or settlement thereof;
         provided, however, that if requested by the Indemnified Party, the
         Indemnifying Party will, at the sole cost and expense of the
         Indemnifying Party, provide reasonable cooperation to the Indemnified
         Party and its counsel in contesting any Third Party Claim which the
         Indemnified Party is contesting. Notwithstanding the foregoing
         provisions of this clause (ii), if the Indemnifying Party has notified
         the Indemnified Party within the Dispute Period that the Indemnifying
         Party disputes its liability hereunder to the Indemnified Party with
         respect to such Third Party Claim and if such dispute is resolved in
         favor of the Indemnifying Party in the manner provided in clause (iii)
         below, the Indemnifying Party will not be required to bear the costs
         and expenses of the Indemnified Party's defense pursuant to this
         clause (ii) or of the Indemnifying Party's participation therein at
         the Indemnified Party's request, and the Indemnified Party will
         reimburse the Indemnifying Party in full for all reasonable costs and
         expenses incurred by the Indemnifying Party in connection with such
         litigation. The Indemnifying Party may participate in, but not
         control, any defense or settlement controlled by the Indemnified Party
         pursuant to this clause (ii), and the Indemnifying Party will bear its
         own costs and expenses with respect to such participation.

                  (iii)    If the Indemnifying Party notifies the Indemnified
         Party that it does not dispute its liability to the Indemnified Party
         with respect to the Third Party Claim under Section 9.02 or fails to
         notify the Indemnified Party within the Dispute Period whether the
         Indemnifying Party disputes its liability to the Indemnified Party
         with respect to such Third Party Claim, the Loss in the amount
         specified in the Claim Notice will be conclusively deemed a liability
         of the Indemnifying Party under Section 9.02 and the Indemnifying
         Party shall pay the amount of such Loss to the Indemnified Party on
         demand. If the Indemnifying Party has timely disputed its liability
         with respect to such claim, the Indemnifying Party and the Indemnified
         Party will proceed in good faith to negotiate a resolution of such
         dispute, and if not resolved through negotiations within the
         Resolution Period, such dispute shall be resolved by arbitration in
         accordance with Section 11.15, except as otherwise permitted by the
         terms of this Agreement.



                                      36
<PAGE>   43



         (b)      In the event any Indemnified Party should have a claim under
Section 9.02 against any Indemnifying Party that does not involve a Third Party
Claim, the Indemnified Party shall deliver an Indemnity Notice with reasonable
promptness to the Indemnifying Party. The failure by any Indemnified Party to
give the Indemnity Notice shall not impair such party's rights hereunder except
to the extent that an Indemnifying Party demonstrates that it has been
irreparably prejudiced thereby. If the Indemnifying Party notifies the
Indemnified Party that it does not dispute the claim described in such
Indemnity Notice or fails to notify the Indemnified Party within the Dispute
Period whether the Indemnifying Party disputes the claim described in such
Indemnity Notice, the Loss in the amount specified in the Indemnity Notice will
be conclusively deemed a liability of the Indemnifying Party under Section 9.02
and the Indemnifying Party shall pay the amount of such Loss to the Indemnified
Party on demand. If the Indemnifying Party has timely disputed its liability
with respect to such claim, the Indemnifying Party and the Indemnified Party
will proceed in good faith to negotiate a resolution of such dispute, and if
not resolved through negotiations within the Resolution Period, such dispute
shall be resolved by arbitration accordance with Section 11.15, except as
otherwise permitted by the terms of this Agreement.

         9.03     Method of Asserting Tax Claims.

         (a)      After the Closing, Purchaser and Seller each shall promptly
notify the other party in writing of the commencement of any Tax audit or
administrative or judicial proceeding affecting the Company, which, if
determined adversely to the taxpayer or after the lapse of time would be
grounds for indemnification of either Seller or Purchaser ("Tax Indemnitee")
under this Article IX by the other party ("Tax Indemnitor"). Such notice shall
contain factual information describing the asserted Tax liability in reasonable
detail and shall include copies of any notice or other document received from
any taxing authority in respect of any such asserted Tax liability. If either
Purchaser or Seller fails to give the other party prompt notice of an asserted
Tax liability as required by this Section 9.03, then, if such failure to give
prompt notice results in a detriment to the indemnifying party, then any amount
which the indemnifying party is otherwise required to pay pursuant to this
Article IX with respect to such liability shall be reduced by the amount of
such detriment.


         (b)      The Seller may participate, through counsel of its own
choosing and at its own expense, in any audit, or administrative or judicial
proceeding involving any asserted Tax liability with respect to which indemnity
may be sought under this Article IX (any such audit or proceeding relating to
an asserted Tax liability are referred to herein collectively as a "Contest").
If the Seller elects to participate in the Contest of an asserted Tax
liability, it shall within thirty (30) calendar days of receipt of the notice
of an asserted Tax liability notify the Purchaser of its intent to do so, and
the Purchaser shall cooperate in good faith and shall cause the Company or its
successor to cooperate in good faith, at the Seller's expense, in each phase of
such Contest. If the Seller elects not to participate in the Contest, fails to
notify the Purchaser of its election as herein provided or contests its
obligation to indemnify hereunder, the Purchaser or the Company may pay,
compromise or contest such asserted liability. However, in such case, neither
the Purchaser nor the Company (including any designated Representative of
either) may settle or compromise any asserted liability



                                      37
<PAGE>   44

in a manner that would create an indemnification obligation unless such
settlement or compromise would be reasonable in the case of a person that owned
the Company before and after the Closing Date. In any event, each of the
Purchaser (or the Company) and the Seller may participate, at its own expenses,
in the Contest.

         9.04     Method of Calculating Losses. The liability of the
Indemnifying Party with respect to any Indemnification Claim shall be reduced
by the tax benefit actually realized by the Indemnified Party as the result of
any Loss upon which such Indemnification Claim is based, and shall be increased
by any tax detriment actually suffered by the Indemnified Party as a result of
such Loss or the receipt of indemnification payments hereunder. The amount of
any such tax benefit or detriment shall be determined by taking into account
the effect, if any, and to the extent determinable, of timing differences
resulting from the acceleration or deferral of items of income or loss
resulting from such Loss or indemnification payments and shall otherwise be
determined so that payment by the Indemnifying Party of the Indemnification
Claim, as adjusted to give effect to any such tax benefit or detriment, will
make the Indemnitee as economically whole as is reasonably practical with
respect to the Losses upon which the Indemnification Claim is based.

         9.05     Source of Funds to Satisfy Claims for Indemnification.
Notwithstanding anything else in this Agreement or the Operative Agreements to
the contrary, all claims by Seller for indemnification under this Agreement or
the Operative Agreements shall, in Purchaser's sole and absolute discretion, be
paid under the Letter of Credit or from the proceeds thereof which have been
deposited pursuant to the Escrow Agreement.

         In the event that Purchaser shall elect to receive payment for any
claim asserted under or with respect to this Agreement or the Operative
Agreements, other than pursuant to a draw under the Letter of Credit or a
distribution from the Escrow Account, and such payment is thereafter disallowed
or treated as a preference under Title 11, U.S. Code or any similar Federal or
state law for the relief of debtors (a "Bankruptcy Law"), then Purchaser may
draw under the Letter of Credit or the Escrow Account the full amount of any
such payments constituting or treated as a preference under applicable
Bankruptcy Law or as to which the Purchaser does not have full and unfettered
right, title and interest in, by virtue of any legal proceeding or by reason of
any order or judgement of any court or governmental authority enjoining,
restraining or otherwise contesting the Company's right to such funds in each
case under any applicable Bankruptcy Law.


                                   ARTICLE X
                                  DEFINITIONS

         10.01    Definitions.

         (a)      Defined Terms. As used in this Agreement, the following
defined terms have the meanings indicated below:





                                      38
<PAGE>   45

                  "AAP" means Austrian statutory accounting principles
consistently applied throughout the specified period and in the immediately
prior comparable period.

                  "Actions or Proceedings" means any action, suit, proceeding,
arbitration or Governmental or Regulatory Authority investigation or audit.

                  "Affiliate" means any Person that directly, or indirectly
through one of more intermediaries, controls or is controlled by or is under
common control with the Person specified. For purposes of this definition,
control of a Person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such Person whether by Contract or
otherwise and, in any event and without limitation of the previous sentence,
any Person owning ten percent (10%) or more of the voting securities of another
Person shall be deemed to control that Person.

                  "Agreement" means this Stock Purchase Agreement and the
Exhibits, the Disclosure Schedule and the Schedules hereto and the certificates
delivered in accordance with Sections 5.01 and 6.01, as the same shall be
amended from time to time.

                  "Assets and Properties" of any Person means all assets and
properties of every kind, nature, character and description (whether real,
personal or mixed, whether tangible or intangible, whether absolute, accrued,
contingent, fixed or otherwise and wherever situated), including the goodwill
related thereto, operated, owned or leased by such Person, including without
limitation cash, cash equivalents, Investment Assets, accounts and notes
receivable, chattel paper, documents, instruments, general intangibles, real
estate, equipment, inventory, goods and Intellectual Property.

                  "Associate" means, with respect to any Person, any
corporation or other business organization of which such Person is an officer
or partner or is the beneficial owner, directly or indirectly, of ten percent
(10%) or more of any class of equity securities, any trust or estate in which
such Person has a substantial beneficial interest or as to which such Person
serves as a trustee or in a similar capacity and any relative or spouse of such
Person, or any relative of such spouse, who has the same home as such Person.

                  "Audited Financial Statement Date" means the last day of the
most recent fiscal year of the Company for which Audited Financial Statements
are delivered to Purchaser pursuant to Section 2.09.

                  "Audited Financial Statements" means the Financial Statements
for the most recent fiscal year of the Company, upon which an Austrian
certified accounting firm rendered an opinion as to the fairness of the
presentation thereof, and which were delivered to Purchaser pursuant to Section
2.09.

                  "Benefit Plan" means any bonus, incentive compensation,
deferred compensation, pension, profit sharing, retirement, stock purchase,
stock option, stock ownership, stock appreciation



                                      39
<PAGE>   46

rights, phantom stock, leave of absence, layoff, vacation, day or dependent
care, legal services, cafeteria, life, health, accident, disability, workmen's
compensation or other insurance, severance, separation or other employee
benefit plan, practice, policy or arrangement of any kind, whether written or
oral, established by the Company or any predecessor or Affiliate of any of the
Company, existing at the Closing Date or prior thereto, to which the Company
contributes or has contributed, or under which any employee, former employee or
director of the Company or any beneficiary thereof is covered, is eligible for
coverage or has benefit rights.

                  "Books and Records" means all material, and, to Seller's
Knowledge, all other files, documents, instruments, papers, books and records
relating to the Business or Condition of the Company, including without
limitation financial statements, Tax Returns and related work papers and
letters from accountants, budgets, pricing guidelines, ledgers, journals,
deeds, title policies, minute books, stock certificates and books, stock
transfer ledgers, Contracts, Governmental Licenses, customer lists, computer
files and programs, retrieval programs, operating data and plans and
environmental studies and plans, provided however that as to budgets or
projections such documents shall not be a warranty or guarantee of future
performance.

                  "Business" means the business of the Company as carried on
during the year immediately prior to the execution of this Agreement.

                  "Business Day" means a day other than Saturday, Sunday or any
day on which banks located in the States of New York or Georgia are authorized
or obligated to close.

                  "Business or Condition of the Company" means the business,
condition (financial or otherwise), results of operations, Assets and
Properties and opportunities of the Company taken as a whole.

                  "Claim Notice" means written notification pursuant to Section
9.02(a) of a Third Party Claim as to which indemnity under Section 9.02 is
sought by an Indemnified Party, enclosing a copy of all papers served, if any,
and specifying the nature of and basis for such Third Party Claim and for the
Indemnified Party's claim against the Indemnifying Party under Section 9.02,
together with the amount or, if not then reasonably ascertainable, the
estimated amount, determined in good faith, of such Third Party Claim.

                  "Closing" means the closing of the transactions contemplated
by Section 1.03.

                  "Closing Date" means the date of this Agreement.

                  "Code" means the Internal Revenue Code of 1986, as amended,
and the rules and regulations promulgated thereunder.



                                      40
<PAGE>   47

                  "Common Stock" means the common stock, nominal value Austrian
Schillings 1,000 per share, of the Company.

                  "Company" means Tele Control Kommunications und
Computersysteme Aktien Gesellschaft and, for any period prior to its
organization as an A.G., also means Tele Control Kommunications und
Computersysteme Gesellschaft M.b.H.

                  "Contract" means any agreement, lease, license, evidence of
Indebtedness, mortgage, indenture, security agreement, stockholders agreement,
voting trust or other contract (whether written or oral).

                  "Deferred Revenue" means the sum of (i) 3,465,000 Austrian
Schillings as of October 31, 1996, and (ii) all cash received by the Company
after October 31, 1996 from Internationale des Jeux.

                  "Disclosure Schedule" means the record delivered to Purchaser
by Seller herewith and dated as of the date hereof, containing all lists,
descriptions, exceptions and other information and materials as are required to
be included therein by Seller pursuant to this Agreement.

                  "Disputed Amount" means the amount of any draw by Scientific
Games Holdings Corp. or SGBAG under the Letter of Credit and deposited in the
Escrow Account which the Seller has, in good faith, contended is not properly
payable either to Scientific Games Holding Corp. or SGBAG under the provisions
of Article IX of this Agreement.

                  "Dispute Period" means the period ending ten (10) days
following receipt by an Indemnifying Party of either a Claim Notice or an
Indemnity Notice.

                  "Environmental Claim" means, with respect to any Person, any
written or oral notice, claim, demand or other communication (collectively, a
"claim") by any other Person alleging or asserting such Person's liability for
investigatory costs, cleanup costs, Governmental or Regulatory Authority
response costs, damages to natural resources or other property, personal
injuries, fines or penalties arising out of, based on or resulting from (a) the
presence, or Release into the environment, of any Hazardous Material at any
location, whether or not owned by such Person, or (b) circumstances forming the
basis of any violation, or alleged violation, of any Environmental Law. The
term "Environmental Claim" shall include, without limitation, any claim by any
Governmental or Regulatory Authority for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and any claim by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive relief
resulting from the presence of Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.



                                      41
<PAGE>   48

                  "Environmental Law" means any material Law or Order relating
to the regulation or protection of human health, safety or the environment or
to emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals or industrial, toxic or hazardous substances or wastes
into the environment (including, without limitation, ambient air, soil, surface
water, ground water, wetlands, land or subsurface strata), or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals or
industrial, toxic or hazardous substances or wastes.

                  "Escrow Account" means the escrow account established by the
Escrow Agreement.

                  "Escrow Agreement" means the escrow agreement in the form of
Exhibit B entered into by the Purchaser, Seller and First Union National Bank
of Georgia contemporaneously with this Agreement.

                  "Financial Statements" means the balance sheets, statements
of operations and cash flow statements of the Company prepared under AAP.

                  "Governmental Licenses" means all licenses, permits,
certificates of authority, authorizations, approvals, registrations, franchises
and similar consents granted or issued by any Governmental or Regulatory
Authority.

                  "Governmental or Regulatory Authority" means any court,
tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of the United States, any foreign country or any domestic or
foreign state, county, city or other political subdivision.

                  "Hazardous Material" means (a) any petroleum or petroleum
products, flammable explosives, radioactive materials, asbestos in any form
that is or could become friable, urea formaldehyde foam insulation and
transformers or other equipment that contain dielectric fluid containing levels
of polychlorinated biphenyls (PCBs); (b) any chemicals or other materials or
substances which are now or hereafter become defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous wastes," "restricted hazardous wastes," "toxic
substances," "toxic pollutants" or words of similar import under any
Environmental Law; and (c) any other chemical or other material or substance,
exposure to which is now or hereafter prohibited, limited or regulated by any
Governmental or Regulatory Authority under any Environmental Law.

                  "IDJ" means Internationale des Jeux, a French societe
anonyme.

                  "Indebtedness" of any Person means all obligations of such
Person (a) for borrowed money, (b) evidenced by notes, bonds, debentures or
similar instruments, (c) for the deferred purchase price of goods or services
(other than trade payables or accruals incurred in the ordinary



                                      42
<PAGE>   49

course of business), (d) under capital leases and (e) in the nature of
guarantees of the obligations described in clauses (a) through (d) above of any
other Person.

                  "Indemnified Party" means any Person claiming indemnification
under any provision of Article IX.

                  "Indemnifying Party" means any Person against whom a claim
for indemnification is being asserted under any provision of Article IX.

                  "Indemnity Notice" means written notification pursuant to
Section 9.02(b) of a claim for indemnity under Article IX by an Indemnified
Party, specifying the nature of and basis for such claim, together with the
amount or, if not then reasonably ascertainable, the estimated amount,
determined in good faith, of such claim.

                  "Intellectual Property" means all patents and patent rights,
trademarks and trademark rights, trade names and trade name rights, service
marks and service mark rights, service names and service name rights, brand
names, inventions, processes, formulae, copyrights and copyright rights, trade
dress, business and product names, logos, slogans, research records, records of
invention, test information, market surveys, marketing know-how, applications,
trade secrets, industrial models, processes, designs, methodologies, computer
programs (including all source codes) and related documentation, technical
information, manufacturing, engineering and technical documentation and
drawings, shop-rights, plans, know-how, technologies and all pending
applications for and registrations of patents, trademarks, service marks and
copyrights.

                  "Investment Assets" means all debentures, notes and other
evidences of Indebtedness, stocks, securities (including rights to purchase and
securities convertible into or exchangeable for other securities), interests in
joint ventures and general and limited partnerships, mortgage loans and other
investment or portfolio assets owned of record or beneficially by the Company
and issued by any Person other than the Company (other than trade receivables
generated in the ordinary course of business of the Company).

                  "IRS" means the Internal Revenue Service.

                  "January Loan" has the meaning ascribed to it in Section 1.04
of the Disclosure Schedule.

                  "Knowledge of Seller" or "Known to Seller" or "to Seller's
Knowledge" means the knowledge of any officer, director or key employee of
Seller or the Company.

                  "Laws" means all material laws, statutes, rules, regulations,
ordinances and other pronouncements having the effect of law of the United
States, Austria or other country or any



                                      43
<PAGE>   50

domestic or foreign state, district, county, city or other political
subdivision or of any Governmental or Regulatory Authority.

                  "Letter of Credit" means a letter of credit as defined in
Section 1.03.

                  "Liabilities" means all Indebtedness, obligations and other
liabilities of a Person (whether absolute, accrued, contingent, fixed or
otherwise, or whether due or to become due).

                  "Liens" means any mortgage, pledge, assessment, security
interest, lease, lien, adverse claim, levy, charge or other encumbrance of any
kind, or any conditional sale Contract, title retention Contract or other
Contract to give any of the foregoing.

                  "Loss" means any and all damages (including, without
limitation, damages resulting in material diminution in value of assets),
fines, fees, penalties, deficiencies, losses, and expenses (including without
limitation interest, court costs, reasonable fees of attorneys, accountants,
consultants, engineers and other experts or other expenses of litigation or
other proceedings or of any claim, default or assessment).

                  "Material Adverse Effect" means any material adverse effect
on the business, financial condition, opportunities, properties or otherwise of
the Company.

                  "1997 Dividend" has the meaning ascribed to it in Section
1.04 of the Disclosure Schedule.

                  "1997 Dividend Withholding Tax Receivable" means the
receivable of the Company with respect to the Austrian withholding tax related
to the 1997 Dividend.

                  "1997 Interest Accrual" has the meaning ascribed to it in
Section 1.04 of the Disclosure Schedule.

                  "1997 Management Fee" has the meaning ascribed to it in
Section 1.04 of the Disclosure Schedule.

                  "1997 Withholding Taxes" means the amount of Austrian
withholding taxes paid or payable by the Company with respect to the 1997
Dividend in the amount of 78,297,846.80 Austrian Schillings.

                  "Operative Agreements" means the Escrow Agreement, the Letter
of Credit, the Right of First Refusal Agreement, the Exclusive License
Agreement, the Inspection Rights and License Agreement, and any support or
other agreements to be entered into in connection with this Agreement. As to
Seller or Purchaser, as the case may be, Operative Agreements means only the
Operative Agreements to which such person is a party.



                                      44
<PAGE>   51

                  "Option" with respect to any Person means any security,
right, subscription, warrant, option, "phantom" stock right, rights of
takeover, rights to conversion, or other Contract that gives the right to (a)
purchase or otherwise receive or be issued any shares of capital stock of such
Person or any security of any kind convertible into or exchangeable or
exercisable for any shares of capital stock of such Person or (b) receive or
exercise any benefits or rights (legal or economic) similar to any rights
enjoyed by or accruing to the holder of shares of capital stock of such Person,
including any rights to participate in the equity or income of such Person or
to participate in or direct the election of any directors or officers of such
Person or the manner in which any shares of capital stock of such Person are
voted.

                  "Order" means any writ, judgment, decree, injunction or
similar order of any Governmental or Regulatory Authority (in each such case
whether preliminary or final).

                  "Permitted Lien" means (a) any Lien for Taxes not yet due or
delinquent or being contested in good faith by appropriate proceedings for
which adequate reserves have been established in accordance with AAP, (b) any
statutory Lien arising in the ordinary course of business by operation of Law
with respect to a Liability that is not yet due or delinquent and (c) any minor
imperfection of title or similar Lien which individually or in the aggregate
with other such Liens does not materially impair the value of the property
subject to such Lien or the use of such property in the conduct of the business
of the Company.

                  "Person" means any natural person, corporation, general
partnership, limited partnership, limited liability corporation,
proprietorship, joint venture, other business organization, trust, union,
association or Governmental or Regulatory Authority.

                  "Product" means all tangible and intangible goods and
services sold by or through the Company, including, without limitation,
computer hardware and computer software sold or produced by the Company or
provided by the Company under license or sublicense arrangements.

                  "Purchase Price" has the meaning ascribed to it in Section
1.02.

                  "Purchaser" has the meaning ascribed to it in the forepart of
this Agreement.

                  "Purchaser Indemnified Parties" means Purchaser and its
officers, directors, employees, agents and Affiliates.

                  "Release" means any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment, including, without
limitation, the movement of Hazardous Materials through ambient air, soil,
surface water, ground water, wetlands, land or subsurface strata.



                                      45
<PAGE>   52

                  "Representatives" means, as to any Person, such Person's
officers, directors, employees, agents, counsel, accountants, financial
advisors, consultants and other representatives.

                  "Resolution Period" means the period ending twenty (20) days
following receipt by an Indemnified Party of a written notice from an
Indemnifying Party stating that it disputes all or any portion of a claim set
forth in a Claim Notice or an Indemnity Notice.

                  "Seller" has the meaning ascribed to it in the forepart of
this Agreement.

                  "Seller Indemnified Parties" means Seller and its officers,
directors, employees, agents and Affiliates.

                  "Seller's Banks" means the financial institutions party to
that certain Amended and Restated Credit Agreement, dated as of January 26,
1996, among Autotote Corporation, Autotote Systems, Inc., certain financial
institutions identified therein as "Banks", and Bankers Trust Company, as
"Agent" for the Banks, as amended from time to time.

                  "Seller's Lottery Business" means all of Autotote's lottery
businesses (excluding the Company but including, without limitation, its
central processing system, data communications networks, on-line/off-line
lottery terminals, operating contracts, technical and software support
contracts, sale contracts and its on-line contract with the State of
Connecticut), whether conducted through Autotote Lottery Corporation, Autotote
Lottery Canada, Inc., or Autotote Israel, Ltd., whether now owned or hereafter
acquired during the term of the Right of First Refusal Agreement. Seller's
Lottery Business shall not be deemed to include the totalisator business as
operated at horse (thoroughbred and harness) race tracks, dog race tracks,
off-track betting establishments, jai alai frontons and casino/sports betting
facilities or simulcasting such activities in connection with gaming thereon so
long as such activities are not engaged in a manner so as to be a lottery, as
such term is customarily understood in the gaming industry.

                  "SGBAG" means Scientific Games Beteiligung A.G., an Austrian
stock company.

                  "Shares" has the meaning ascribed to it in the forepart of
this Agreement.

                  "Subsidiary" means any Person in which the Company, directly
or indirectly, through a subsidiary or otherwise, beneficially owns more than
fifty percent (50%) of either the equity interests in, or the voting control
of, such Person.

                  "Tax Returns" means all returns, declarations, reports and
forms, claims for refunds, or information returns and reports relating to
Taxes, including any schedule or attachment thereto, and including any
amendments thereof.



                                      46
<PAGE>   53

                  "Tax" or "Taxes" means all Federal, state, local and foreign
income, gross receipts, profits, windfall profits, capital gains, franchise,
sales, use, license, occupation, property, property transfer, capital stock,
premium, excise, employment, payroll, withholding, estimated, severance, stamp,
environmental (including taxes under section 59A of the Code), customs duties,
franchise, social security, unemployment, disability, sales, use, registration,
value added, alternative or add-on minimum and other taxes, assessments or
governmental charges of any nature, kind or character, and including any
interest, additions to tax and penalties thereon, whether disputed or not.

                  "Terminals" means the Seller's Probe * L on-line retailer
terminals.

                  "Third Party Claim" has the meaning ascribed to it in Section
9.02(a).

                  "Transfer Taxes" means any sales, use, excise, transfer or
other similar tax imposed with respect to the transactions provided for in this
Agreement, and any interest or penalties related thereto.

                  "Unaudited Financial Statement Date" means the last day of
the most recent fiscal period of the Company for which Financial Statements are
delivered to Purchaser pursuant to Section 2.09.

                  "Unaudited Financial Statements" means the Financial
Statements for the most recent fiscal period of the Company delivered to
Purchaser pursuant to Section 2.09.

         (b)      Construction of Certain Terms and Phrases. Unless the context
of this Agreement or an Operative Agreement otherwise requires, (a) words of
any gender include each other gender; (b) words using the singular or plural
number also include the plural or singular number, respectively; (c) the terms
"hereof," "herein," "hereby" and derivative or similar words refer to this
entire Agreement or the entire applicable Operative Agreement, as the case may
be; (d) the terms "Article" or "Section" refer to the specified Article or
Section of this Agreement (or the Operative Agreement, as the case may be); and
(e) the phrases "ordinary course of business" and "ordinary course of business
consistent with past practice" refer to the business and practice of the
Company. Whenever this Agreement or an Operative Agreement refers to a number
of days, such number shall refer to calendar days unless Business Days are
specified. All accounting terms used herein and not expressly defined herein
shall have the meanings given to them under AAP.

                                   ARTICLE XI

                                 MISCELLANEOUS

         11.01    Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally or by facsimile




                                      47
<PAGE>   54

transmission sent (and receipted for) by overnight delivery service or mailed
(prepaid certified mail with return receipt requested) to the parties at the
following addresses or facsimile numbers:

                  If to Purchaser, to:

                  Scientific Games Holdings Corp.
                  1500 Bluegrass Lakes Parkway
                  Alpharetta, Georgia 30201-7712
                  Attn: C. Gray Bethea, Jr., Esq.
                  Telephone:      770/664-3700
                  Facsimile:      770/343-8798

                  with a copy to:

                  Smith, Gambrell & Russell, LLP
                  1230 Peachtree Street, N. E.
                  Suite 3100, Promenade II
                  Atlanta, Georgia 30309-3592
                  Attn:   Howard E. Turner, Esq.
                  Telephone:      404/815-3594
                  Facsimile:      404/815-3509

                  If to Seller, to:

                  Autotote Corporation
                  750 Lexington Avenue
                  25th Floor
                  New York, New York 10022
                  Attn: Martin E. Schloss, Esq.
                  Telephone:   212/754-2233
                  Facsimile:   212/754-2372

                  with a copy to:

                  Rosenman & Colin LLP
                  575 Madison Avenue
                  New York, New York  10022
                  Attn:  Howard Schneider, Esq.
                  Telephone: 212/940-8787
                  Facsimile: 212/940-7079




                                      48
<PAGE>   55

All such notices, requests and other communications will (i) if delivered
personally or by a nationally recognized overnight delivery service to the
address as provided in this Section, be deemed given upon delivery, (ii) if
delivered by facsimile transmission to the facsimile number as provided in this
Section, be deemed given upon receipt as evidenced by sender's telecopy
confirmation, and (iii) if delivered by mail in the manner described above to
the address as provided in this Section, be deemed given upon receipt or
refusal of delivery by the intended recipient (in each case regardless of
whether such notice, request or other communication is received by any other
Person to whom a copy of such notice, request or other communication is to be
delivered pursuant to this Section). Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other party hereto.

         11.02    Entire Agreement. This Agreement, the Operative Agreements
and the side letter, dated the date hereof, relating to the 1997 Withholding
Taxes supersede all prior discussions and agreements, including the Letter of
Intent dated January 14, 1997, between the parties with respect to the subject
matter hereof and thereof and contain the sole and entire agreement between the
parties hereto with respect to the subject matter hereof and thereof.

         11.03    Expenses.

                  (a)      Except as otherwise expressly provided in this
Agreement or an Operative Agreement, whether or not the transactions
contemplated hereby are consummated, Purchaser will pay its own costs and
expenses, and Seller and the Company shall each pay its own costs and expenses
incurred in connection with, or in preparation for, the negotiation, execution
and closing of this Agreement and the Operative Agreements and the transactions
contemplated hereby and thereby, all of which as it relates to the Company
shall be charged to the period prior to the Closing Date.

                  (b)      Purchaser agrees to pay, and to indemnify, defend
and hold Seller harmless from and against any United States or Austrian sales,
use, excise, transfer or other similar tax imposed with respect to this
Agreement, the Operative Agreements and the transactions arising as a result
thereof, and any interest or penalties related thereto.

                  (c)      The parties agree that the prevailing party in any
action or arbitration proceeding brought with respect to or to enforce any
right or remedy under this Agreement shall be entitled to recover from the
other party or parties all reasonable costs and expenses of any nature
whatsoever incurred by the prevailing party in connection with such action,
including without limitation, attorneys' fees and prejudgment interest.

         11.04    Public Announcements. Seller and Purchaser will obtain the
other party's prior approval of any press release to be issued immediately
following the Closing announcing the consummation of the transactions
contemplated by this Agreement.



                                      49
<PAGE>   56

         11.05    Confidentiality.

         (a)      Since January 14, 1997, each party hereto has held, and has
used its best efforts to cause its Affiliates and their respective
Representatives to hold, in strict confidence from any Person (other than any
such Affiliate or Representative), all Confidential Information, as hereinafter
defined, unless (i) compelled to disclose by judicial or administrative process
(including without limitation in connection with obtaining the necessary
approvals of this Agreement and the transactions contemplated hereby of
Governmental or Regulatory Authorities) or by other requirements of Law or (ii)
disclosed in an Action or Proceeding brought by a party hereto in pursuit of
its rights or in the exercise of its remedies hereunder, provided that,
following the Closing, the foregoing restrictions do not apply to Purchaser's
use of documents and information concerning the Company furnished by Seller and
the Company hereunder or any Confidential Information arising from or
pertaining to the Company. For purposes of this Section 11.05(a), the term
"Confidential Information" shall mean all documents and information concerning
the other party or any of its Affiliates furnished to it by the other party or
such other party's Representatives in connection with this Agreement or the
transactions contemplated hereby, except to the extent that such documents or
information can be shown to have been (A) previously known by the party
receiving such documents or information, as evidenced by a writing truly and
correctly dated prior to its date of disclosure, (B) in the public domain
(either prior to or after the furnishing of such documents or information
hereunder) through no fault of such receiving party, (C) later acquired by the
receiving party from another unaffiliated source if such source is under no
obligation to another party hereto to keep such documents and information
confidential, (D) is independently developed by the receiving party or its
affiliates by personnel who have not had access to the Confidential
Information, or (E) is approved in advance for release by written authorization
of an officer of the party to whom the Confidential Information relates;

         (b)      Seller agrees that, subsequent to the Closing Date, Seller
shall, and shall cause its subsidiaries and Affiliates to, and will use its
best efforts to cause all of their respective Representatives to, hold in
strict confidence and in a fiduciary capacity for the benefit of the Purchaser
and the Company, and shall not directly or indirectly use or disclose any
Confidential Information, as hereinafter defined, that Seller or its
subsidiaries or Affiliates or Representatives may have or acquire (whether or
not developed or compiled by the Seller or the Company prior to the Closing
Date, unless (i) compelled to disclose by judicial or administrative process in
a court or other venue of competent jurisdiction or as otherwise required by
applicable Law or legal process, or (ii) disclosed in an Action or Proceeding
brought by a party to this Agreement or an assignee thereunder in pursuit of
rights of a party thereunder, or in the exercise of a party's remedies
thereunder, provided that, in the event Seller or its subsidiaries, or
Affiliates or their Representatives are so required to disclose such
Confidential Information pursuant to the foregoing clauses (i) and (ii) of this
Section 11.05(b), Seller or its subsidiaries or Affiliates or their
Representatives, as the case may be, shall promptly notify Purchaser so that
Purchaser or any of its subsidiaries or Affiliates, as the case may be, may
seek a protective order or other appropriate remedy with respect to such
proposed disclosure. For purposes of this Section 11.05(b), the term
"Confidential



                                      50
<PAGE>   57

Information" shall mean and include any information, documents, data and
know-how relating to the Company or its business that has been disclosed to the
Seller or its subsidiaries or Affiliates or their Representatives by or on
behalf of the Company, or known to such Persons as a result of their
relationship with the Company and not generally within the public domain
(whether constituting a trade secret or not), including, without limitation,
the following: financial information, supply and service information, marketing
information, personnel information, customer information, and information with
respect to any corporate affairs that the Company, prior to the Closing Date,
has treated as confidential. The term "Confidential Information" shall not
include information that has become generally available to the public by the
act of a Person who has the right to disclose such information without
violating any rights of the Purchaser, the Company or any of their
subsidiaries, Affiliates or Representatives or the rights of any customer or
other Person to which such information pertains;

         (c)      Each party to this Agreement acknowledges that the disclosure
of Confidential Information (as defined, as the case may be, in Section
11.05(a) or (b) above) of the other party, the Company or their subsidiaries or
Affiliates would cause irreparable harm for which monetary damages are not an
adequate remedy. Accordingly, if any Person bound or intended to be bound by
the foregoing provisions should ever violate or threaten to violate such
provisions, the party seeking to invoke the protection of the foregoing
subsections will be entitled to injunctive and other equitable relief,
reimbursement of all fees, costs and expenses incurred in enforcing such
provisions and compensatory damages, as well as all other damages permitted by
law, jointly and severally from the Person or Persons violating or threatening
to violate such provisions or otherwise failing to fulfill its obligations as
set forth above.

         11.06    Further Assurances; Post-Closing Cooperation. (a) At any time
or from time to time after the Closing, Seller shall execute and deliver to
Purchaser, at Purchaser's expense, except as provided in Section 11.06(e)
below, such other documents and instruments, provide such materials and
information and take such other actions as Purchaser may reasonably request
more effectively to vest title to the Shares in Purchaser and, to the full
extent permitted by Law, to put Purchaser in actual possession and operating
control of the Company and its Assets and Properties and Books and Records, and
otherwise to cause Seller to fulfill its obligations under this Agreement and
the Operative Agreements to which it is a party.

         (b)      Following the Closing, each party will afford the other
party, its counsel and its accountants, during normal business hours,
reasonable access to the books, records and other data relating to the Business
or Condition of the Company in its possession with respect to periods prior to
the Closing and the right to make copies and extracts therefrom, to the extent
that such access may be reasonably required by the requesting party in
connection with (i) the preparation of Tax Returns, (ii) the determination or
enforcement of rights and obligations under this Agreement, (iii) compliance
with the requirements of any Governmental or Regulatory Authority, (iv) the
determination or enforcement of the rights and obligations of any Indemnified
or Indemnifying Party, or (v) in connection with any actual or threatened
Action or Proceeding. Further, each party



                                      51
<PAGE>   58

agrees for a period extending six (6) years after the Closing Date not to
destroy or otherwise dispose of any such books, records and other data unless
such party shall first offer in writing to surrender such books, records and
other data to the other party and such other party shall not agree in writing
to take possession thereof during the ten (10) day period after such offer is
made.

         (c)      If, in order properly to prepare its Tax Returns, other
documents or reports required to be filed with Governmental or Regulatory
Authorities or its financial statements or to fulfill its obligations
hereunder, it is necessary that a party be furnished with additional
information, documents or records relating to the Business or Condition of the
Company not referred to in paragraph (b) above, and such information, documents
or records are in the possession or control of the other party, such other
party shall use its commercially reasonable efforts to furnish or make
available such information, documents or records (or copies thereof) at the
recipient's request, cost and expense. Any information obtained by Seller in
accordance with this paragraph shall be held confidential by Seller in
accordance with Section 11.05.

         (d)      Notwithstanding anything to the contrary contained in this
Section, if the parties are in an adversarial relationship in litigation or
arbitration, the furnishing of information, documents or records in accordance
with any provision of subsections (a) - (d) this Section shall be subject to
applicable rules relating to discovery.

         (e)      Seller will use commercially reasonable efforts to cooperate
with Purchaser as promptly as practicable in obtaining, at Purchaser's cost,
all consents, approvals or actions of, making all filings with and giving all
notices to Governmental or Regulatory Authorities or other Persons required
following the consummation of the transactions contemplated hereby and by the
Operative Agreements; provided, however, that all further consents, approvals,
actions or filings required from or with respect to Seller's Banks shall be at
Seller's expense and that any damages to Purchaser arising out of Seller's
breach of this Section 11.06(e) shall not be subject to the limits on liability
set forth in Section 8.02 (b) of this Agreement.

         11.07    Waiver. Any term or condition of this Agreement may be waived
at any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No waiver
by any party of any term or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the same or any
other term or condition of this Agreement on any future occasion. All remedies,
either under this Agreement or by Law or otherwise afforded, will be cumulative
and not alternative.

         11.08    Amendment. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.

         11.09    No Third Party Beneficiary. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and



                                      52
<PAGE>   59

it is not the intention of the parties to confer third-party beneficiary rights
upon any other Person other than any Person entitled to indemnity under Article
IX.

         11.10    No Assignment; Binding Effect. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other party hereto and any attempt to
do so will be void, except (a) for assignments and transfers by operation of
Law and (b) that Purchaser may assign any or all of its rights, interests and
obligations hereunder (including without limitation its rights under Article
IX) to (i) a direct or indirect Subsidiary, provided that any such Subsidiary
agrees in writing to be bound by all of the terms, conditions and provisions
contained herein, (ii) any post-Closing purchaser of all of the issued and
outstanding stock of the Company or a substantial part of its assets or (iii)
any financial institution providing purchase money or other financing to
Purchaser or the Company from time to time as collateral security for such
financing, but no such assignment referred to in clause (i) or (ii) shall
relieve Purchaser of its obligations hereunder. Subject to the preceding
sentence, this Agreement is binding upon, inures to the benefit of and is
enforceable by the parties hereto and their respective successors and assigns.

         11.11    Headings. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.

         11.12    Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any present or future Law,
and if the rights or obligations of any party hereto under this Agreement will
not be materially and adversely affected thereby, (a) such provision will be
fully severable, (b) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(c) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom and (d) in lieu of such illegal, invalid
or unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.

         11.13    Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of New York applicable to a
contract executed and performed in such State, without giving effect to the
conflicts of law principles thereof.

         11.14    Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.



                                      53
<PAGE>   60

         11.15    Arbitration.

         (a)      Except as otherwise expressly provided by this Agreement, any
controversy or claim arising out of or relating to this Agreement or the
transactions contemplated hereby and thereby, shall be submitted to and be
finally resolved by arbitration pursuant to the provisions of the United States
Arbitration Act (9 U.S.C. ss. 1 et seq.), to be conducted by the American
Arbitration Association ("AAA"), with such arbitration to be held in New York,
New York, if the party sought to be charged is the Seller or in Atlanta,
Georgia if the party sought to be charged is the Purchaser in accordance with
the AAA's Commercial Arbitration Rules then in effect. Each party hereby
irrevocably agrees that service of process, summons, notices or other
communications related to the arbitration procedure shall be deemed served and
accepted by the other party if given in accordance with Section 11.01. The
arbitrators shall render a judgment of default against any party who fails to
appear in a properly noticed arbitration proceeding. The arbitration shall be
conducted by a panel of three arbitrators selected pursuant to AAA Rules. Any
award or decision rendered in such arbitration shall be final and binding on
both parties, and judgment may be entered thereon in any court of competent
jurisdiction if necessary.

         (b)      Notwithstanding subsection (a) above to the contrary, any
party may seek temporary or preliminary injunctive relief against the other
party in any court of proper jurisdiction with respect to any and all
preliminary injunctive or restraining procedures pertaining to this Agreement
or the breach thereof, pending the outcome of any arbitration proceeding.

         (c)      Notwithstanding subsection (a) above to the contrary, any
proceeding involving a claim with respect to amounts deposited under the Escrow
Agreement shall be held in Atlanta, Georgia.

         11.16    Consent to Jurisdiction and Service of Process.  Seller
hereby irrevocably appoints Martin E. Schloss, Esq., at its office at Autotote
Corporation, 750 Lexington Avenue, 25th Floor, New York, New York 10022, and
Purchaser hereby appoints C. Gray Bethea, Jr., Esq. at its office at Scientific
Games Holdings Corp., 1500 Bluegrass Lakes Parkway, Alpharetta, Georgia 30201-
7712, its lawful agent and attorney to accept and acknowledge service of any
and all process against it in any action, suit or proceeding arising out of or
relating to this Agreement or any of the Operative Agreements or any of the
transactions contemplated hereby or thereby, and upon whom such process may be
serviced with the same effect as if such party were a resident of the State of
Georgia or New York, as the case may be, and had been lawfully served with such
process in such jurisdiction, and waives all claims of error by reason of such
service, provided that in the case of any service upon such agent and attorney,
the party effecting such service shall also deliver a copy thereof to the other
party at the address and in the manner specified in Section 11.01. Seller and
Purchaser will enter into such agreements with such agents as may be necessary
to constitute and continue the appointment of such agents hereunder. In the
event that such agent and attorney resigns or otherwise becomes incapable of
acting as such, such party will appoint a successor agent and attorney in the
United States, reasonably satisfactory to the other party, with like powers.



                                      54
<PAGE>   61

         For purposes of the arbitration proceedings contemplated by Section
11.15, each party agrees to the jurisdiction set forth in Section 11.15 for any
arbitration proceeding and hereby irrevocably waives, to the fullest extent
permitted by Law, any objection that it may now or hereafter have to the laying
of the venue of such arbitration proceeding brought in such jurisdiction and
any claim that any such arbitration proceeding brought in such jurisdiction has
been brought in an inconvenient forum. Nothing herein shall affect the right of
any party to serve process in any other manner permitted by Law or to commence
legal proceedings or otherwise proceed against the other in any other
jurisdiction.

         11.17    Construction. This Agreement, the Operative Agreements and
any documents or instruments delivered pursuant hereto shall be construed
without regard to the identity of the party who drafted the various provisions
of the same. The parties and their respective counsel have actively negotiated
and participated equally in the drafting of each and every provision of this
Agreement, the Operative Agreements and such other documents and instruments.
Consequently, the parties acknowledge and agree that any rule of construction
that a document is to be construed against the drafting party shall not be
applicable either to this Agreement, the Operative Agreements or such other
documents and instruments.

         11.18    Time. Time is of the essence of each and every provision of
this Agreement as to which time is a factor.

         IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officer of each party hereto under seal as of
the date first above written.



                                    PURCHASER

                                    SCIENTIFIC GAMES HOLDINGS CORP.



                                    By:  Cliff O. Bickell
                                       ---------------------------------------
                                       Name:  Cliff O. Bickell
                                       Title: VP & CFO




                                      55
<PAGE>   62



                                    SELLER

                                    AUTOTOTE CORPORATION


                                    By:  William Luke
                                       ---------------------------------------
                                       Name:  William Luke
                                       Title: Vice President





                                       56