RACINGO TOTE SERVICES AND SOFTWARE LICENSE AGREEMENT
This Agreement is made as of the 24 day of May, 2000,
BETWEEN:
AUTOTOTE SYSTEMS, INC., a Delaware corporation,
("Autotote")
and
PLAYANDWIN, INC., a Nevada corporation,
("PWIN")
WHEREAS PWIN helped to create and develop a pari-mutuel game
known as "Racingo", which is a combination of horse racing, bingo
and lottery game and is described on Schedule B hereto
("Racingo");
AND WHEREAS PWIN holds licenses from Racingo Investments Ltd. to
operate and deliver Racingo both through on- and off-track
betting facilities ("On-and Off-Track Racingo") and through the
Internet ("On-Line Racingo");
AND WHEREAS Autotote is a leading technology supplier and
operator of wagering systems, related equipment and gaming venues
in North America and around the world, providing technology,
services and operations management primarily to two major
segments of the industry, namely (i) pari-mutuel wagering and
(ii) government-sponsored or licensed lotteries;
AND WHEREAS the software for Racingo (the "Racingo Software"), as
described in Schedule C hereto, has been developed by Autotote;
AND WHEREAS Autotote wishes to enter into a cross-license and
joint marketing agreement with PWIN in support of the market
launch of Racingo in North America initially, and to expand into
international markets (the "Racingo Rollout"), and PWIN wishes to
enter into such an agreement with Autotote for the same purpose.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of
the mutual covenants and promises contained herein, and of other
good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Parties hereto covenant and
agree each with the other as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions. In this Agreement, unless the context otherwise
requires, the terms set forth in Schedule "A" shall have the
meanings set forth therein.
1.2 Entire Agreement. This Agreement together with the
agreements and other documents to be delivered pursuant to this
Agreement, constitute the entire agreement between the Parties
pertaining to the provision of services by Autotote to PWIN, the
corresponding covenants provided by PWIN to Autotote, and the
licensing of the Racingo Software by Autotote to PWIN, and
supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written, and there are no
warranties, representations and other agreements between the
Parties in connection with the subject matter hereof except as
specifically set forth in this Agreement or any other agreement
or document to be delivered pursuant to this Agreement.
1.3 Extended Meanings. In this Agreement, words importing the
singular number include the plural and vice versa; words
importing the masculine gender include the feminine and neuter
genders.
1.4 Headings. The division of this Agreement into articles,
sections, subsections and paragraphs and the insertion of
headings are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement.
1.5 References. References to an article, section, subsection,
paragraph, schedule or exhibit shall be construed as references
to an article, section, subsection, paragraph, schedule or
exhibit to this Agreement, unless the context otherwise requires.
1.6 Currency. Unless otherwise specified, the word "dollar", or
the symbol "$" refers to United States dollars.
1.7 Governing Law. This agreement shall be governed by and
construed in accordance with the internal laws of the State of
New York.
1.8 Schedules. The following is a list of schedules attached to
and incorporated into this Agreement by reference and deemed as
part of this Agreement.
SCHEDULE DESCRIPTION
"A" Definitions
"B" Racingo
"C" Racingo Software
"D" Timetable
ARTICLE 2
CROSS-LICENSING
2.1 Racingo Software License. Autotote hereby grants to PWIN an
exclusive five (5) year license (the "Racingo Software License"),
renewable for an additional five (5) years upon mutual agreement,
to use the Racingo Software with respect to the use, conduct,
delivery, sale, distribution or exploitation of Racingo under the
On- and Off-Track Racingo License and the On-Line Racingo
License. For greater clarity, the Racingo Software License
includes the use of the Racingo Software for or with respect to:
(a) Fantasy Racingo; and
(b) the use, conduct, delivery, sale, distribution or
exploitation of On- and Off-Track Racingo or On-Line Racingo
at any racing track for which Autotote is not the Tote
Supplier.
2.2 Racingo License. PWIN hereby grants to Autotote an
exclusive license (the "Racingo License"), for the term of this
Agreement, to use the intellectual property rights and know-how
identified under the terms "Racingo", "Racingo Copyrights",
"Racingo Patent" and "Racingo Trademarks" solely in connection
with and to the extent required by the provision of the services
identified in section 3.1 below.
2.3 Domain Name Transfer. Autotote hereby assigns to PWIN all
of its right, title and interest in and to the domain name
"racingo.com" currently registered in the name of Autotote.
Autotote hereby covenants to take all further actions that may be
necessary to register the foregoing transfer and to give effect
to it.
ARTICLE 3
RACINGO ROLLOUT
3.1 Autotote's Responsibilities. Upon the commencement of the
Racingo Rollout, and during the term of this Agreement, Autotote
shall provide the following services to PWIN.
3.1.1 Technology. Autotote shall ensure that the Racingo
Software enables Racingo common pool wagering in the following
areas:
(a) for On-Line Racingo, worldwide; and
(b) for On- and Off-Track Racingo, in North America and in
such other territory for which PWIN may obtain a license
to conduct and market On- and Off-Track Racingo.
3.1.2 Hosting. Autotote shall provide hosting and
interface services, through one or more Autotote Hubs:
(a) for On- and Off-Track Racingo in the United States of
America, and in such other territory for which PWIN may
obtain a license to conduct and market On- and Off-Track
Racingo; and
(b) for On-Line Racingo worldwide.
3.1.3 Integration. Autotote shall from time to time make
such modifications or upgrades to the Racingo Software as may
be required to ensure the seamless integration of the Racingo
Software into the Autotote Hubs and its seamless operation on
the Autotote Hubs.
3.1.4 Quality Control. During the installation and
testing of the Racingo Software on the Autotote Hubs, and
during the construction and testing of the Autotote Hubs
containing the Racingo Software (collectively known as the
"Racingo System"), Autotote shall implement adequate quality
control procedures to ensure that the Racingo System shall
operate in accordance with normal totalisator standards,
including but not limited to:
(a) unit testing: as individual component of the Racingo
System (whether software or hardware) is developed, it
will undergo testing routines as a unique entity; and
(b) system testing: as soon as the Racingo System is complete
and each component has been integrated into and has
become a fully functional part of the Racingo System,
each component will tested as part of the Racingo System.
3.1.5 Redundancy. Autotote shall at all times maintain
sufficient redundant systems to ensure that the Racingo System
remains operational at all times in accordance with this
agreement, including section 7.2(b)..
3.1.6 Wager Scheduling and Co-Ordination. Autotote shall
be responsible for scheduling and coordinating the Racingo
Wager. Autotote shall use reasonable efforts to ensure that
each Racingo Wager has a large and competitive Field Size. In
providing this service, Autotote shall use its existing
personnel and not hire additional personnel, and shall
dedicate such personnel to perform this service on a full-time
basis.
3.1.7 Racingo System Operation. In providing the Racingo
System to racing tracks, Autotote shall act in accordance with
the standard totalisator / pari-mutuel service practices
governing its other relationships with the various racing
tracks for which it is the Tote Supplier, including but not
limited to liquidated damages provisions (applicable to both
parties), daily and yearly caps on liability, and the
exclusion of incidental and consequential damages.
3.1.8 Accounting. Autotote shall be responsible for
providing accounting services to handle payments to tracks,
money room transfers, royalties, commissions to partners, and
the payment of direct and indirect expenses. Each month,
Autotote will prepare accurate reports in accordance with
generally-accepted accounting principles, compiling and
analyzing the monthly expenses of providing the services set
out in this section 3.2. Autotote will provide such reports
to PWIN each month in both hard copy and electronic formats.
3.1.9 Hyperlinks. Autotote shall provide and maintain
hyperlinks to the main Autotote Hub carrying the Racingo
Software from the Autotote Web Site and all associated web
sites.
3.1.10 Telephone Wagering. Autotote shall provide and
maintain a telephone betting service in the United States for
On- and Off-Track Racingo.
3.1.11 Web Site Posting. Autotote shall use reasonable
efforts to post on the Autotote Web Site official Racingo
results, past performance lines, information on upcoming
Racingo events, and such other information about Racingo as
PWIN and Autotote may agree on.
3.1.12 State Approval. Autotote shall make such filings as
may from time to time be required to approve Racingo for
gaming license purposes on a State by State basis.
3.1.13 Representation. Autotote will use reasonable
efforts to represent Racingo to the pari-mutuel industry in
the most favorable manner possible.
3.1.14 Work Reports. Each month, Autotote shall provide to
PWIN an accurate report outlining any additional modifications
or enhancements that may be required for the Racingo Software
and the estimated cost of such modifications or enhancements.
Autotote shall not commence any work on any such modifications
or enhancements without PWIN's prior approval of such work and
costs.
3.1.15 Access and Reports. Autotote shall provide PWIN
with restricted computer access to and monthly reports from
the Racingo System to permit analysis of wagering trends and
racing products. Autotote shall assist PWIN in reviewing these
reports with a view to determining the most popular signals
and the largest possible fields for Racingo, and developing
new ways to increase the Racingo Wager.
3.1.16 Financial Statements. Autotote will provide to PWIN
audited financial results for the sale of Racingo through
Autotote Hubs on an annual basis.
3.1.17 Examination of Records. PWIN shall have the right
to examine the records of Autotote with respect to Racingo at
any time on ten (10) days' notice. The examination shall be at
PWIN's costs unless the examination shall discover errors
exceeding a 5% margin, in which case Autotote shall bear
PWIN's examination costs.
3.2 PWIN's Covenants. During the term of this Agreement, PWIN
shall be responsible for the following:
3.2.1 Offices. PWIN shall from time to time establish and
staff such PWIN corporate offices in the United States, Europe
and Asia as may from time to time be required to support the
Racingo Rollout.
3.2.2 Strategy. PWIN shall from time to time determine
sales and marketing strategies for Racingo.
3.2.3 Marketing Funding. PWIN shall be responsible for
securing funding for all sales and marketing programs for
Racingo as and when required by PWIN.
3.2.4 Racingo Rollout Financing. PWIN shall provide at
least $3,000,000 to finance the Racingo Rollout.
3.2.5 Promotion. PWIN shall provide personnel and
materials for Racingo racetrack promotional programs as and
when required.
3.2.6. Development. PWIN shall continue the development
and enhancement of Racingo in conjunction with the Autotote
development team.
3.2.7 Jackpot Pool. PWIN shall establish and at all times
maintain a Jackpot Pool of at least $1,000,000 starting on the
date on which Racingo becomes available to players, and this
Jackpot Pool shall be used for all games of Racingo, whether
offered through Autotote or otherwise.
3.2.8 Compliance. PWIN hereby acknowledges that Autotote
is subject to the gaming and licensing requirements of various
jurisdictions and is obliged to take reasonable efforts to
determine the suitability of its business associates. PWIN
agrees to cooperate fully with Autotote in providing it with
any information, of whatever nature, that Autotote deems
necessary or appropriate in assuring itself that PWIN and its
directors, officers and Major Shareholders possess the good
character, honesty, integrity, and reputation applicable to
those engaged in the gaming industry.
3.3 Mutual Obligations. During the term of this Agreement, both
parties shall observe the following terms:
3.3.1 Prohibited Jurisdictions. Subject to subsection
3.3.2 below, neither party shall market, sell, operate or make
available On-Line Racingo or On- and Off-Track Racingo in or
to any jurisdiction in which Racingo is not permitted or
licensed. Each party shall use its best efforts to ensure
that On-Line Racingo is not offered to persons situated in
jurisdictions in which On-Line Racingo is not permitted by law
or licensed. For greater certainty, when required by the law
of any jurisdiction, the parties shall obtain the appropriate
licenses authorizing them to engage in On-Line Racingo in that
jurisdiction.
3.3.2 On-Line Wagering Restrictions. No wagers shall be
taken for On-Line Racingo from persons situated in
jurisdictions in which wagering over the Internet is not
permitted by law. All On-Line Racingo provided to the public
will be Fantasy Racingo until and unless wagering over the
Internet is permitted by law, and then only in those
jurisdictions in which it is so permitted.
3.3.3 Due Diligence. Each party shall undertake all
appropriate investigations prior to marketing, selling,
operating or making available Racingo in any given
jurisdiction, to ensure compliance with the laws of that
jurisdiction.
3.3.4 Procedural Review. Each party (the "Reviewing
Party") shall have the right to review from time to time those
operating or regulatory compliance procedures of the other
party (the "Reviewed Party") which have or would reasonably be
expected to have a material effect on that party's ability to
perform its obligations under this Agreement. Each party
hereby agrees to:
(a) as the Reviewed Party, give the Reviewing Party access to
its premises, personnel and records for the purposes of
said review;
(b) as the Reviewing Party, to conduct its review in good
faith and in accordance with the terms of this Agreement
including but not limited to the confidentiality
provisions of Article 8 below; and
(c) as the Reviewed Party, to implement such recommendations
of the Reviewing Party as may be necessary to ensure the
Reviewed Party's compliance with the terms of this
Agreement.
3.3.5 Timetable. The parties shall agree upon a timetable
for the performance of their respective obligations under this
Agreement, which timetable shall be attached to this Agreement
as Schedule "D" and shall be part of this Agreement. Both
parties agree to use reasonable efforts to perform their
respective obligations by the times specified therefor in said
timetable. Without limiting the foregoing, both parties agree
to use reasonable efforts to commence the Racingo Rollout in
time for the Fall racing season. Both parties agree to notify
each other of any event or circumstance that could delay the
timely performance of their obligations. Both parties agree
to review the timetable from time to time and to revise it as
necessary.
ARTICLE 4
SOFTWARE RIGHTS
4.1 Ownership. Subject to the provisions of section 4.2 below,
Autotote shall remain at all times the owner of all intellectual
property rights in and to the Racingo Software, including any
modifications or upgrades thereto.
4.2 Source Code Escrow. Autotote agrees to place the source
code for the most recent version of the Racingo Software in
escrow ( the "Escrow Copy") with a mutually agreed upon escrow
agent, such copy to be updated for all new developments,
enhancements, bug fixes or other necessary changes on a quarterly
basis.
4.2.1 Release on Expiry. Upon the expiry of the term of
the Racingo Software License the Escrow Copy shall be
released to Autotote.
4.2.2 Release on Insolvency. Upon the insolvency or
bankruptcy of Autotote or the making of an assignment to
its creditors:
(a) ownership of the Racingo Software and of all intellectual
property rights therein shall automatically vest in PWIN without
any further action on the part of Autotote or PWIN;
(b) the Escrow Copy shall be released to PWIN; and
(c) PWIN shall grant to Autotote an exclusive license to use the
Racingo Software.
ARTICLE 5
COMPENSATION
5.1 Where Autotote is the Tote Supplier. PWIN shall pay to
Autotote a fee equal to the greater of:
(a) 23% of PWIN's Take-Out from all racing tracks for which
Autotote is the Tote Supplier; or
(b) 1.25% of the Racingo Wager from all racing tracks for which
Autotote is the Tote Supplier.
5.2 Where Autotote is not the Tote Supplier. PWIN shall pay to
Autotote a fee equal to 5% of PWIN's Take-Out from all racing
tracks for which Autotote is not the Tote Supplier.
5.3 Transaction / Interface Fees. PWIN acknowledges that
Autotote shall be entitled to charge each racing track its
standard transaction or interface fee of 0.125% of the Racingo
Wager for that track, whether or not Autotote is the Tote
Supplier for that track.
ARTICLE 6
TERM AND TERMINATION
6.1 Term of Agreement. This Agreement (not including the
Racingo Software License) shall commence on the date hereof and
shall continue for a term of five (5) years, which term may be
renewed for an additional five (5) years upon mutual agreement.
6.2 Term of Racingo Software License. The Racingo Software
License shall commence on the date hereof and shall continue for
a term of five (5) years, which term may be renewed for an
additional five (5) years upon mutual agreement.
6.3 Termination Upon Breach.
(a) If PWIN breaches any material term of this Agreement, and
such breach continues uncured for a period of sixty (60) days,
this Agreement (including the Racingo Software License) shall be
terminated forthwith upon written notice by Autotote.
(b) If, during the term of the contract, Autotote is notified by
any regulatory agency that the conduct of business with PWIN will
jeopardize Autotote's license or ability to be licensed to carry
on its business, or if Autotote concludes that PWIN or any of the
directors, officers or Major Shareholders of PWIN no longer
possesses the good character, honesty, integrity, and reputation
applicable to those engaged in the legitimate gaming industry
that PWIN's background, history, or reputation would be deemed
unsuitable under the legislation and standards applicable to the
gaming industry, and the foregoing state of affairs is not cured
within thirty (30) days of receipt by PWIN of notice to that
effect, this Agreement shall be terminated forthwith upon written
notice by Autotote.
(c) If Autotote breaches any material term of this Agreement,
and such breach continues uncured for a period of sixty (60)
days, this Agreement shall be terminated forthwith upon written
notice by PWIN.
6.4 Survival of Racingo Software License. Notwithstanding the
provisions of section 6.2(c) above, the Racingo Software License
shall survive any termination of this Agreement resulting from a
breach by Autotote of its obligations under section 3.1 above,
unless expressly terminated by PWIN.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
7.1 Mutual Representations and Warranties. Each party
represents and warrants the following to the other, and
acknowledges that the other party is relying on said
representations and warranties in entering into this Agreement:
(a) it is a corporation duly organized, validly existing and in
good standing under the laws of the state or province or country
of its incorporation and has all requisite power and authority to
enter into and perform its obligations under this Agreement;
(b) the execution of this Agreement has been authorized by all
requisite corporate action on its part;
(c) this Agreement when executed will become the legal, valid
and binding obligation of the party and shall be enforceable
against the party in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization and other similar laws relating to the rights of
creditors generally;
(d) to the best of its present knowledge, there is no material
action, suit or proceeding pending against it nor, to the best of
its knowledge, threatened against it which is likely to
materially adversely affect its performance of its obligations
hereunder, nor, to the best of its knowledge, are there any
existing acts or conditions which are reasonably expected to be a
proper basis for any such action, suit or proceeding;
(e) this Agreement creates no agency relationship between the
parties hereto, and nothing herein contained shall be construed
to place the parties in the relationship of partners or joint
venturers, and neither party shall have the power to obligate or
bind the other in any manner whatsoever; and
(f) it is not insolvent or bankrupt.
7.2 Representations and Warranties of Autotote. Autotote
represents and warrants to PWIN as follows, and acknowledges that
PWIN is relying on said representations and warranties in
entering into this Agreement:
(a) Autotote is and shall at all times be the sole and exclusive
owner of all rights and title in and to the Racingo Software and
the Racingo System, including but not limited to intellectual
property rights, and if the Racingo Software incorporates any pre-
existing works not owned by Autotote, Autotote has a valid
license to incorporate said pre-existing works in the Racingo
Software;
(b) The Racingo Software and the Racingo System shall at all
times operate efficiently and without interruption on all
wagering days for the term of this agreement; provided, however,
that there shall not be deemed a breach of the foregoing
guarantee and warranty if pari-mutuel wagering is interrupted for
less than thirty (30) minutes on any racing day, or if the
failure of the Racingo System to operate efficiently or without
interruption shall be due to or result from one of more of the
causes enumerated in section 11.4 below, or acts or neglect of
PWIN, its agents or employees, or of any third party, or for any
cause not within the control of Autotote and/or its employees.
(c) to the best of Autotote's knowledge, information and belief,
the Racingo Software and the Racingo System, and any part
thereof, does not now and shall not infringe any patent,
copyright, mask work, trade mark or service mark, trade secret,
or other intellectual property right of a third party, and does
not now and shall not misappropriate or violate any third party's
proprietary rights, and no claim or threat thereof has been made
in respect of any of the foregoing matters, and the use of the
Racingo Software and the Racingo System by PWIN will not infringe
upon or violate any rights of any third party; and
(d) to the best of Autotote's knowledge, information and belief,
no person or company is infringing on Autotote's right and title
in and to the Racingo Software or the Racingo System.
7.3 Representations and Warranties of PWIN. PWIN represents and
warrants to Autotote as follows, and acknowledges that Autotote
is relying on said representations and warranties in entering
into this Agreement:
(a) PWIN is the exclusive licensee of the entire and
unencumbered exclusive license in and to the intellectual
property rights and know-how identified under the terms
"Racingo", "Racingo Copyrights", "Racingo Patent" and "Racingo
Trademarks" as they apply to On-Line Racingo and On- and Off-
Track Racingo, and has the full right to use, license, and
protect its rights therein for the term of this Agreement;
(b) PWIN has full right and authority under the On-Line Racingo
License and the On- and Off-Track Racingo License to grant
Autotote the license to use the Racingo Trademarks, Racingo
Copyrights and Racingo Patents for the purpose of providing the
services set out in section 3.2 above, free of any liens, claims
or encumbrances for the term of this Agreement, and there is no
litigation pending against PWIN which would limit, restrict or
prevent Autotote's use of the same;
(c) applications to register the Racingo Trademarks have been
duly made and are in good standing under the laws of the
jurisdictions where they have been applied for, and Racingo
Investments Ltd. has agreed to register said trademarks and
maintain them in good standing under all applicable laws;
(d) the Racingo Patent (being U.S. Patent No. 5,518,239 dated
May 21, 1996 for a racing lottery sweepstakes game called
"Racingo") was duly issued by the relevant authorities to William
H. Johnston, who in turn duly assigned said patent to Winning
Games Inc., an Illinois company controlled by him, which in turn
duly granted an exclusive twenty (20) year license to Racingo
Investments Ltd. to use the Racingo Patent and by the terms of
said license precluded itself from carrying on any business
involving Racingo or any game similar to Racingo, and Racingo
Investments Ltd. in turn duly granted an exclusive ten (10) year
license (renewable for another ten (10) years) to PWIN to use the
Racingo Patent with respect to On-Line Racingo worldwide and with
respect to On- and Off-Track Racingo in Canada, the United States
and Mexico;
(e) the Racingo Copyrights have been duly registered and are in
good standing under the laws of their respective jurisdictions;
(f) to the best of PWIN's knowledge, information and belief,
aside from the possible infringement with regard to a bingo
betting game called Bingo Bet being conducted in Arkansas, no
person or company is infringing on PWIN's license to the Racingo
Trademarks, Racingo Copyrights, Racingo Patent;
(g) to the best of PWIN's knowledge, information and belief, the
Racingo Trademarks, Racingo Patent and Racingo Copyrights do not
infringe on any patent, copyright, mask work, trade mark or
service mark, trade secret, or other intellectual property right
of a third party, and do not misappropriate or violate any third
party's proprietary rights, and no claim or threat thereof has
been made in respect of any of the foregoing matters, and the use
of the foregoing by Autotote pursuant to this Agreement will not
infringe upon or violate any rights of any third party; and
(h) PWIN and the directors, officers and Major Shareholders of
PWIN possess the good character, honesty, integrity, and
reputation applicable to those engaged in the legitimate gaming
industry and there is nothing in their respective backgrounds,
histories, or reputations that would be deemed unsuitable under
the legislation and standards applicable to the gaming industry.
7.4 Survival of Representations and Warranties. The
representations and warranties of the parties made in sections
this Article 7 will survive the termination of this Agreement for
a period of one (1) year.
ARTICLE 8
CONFIDENTIALITY
8.1 Confidential Information. Each party hereby acknowledges and
agrees that the information (the "Confidential Information")which
the other parties have provided or will provide to it in
connection with this Agreement, including but not limited to any
information of any kind whatsoever regarding the business,
assets, customers, financial state, or business plans of such
other parties, is and shall be confidential and proprietary to
the providing party (the "Proprietor").
8.2 Non-Disclosure. Each party agrees not to use or disclose any
Confidential Information except for the purposes of this
Agreement. Each party agrees not to use or disclose the
Confidential Information without the Proprietor's prior written
consent. Each party agrees to restrict dissemination of
particular Confidential Information to only those persons in its
organization who must have access to such confidential
information in order for said party to perform its obligations
under this Agreement. Each party shall cause every person or
company (including its employees) to whom it discloses
Confidential Information in order to perform its obligations
hereunder to abide by the foregoing confidentiality provisions.
Upon the termination of this Agreement, each party shall promptly
return such Confidential Information (and any copies, extracts
and summaries thereof) to its Proprietor.
8.3 Exclusions. The provisions of this Article 8 shall not
apply to Confidential Information:
(a) whose disclosure has been authorized in writing by its
Proprietor prior to such disclosure;
(b) which is or becomes available in the public domain, other
than by an act or omission of a party or any employee, agent or
other person acting for or on behalf of that party;
(c) which is lawfully acquired by a party to this Agreement or a
third party from a- source other than its Proprietor without
breach of this Agreement;
(d) which is internally developed by a party without breach of
this Agreement; or
(e) which is ordered to be disclosed by a court, administrative
agency or other governmental body with jurisdiction over the
parties, provided that the disclosing party will first have
provided the Proprietor with prompt written notice of such
required disclosure and will take reasonable steps to allow the
Proprietor to seek a protective order with respect to the
confidentiality of the information required to be disclosed. The
disclosing party will promptly co-operate with and assist the
Proprietor in connection with obtaining such protective order, at
the Proprietor's expense.
8.4 Remedy. Each party further acknowledges that irreparable
harm and damage will result if any of the Confidential
Information is improperly used or disclosed. In the event of a
breach or threatened breach of this provision, each party shall,
in addition to any other remedies which may be available, be
entitled to injunctive and other equitable relief in any court of
competent jurisdiction.
8.5 Public Announcements. PWIN and Autotote shall make all
public announcements relating to Racingo jointly, and all such
public announcements shall be approved by both PWIN and Autotote
prior to publication.
8.6 Survival. Each party's obligations under this Article 9
shall come into effect on the date hereof and shall continue
indefinitely.
ARTICLE 9
NON-COMPETITION
9.1 Autotote's Covenant. During the term of this Agreement,
Autotote shall not, either alone or in partnership or with any
other person, firm or corporation, as principal, agent,
shareholder or in any other manner, carry on or be engaged in or
concerned with or interested in, directly or indirectly, or
advise, lend money to, guarantee the debts or obligations of, or
permit its name or any part thereof to be used or employed by any
person, firm or corporation engaged in or interested in any
business which sells, licenses, distributes or otherwise markets
Racingo or products similar to Racingo anywhere in the world.
9.2 PWIN's Covenant. During the term of this Agreement, PWIN
will not, without Autotote's consent, enter into any agreements
bearing terms identical or substantially similar to the terms of
this Agreement with any other person or entity, unless the
agreement relates to an area for which Autotote is unable or
unwilling to provide tote services.
ARTICLE 10
INDEMNIFICATION
10.1 Indemnity for Racingo Infringement. Without derogation from
the indemnity provided in section 10.2 below, PWIN will indemnify
and hold Autotote harmless from any claim, suit or proceeding
brought against it based on a claim that PWIN has infringed or is
infringing any third party's trademark, copyright, patent or
other intellectual property right in or with respect to Racingo,
or misappropriated a third party's trade secrets ("Claim")
concerning Racingo, including but not limited to U.S. Patent No.
5,518,239 owned by William H. Johnston and/or Winning Games Inc.,
and U.S. Trademark application No. 75/331,278.
10.2 Mutual Indemnifications for Breaches of Warranty, etc. Each
party hereby covenants and agrees with the other parties hereto
(the parties covenanting and agreeing to indemnify another party
under this Article 10 are hereinafter individually referred to as
"Indemnifying Party" and the parties that are being indemnified
by another Party under this Article 10 are hereinafter
individually referred to as the "Indemnified Party") to indemnify
and save harmless the Indemnified Party, effective as and from
the Closing Time, from and against any Claims which may be made
or brought against the Indemnified Party and/or which it may
suffer or incur as a result of, or arising out of:
(a) any non-fulfilment of any covenant or obligation of the
Indemnifying Party under this Agreement;
(b) any incorrectness in or breach of any representation or
warranty of the Indemnifying Party contained in this Agreement;
(c) any alleged or actual infringement of any third party's
trademark, copyright, patent, or other intellectual property
rights, or any alleged or actual misappropriation of any third
party's trade secrets by the Indemnifying Party;
(d) the violation by the Indemnifying Party of the gaming laws
and regulations of any jurisdiction; or
(e) any liability of the Indemnifying Party or any act or
omission of the Indemnifying Party giving rise to such liability
prior to the date hereof which has not been disclosed to the
Indemnified Party.
10.3 Procedure for Indemnification - The following provisions
shall apply to any Claims for which an Indemnifying Party may be
obligated to indemnify an Indemnified Party pursuant to this
Agreement:
(a) upon receipt by the Indemnified Party of notice of a Claim
from a third party, or upon the Indemnified party becoming
aware of a Claim in respect of which the Indemnified Party
proposes to demand indemnification from the Indemnifying
Party, the Indemnified Party shall give notice to that
effect to the Indemnifying Party with reasonable promptness,
provided that failure to give such notice shall not relieve
the Indemnifying Party from any liability it may have to the
Indemnified Party except to the extent that the Indemnifying
Party is prejudiced thereby;
(b) in the case of Claims arising from third parties, the
Indemnifying Party shall have the right to assume the
control of the defence, compromise or settlement of the
Claims by notice to the Indemnified party not later than
thirty (30) days after receipt of the notice described in
paragraph (i) above, provided that such assumption shall, by
its terms, be without costs to the Indemnified Party and the
Indemnifying Party shall at the Indemnified Party's request
furnish it with reasonable security against any costs or
other liabilities to which it may be or become exposed by
reason of such defence, compromise or settlement;
(c) upon the assumption of control by the Indemnifying Party as
aforesaid, the Indemnifying Party shall diligently proceed
with the defense, compromise or settlement of the Claims at
its sole expense, including employment of counsel reasonably
satisfactory to the Indemnified Party and, in connection
therewith, the Indemnified Party shall co-operate fully, but
at the expense of the Indemnifying Party, to make available
to the Indemnifying Party all pertinent information and
witnesses under the Indemnified Party's control, make such
assignments and take such other steps as in the opinion of
counsel for the Indemnifying Party are necessary to enable
the Indemnifying Party to conduct such defence; provided
always that the Indemnified Party shall be entitled to
reasonable security from the Indemnifying Party for the
expense, costs of other liabilities to which it may be or
may become exposed by reason of such co-operation;
(d) the final determination of any such Claims arising from
third parties, including all related costs and expenses,
will be binding and conclusive upon the Parties as to the
validity or invalidity, as the case may be of such Claims
against the Indemnifying Party hereunder; and
(e) should the Indemnifying Party fail to give notice to the
Indemnified Party as provided in paragraph (ii) above, the
Indemnified Party shall be entitled to make such settlement
of the Claims as in its sole discretion may appear
advisable, and such settlement or any other final
determination of the Claims shall be binding upon the
Indemnifying Party.
10.4 Survival. The provisions of this Article 10 shall survive
the termination of this Agreement for a period of one (1) year.
ARTICLE 11
LIMITATION OF LIABILITY
11.1 Limitation of Liability. In no event shall any party be
liable to the other party for:
(a) any indirect, special or consequential damages
including, without limitation, those based on loss of
business opportunities, whether or not the party had or
should have had any knowledge, actual or constructive,
that such damages might be incurred; or
(b) damages of any kind whatsoever in excess of
$250,000.
11.2 Exception for Intellectual Property Infringement.
Notwithstanding the foregoing, the limitations of liability set
forth in section 11.1 above, will not apply to a breach of the
representation and warranty set out in sections 7.2(c) and
7.3(g) above.
11.3 Exception for Tote Services. Notwithstanding the foregoing,
Autotote's liability in respect of the representation and
warranty set out in section 7.2(b) above shall be limited to
liquidated damages equal to 5% of the difference between the Take-
Out on the day on which the Racingo System does not operate in
accordance with said representation and warranty and the average
Take-Out on the days on which the Racingo System operates in
accordance with said representation and warranty; provided that
Autotote shall not be liable for more than the lesser of $5,000
per day or $25,000 per year, in liquidated damages.
11.4 Force Majeure. Neither party shall be liable to the other
for any failure to perform any provision of this Agreement caused
by fire, strike, boycott, picketing or other industrial
disturbances, riot, civil commotion, theft, vandalism, flood,
lightening, tempest, storm, acts of God, war, acts of war and
defense, power failure, failure of any cable or interference by
any governmental or government agency.
ARTICLE 12
GENERAL
12.1 Notices. All notices, demand or other communications
required to be made or given pursuant to the terms of this
Agreement shall be in writing and shall be delivered personally,
by overnight courier, by facsimile or by prepaid registered post,
to the parties at their respective addresses as hereinafter set
out, or such other addresses as the parties may subsequently
advised in writing. Any notice, demand or other communication
mailed shall be deemed to be received on the fifth (5th) Business
Day next following the date of mailing, if delivered personally
shall be deemed to have been received on the actual day of
delivery, and if delivered by facsimile or by overnight courier,
shall be deemed to have been received on the first Business Day
next following the date the same as faxed or delivered by the
sender to the courier. In the event that the government postal
service shall be disrupted due to strike, lockout or otherwise,
all notices, demands or other communications shall be delivered
personally or by courier. The following shall be the addresses
for the deliver of notices of each of the parties:
For Autotote Systems, Inc.:
100 Bellevue Road
P.O. Box 6009
Newark, Delaware, 19714
Fax: (302) 453-8128, Attention: Brooks Pierce
For Playandwin, Inc.:
7050 Weston Road, Suite 500
Vaughan, Ontario, L4L 8G7
Fax: (905) 850-5012, Attention: Stewart Garner
12.2 Further Assurances. Each of the parties shall from time to
time both before and after the Closing Date take or cause to be
taken such action and execute and deliver or cause to be executed
and delivered to the other such documents and further assurances
as may, in the reasonable opinion of counsel for the other, be
necessary or advisable to give effect to this Agreement.
12.3 Assignment. This Agreement shall not be assigned by any
party without the written consent of the other.
12.4 Enurement. This Agreement shall enure to the benefit of and
be binding upon each of the parties hereto and upon their
respective successors and permitted assigns.
12.5 Severability. Any term or provision of this agreement which
is invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective and severable from the Agreement to
the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and
provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction.
12.6 Counterparts: This Agreement may be executed by the parties
hereto in two or more counterparts, all of which taken together
shall constitute one document and any facsimile transmission of
this document shall be treated as if it were an original.
IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be executed on its behalf by one or more of its officers duly
authorised to sign, as of the date first above written.
AUTOTOTE SYSTEMS, INC.
Per: /s/ Brooks Pierce
Brooks Pierce, President
I have authority to bind the
corporation.
PLAYANDWIN, INC.
Per: /s/ Stewart Garner
Stewart Garner, President
I have authority to bind the
corporation.
SCHEDULE "A"
DEFINITIONS
"Agreement" means this Agreement and any instrument supplemental
or ancillary to it.
"Autotote" means Autotote Systems, Inc.
"Autotote Hubs" means the computers used by Autotote as servers
for its network.
"Autotote Web Site" means Autotote's web site at www.racingo.com
or such other web site as the parties may agree on.
"Business Day" means any day other than a Saturday, Sunday or
statutory holiday in the Province of Ontario or the State of New
York, or a federal holiday in Canada or the United States of
America.
"Claims" means claims, demands, actions, causes of action,
damages, losses, costs, fines, penalties, interest, liabilities
and expenses, including, without limitation, reasonable legal
fees.
"Confidential Information" has the meaning set out in section 8.1
of this Agreement.
"Dollars" or the symbol "$" shall mean United States dollars.
"Escrow Copy" means a copy of the Source Code placed into escrow
in accordance with this Agreement.
"Fantasy Racingo" means any game of On-Line Racingo or On- and
Off-Track Racingo not involving actual wagers.
"Field Size" means the number of horses involved in any given
race(s) on which a Racingo Wager is based, and shall mean nine
(9) horses unless the parties agree otherwise.
"Indemnified Party" has the meaning set out in section 10.1 of
this Agreement.
"Indemnifying Party" has the meaning set out in section 10.1 of
this Agreement.
"Jackpot Pool" shall mean the pool or pools of funds (as
applicable), funded in accordance with this Agreement and the
Racingo game rules attached hereto as Schedule "B" and, from
which prize moneys will be disbursed to winners in the Racingo
game in accordance with said rules.
"Licensed Off-Track Betting Establishment" means any betting
establishment which provides facilities for betting on horse or
greyhound races and which is duly licensed by the relevant
governmental authority in the jurisdiction in which it is
located.
"Major Shareholder" means a registered holder or beneficial
owner, in the aggregate, of more than 5% of the issued and
outstanding securities of PWIN of any class.
"On- and Off-Track Racingo" means the Racingo game sold,
delivered or conducted by means of any betting or wagering method
owned or operated by a horse racing track, greyhound racing track
or Licensed Off-Track Betting Establishment, including but not
limited to on-track betting via mutuel tellers and SAM machines,
track-owned OTB parlors, or track telephone account betting,
which channels wagers into that tracks primary pari-mutuel pool.
"On- and Off-Track Racingo License" means the license granted by
Racingo Investments Ltd. to Playandwin, Inc. on October 7, 1999,
to use, conduct, market, and deliver On- and Off-Track Racingo
in the territory of Canada, Mexico and the United States of
America including the State of Hawaii but not including any
overseas territories, dependencies or protectorates, nor : (i)
any cruise ship, other than one travelling on the Mississippi
river; (ii) any betting establishment located on an Indian/
Native/Aboriginal/First Nations reserve; (iii) any in-flight
betting establishment, owned and operated by an airline; (iv) any
bingo hall or group of bingo halls linked by a local area
network, duly licensed by the relevant governmental authority of
the jurisdiction in which it is located; or (v) closed-loop in-
home TV-based RACINGO.
"On-Line Racingo" means the Racingo game sold, delivered or
conducted by means of the Internet, by which is meant the
worldwide network of computers utilizing the TCP/IP protocol,
commonly understood to provide some or all of the following
features, among others: electronic mail, file transfers through
File Transfer Protocol, Telnet access to local and remote
computers, UseNet Newsgroups, Gopher access to information on
local and remote computers, Wide Area Information Servers, and
World Wide Web access.
"On-Line Racingo License" means the license granted by Racingo
Investments Ltd. to Playandwin, Inc. on October 7, 1999, to use,
conduct, market, and deliver On-Line Racingo worldwide.
"Parties" means the parties to the Agreement and "Party" means
any one of them.
"Person" means an individual, body corporate, partnership,
trustee, trust, unincorporated association, executor,
administrator or legal representative.
"PEST" means P.E.S.T. Creative Gaming Corporation.
"PWIN" means Playandwin, Inc.
"Racingo" means the pari-mutuel bingo-type wager game and lottery
known as "Racingo" and identified by the Racingo Trademarks, and
all associated know-how, intellectual property and other
materials utilized in the execution of the Racingo game,
including the Racingo Patent, the Racingo Trademarks, the Racingo
Copyrights, the rules and regulations of which are appended
hereto as Schedule B.
"Racingo Copyrights" means the Canadian copyrights for the "Sulky
and Rider" design and the "Racingo Game Card" registered on
January 20, 1995, the Canadian copyright for the "Racingo Rules"
registered on February 23, 1995, the Canadian copyrights for the
"Racingo Races Card", "Racingo Rules and Regulations", "Racingo
In the Money Card", "Super Racingo Race Card" and "Racingo Play
for the Day Card" registered on September 11, 1996, the U.S.
copyrights for the "Sulky and Rider" design and the "Racingo
Rules" registered on January 24, 1995, and the U.S. copyright for
the "Racingo Rules and Regulations" registered on September 24,
1996, all of the foregoing being licensed to Racingo Investments
Ltd. and sub-licensed (with respect to On-Line Racingo and On-
and Off-Track Racingo) to Playandwin, Inc.
"Racingo Patent" means the United States Patent No. 5,518,239
dated May 21, 1996, regarding a lottery racing sweepstake issued
to William H. Johnston, owned by Winning Games Inc., licensed to
Racingo Investments Ltd. and sub-licensed (with respect to On-
Line Racingo and On- and Off-Track Racingo) to Playandwin, Inc.
"Racingo Rollout" means the market launch of On- and Off-Track
Racingo and On-Line Racingo in Canada, the United States and
Mexico, and the subsequent market launch of On-Line Racingo in
the rest of the world.
"Racingo Software" means the software developed by or on behalf
of Autotote for playing Racingo on a computer or electronic
terminal and for delivering Racingo by means of the Internet or a
local area network, described in Schedule C hereto.
"Racingo System" means the network of operational Autotote Hubs
containing Racingo Software, by means of which Racingo is to be
provided to players.
"Racingo Trademarks" means the trademark "Racingo" owned by
Winning in the United States and the subject of its application
to register the trademark, Application No. 75/331,278; and the
Canadian trademark "Racingo" (the subject of an application by
PEST to register the trademark, application number 767,826), the
Canadian trademark "Super Racingo" (the subject of an application
by PEST to register the trademark, application number 767,827),
the Canadian trademark "Racingo Horshoe Design" (the subject of
an application by PEST to register the trademark, application
number 856,030), the Canadian trademark "Racingo Goin' Big Time"
(the subject of an application by PEST to register the trademark,
application number 856,029), and the Canadian trademark "Sulky
Design" (the subject of an application by PEST to register the
trademark, application number 767,828), all owned by PEST in
Canada; and the European trademark "Racingo" owned by PEST, the
subject of an application by PEST to register the trademark,
application number 642,728, all of the foregoing being licensed
to Racingo Investments Ltd. and sub-licensed (with respect to On-
Line Racingo and On- and Off-Track Racingo) to Playandwin, Inc.
"Racingo Wager" means the total sum wagered on Racingo by all
players at a given racing track or betting establishment or
through a given venue on a given day.
"Reviewed Party" has the meaning assigned to it in subsection
3.3.4 of this Agreement.
"Reviewing Party" has the meaning assigned to it in subsection
3.3.4 of this Agreement.
"Source Code" means any human-readable, high-level language
version of the Racingo Software capable upon compilation of
being translated into machine-executable object code.
"Take Out" means PWIN's gross revenues from Racingo from a given
racing track, being a portion of the Racingo Wager for that
track.
"Tote Supplier" means a supplier of totalisator or pari-mutuel
services.
"Winning" means Winning Games Inc.
SCHEDULE "B"
RACINGO RULES
1. RACINGO is a proposition wager based upon the outcome of
three designated pari-mutuel races. It is played by matching the
numbers on a RACINGO bet slip (see Figure 1) with the numbers of
the betting interests finishing first, second or third in the
designated races, not necessarily in exact order. RACINGO has no
connection with any other pool.
2. This wager may be placed at all ticked issuing machines
other than Mark II terminals and may require the use of printed
bet slips. The minimum denomination of RACINGO tickets will be
$2.00. A copy of these rules may be obtained by any patron upon
request. Notice of the availability of these rules will be
prominently displayed.
3. The takeout for this wager will be thirty (30) percent.
4. The races that are a part of this wager will be
predetermined and will be indicated in the racing information
provided to patrons. The official results of each leg will be
based on the official order of finish as posted by the host track
stewards.
5. In the event of a scratch of a betting interest after
wagering has begun on RACINGO, substitution will be to the next
highest unused runner available. In the event where the highest
runner is used or scratched, substitution will proceed via a wrap-
around method to the lowest numbered runner and come forward
until an available runner has been reached. Substitution for
scratched entries will always begin with the lowest numbered
scratched entry in that leg of the wager. Substitutions will
take place only the host track stewards have posted after all
official scratches in the official results of each leg.
Example:
Selection Available Runners
1-9-11 1 2 3 4 5 6 7 8 9 10 11 12
Scratch 11 xx
Scratch 12 xx
Scratch 1 x
1 is substituted with 2
9
11 is substituted with 3. The new wager is 2-9-3.
11-1-9 is replaced with 3-2-9
6. If less than three (3) betting interests finish a given leg,
that leg will be scratched. If a leg is scratched for any
reason, no additions to the jackpot prizes will be made and that
entire current RACINGO pool will be refunded. If there are more
than 12 betting interests in a race, 13, 14, etc. will be part of
the field and will be considered as one betting interest.
7. In the event of a dead heat(s) in any of the 3 legs, squares
on RACINGO tickets containing any of the dead heated entries in
that leg shall be considered matching squares. Squares
containing dead heated entries in the correct order of finish in
that leg shall be considered exact matching squares pursuant to
qualification for prize E as detailed below.
8. Program numbers are synonymous with saddlecloth numbers.
9. Wagering on RACINGO will cease prior to running of the first
RACINGO leg run, regardless of its order on the RACINGO ticket.
10. RACINGO will consist of the following prizes categories (see
Figure 2):
A) The DIAMOND ANY ORDER (Excluding Diamond Exact Order)
B) The X ANY ORDER (Excluding X Exact Order)
C) The DIAMOND EXACT ORDER
D) The X EXACT ORDER
E) The FULL CARD ANY ORDER (Excluding Full Card Exact Order).
F) The FULL CARD EXACT ORDER (Jackpot)
11. Winners for each prize will be determined by matching
squares on the RACINGO ticket in the patterns as described below
and in Figure 2:
A) Matching Squares
1) For Prizes A, B and E a matching square is defined as a
square which contains the program number of a betting interest
finishing either first, second or third in that RACINGO leg. The
order of the betting interest on the RACINGO ticket for that race
does not need to be exact in order for a given square to be a
match.
2) For Prizes C and D, a matching square is defined as a square
which contains the program number of a betting interest finishing
either first, second or third in that RACINGO leg. The order of
the betting interest on the RACINGO ticket for that race must be
exact in order for a given square to be a match.
3) For Prize F a matching square is defined as a square which
contains the program number of a betting interest finishing first
or second or third in that RACINGO leg in the exact position it
finished in the race.
B)
Winning Tickets - Winning RACINGO tickets are determined as
follows:
1) For Prizes A and C - "The DIAMOND" - Matching four (4)
squares on the ticket in the following pattern: middle left with
upper and lower center and middle right
2) For Prizes B and D- "The X" - Matching five (5) squares on
the ticket in the following pattern: upper and lower left with
middle center and upper and lower right
3) For Prize E - The FULL CARD IN ANY ORDER (Excluding the FULL
CARD IN EXACT ORDER) - Matching all squares on the ticket
disregarding the exact order of finish for first, second and
third in each race.
4) For Prize F - The FULL CARD IN EXACT ORDER - Matching all
squares on the ticket. All selections must appear on the ticket
in their exact order of finish for first, second and third. In
the event of a dead heat (s) for any position a square will be
considered an exact match if it contains any of the betting
interests dead heated for that position. Within each prize
category all winning tickets will be calculated as in a Win pool.
5) Additional matching squares on any winning ticket will be
disregarded.
12. Winning tickets qualify for one prize based on the following
order of precedence:
1. Prize F
2. Prize E
3. Prize D
4. Prize C
5. Prize B
6. Prize A
Prize amounts will be based on the pari-mutuel distribution of
each prize category. The order of precedence will determine the
prize category in which a particular winning ticket is
calculated.
13. The net amount of the RACINGO pool will be allocated to the
various prize categories as follows:
1. Prize A - 15 percent
2. Prize B - 10 percent
3. Prize C - 5 percent
4. Prize D - 5 percent
5. Prize E - 20 percent
6. Prize F - 45 percent
14. The payoff for each prize will be separately calculated on a
pari-mutuel basis considering both the number of winning dollars
qualifying for that particular prize and the total amount
allocated to that prize category plus any applicable carryover as
in the cases of Prize F.
Prize F is a separate Jackpot prize. The pool for each
jackpot prize will consist of the current allocation of the
net RACINGO pool plus the applicable carryover, if any. If no
winning tickets are sold for a particular Jackpot pool, 100
percent of that total pool will then be carried over to the
next RACINGO wager. In the event there is no pari-mutuel
ticket properly issued correctly designating a winner for a
specific lower prize (A, B, C, D or E), the portion of the net
pool allocated for that prize will be divided equally and
added to the carryover of distribution of the Jackpot prize
(F).
15. In the event that the Association decides to discontinue
this wager, the current pool allocation to the Jackpot prize plus
any applicable carryovers will be distributed on a specific date
chosen by the Association, pending at least two weeks notice to
the public, and in the following manner:
A) Prizes F: If no winning tickets are sold matching all
squares on the ticket in the exact order of finish for first,
second and third, the winning payoff for Prize E will be the sum
of the net pool from Prize F and the net pool from Prize E.
B) Prize E: If a winning ticket is sold matching all squares on
the ticket in any order of finish for first, second and third and
if no winning tickets are sold for Prize F, then the winning
payoff for Prize E will be the sum of the net pool from Prize F
and Prize E. If no winning tickets are sold matching all squares
on the ticket in the any order of finish for first, second and
third for Prize E and if no winning tickets are sold matching all
squares on the ticket in exact order of finish for first, second
and third for Prize F, then the net pool from Prize F plus the
net pool from Prize E will be added to the net pool for Prize D.
Should no winning tickets be sold for a Prize E, yet
winning tickets should be sold for Prizes F, then the net
pool from Prize E will be added to the net pool for the
next prize category, following down the list (D, C, B or
A), based on the order of precedence, containing at least
one winning ticket, but if no winning ticket is sold for
prizes D, C, B or A, then the net pool for all Prizes
will be added to Prize F.
C) Prize D: If a winning ticket is sold matching five squares
in the pattern of upper and lower left with middle center and
upper and lower right in exact order and if no winning tickets
are sold for Prizes F and E, the winning payoff for Prize D will
be the sum of the net pool from Prizes F, E and D. If no winning
tickets are sold matching five squares in the pattern of upper
and lower left with middle center and upper and lower right in
exact order for Prize D and if no winning tickets are sold for
Prizes F and E then the net pools from Prizes F, E and D will be
added to the net pool for Prize C.
D) Prize C: If a winning ticket is sold matching four squares
in the pattern of upper center with middle left and middle right
and lower center in exact order and if no winning tickets are
sold for Prizes F, E and D, then the winning payoff for Prize C
will be the sum of the net pool from Prizes F, E, D and C. If no
winning tickets are sold matching four squares in the pattern of
upper center with middle left and middle right and lower center
in exact order and if no winning tickets are sold for Prizes F, E
and D, the net pool from Prizes F, E, D and C will be added to
the net pool for Prize B.
E) Prize B: If a winning ticket is sold matching five squares
in the pattern of upper and lower left, middle center and upper
and lower right in any order and if no winning tickets are sold
for Prizes F, E, D and C then the net pool from Prizes F, E, D, C
and B will be added to the net pool for Prize B. If no winning
ticket is sold matching five squares in the pattern of upper and
lower left, middle center and upper and lower right in any order
and if no winning tickets are sold for Prizes F, E, D, and C,
then the net pool from Prizes F, E, D, C, and B will be added to
the pool for Prize A.
F) Prize A: If a winning ticket is sold matching four squares
in the pattern of upper center with middle left and middle right
and lower center in any order, and if no winning tickets are sold
for Prizes F, E, D, C and B, then the net pool from Prizes F, E,
D, C, B and A will be added to the net pool for Prize A. If no
ticket is sold matching four squares in the pattern of upper
center with middle left and middle right and lower center in any
order and if no winning tickets are sold for Prizes F, E, D, C
and B, then the net pool from Prizes F, E, D, C, B and A will be
paid to all ticket holders of the current RACINGO Wager.
16. Quick Pick will be available. Anything NOT marked on a bet
slip will be a Quick-Pick number.
Figure 1: RACINGO Bet Slip
Figure 2: Winning Patterns
A - Diamond Any B - X Any Order
Order
(Excluding Diamond Exact (Excluding X Exact
Order) Order)
Race 1 Race 2 Race3 Race 1 Race Race3
2
Runner Runner
1 1
Runner Runner
2 2
Runner Runner
3 3
C - Diamond Exact D - X Exact
Order Order
Race 1 Race 2 Race3 Race 1 Race Race3
2
Runner Runner
1 1
Runner Runner
2 2
Runner Runner
3 3
E - Full Card Any F - Full Card Exact
Order Order
(Excluding Full Card Exact JACKPOT
Order)
Race 1 Race 2 Race3 Race 1 Race Race3
2
Runner Runner
1 1
Runner Runner
2 2
Runner Runner
3 3
</Tabl
e>
SCHEDULE "C"
RACINGO SOFTWARE
SCHEDULE "D"
TIMETABLE
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Playandwin, Inc.
By: /s/ Stewart Garner
Stewart Garner, President