HUB AGREEMENT
This Agreement is made as of the ____ day of
, 2000,
BETWEEN:
PLAYANDWIN, INC. ("PWIN")
and
PENN NATIONAL RACE COURSE ("PENN")
WHEREAS PWIN helped to create and develop a pari-mutuel game
known as "Racingo", which is a combination of horse racing,
bingo and lottery games and is described on Schedule 1
annexed hereto ("Racingo");
AND WHEREAS PWIN is engaged in a program to make Racingo
available at racetracks and licenced off-track wagering
establishments (individually or collectively the "Guest
Tracks") throughout the United States of America ("USA") by
contracting with owners of Guest Tracks in order that
patrons at Guest Tracks may play Racingo;
AND WHEREAS PWIN is also engaged in a program to obtain the
rights from owners of racetracks ("Host Tracks") throughout
the USA to designate certain pari-mutuel races conducted at
the Host Tracks as Racingo races in order to enable patrons
at Guest Tracks to play Racingo;
AND WHEREAS PWIN has entered into a Racingo Services and
Software License Agreement with Autotote Systems, Inc.
("Autotote") made as of May 24, 2000 under which, inter
alia, PWIN has conferred upon Autotote the right to
designate the Racingo races conducted at the Host Tracks;
AND WHEREAS PENN has agreed to provide all hosting and
interface services in the USA through its hub situate at the
PENN National Race Course racetrack in the Commonwealth of
Pennsylvania for the designated Racingo races conducted on
any given day at any Host Tracks;
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
covenant and agree each with the other as follows:
ARTICLE 1
INTERPRETATION
1.1 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.
1.2 Unless otherwise specified, the word "dollar", or the
symbol "$" refers to United States dollars.
1.3 In this Agreement, words importing the singular number
include the plural and vice versa, words importing the
masculine gender include the feminine and neuter gender.
1.4 Schedule 1 attached hereto is incorporated into this
Agreement by reference and shall be deemed a part of
this Agreement.
ARTICLE 2
DESIGNATION AND SERVICES
2.1 PWIN shall ensure that be responsible for the
designation of the three daily pari-mutuel races conducted
at the Host Tracks upon which Racingo is based shall be and
shall ensure the designation is carried out on its behalf by
Autotote in a timely manner and particulars of the
designation shall be are given to PENN in advance of such
designation.
2.2 PENN shall provide all hosting and interface services
in the USA through its hub situate at the PENN National Race
Course racetrack in the Commonwealth of Pennsylvania (the
"Facility") for the designated Racingo races conducted on
any given day at any Host Track. The parties acknowledge
that PENN shall be the exclusive provider of the said
hosting services in the U.S.A.
2.3 PENN shall provide all of the necessary equipment,
infrastructure, services, support and personnel at its
Facility required for the efficient and timely operation of
Racingo at the Guest Tracks throughout the USA.
2.4 PENN shall collect the total amount wagered on Racingo
by all patrons at all Guest Tracks in the USA on any given
day on which Racingo is conducted ("Racingo Handle"), less
the total amount of payments made to the Racingo winners, if
any, and the amount equal to 20% of the Racingo Handle
retained by each Guest Track on the day in question.
2.5 PENN shall prepare and provide accurate written reports
to PWIN on a weekly basis detailing the total amount of the
Racingo Handle and the amount received by it together
with all payments required to be made by it pursuant to
the terms of this Agreement.
2.6 PENN shall be responsible for providing accounting
services to facilitate payments to all Host Tracks and PWIN.
Any settlement of payments of the Racingo Handle which
require a payment to be made to the Guest Tracks, shall be
made by PENN and it shall provide all accounting services
required to facilitate such payments.
2.7 The parties agree to develop separate payment
procedures to facilitate payment to individual Racingo
winners in excess of One Hundred Thousand ($100,000)
Dollars. The said payment procedures shall be agreed upon
between the parties within ninety (90) days from the date
hereof.
ARTICLE 3
PAYMENTS
3.1 PENN shall promptly remit to the Host Tracks on a
weekly basis a percentage of the Racingo Handle as PWIN may
from time to time direct PENN in writing provided that the
total amount shall not exceed 4.95% of the Racingo Handle.
In the event that PWIN directs that less than 4.95% of the
Racingo Handle is to be paid to the Host Tracks, PENN shall
promptly remit the difference in the percentage between the
amount remitted to the Host Tracks and 4.95% of the Racingo
Handle to PWIN on a weekly basis.
3.2 In addition to any amount set out in section 3.1
hereof, PENN shall promptly remit to PWIN 5% of the Racingo
Handle on a weekly basis.
3.3 As compensation for PENN providing the services
described in this Agreement, it shall be entitled to retain
0.5% of the Racingo Handle.
ARTICLE 4
AVAILIBILITY AND ACCESS TO INFORMATION
4.1 PENN shall provide PWIN with restricted computer access
to and monthly reports from its totalisator system situate
at its Facility or wherever it may be situate in order to
permit analysis of wagering trends and racing products.
PENN shall assist PWIN in reviewing the said reports with a
view to determining the most popular simultaneous audio-
visual signals for designated Racingo races and the largest
possible fields for Racingo and developing new ways to
increase the amount wagered by patrons at the Guest Tracks
on Racingo.
4.2 PWIN shall have the right to examine PENN's records
with respect to Racingo at any time on ten (10) days notice.
The examination shall be at PWIN's cost unless such
examination shall discover errors exceeding 5% margin, in
which event, PENN shall bear PWIN's reasonable cost of
examination.
ARTICLE 5
TERM AND TERMINATION
5.1 This Agreement shall commence on the date on which
Racingo shall first become available to the patrons in
the USA as stipulated in the notice described in
section 9.4 hereof and shall continue for a period of
four (4) years and may be renewed thereafter by mutual
consent of the parties.
5.2 If PWIN breaches any material term of this Agreement,
and such breach continues uncured for a period of fifteen
(15) days, this Agreement shall be terminated forthwith upon
written notice by PENN.
5.3 If PENN breaches any material term of this Agreement,
and such breach continues uncured for a period of fifteen
(15) days, this Agreement shall be terminated forthwith upon
written notice by PWIN.
5.4 This Agreement shall be automatically terminated upon
the bankruptcy, insolvency or dissolution of either party.
5.5 Any termination of this Agreement shall not affect any
outstanding obligations or indemnities of either party.
ARTICLE 6
REGULATORY APPROVAL
6.1 Prior to the date on which Racingo shall first become
available to patrons in the USA as stipulated in section 9.4
hereof, PENN shall pursue all appropriate and reasonable
steps in order to obtain all necessary regulatory approvals
and licences to enable it to provide the services as
described in this Agreement. PWIN agrees to fully cooperate
in satisfying any reasonable requests for information from
any regulatory authority.
6.2 Notwithstanding anything herein contained to the
contrary, in the event PENN shall be unable to obtain the
said regulatory approvals and licences prior to the date
stipulated in section 9.4 hereof, this Agreement shall be
rendered null and void.
6.3 Within seven (7) days of a request by PWIN, PENN shall
furnish reasonable evidence of the status existence of the
regulatory approvals and licences described in section 6.1
hereof.
6.4 Subject to section 6.1 hereof, PENN represents and
warrants that to the best of its information, knowledge and
belief, it is in compliance with all applicable federal and
state statutes, local laws and ordinances.
6.5 In the event any regulatory authority determines that
the relationship between the parties creates a negative
impact upon any other licence held by PENN, it shall
forthwith provide written notice of same together with full
particulars to PWIN and thereafter this Agreement may then
be terminated by either party upon 72 hours notice without
any further liability save and except for any outstanding
payment or accounting obligations to be made or performed
under this Agreement.
ARTICLE 7
INDEMNITY
7.1 PENN shall indemnify and hold PWIN harmless against any
loss, liability, costs or expenses (including reasonable
attorneys fees) arising out of or related to claims or suits
for damages to persons or property which may be instituted
against PWIN or to which PWIN may be made a party, arising
out of or by reason of the performance by PENN of its
obligations described in this Agreement.
7.2 PWIN shall indemnity and hold PENN harmless against any
loss, liability, costs or expenses (including reasonable
attorneys fees) arising out of or related to claims or suits
for damages to persons or property which may be instituted
against PENN or to which PENN may be made a party, arising
out of or by reason of the performance by PWIN of its
obligations described in this Agreement.
ARTICLE 8
LIMITATION OF LIABILITY
8.1 In the event of any failure by PENN to provide the
services described in section 2.2 hereof, and provided
it has acted throughout honestly and in good faith, the
maximum liability to which PENN shall be subject shall
not exceed the lesser of $5,000 per day or $25,000 per
year, in liquidated damages.
8.2 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, lightning, tempest, storm, acts of God, war, acts of
war and defence defense, power failure, failure of any cable
or interference by any governmental or government agency.
ARTICLE 9
DATE RACINGO BECOMES AVAILABLE
9.1 The parties acknowledge that in order to generate and
maintain sufficient interest amongst the patrons at the
Guest Tracks to play Racingo, a level of participation in
Racingo by other facilities throughout the USA as may be
determined by PWIN is required.
9.2 Notwithstanding anything herein contained to the
contrary, this Agreement shall not become operative and
shall remain suspended until PWIN is first satisfied that
the level of participation in Racingo by Guest Tracks
throughout the USA is adequate and gives notice thereof to
PENN. In the event notice is not given by PWIN within one
hundred and eighty (180) days from the date hereof, this
Agreement shall be rendered null and void.
9.3 Following the notice described in section 9.2, PWIN
shall be entitled to a period not to exceed thirty (30)
days to complete its initial marketing campaign in
order to aggressively promote Racingo.
9.4 Upon completion of the said campaign, PWIN shall give
notice to PENN stipulating the date on which Racingo
shall first become available to patrons in the USA
which date shall be not later than three (3) days after
completion of the campaign.
ARTICLE 10
GOVERNING LAW
10.1 This Agreement shall be deemed to have been entered
into in the Commonwealth of Pennsylvia and the validity,
interpretation and legal effect of this Agreement shall be
governed by the laws of that State. The parties consent and
agree to the jurisdiction of the Courts of that State and
the Federal Court located in that State.
ARTICLE 11
REPRESENTATIONS AND WARRANTIES
11.1 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 Agreeement has been authorized by
all requisite corporate action on its part;
(c) 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;
(d) 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
(e) it is not insolvent or bankrupt;
(f) each party and its directors, officers and major
shareholders 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.
11.2 PWIN further represents and warrants to PENN and
acknowledges that PENN is relying on said representations
and warranties in entering this Agreement:
(a) PWIN has entered into an agreement with Autotote as
described in the recitals hereto which agreement is for a
term that is no less than the term in this Agreement;
(b) no tote interface fees which may arise from the amount
wagered on Racingo are payable under the terms of this
Agreement.
ARTICLE 12
GENERAL
12.1 All notices or communication hereunder shall be given
to the respective parties in writing and shall be sent
through the United Postal Service by Registered or
Certified mail, return receipt requested, or its
international equivalent (if appropriate), to the
addresses stated below or to such other address as
either party shall designate by written notice to the
other party.
12.2 Each of the parties shall from time to time 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 This Agreement shall not be assigned by any party
without the written consent of the other and such
consent shall not be unreasonably withheld.
12.4 Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as
of 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.
12.5 The waiver by either party of any right hereunder shall
not be deemed a waiver of any other right hereunder.
12.6 The parties expressly agree that time shall be of the
essence of this Agreement.
12.7 This Agreement may be executed by the parties 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.
12.8 This Agreement, including the schedule annexed hereto,
contains the entire Agreement between PWIN and PENN and no
prior written or oral representations, inducements,
agreements, promises or understandings altering, modifying,
taken from or adding to its terms and conditions shall have
any force or effect and each of the parties hereby confirms
that it is not placing any reliance on any covenant,
representation or warranty of the other party, whether oral
or in writing, expressed or implied except those set forth
herein.
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 authorized to sign, as of the date first above
written.
PLAYANDWIN, INC.
per:
Authorized Signing Officer
Address of PWIN
PENN NATIONAL RACE COURSE
per:
Authorized Signing Officer
Address of PENN
Address of PENN's
General Counsel