December 21, 2000
LETTER OF INTENT
Between: PlayandWin, Inc.
7050 Weston Rd., Suite #500
Vaughn, Ontario
L4L 8G7
TrackPower, Inc.
67 Wall Street, Suite 2211
New York, New York
10005
1. Background:
1.1 PlayandWin, Inc. (PWIN) holds the exclusive license to
Racingo concept for the Internet as well as North American
on-track and off-track versions of Racingo. Playandwin, Inc.
retains the right of first refusal to introduce the Racingo
concept internationally and to other venues (i.e. cruise
ship lines, airlines, Native American gaming and bingo) from
Racingo Investments Ltd. PlayandWin, Inc., through it 100%
wholly owned subsidiary, Lynx Gaming is a partner in Racingo
Investments Ltd.
1.2 Racingo is a pari-mutuel, `Bingo-type', proprietary
game, protected worldwide by trademarks and patents, with
the outcome based on a series of horse races.
1.3 TrackPower, Inc. ("TrackPower") is a publicly traded on
the NASDAQ Over-the-counter-bulletin-Board: TPWR.
1.4 TrackPower Interactive ("TPI"), a wholly owned
subsidiary of TrackPower, Inc., is currently preparing to
launch an ATM/information kiosk network within the Gaming
industry. It is also creating an enhanced interactive video
and information service for horseracing in conjunction with
Inetcable.com, Inc.
1.5 TPI is a party to various contracts ("TPI Contracts")
with racetracks, broadcasters, gaming technology developers,
and satellite operators, which facilitate the operation of
the TPI business.
2. Acquisition of TPI
2.1 PWIN will acquire the following assets from TPI,
including all related interests, contracts and licenses,
subject to any required Regulatory, Shareholder and Board
approvals ("Approvals"):
(i) the ATM/information kiosk business plan and related
contracts,
(ii) Inetcable, Inc. contracts and broadcasts strategy, and
(iii) All Comp-U-Race, Inc. shares.
(iv) The TPI Business and any TPI Domains, URL's and
Trademarks, including, but not limited to, the
www.compuraceinc.com domain name and the Comp-U-Race Inc.
trademark.
(v) Rights and obligations in other contracts necessary and
relevant to the operation of the TPI Business.
2.2 In consideration for the above noted assets, PWIN shall
provide TPI with the following at the closing:
(i) 20,000,000 fully paid common shares of PWIN (NASDAQ
OTTB: PWIN), which shares will be subject to statutory
resale restrictions, as required by any applicable law or
regulations;
(ii) Warrants to acquire 5,000,000 common shares of PWIN
(NASDAQ: PWIN):
1,000,000 @ US$1.00
1,000,000 @ US$1.50
1,000,000 @ US$2.00
1,000,000 @ US$2.50
1,000,000 @ US$3.00
(iii)PWIN will pay TrackPower a perpetual royalty of 5%
of TPI's net revenues.
3. Representations and Warranties
3.1 Each Party will grant the other customary
representations and warranties. Without limitation, each
Party represents and warrants to the other as follows:
a) that it has the full power, right and authority to
enter into this Agreement and to perform its obligations
under this Agreement;
b) that it has no prior commitments, arrangements or
agreements with any other person, entity or corporation
which might interfere with or preclude it from carrying out
its obligations;
c) that the audited financial statements in respect of it
which it has provided to the other Parties provide a true
and fair view of its financial position as at the balance
date referable to those accounts; and
d) the assets referred to in article 2.1 herein are held
by TPI free of any encumbrances, liens, debts or other
interests.
4. Confidential Information
4.1 The Parties acknowledge that all information relating
to the other parties and their respective businesses,
including, without limitation, each others' business plans,
operations, contracts, negotiations, and technology not in
the public domain, and all information in the public domain
which has been made public by a Party in breach of this Part
4 ("confidential Information") is confidential. Each Party
will be required to make available such Confidential
Information for, among other things, due diligence inquiries
of each of the other Parties.
4.2 Each Party will use its best efforts to ensure that
Confidential Information is maintained in confidence. A
party need not comply with clause 4.2 to the extent that:
a) Disclosure is required by applicable law; or
b) Disclosure is made to an employee, agent, consultant or
adviser provided such disclosure is limited to disclosure
required on a "need-to-know" basis and that third party
undertakes to be bound by the confidentiality undertakings
under this Part 4.
4.3 Each recognizes that TrackPower and PWIN are obliged by
the listing rules of the stock exchange on which its shares
are traded ("Listing Rules") and other applicable law to
disclose material information relevant to its business.
5. Governing Law
5.1 This Term Sheet is governed by the laws of the State of
Nevada, United States of America and the Federal laws in
force in that State.
6. Term and Termination
6.1 This term sheet is effective for 30 days from signing,
or will expire in 30 days from signing without both parties
mutually agreeing to an extension.
6.2 The parties agree to work on a "best-efforts" basis to
have formal documentation completed within 30 days.
6.3 This agreement is subject to due diligence and
necessary approvals.
7. Expression of Intent
7.1 The foregoing is merely an expression of our intent,
but does not constitute a complete statement of, a legally
binding or enforceable agreement or commitment on the part
of, PWIN or TrackPower with respect to the matters described
herein. The terms set forth herein shall serve as a guide
for the preparation of legally binding agreements that may
be prepared and executed between PWIN and TrackPower. Any
agreement between the parties concerning the matters
described herein, shall be subject to definitive agreements
to be negotiated between the parties and the receipt by each
party of all necessary corporate approvals.
Executed as an Agreement
Dated this 22nd Day of December 2000.
Signed for and on behalf of: Signed for and on behalf of:
PLAYANDWIN, INC. TRACKPOWER, INC.
Signature: /s/ Stewart Garner Signature: /s/ John G. Simmonds
Name: Stewart Garner Name: John G. Simmonds
Position: President Position: C.E.O