L E T T E R OF I N T E N T
September 22, 2000
Mr. William J. Bork
President
Penn National Gaming, Inc.
825 Berkshire Blvd., Suite 200
Wyomissing, PA 19610
Dear Bill,
Further to our recent discussions this letter shall serve to
confirm the intent of PlayandWin, Inc., ("PWIN") to enter
into good faith negotiations with Penn National Gaming,
Inc., ("PENN NATIONAL") to conclude a contract under which
the parties agree to carry out the following:
1. PWIN shall continue to embark upon a program to make
Racingor available to racetracks ("Guest Tracks") throughout
the United States by contracting with Guest Tracks in order
that they may participate in Racingor.
2. As part of the said program, PWIN shall contract with
various racetracks in the United States "(Host Tracks") to
act as the host for the three designated Racingor races on
any given day.
3. PENN NATIONAL shall act as the hub for all hosting and
interface services in the United States in respect to
Racingor and shall provide all of the necessary
infrastructure and support required for the efficient and
timely operation of Racingor throughout the United States.
4. PENN NATIONAL shall collect the total amount wagered on
Racingor by all patrons at all Guest Tracks on a given day
("Racingor Handle") less Racingor winner pay-outs, less an
amount equal to twenty percent (20%) of the total wagered on
Racingor by patrons at each Guest Track ("Commissions")
which shall be retained by each Guest Track.
In the event that Racingor settlement results in an
amount due to the Guest Track, PENN NATIONAL will
reimburse to the Guest Track.
Separate payment procedures will be developed by PENN
NATIONAL and PWIN for settlement in individual winners
in excess of one hundred thousand dollars
($100,000.00).
5. PENN NATIONAL shall provide accurate written reports to
PWIN on a weekly basis detailing the total amount of the
Racingor Handle and the amount thereof received by it
together with all pay-outs made by it under the terms of the
contract.
6. PENN NATIONAL shall be responsible for providing
accounting services to handle payments to all Guest Tracks
and Host Tracks, payments to winners of Racingor, money room
transfers and payments to PWIN.
7. PENN NATIONAL shall promptly remit to PWIN on a weekly
basis 5.50% of the Racingor Handle.
8. PENN NATIONAL shall promptly remit to PWIN on a weekly
basis 5.50% of the Racingor Handle.
9. PENN NATIONAL shall promptly remit to the Host Tracks
on a weekly basis a percentage of the Racingor Handle as may
be determined by PWIN from to time to time provided that the
total amount shall not exceed 4.5%.
10. As compensation for PENN NATIONAL carrying out the
responsibilities as described herein, PENN NATIONAL shall be
entitled to retain 0.5% of the Racingor Handle.
11. PENN NATIONAL shall provide PWIN with restricted
computer access to and monthly reports from its Totalisator
system to permit analyses of wagering trends and racing
products. PENN NATIONAL shall assist PWIN in reviewing
these reports with a view to determining the most popular
signals and the largest possible fields for Racingor and
developing new ways to increase the amount wagered on
Racingor.
12. PWIN shall have the right to examine the records of
PENN NATIONAL at any time on 10 days notice. The
examination shall be at PWIN's cost unless the examination
shall discover errors exceeding a 5% margin in which case
PENN NATIONAL shall bear PWIN's examination cost.
13. PENN NATIONAL shall obtain all necessary regulatory
approvals and licenses to enable it to carry out its
responsibilities as described herein.
14. The contract shall be for such term as the Parties may
mutually agree upon and the provisions of the contract shall
be subject to final approval by the boards of the Parties
hereto.
If the above-described terms and conditions accurately set
out our mutual understandings and agreements please indicate
by signing a copy of this letter in the space provided below
and return an executed copy to us for our files. We will
them move forward on the negotiation of the provisions and
the execution of a final contract.
Sincerely yours,
PLAYANDWIN, INC.
/s/ Stewart Garner
Stewart Garner, President
The foregoing terms are in accordance with my understanding.
PENN NATIONAL GAMING INC.
per: /s/ William J. Bork Date: 9/25/00
AUTHORIZED SIGNING OFFICER
