Telecommunications Facilitation System Agreement - You Bet! Inc., Mountain Laurel Racing Inc. and Washington Trotting Association Inc.
[LOGO] ORIGINAL
JOHN M. SWIATEK VICE PRESIDENT
412-937-4410
June 23, 1997
You Bet!, Inc.
1950 Sawtelle Blvd.
Suite 180
Los Angeles, California 90024
RE: Telecommunications Facilitation System Agreement
Gentlemen:
We are this date entering into that certain Telecommunications
Facilitation System Agreement (the "Agreement") between You Bet!, Inc.,
Mountain Laurel Racing, Inc. and Washington Trotting Association, Inc.
Notwithstanding anything contained in the Agreement to the contrary, You
Bet!, Inc. agrees that Mountain Laurel Racing, Inc. and Washington Trotting
Association, Inc. ("Ladbroke") have the right to terminate the Agreement for
a period of thirty (30) days from the date hereof in the event that You Bet!,
Inc. does not enter into an agreement with Bloodstock Research Information
Services, Inc. and Thoroughbred Sports Network which preserves Ladbroke's
existing relationship with them in a manner reasonably acceptable to
Ladbroke. In the event no such agreement is reached, we reserve the right to
terminate the Agreement without recourse or liability.
We both agree to keep this letter agreement confidential. If you are in
agreement with this understanding, please indicate so by signing below, and
returning a fully executed copy of this letter to us.
MOUNTAIN LAUREL WASHINGTON TROTTING
RACING, INC. ASSOCIATION, INC.
By: John M. Swiatek By: John M. Swiatek
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Its: Vice President Its: Vice President
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Intending to be legally bound hereby, accepted
and agreed this 24th day of June 1997.
YOU BET!, INC.
By: Steve A. Molnar
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Its: CEO
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LADBROKE RACING CORPORATION
Foster Plaza 9, 750 Holiday Drive, Pittsburgh, Pennsylvania 15220
Phone (412) 937-4410 FAX (412)937-4418
[LOGO] A Ladbroke Group Company
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TELECOMMUNICATIONS FACILITATION SYSTEM AGREEMENT
This TELECOMMUNICATIONS FACILITATION SYSTEM AGREEMENT (this "Agreement") is
entered into as of June 16, 1997, by and between You Bet!, Inc., a Delaware
corporation, the address of which is 1950 Sawtelle Boulevard, Suite 180, Los
Angeles, California 90025 ("You Bet!"), on the one hand, and Mountain Laurel
Racing, Inc., and Washington Trotting Association, Inc., each a Pennsylvania
corporation, the address of which is Post Office Box 499, Racetrack Road,
Meadowlands, Pennsylvania 15347 (collectively, "Ladbroke"), on the other.
WHEREAS, Ladbroke operates horse racing operations within the State of
Pennsylvania; and
WHEREAS, You Bet! is currently developing the System (as defined in Section
1.14), which is an interactive system designed to facilitate the transmission
of wagering information; and
WHEREAS, Ladbroke and You Bet! would like to form a relationship whereby
You Bet! will provide to Ladbroke the service of connecting the System to the
operations of Ladbroke for the purpose of facilitating telecommunications by and
between Ladbroke and its clientele regarding racing products of Ladbroke.
NOW, THEREFORE, the parties to this Agreement hereby agree as follow:
1. DEFINITIONS
For purposes of this Agreement, the following terms shall have the meanings
set forth in this Section 1.
1.1. APPLICATION. The term "Application" shall have the meaning set forth
in Section 7.4.
1.2. APPROVAL. The term "Approval" shall have the meaning set forth in
Section 7.4.
1.3. CLIENT SOFTWARE. The term "Client Software" shall mean that portion
of the System which it is intended will reside on the computers of End Users.
1.4. COMPLIANCE. The term "Compliance" shall mean all matters relating to
the System or Ladbroke (or any subsidiary or affiliate of Ladbroke) governed by
any legislation, statute, statutory instrument, by-law, public or governmental
or statutory or regulatory authority or person, the Ladbroke Group PLC Betting
and Gaming Division Compliance Manual, any directives, guidance and/or advice of
any regulatory or governing authority or body to which Ladbroke (or any
subsidiary or affiliate of Ladbroke) may be subject wheresoever situate, and
shall include, but not be limited to, membership rules and regulations, terms of
admittance, tax or other governmental/statutory/regulatory, reporting and/or
filing, gaming license (personal or corporate), liquor license, business and
other licenses (whether like or unlike the foregoing),
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conduct of gaming and house rules, banking, cage and gaming reserves, audit and
accounting, credit policies and procedures, security and currency rules and
regulations.
1.5. CONFIDENTIAL INFORMATION. The term "Confidential Information" shall
mean the System and the documentation associated with the System (as the
Confidential Information of You Bet!), and any information or material which:
(i) is proprietary to the disclosing party, or designated as Confidential
Information by the disclosing party and not generally known other than by the
disclosing party; or (ii) the disclosing party obtains from any third party
which the disclosing party treats as proprietary, or designates as Confidential
Information, whether or not owned by the disclosing party. "Confidential
Information" shall not include information which the receiving party can show
is: (i) known by the receiving party at the time of receipt from the disclosing
party and not subject to any other nondisclosure agreement between the parties
to this Agreement; (ii) now, or which hereafter becomes, generally known to the
industry through no fault of the receiving party; (iii) published or generally
disclosed to the public by the disclosing party; (iv) otherwise lawfully and
independently developed by the receiving party; or (v) lawfully acquired by the
receiving party from a third party, which third party is not itself in breach of
any obligation of confidentiality.
1.6. DISQUALIFICATION NOTICE. The term "Disqualification Notice" shall
have the meaning set forth in Section 7.4.
1.7. EFFECTIVE DATE. The term "Effective Date" shall mean the date first
set forth above, which shall be the effective date of this Agreement.
1.8. END USER. The term "End User" shall mean an ultimate end user of the
System who is a client of Ladbroke and You Bet!.
1.9. GAMING AUTHORITY. The term "Gaming Authority" shall have the meaning
set forth in Section 7.1.
1.10. HOST SOFTWARE. The term "Host Software" shall mean that portion of
the System intended to reside on one (1) or more interactive host server
computers owned, operated and access restricted to, You Bet!
1.11. INCLUDES: INCLUDING. Except where followed directly by the word
"only", the terms "includes" and "including" shall mean "includes, but is not
limited to," and "including, but not limited to" respectively, it being the
intention of the parties to this Agreement that any listing following thereafter
is illustrative and not exhaustive.
1.12. ITSP. The term "ITSP" shall mean the Inter Tote Standard Protocol,
which the parties to this Agreement acknowledge is the standard protocol of the
racetrack industry.
1.13. NET COMMISSION. The term "Net Commission" shall mean the so-called
gross commission from the revenue generated to Ladbroke from the wagering
information transmitted to Ladbroke through the System, less: (i) state taxes
paid by Ladbroke on gross commission
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(exclusive of taxes based upon the net income of Ladbroke); (ii) the actual
cost which Ladbroke pays to any racing facility for the simulcast signal
which Ladbroke provides pursuant to Section 3.3; (iii) so-called purses; (iv)
the actual cost which Ladbroke pays for all fees referenced in Section 8.1;
(v) the actual cost which Ladbroke pays for all fees referenced in Section
8.2, but only to the extent that such fees exceed the "not to exceed" amount
specified in Section 8.2; (vi) the actual cost which Ladbroke pays for all
fees and costs referenced in Section 8.3, but only to the extent that such
fees and costs are related to the subject matter of this Agreement (I.E.,
Ladbroke shall not have the right to deduct the cost of its licensing and
government approvals generally); (vii) the actual cost which Ladbroke pays
for all taxes referenced in Section 8.7, not including any tax based upon the
net revenue of Ladbroke, and only to the extent that such taxes are related
to the subject matter of this Agreement.
1.14. SYSTEM. The term "System" shall mean the interactive on-line
information system contemplated by this Agreement, including the Client Software
and the Host Software.
2. INTELLECTUAL PROPERTY RIGHTS
2.1. SYSTEM OWNERSHIP AND LIMITED USE RESTRICTION. Ladbroke hereby
acknowledges that the System constitutes the valuable proprietary, copyrighted
and trade secret property of You Bet!. Accordingly, Ladbroke shall use its best
efforts to restrict access to the System and its components, and use security
procedures and locations which will minimize the risk of theft or unauthorized
copying. Ladbroke shall hold all information regarding the System in confidence,
disclosing information regarding the System only to authorized personnel and
agents of Ladbroke having a need to know such information, and to take all
reasonable precautions to prevent disclosure to other parties. Ladbroke shall
not make, have made or permit to be made any copies of the System and/or its
components. This Agreement does not grant to Ladbroke any rights to patents,
copyrights, trade secrets, trade names, trademarks (whether registered or
unregistered), or any other rights, franchises or licenses in respect of the
System. Title to and ownership of the System and its components, any
reproductions thereof and/or any documentation associated therewith shall remain
with You Bet!. Ladbroke shall not adapt or use any trademark or trade name
which is likely to be similar to or confusing with that of You Bet!, or take any
other action which might impair or reduce the trademark rights of You Bet! or
its affiliates.
2.2. NO RIGHT TO REPRODUCE OR REVERSE ENGINEER SYSTEM. Nothing in this
Agreement shall be construed as giving Ladbroke any right to, and Ladbroke shall
not, and shall not permit or assist any third party to: (i) manufacture or
otherwise make copies of the System, including the Client Software and the Host
Software, or the documentation associated therewith; (ii) reverse engineer all
or any part of the System, including the Client Software and the Host Software,
or the Confidential Information of You Bet!, or otherwise attempt to discover
any of the Confidential Information of You Bet!; or (iii) transfer, give away,
rent, lease, loan or otherwise distribute the whole or any part of the System,
including the Client Software and the Host Software.
2.3. END USER INFORMATION AND LIMITED USE RESTRICTION.
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2.3.1. You Bet! hereby acknowledges that all information concerning
End Users, their personal information and wagering history with Ladbroke (as
opposed to with other partners of You Bet!) constitutes the valuable proprietary
and trade secret property of Ladbroke. Accordingly, You Bet! shall use its best
efforts to restrict access to such information and will use security procedures
which will minimize the risk of theft or unauthorized us of such information.
You Bet! shall hold all such information regarding End Users in confidence,
disclosing information regarding End Users only to authorized personnel and
agents of You Bet! having a need to know such information, and take all
reasonable precautions to prevent disclosure to other parties. You Bet! shall
not make, have made, or permit to be made any copies of any such information
concerning End Users. This Agreement does not grant You Bet! any rights to trade
secrets, trade names, trademarks (whether registered or unregistered) or any
other rights, franchises or licenses in respect of such information concerning
End Users. Title to and ownership of all such information relating to End Users,
any reproductions thereof, or any documentation associated therewith shall
remain with Ladbroke.
2.3.2. Notwithstanding the foregoing, or anything else in this
Agreement, nothing in this Agreement shall be deemed to restrict the rights of
You Bet! in or to information regarding End Users where: (i) such information
does not relate to information conveyed by End Users to Ladbroke and was gained
by You Bet! other than through performance under this Agreement (E.G., through
the fact that an End User is also an end user of the System with a You Bet!
partner other than Ladbroke); and/or (ii) Ladbroke agrees, in its reasonable
discretion, that such information is merely demographic, as opposed to End User
specific.
2.4. NO RIGHT TO REPRODUCE END USER INFORMATION. Except as provided in
Section 2.3, nothing in this Agreement shall be construed as giving You Bet! any
right to, and You Bet! shall not, and shall not permit or assist any third party
to, transfer, give away, rent, lease, own or otherwise distribute the whole or
any part of any information concerning End Users, their personal information and
wagering history with Ladbroke.
2.5. MUTUAL RESERVATION. All rights not specifically and expressly
granted in this Agreement are hereby reserved.
3. RESPECTIVE OBLIGATIONS
3.1. SYSTEM IMPLEMENTATION. You Bet! shall develop and implement the
System materially in accordance with written specifications which shall be
agreed upon by You Bet! and Ladbroke after the Effective Date, and which, upon
such agreement, shall be attached as Exhibit H to this Agreement.
3.2. PHYSICAL SPACE. Ladbroke shall provide for You Bet!, during the term
of this Agreement, reasonably comfortable and professional office space, within
the race track enclosure of a facility operated by Ladbroke, for all equipment
and personnel reasonably deemed necessary by You Bet! for its performance under
this Agreement. The general parameters of the space which it is anticipated will
be required pursuant to the preceding sentence of this Section 3.2 is specified
in Exhibit A to this Agreement.
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3.3. RACE SIMULCAST SIGNAL. Ladbroke shall provide, for use in connection
with the operation of the System as contemplated by this Agreement, racing
information, including odds, scratches, changes, racecards, and post times, as
well as a simulcast audio and video signal of racing activities which shall be
the subject of wagering information transmitted to Ladbroke in connection with
the utilization of the System as contemplated by this Agreement, including
simulcasted races (from both Ladbroke, and from other racing facilities
simulcasted by Ladbroke to the extent that all approvals desired by either party
to this Agreement, in their respective reasonable discretion, to transmit such
signals from such other racing facilities have been procured). Ladbroke
represents and warrants You Bet! that the simulcast signal which Ladbroke is
required to provide pursuant to this Section 3.3 shall be contemporaneous with
the live events which it portrays, and that no other recipient of such simulcast
shall receive such simulcast prior to receipt of such simulcast by You Bet!.
3.4. SYSTEM PROTOCOL. Ladbroke shall commit to the implementation of the
System by way of the ITSP, or another protocol specified by You Bet! and agreed
to by Ladbroke, in its reasonable discretion, and shall support such
implementation with regard to connection of the System with the on-track host
totalisator system used by Ladbroke in the operation of its business.
3.5. Distribution by You Bet!. You Bet! shall have the sole obligation
and authority to determine and communicate to Ladbroke the geographic regions,
designated by state and country, to which the simulcast signal which Ladbroke
provides pursuant to Section 3.3 will be transmitted utilizing the System. You
Bet! shall bear the sole responsibility for all legal ramification(s) of such
determination by You Bet!, and the rights of Ladbroke and obligations of You
Bet! pursuant to Sections 13 and 14 shall be operable in the event of any such
legal ramification(s).
3.6. GEOGRAPHIC REGION DETERMINATIONS. Ladbroke shall have the sole
obligation and authority to determine and communicate to You Bet! the geographic
regions, designated by state and country, from which wagering information shall
be received utilizing the System. Ladbroke and You Bet! shall jointly bear the
responsibility for all legal ramification(s) of such determination by Ladbroke.
3.7. END USER DETERMINATIONS. Ladbroke shall make the initial
determination as to whether it is lawful and legal to receive wagering
information from End Users through the System, including whether such End Users
are of legal age to participate in activities related to the transmission of
wagering information to Ladbroke as contemplated by this Agreement. Ladbroke and
You Bet! shall jointly bear the responsibility for all legal ramification(s) of
such determinations by Ladbroke.
3.8. VETO RIGHTS ON GEOGRAPHIC REGIONS AND END USERS. Notwithstanding the
provisions of Section 3.6 and Section 3.7, You Bet! shall have the right, in its
sole and absolute discretion, to decline to make the System available to any
particular geographic region generally, or any End User(s) specifically (i.e.,
to not allow the System to receive wagering information from, such geographic
region and/or such End User(s)).
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3.9. GOVERNMENTAL APPROVALS AND LICENSES.
3.9.1. Ladbroke shall use its best efforts to procure, and maintain
for the entire term of this Agreement, all such government approvals and
licenses required for: (i) the operation of Ladbroke in general; (ii) the
operation of the wagering system in Pennsylvania, which is intended to be the
recipient of wagering information through the System from End Users.
3.9.2. You Bet! shall procure, and maintain for the entire term of
this Agreement, all such government approvals and licenses required for: (i) the
operation of You Bet! in general; and (ii) the operation of the System, as
contemplated by this Agreement. Notwithstanding the foregoing, nothing in this
Agreement is intended to require You Bet! to become a licensed gaming entity.
3.9.3. Each party to this Agreement shall bear the sole
responsibility for all legal ramifications of its obligations under this Section
3.9, and will maintain any such approval and/or license, and the rights of each
party to this Agreement pursuant to Sections 13 and 14 shall be operable in the
event of any such legal ramifications.
3.10. TECHNOLOGY MODIFICATIONS. You Bet! and Ladbroke shall each modify
the technology under their respective control which it is anticipated by You
Bet! will interface and communicate with the System such that such technology is
compatible with the ITSP (or another protocol specified by You Bet! and agreed
to by Ladbroke.
4. END USERS
4.1. LICENSE OF CLIENT SOFTWARE. You Bet! shall have the sole
responsibility to: (i) develop, and grant to each End User a non-exclusive and
non-transferable and time limited license to utilize the Client Software: and
(ii) arrange for the availability to all End Users of the server
telecommunications systems necessary to connect to the Host Software.
4.2. TECHNICAL SUPPORT. During the term of this Agreement: (i) You Bet!
shall provide to End Users a reasonable amount of training and technical support
regarding the use and operation of the Client Software; and (ii) Ladbroke shall
have no obligation to provide any technical support to any End User.
4.3. CHARGES TO END USERS.
4.3.1. You Bet! shall have the right to charge to End Users fees
for on-line time and/or information purchases which You Bet! may from time to
time decide, in its sole discretion, to offer to End Users through the System;
provided, however, that it is the intention of the parties to this Agreement
that any such charges shall be to allow You Bet! to offset the following costs
of operating the System: (i) network personnel; (ii) network hardware, software
and information purchase and development; (iii) on-line, communications
connections and cash transactions fees; and (iv) promotion of the You Bet!
Racing Network. You Bet! shall have no
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right to charge to End Users any other fees or charges whatsoever, without the
express and unambiguous written consent of Ladbroke, which consent shall not be
unreasonably withheld or delayed. It is the intention of the parties to this
Agreement that, unless Ladbroke grants consent pursuant to the preceding
sentence of this Section 4.3.1, the sole profit income to You Bet! in relation
to the operation of the System shall be the income, if any, which it is paid to
You Bet! by Ladbroke pursuant to Section 8.4. Notwithstanding anything else in
this Section 4.3.1 or this Agreement, Ladbroke shall grant consent to other fees
and charges in the event that other revenue streams are discovered; provided,
however, that You Bet! and Ladbroke shall proportionately share the profits from
each such revenue stream, and shall negotiate in good faith, given the nature of
each such revenue stream, as to the best manner of so proportionately sharing.
4.3.2. Ladbroke shall have no right to charge to End Users any fee
whatsoever for usage, either on a time (e.g., monthly, weekly, etc.), on-line
time (e.g., per minute) or per transaction basis during the term of this
Agreement without the express and unambiguous written consent of You Bet!, which
consent shall not be unreasonably withheld or delayed. It is the intention of
the parties to this Agreement that, unless You Bet! grants consent pursuant to
the preceding sentence of this Section 4.3.2, the sole income to Ladbroke in
relation to the operation of the System shall be the income, if any, which it
earns from wagering information transmitted from End Users through the System.
4.4. LEGALITY. Ladbroke and You Bet! shall share responsibility that: (i)
operation of the System shall not violate any statute or ordinance of any
geographic region(s) to or from which information may be transmitted utilizing
the System; (ii) the operation of the System as contemplated by this Agreement
shall not violate any law, rule or regulation in effect in any entity,
government or territory which may assert jurisdiction over such operations,
Ladbroke and/or You Bet!; (iii) it is lawful and legal for each End User who
utilizes the System to so utilize the System; and (iv) each End User who
utilizes the System is of legal age to participate in the transmission of
wagering information as contemplated by this Agreement.
5. MARKETING
5.1. PRESS RELEASES AND OTHER PUBLICITY. Neither party to this Agreement
shall have the right to disclose any information regarding the subject matter of
this Agreement, including the name of the other party to this Agreement, without
the prior written consent of the other party to this Agreement; provided,
however, that each party to this Agreement shall have the right to disclose
information as required by law or legal process.
5.2. LICENSE OF TRADEMARKS.
5.2.1. Concurrently with the execution of this Agreement, Ladbroke
shall cause Ladbroke Racing Corporation, a Delaware corporation, to execute a
license to You Bet! in the form attached as Exhibit F to this Agreement.
Execution of such a license shall be a condition precedent to the covenants,
representations and warranties of You Bet! under this Agreement.
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5.2.2. Concurrently with the execution of this Agreement, You Bet!
shall execute a license to Ladbroke in the form attached as Exhibit G to this
Agreement. Execution of such a license shall be a condition precedent to the
covenants, representations and warranties of Ladbroke under this Agreement.
5.3. YOU BET! EXCLUSIVITY TO LADBROKE. For the first twenty-four (24)
months of the term of this Agreement, You Bet! shall not enter into any
agreement of any nature with any horse racing facility, race book, simulcast
provider or other provider of racing signals, other than a single such provider
in the State of New York, regarding the integration of such racing signals into
the System, or into any other system which is materially similar in intent, form
or substance to the System. In the event that You Bet! intends to enter into any
such arrangement following the expiration of such exclusivity, You Bet! will
notify Ladbroke of such intent, and of the agreements which are contemplated
under such arrangements, and Ladbroke will have the right to either terminate
this Agreement or otherwise reach agreement with You Bet! concerning such
changes to the terms and conditions of this Agreement as the parties to this
Agreement may both agree.
5.4. LADBROKE MOST FAVORED NATIONS STATUS. In the event that You Bet!
enters into, or has entered into, any written agreement with any other horse
racing facility, race book, simulcast provider or other provider of racing
signals in the United States or Canada regarding an integration of the System,
or any other system which is materially similar in intent, form or substance to
the System, into the operations of such horse racing facility, race book,
simulcast provider or other provider of racing signals which written agreement
contains terms more favorable to such other horse racing facility, race book,
simulcast provider or other provider of racing signals than those provided to
Ladbroke under this Agreement, You Bet! shall offer to Ladbroke the benefit of
such more favorable terms under this Agreement, on a going forward basis from
the effective date of such other agreement (as opposed to on a retroactive basis
prior to the effective date of such other agreement); provided, however, that in
transferring the benefits of such more favorable terms to this Agreement, the
parties shall take into account all terms and conditions of both agreements, so
that this Agreement, as modified by the benefit of this Section 5.4, is, on the
whole, no more favorable than the agreement entered into with such other horse
racing facility, race book, simulcast provider or other provider of racing
signals. Ladbroke shall have the right to periodically audit the contracts of
You Bet! in order to confirm compliance with the provisions of this Section 5.4;
provided, however, that: (i) no audit (other than the first audit) may be
conducted less than one (1) year after the previous audit; and (ii) You Bet! and
Ladbroke shall cooperate, through the use of an independent third party
accounting firm, paid for and selected by Ladbroke, with the approval of You
Bet!, to review and evaluate such agreements in compliance with any
confidentiality obligations in place.
5.5. LADBROKE EXCLUSIVITY TO YOU BET! During the first twenty-four (24)
months of the term of this Agreement, Ladbroke shall not enter into any
agreement which provides for the distribution of the audio and/or video of any
Ladbroke racing schedule to be distributed on any interactive service which is
integrated with the end user utilizing an IBM personal computer, a clone of an
IBM personal computer or a Macintosh personal computer; provided, however, that
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the prohibition set forth in this Section 5.5 shall not be applicable to any
future agreement entered into with any of the following with whom Ladbroke has
any business relationship as of the Effective Date: (i) Bloodstock Research
Information Services, Inc.; (ii) Thoroughbred Sports Network; (iii) TCI Cable;
(iv) Autotote; (v) any cable television operator; and (vi) any direct broadcast
satellite provider.
5.6. YOU BET! RIGHTS OF FIRST REFUSAL ON OTHER LADBROKE ACTIVITIES.
5.6.1. For the first twenty-four (24) months of the term of this
Agreement, You Bet! shall have a right of first refusal with respect to other
opportunities as to which Ladbroke shall have the opportunity to enter into with
ODS Technologies, L.P. In the event that Ladbroke has the opportunity to enter
into any such transaction, Ladbroke shall offer in writing to enter into such
transaction with You Bet! on the terms and conditions described in this Section
5.6.1. Upon learning of the opportunity to enter into such transaction with ODS
Technologies, L.P., Ladbroke shall provide written notice to You Bet!, which
written notice shall include all material terms and conditions of such proposed
transaction. For a period of thirty (30) days from the date upon which You
Bet! receives such written notice, You Bet! shall have the right to enter into
such transaction with Ladbroke on the same material terms and conditions as set
forth in such written notice, so long as You Bet! can reasonably demonstrate
that it has the ability to perform in such transaction in accordance with the
timelines set forth in the written notice. In the event that You Bet! fails to
exercise its rights under this Section 5.6.1, Ladbroke shall be free, for a
period of ninety (90) days from the expiration of the thirty (30) day period
specified in this Section 5.6.1, to consummate a transaction with ODS
Technologies, L.P., on the same material terms and conditions specified in the
written notice to You Bet!, and shall have no obligation to enter into any such
transaction with You Bet! Any transaction by and between Ladbroke and ODS
Technologies, L.P., after the expiration of the ninety (90) day period referred
to in this Section 5.6.1, as well as any transaction on material terms and
conditions substantially dissimilar those set forth in the written notice to You
Bet!, shall be deemed pursuant to a new offer, requiring compliance once again
with the terms and conditions of this Section 5.6.1.
5.6.2. In addition to the right of first refusal set forth in
Section 5.6.1, during the term of this Agreement, You Bet! shall have the
opportunity to present for Ladbroke's consideration competing alternatives to
Ladbroke allowing the audio and/or video of any Ladbroke racing activity to be
distributed on any interactive service, other than those as to which You Bet!
has exclusivity pursuant to Section 5.5, including on any such interactive
service which involves interactive television application. In the event that
Ladbroke is considering entering into any such distributions, Ladbroke shall
provide written notice to You Bet! sufficiently in advance of entering into such
distributions such that You Bet! has a meaningful opportunity to respond in
accordance with this Section 5.6.2 For a period of thirty (30) days from the
date upon which You Bet! receives such written notice, You Bet! shall have the
right to indicate an intention to enter into such transaction with Ladbroke and,
in the event that You Bet! so indicates such an intention, a proposal for a
transaction and timetable shall be presented to Ladbroke within the next thirty
(30) days. Following receipt of such proposal, Ladbroke shall have the right,
but not the obligation, to enter into such proposed transaction with You Bet!.
Permitting
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the presentation of a proposal in accordance with this Section 5.6.2 shall fully
satisfy Ladbroke's obligations under this Section 5.6.2, and in no event shall
Ladbroke be obligated to enter into with You Bet! any transaction described by
this Section 5.6.2.
5.7. MARKETING PLAN. The parties to this Agreement shall each use
commercially reasonable efforts to implement the marketing plan attached as
Exhibit B to this Agreement.
6. COMPLIANCE
Ladbroke shall have the right at all times to direct You Bet! to make such
changes in and to the operation of the System, and to implement and take such
actions in the management of the System, as are considered necessary and/or
desirable from time to time, in the reasonable discretion of Ladbroke, in order
to ensure that all matters of Compliance are strictly and properly adhered to,
fulfilled and followed; provided, however, that Ladbroke shall provide to You
Bet! a reasonably detailed explanation of the reasoning behind each such
direction.
7. REGULATORY AUTHORITY CONDITIONS
7.1. ACKNOWLEDGMENT OF OPERATIONS. You Bet! understands and acknowledges
that Ladbroke (and its subsidiaries and affiliates) now and may hereafter
conduct gaming operations in various countries throughout the world and are and
may become subject to the jurisdiction and regulation of various local
regulatory authorities throughout the world (each a "Gaming Authority") in
respect of such gaming operations as are now and may hereafter be conducted by
Ladbroke (and its subsidiaries and affiliates).
7.2. PROVISION OF INFORMATION. Ladbroke shall be entitled to provide to
any Gaming Authority such financial and other information in relation to the
System and You Bet! as any Gaming Authority may require from time to time, and
You Bet! shall provide such information as may be required of it from time to
time so that Ladbroke (and its subsidiaries and affiliates) may properly respond
to any request or demand of any such Gaming Authority in a timely manner.
7.3. PROVISION OF SHAREHOLDER INFORMATION. You Bet! shall, upon written
request from Ladbroke, provide Ladbroke (and its subsidiaries and affiliates)
with reasonable details and the identity of the immediate, intermediate and
ultimate shareholders of You Bet! and such other information relating to You
Bet! and such shareholders as may be requested of Ladbroke (and its subsidiaries
and affiliates) by any Gaming Authority to which Ladbroke (and its subsidiaries
and affiliates) may be subject from time to time, but this shall not require You
Bet! to provide details of or relating to the shareholders of any company within
the You Bet! group of companies which is quoted on any international stock
exchange. In the event that such requests for information from such Gaming
Authorities are not responded to, to the satisfaction of the laws, regulations
and requests of such Gaming Authorities, prior to the date upon which the first
transmission of live wagering information is scheduled to occur with an End
User: (i) Ladbroke shall have the right to terminate this Agreement, effective
upon thirty (30) days written notice to You Bet!, provided that requirements are
not satisfied within the thirty (30) day notice period); and (ii) in at
requirements are not satisfied within, the thirty (30) day notice period); and
(ii) in
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no event shall any transmission of live wagering information occur with any End
User until all such requests for information are responded to, to the
satisfaction of the laws, regulations and requests of such Gaming Authorities.
7.4. DISQUALIFICATION NOTICE. In the event that Ladbroke (or any
subsidiary or affiliate of Ladbroke) (i) is ordered, required or otherwise
advised by a Gaming Authority to terminate its relationship with You Bet!, (ii)
is advised in writing by a Gaming Authority that its relationship with You Bet!
or any directors, officers, shareholders or principals of You Bet! jeopardizes
its registrations, licenses, findings of suitability or approvals (collectively
the "Approvals" and individually an "Approval") or any application by Ladbroke
(or any subsidiary of affiliate of Ladbroke) for an Approval (collectively,
"Applications" and individually an "Application"), or (iii) determines in its
reasonable judgment that its relationship with You Bet! or any directors,
officers, shareholders or principals of You Bet! does or may jeopardize its
Approvals or any Application, then Ladbroke shall have the right, but not the
obligation, to deliver a written notice specifying the relevant event or
situation set forth in this Section 7.4 (a "Disqualification Notice") to You
Bet!. In the event that the facts and circumstances giving rise to a
Disqualification Notice are not remedied, in a time frame and manner determined
in the discretion of Ladbroke, then Ladbroke shall have the right to terminate
this Agreement, effective upon thirty (30) days written notice to You Bet!
8. CONSIDERATION, PAYMENTS AND OTHER FINANCIAL RESPONSIBILITIES
8.1. LADBROKE PAYMENT OF TOTALISATOR FEES. Ladbroke shall be solely
responsible for all fees to be paid, levied or imposed by the Autotote
totalisator system utilized by Ladbroke (or any such other totalisator system
which Ladbroke may use during the term of this Agreement) and/or by any other
third party vendor utilized by Ladbroke to which You Bet! shall be required
to make an electronic connection for the purpose of its performance under
this Agreement, including for retrieving racing data, account management and
retrieving audio and video signals.
8.2. LADBROKE PAYMENT OF TELECOMMUNICATIONS FEES. Ladbroke shall be
solely responsible for all fees to be paid, levied or imposed arising out of
or related to the use of telecommunications systems (e.g., telephone lines;
T1 lines, etc.) in connection with the operation of the System. Ladbroke
shall pay directly, or reimburse You Bet! for, the amount of such fees which
You Bet! is at any time obligated to pay. Notwithstanding the foregoing, in
the event that the fees paid by Ladbroke pursuant to this Section 8.2 exceed
Twelve Thousand Dollars($12,000.00) per calendar year, Ladbroke shall have
the right to deduct the amount paid in excess of such "not to exceed" amount,
in the calculation of Net Commission.
8.3. APPROVAL AND LICENSE FEES AND COSTS. Ladbroke shall be solely
responsible for the fees and costs paid to any government agency associated
with each and any of the governmental approvals and/or licenses which
Ladbroke is required to procure and maintain pursuant to Section 3.9.1.
Ladbroke shall pay directly, or reimburse You Bet! for, the amount of such
fees and/or costs which You Bet! is at any time obligated to pay.
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8.4. YOU BET! COMPENSATION. Ladbroke shall pay to You Bet!, for each
calendar week during the term of this Agreement, a sum equal to fifty percent
(50%) of the Net Commission. For purposes of this Agreement, a calendar week
shall be the period beginning with the first race subsequent to the close of
racing each Sunday, and ending at the close of racing the immediately
subsequent Sunday.
8.5. PAYMENT TIMING AND REPORTS. Each Tuesday prior to 3:00 p.m.
Eastern Time during the term of this Agreement, Ladbroke shall cause to be
transferred to an account of You Bet! via wire transfer, as such account may
be specified by You Bet! from time to time during the term of this Agreement,
the fee due You Bet! for the calendar week ended with the close of racing the
preceding Sunday (I.E., the day before), pursuant to Section 8.4.
Concurrently with the funds transfer required pursuant to this Section 8.5,
Ladbroke shall forward to You Bet! a written report specifying the fee earned
by You Bet! during the previous calendar week, and the calculation thereof,
in accordance with the detail specified in Exhibit C to this Agreement. In
addition to the weekly written reports required by the preceding sentence of
this Section 8.5, Ladbroke shall also forward to You Bet! written reports on
a daily and monthly basis, in accordance with the detail specified in Exhibit
C to this Agreement.
8.6. AUDIT RIGHTS. Ladbroke shall allow You Bet! representatives
and/or independent auditors to audit and analyze appropriate and relevant
accounting records of Ladbroke, at the premises of Ladbroke, to verify
accurate and full accounting for revenues, and compliance by Ladbroke with
the terms of this Agreement. If any such audit discloses a discrepancy of
more than five percent (5%) for the period as to which the discrepancy has
arisen, Ladbroke shall pay the reasonable cost of the audit. Any such audit
shall be permitted during business hours within 10 days of receipt by
Ladbroke of written request from You Bet! provided, however, that no audit
(other than the first audit) may be conducted less than one (1) year after
the previous audit.
8.7. TAXES. Ladbroke shall be solely responsible for any Federal,
state or local tax, tariff, duty or assessment levied or imposed arising out
of or related to any of the transactions contemplated under this Agreement,
including any Federal excise wagering tax (but, excluding any tax based upon
the net income of You Bet!) which may be assessed in connection with the
operation of the System. Ladbroke shall pay directly, or reimburse You Bet!
for, the amount of such tax, tariff, duty or assessment which You Bet! is at
any time obligated to pay or collect.
8.8. OTHER EXPENSES AND PAYMENTS. Except as expressly and
unambiguously set forth in this Agreement, each party to this Agreement shall
be responsible for payment of its own costs and expenses involved in
performance under this Agreement, and no party to this Agreement shall be
obligated to compensate the other party to this Agreement in any manner
whatsoever.
9. CONFIDENTIALITY
9.1. NO DISCLOSURE. Except as may be required by law or legal
process, each party to this Agreement shall: (i) hold in confidence, and not
disclose or reveal to any person or entity, any Confidential Information
disclosed under this Agreement without the clear and express prior written
consent of a duly authorized representative of the disclosing party; and (ii)
not use or
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disclose any of the Confidential Information for any purpose at any time, other
than for the limited purpose of performance under this Agreement.
9.2. PUBLISHED REPORTS. Without limiting the generality of Section 9.1,
any reports concerning Confidential Information which are not made or authorized
by the disclosing party and which appear in any publication prior to official
disclosure of such Confidential Information shall not release the receiving
party from its obligations under this Agreement with respect to such
Confidential Information.
9.3. OBLIGATION TO HAVE PERSONNEL EXECUTE CONFIDENTIALITY AGREEMENTS.
Ladbroke shall have each of its personnel who may receive Confidential
Information of You Bet! execute the standard form non-disclosure agreement
used by Ladbroke, in the form attached as Exhibit D to this Agreement. You
Bet! shall have each of its personnel who may receive Confidential
Information of Ladbroke execute the standard form non-disclosure agreement
used by You Bet! in the form attached as Exhibit E to this Agreement.
9.4. NO CONFIDENTIAL INFORMATION OF THIRD PARTIES. Ladbroke and You
Bet! each represent and warrant to each other that it shall not use, in the
course of its performance under this Agreement, and shall not disclose to the
other, any confidential information or other intellectual property of any
third party (including competitors of You Bet! or Ladbroke) unless such party
making such disclosure is expressly authorized in writing by such third party
to do so, and discloses same to the other.
10. WARRANTIES AND DISCLAIMERS OF YOU BET!
10.1. PROPRIETARY RIGHTS. You Bet! hereby covenants, represents and
warrants to Ladbroke that: (i) You Bet! has full right, power and authority
to enter into this Agreement and, provided that Ladbroke is not in breach of
this Agreement, to grant to and vest in Ladbroke all rights set forth in this
Agreement, free and clear of any and all claims, rights and obligations
whatsoever; (ii) the rights under this Agreement, and any and all of the
results and proceeds of the services of You Bet! under this Agreement,
delivered and to be delivered by You Bet! under this Agreement, are and shall
be new and original; and (iii) You Bet! shall be the creator of, or otherwise
have the right to, the Client Software and the Host Software, and no part of
either the Client Software or the Host Software shall be an imitation or copy
of, or shall infringe upon, any other material, or shall violate or infringe
upon any common law or statutory rights of any person or entity, including
rights relating to defamation, contract, trademark, patent, copyright, trade
secret, privacy or publicity.
10.2. TRANSACTION COMMUNICATIONS. You Bet! covenants, represents and
warrants to Ladbroke that the System shall accurately convey wagering
information from End Users to the Autotote totalisator system utilized by
Ladbroke. In the event that any wagering information from any End User is not
accurately conveyed by the System to the Autotote totalisator system utilized
by Ladbroke, the indemnity and hold harmless obligation of You Bet! as set
forth in Section 13.1 shall apply as to any action by such End User whose
wagering information was not accurately conveyed.
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10.3. LICENSES AND THIRD PARTY RIGHTS. You Bet! covenants, represents
and warrants to Ladbroke that to the extent that any third parties have any
rights with respect to any portion of the System, You Bet! has obtained any
and all such third party rights or permissions which are required for the
uses contemplated by this Agreement and for exercise by Ladbroke of the
rights granted to it under this Agreement, and that all such rights will be
in effect for the full term of this Agreement.
10.4. DISCLAIMER OF IMPLIED WARRANTIES. EXCEPT FOR THE EXPRESS
WARRANTIES SET FORTH IN THIS SECTION 10, THE SYSTEM IS PROVIDED WITHOUT
WARRANTY OF ANY KIND, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. LADBROKE SHALL HAVE
THE SOLE OBLIGATION TO DETERMINE THAT THE SYSTEM SUFFICIENTLY MEETS ITS
REQUIREMENTS. YOU BET! DOES NOT WARRANT THAT THE SYSTEM IS ERROR FREE, AND
YOU BET! DISCLAIMS ALL OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING
THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE
AND NON-INFRINGEMENT OF THIRD PARTY RIGHTS WITH RESPECT TO THE SYSTEM. THIS
DISCLAIMER OF WARRANTY CONSTITUTES AN ESSENTIAL PART OF THIS AGREEMENT.
10.5. NO PASS-THROUGH OF WARRANTIES. Ladbroke shall not have the
right to make or pass on, and shall take all measures necessary to ensure
that neither it nor any of its personnel or agents makes or passes on, or
attempts to make or pass on, any representation or warranty on behalf of You
Bet! to any third party, including any End User.
11. WARRANTIES AND DISCLAIMERS OF LADBROKE
11. 1. PROPRIETARY RIGHTS. Ladbroke hereby covenants, represents and
warrants to You Bet! that: (i) Ladbroke has full right, power and authority
to enter into and perform this Agreement, and to grant to and vest in You
Bet! all rights set forth in this Agreement, free and clear of any and all
claims, rights and obligations whatsoever; (ii) the rights under this
Agreement, and any and all of the results and proceeds of the services of
Ladbroke under this Agreement, delivered and to be delivered by Ladbroke
under this Agreement, are and shall be new and original; and (iii) Ladbroke
shall be the creator of, or otherwise have the right to, all items to be
provided by Ladbroke under this Agreement, including the simulcast and racing
information to be provided pursuant to Section 3.3, and no part of any such
item shall be an imitation or copy of, or shall infringe upon, any other
material, or shall violate or infringe upon any common law or statutory
rights of any person or entity, including rights relating to defamation,
contract, trademark, patent, copyright, trade secret, privacy or publicity.
11.2. LICENSES AND THIRD PARTY RIGHTS. Ladbroke covenants, represents
and warrants to You Bet! that to the extent that any third parties have any
rights with respect to any portion of the items to be provided by Ladbroke
under this Agreement, including the simulcast and racing information to be
provided pursuant to Section 3.3, Ladbroke has obtained any and all such
third party rights or permissions which are required for the uses
contemplated by this Agreement and
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for exercise by You Bet! of the rights granted to it under this Agreement, and
that all such rights will be in effect for the full term of this Agreement.
12. TERM AND TERMINATION
12.1. TERM. The term of this Agreement shall commence as of the Effective
Date and shall continue, unless lawfully terminated earlier, until the earlier
of: (i) the five (5) year anniversary of the date upon which the first
transmission of live wagering information occurs with an End User; or (ii) the
one hundred fiftieth (150th) day subsequent to the five (5) year anniversary of
the Effective Date.
12.2. MUTUAL RIGHT OF TERMINATION FOR CAUSE. Either party to this
Agreement shall have the right to terminate this Agreement at any time prior to
expiration of the term of this Agreement, effective upon thirty (30) days
written notice of termination to the other party to this Agreement in the event
that such other party to this Agreement materially fails to perform any of its
material obligations under this Agreement, and such failure is not cured by such
party within the thirty (30) day notice period.
12.3. RIGHTS OF TERMINATION FOR LACK OF FEASIBILITY.
12.3.1. You Bet! shall have the right to terminate this Agreement at
any time prior to expiration of the term of this Agreement, effective upon one
hundred twenty (120) days written notice of termination to Ladbroke in the event
that the transaction contemplated by this Agreement is no longer competitive in
the interactive racing/wagering information market due to the fact that the
geographic reach specified by Ladbroke pursuant to Section 3.6 becomes such that
performance under this Agreement by You Bet! becomes commercially unreasonable.
12.3.2. Each party to this Agreement shall have the right to
terminate this Agreement at any time prior to expiration of the term of this
Agreement, effective upon one hundred twenty (120) days written notice of
termination to the other party to this Agreement, in the event that Net
Commissions are, or are projected in good faith by either party to this
Agreement to be, less than One Million Dollars ($1,000,000.00) for either: (i)
the first eighteen (18) full months subsequent to the date upon which the first
transmission of live wagering information occurs with an End User; or (ii) any
full twelve (12) month period during the term of this Agreement subsequent to
the eighteen (18) month period described in Subsection (i) of this Section
12.3.2.
12.4. AUTOMATIC TERMINATION FOR INSOLVENCY. This Agreement shall terminate
automatically, with no further act or action required of either party to this
Agreement, if: (i) a receiver is appointed for either party to this Agreement or
the property of such party; (ii) either party to this Agreement makes an
assignment for the benefit of its creditors; (iii) any proceedings are commenced
by, for or against either party to this Agreement under any bankruptcy or
insolvency for debtor's relief law; or (iv) either party to this Agreement is
liquidated or dissolved. Notwithstanding the foregoing, this Agreement shall not
automatically so terminate in the event that the other party to this
Agreement provides the financially distressed party to this
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Agreement with written notice, within thirty (30) days of written notice to such
other party of an event which would effect an automatic termination of this
Agreement pursuant to this Section 12.4, that such other party desires to keep
this Agreement in full force and effect.
12.5. AUTOMATIC TERMINATION FOR TERMINATION OF UNDERLYING LICENSE.
12.5.1. In the event of any termination of any license for any
intellectual property involved in the operation of the System, for any reason
whatsoever, including expiration, this Agreement, and the rights granted under
this Agreement, shall automatically terminate effective immediately upon the
effective date of such termination or expiration. Notwithstanding the foregoing,
in the event that any party to this Agreement learns of any such termination, or
any potential such termination, or any facts or circumstances which would or
might give rise to such termination, such party to this Agreement shall promptly
provide written notice of such matter to the other party to this Agreement.
12.5.2. In the event of any termination of any approval or license
which either party to this Agreement is required to procure and maintain
pursuant to Section 3.9, for any reason whatsoever, including expiration, this
Agreement, and the rights granted under this Agreement, shall automatically
terminate effective immediately upon the effective date of such termination or
expiration. Notwithstanding the foregoing, in the event that any party to this
Agreement learns of any such termination, or any potential such termination, or
any facts or circumstances which would or might give rise to such termination,
such party to this Agreement shall promptly provide written notice of such
matter to the other party to this Agreement.
12.6. TERMINATION FOR INFRINGEMENT CLAIM. In the event that the System is,
or in the reasonable judgment of You Bet! is likely to become, the subject of
any infringement or misappropriation claim, You Bet! shall either use its best
efforts to obtain a valid license to use the System, or to replace or modify the
System to make it non-infringing, in which case that replacement shall then be
governed by the terms of this Agreement, as the System. However, in the event
that neither option of the foregoing sentence of this Section 12.6 is
commercially reasonable, You Bet! shall have the right to terminate this
Agreement, effective immediately upon written notice of termination to Ladbroke.
Notwithstanding the foregoing, in the event that You Bet! terminates this
Agreement pursuant to this Section 12.6 in the first six (6) months following
the date upon which the first transmission of live wagering information occurs
with an End User, You Bet! shall pay to Ladbroke the sum of Fifty Thousand
Dollars ($50,000.00) for each full month less than six (6) for which such
information was conveyed by End Users. Such payment is intended as liquidated
damages as fair compensation to Ladbroke for its losses hereunder and not as a
penalty.
12.7. EFFECT OF TERMINATION. Upon termination of this Agreement for any
reason whatsoever, Ladbroke shall: (i) erase or otherwise destroy all copies of
part or all of the System that are fixed or resident in memory in computers
owned or controlled by Ladbroke; and (ii) return to You Bet! all other existing
copies (including original copies) of part or all of the System in the
possession or under the control of Ladbroke, together with a description of the
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circumstances which resulted in the destruction of any such copies that were
once (but no longer are) in the possession or under the control of Ladbroke.
12.8. NO DAMAGES OR INDEMNIFICATION FOR TERMINATION OF THIS AGREEMENT.
Neither party to this Agreement shall be liable to the other party to this
Agreement for damages of any kind, including incidental or consequential
damages, or for indemnification, solely on account of the lawful termination of
this Agreement, even if informed of the possibility of such damages. Neither
party to this Agreement shall be liable to the other party to this Agreement by
reason of termination of this Agreement for compensation, reimbursement or
damages on account of any loss of prospective profits on anticipated sales or on
account of expenditures, investments, leases or other commitments relating to
the business or goodwill of either party to this Agreement, notwithstanding any
law to the contrary.
12.9. SURVIVAL OF TERMS UPON TERMINATION OF THIS AGREEMENT. The provisions
of this Agreement that by their sense and context are intended to survive
termination of this Agreement, including provisions regarding payment,
confidentiality and indemnity, shall so survive this Agreement.
13. INDEMNITY AND HOLD HARMLESS
13.1. MUTUAL INDEMNIFICATION FOR BREACH OF COVENANT, REPRESENTATION OR
WARRANTY. Each party to this Agreement shall defend, as its sole responsibility,
any claim, suit or proceeding brought against the other party to this Agreement
insofar as such claim, suit or proceeding is based upon a claim by a third party
alleging facts or circumstances that, if true, would constitute a breach of any
covenant, representation or warranty of such indemnifying party set forth in
this Agreement, provided the party entitled to indemnity gives written notice of
any such suit or proceeding promptly upon first learning of such suit or
proceeding, and provides the indemnifying party, at no cost, with such
assistance and cooperation as the indemnifying party may reasonably request in
the defense thereof. The provisions of this Section 13.1 shall apply to any such
claim, suit or proceeding, regardless of the jurisdiction, venue, tribunal
and/or governing law. The indemnifying party shall pay any damages, costs and/or
fines (to the extent that such payment of fines is not held by a Court of
competent jurisdiction to be either illegal or against public policy) assessed
against the party entitled to indemnity (or paid or payable by such party
pursuant to a settlement agreement or any other resolution, formal or informal,
provided that such settlement agreement or other resolution is approved by the
indemnifying party, which approval shall not be unreasonably withheld or
delayed) in connection with such claim, suit or proceeding. The indemnifying
party shall indemnify and hold the party entitled to indemnity harmless from and
with respect to any such loss, damage and/or fine (including reasonable
attorneys' fees and costs).
13.2. OTHER INDEMNIFICATION BY LADBROKE. Ladbroke shall defend and
indemnify You Bet! (including reasonable attorneys' fees and costs of
litigation) against and hold You Bet! harmless from, any and all claims by any
third party, regardless of the form of action: (i) resulting from Ladbroke's
acts, omissions or misrepresentations; and (ii) any claim arising from or based
upon the combination, operation or use of the System with equipment, data or
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programming of Ladbroke, or any alteration or modification of the System made
without the express written approval of You Bet!.
14. ACTIONS
14.1. ACTIONS TO PROTECT THE SYSTEM. You Bet! shall have the right, in its
absolute discretion, to employ attorneys and to institute or defend any action
or proceeding and to take any other appropriate steps and, in that connection,
to settle, compromise in good faith or in any other manner dispose of any
matter, claim, action or proceeding and to satisfy any judgment that may be
rendered, in any manner as You Bet! in its sole discretion shall have the right
to determine, to protect all right, title and interest in and to the System, and
every portion of the System.
14.2. ACTIONS INVOLVING INDEMNITY RIGHTS. In the event that either party
to this Agreement becomes entitled to indemnity and/or hold harmless rights from
the other under Section 13.1 and/or Section 13.2, the indemnifying party shall
defend, at its sole expense, the claim, suit or proceeding brought against the
other party to this Agreement; provided, however, that the party seeking
indemnity gives written notice of any such suit or proceeding promptly upon
first learning of such suit or proceeding, and provides the party from which
indemnity is sought, at no cost, with such assistance and cooperation as such
party may reasonably request in the defense thereof. The indemnifying party
shall pay any damages and costs assessed against the party entitled to indemnity
(or paid or payable by such party pursuant to a settlement agreement or any
other resolution, formal or informal, provided that such settlement agreement or
other resolution is approved by the indemnifying party, which approval shall not
be unreasonably withheld or delayed) in connection with such claim, suit or
proceeding. The party providing indemnity shall indemnify and hold the party
entitled to indemnity harmless from and with respect to any such loss or damage
(including reasonable attorneys' fees and costs).
15. EXCLUSION OF CONSEQUENTIAL DAMAGES
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, AND
EXCEPT FOR THE OBLIGATIONS ARISING OUT OF SECTION 9 AND SECTION 13, IN NO EVENT
SHALL EITHER PARTY TO THIS AGREEMENT UNDER ANY CIRCUMSTANCES, BE LIABLE TO THE
OTHER PARTY TO THIS AGREEMENT FOR CONSEQUENTIAL, INCIDENTAL OR SPECIAL DAMAGES
INCLUDING LOST PROFITS OR DATA, EVEN IF SUCH PARTY HAS BEEN APPRISED OF THE
LIKELIHOOD OF SUCH DAMAGES OCCURRING.
16. NOTICES
Except as specifically provided in this Agreement, all notices required
under this Agreement shall be in writing and shall be given by personal
delivery, national overnight courier service or United States mail, certified or
registered, postage prepaid, return receipt requested, to the parties to this
Agreement at their respective addresses first set forth above, or to any party
to this Agreement at such other addresses as shall be specified in writing by
such party to this Agreement to the other parties to
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this Agreement in accordance with the terms and conditions of this Section 16.
All notices shall be deemed effective upon personal delivery, or three (3) days
following deposit in the United States mail in accordance with this Section 16,
or one (i) business day following deposit with any national overnight courier
service in accordance with this Section 16.
17. MISCELLANEOUS
17.1. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding and agreement, and supersedes any and all prior representations,
understandings and agreements between the parties to this Agreement with respect
to the subject matter of this Agreement, all of which are merged in this
Agreement. Notwithstanding the foregoing, any confidentiality agreements between
the parties to this Agreement are separate from this Agreement and, except as
expressly stated in this Agreement, nothing contained in this Agreement shall be
construed as affecting the rights or obligations of either party to this
Agreement set forth in any such agreement. It is expressly understood and agreed
that no employee, agent, or other representative of either party to this
Agreement has any authority to bind such party to this Agreement with regard to
any statement, representation, warranty or other expression unless the same is
specifically set forth or incorporated by reference in this Agreement. It is
expressly understood and agreed that, there being no expectation of the contrary
between the parties to this Agreement, no usage of trade or custom and practice
within the industry, and no regular practice or method of dealing between the
parties to this Agreement shall be used to modify, interpret, supplement or
alter in any manner the express terms of this Agreement or any part of this
Agreement.
17.2. NO THIRD PARTY BENEFICIARY. Nothing contained in this Agreement
shall be deemed to create or be construed as creating, any third party
beneficiary right of action upon any third party or entity whatsoever, in any
manner whatsoever.
17.3. WAIVER. No waiver of any provision of this Agreement, or any rights
or obligations of either party to this Agreement under this Agreement, shall be
effective, except pursuant to a written instrument signed by the party or
parties to this Agreement waiving compliance, and any such waiver shall be
effective only in the specific instance and for the specific purpose stated in
such writing.
17.4. AMENDMENTS. All amendments or modifications of this Agreement shall
be binding upon the parties to this Agreement despite any lack of consideration
so long as such amendments or modifications are in writing and executed by the
parties to this Agreement in accordance with the other terms of this Agreement
regarding modifications.
17.5. SEVERABILITY OF PROVISIONS. In the event that any provision of this
Agreement is found invalid or unenforceable pursuant to judicial decree or
decision, the remainder of this Agreement shall remain valid and enforceable
according to its terms. Without limiting the generality of the foregoing, this
Agreement is intended to follow and be governed by, and not to supersede, the
laws and judicial decisions of the United States of America and the State of
Pennsylvania, and in the event of any irreconcilable conflict such laws and
judicial decisions shall prevail.
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17.6. ASSIGNMENT. Subject to any governmental approval which may be
required, either party to this Agreement shall have the right to assign or
transfer this Agreement, or any interest in this Agreement (including rights and
duties of performance), to any entity: (i) which owns more than fifty percent
(50%) of the issued and outstanding voting stock of such party; (ii) in which
such party owns more than fifty percent (50%) of the issued and outstanding
voting stock; (iii) which acquires all or substantially all of the operating
assets of such party; or (iv) into which such party is merged or reorganized
pursuant to any plan of merger or reorganization. This Agreement shall be
binding upon and inure to the benefit of each of the parties to this Agreement
and their respective legal successors and permitted assigns.
17.7. EXTENSION OF BENEFITS TO AFFILIATES. All rights and benefits to
either You Bet! or Ladbroke under this Agreement shall be deemed to extend, and
inure to the benefit, of any parent, subsidiary or affiliate of You Bet! or
Ladbroke, respectively. Notwithstanding the foregoing, no parent, subsidiary or
affiliate of You Bet! or Ladbroke shall have any obligation or duty to Ladbroke
or You Bet!, respectively, whatsoever, such obligations and duties resting
solely with You Bet! and Ladbroke.
17.8. NO BREACH WITHOUT NOTICE. Neither party to this Agreement shall be
deemed to be in material breach of any of its obligations under this Agreement
unless and until such party to this Agreement shall have been given written
notice by certified or registered mail, return receipt requested, of the nature
of such breach, and such party shall have failed to cure such breach within
thirty 30) days after receipt of such written notice.
17.9. FORUM AND JURISDICTION. This Agreement was entered into in the State
of Pennsylvania, and its validity, construction, interpretation and legal effect
shall be governed by the laws and judicial decisions of the State of
Pennsylvania applicable to contracts entered into and performed entirely within
the State of Pennsylvania. Any action at law or in equity arising under this
Agreement shall be filed only in an appropriate State or Federal Court located
in the State of Pennsylvania. The parties to this Agreement hereby consent and
submit to the personal jurisdiction of such courts for the purposes of
litigating any such action.
17.10. ATTORNEYS' FEES. In the event that any litigation or other
proceeding is brought by either party to this Agreement in connection with this
Agreement, the prevailing party in such litigation or other proceeding shall be
entitled to recover from the other party all costs, attorneys' fees and other
expenses incurred by such prevailing party in such litigation.
17.11. FORCE MAJEURE. Neither You Bet! nor Ladbroke shall be deemed in
default if its performance or obligations under this Agreement are delayed or
become impossible or impractical by reason of any act of God, war, fire,
earthquake, labor dispute, sickness, accident, civil commotion, epidemic, act of
government or government agency or officers, or any other cause beyond the
control of such party to this Agreement. Notwithstanding the foregoing, a change
in economic conditions or technology shall not be deemed a force majeure event.
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<PAGE>
17.12. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original and all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties to this Agreement have executed this
Agreement as of the date first set forth above.
YOU BET!, INC. MOUNTAIN LAUREL
RACING, INC.
By: /s/ Steve A. Molnar By: /s/ John M. Swiatek
----------------------- -------------------------------
Its: CEO Its: Vice President
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WASHINGTON TROTTING
ASSOCIATION, INC.
By: /s/ John M. Swiatek
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Its: Vice President
-------------------------------
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