MARKET DEVELOPMENT CONSULTING SERVICES AGREEMENT
THIS AGREEMENT made as of the _____ day of _______,
2000 at Xxxxxxx, Xxxxxxx, Xxxxxx.
B E T W E E N:
PLAYANDWIN, Inc., a corporation incorporated
under the laws of the State of Nevada,
U.S.A.;
(hereinafter called "PWIN")
OF THE FIRST PART
- and -
PacCanUs Inc., on behalf of a company to be
incorporated under the laws of Ontario;
(Hereinafter called "Newco")
OF THE SECOND PART
WHEREAS "RACINGO" (trademarked) is a pari-mutuel bingo-
type wager game and lottery subject to a Master License Agreement
dated October 7, 1999 between RACINGO Investments Ltd. and others
("RACINGO");
WHEREAS PWIN is a Licensee from RACINGO Investments
Ltd. of both the North American Off and On-Track RACINGO License
and the Worldwide Internet RACINGO License pursuant to License
Agreements made as of the 7th day of October, 1999, and may
become a licensee of other land-based RACINGO applications (the
"RACINGO Licenses");
AND WHEREAS PWIN and the Newco have been in
negotiations with respect to services required by PWIN to exploit
its licenses and which can be supplied by Newco;
AND WHEREAS Newco is familiar with the RACINGO concepts
as venues licensed to PWIN (the "RACINGO Concept").
NOW THEREFORE IN CONSIDERATION of the facts expressed
in the foregoing recitals and in consideration of the sum of One
Dollar ($1.00) now paid by each Party to the other and other
valuable consideration (the receipt and sufficiency of which is
hereby acknowledged by both Parties), the Parties agree as
follows:
1. Scope of the Work
Newco shall provide service, information and advice to PWIN
in the following areas:
(1) to help PWIN secure a formal deal with Autotote Inc.
("Autotote");
(2) to help PWIN prepare and follow through a critical path to
ensure the above-noted arrangements with Autotote are acted on on
a timely basis;
(3) to prepare presentations in multi-media format necessary to
sell the RACINGO Concept to potential buyers including
racetracks;
(4) to help PWIN in choosing and recruiting the appropriate
personnel necessary to successfully launch RACINGO; and
(5) to act as the strategic adviser to PWIN's Creative Review
Board for any marketing, advertising concepts brought forward to
promote the game in venues controlled by PWIN under the RACINGO
Licenses.
2. TVGN's Services and Track Acquisition Agreement
Newco will enter into a "Services and Track Acquisition
Agreement" with ODS Technologies, L.P., a limited partnership
incorporated under the laws of the state of Delaware, U.S.A., and
having its principal place of business in Broomfield, Colorado,
U.S.A. ("TVGN") and the Agreement is designed to yield the
following direct benefits to PWIN:
(1) Deliver a xxxxxxxx xxxx of wagering and xxxxxx necessary to
launch RACINGO, identified as a betting handle of Five Billion
($5,000,000,000.00) Dollars U.S. demand from racetracks featuring
TVGN coverage or form a combination of such tracks and other
tracks not featuring TVGN covered, but adopting RACINGO in their
wagering format.
(2) Upon launch add RACINGO to TVGN's current offering to its
existing customers.
(3) Collaboration with Autotote to ensure a seamless launch of
the game by Autotote.
(4) Ensure all TVGN software has been tested prior to launch.
(5) Cause a RACINGO dedicated show to be produced to the usual
TVGN production standards as often as RACINGO is played.
(6) Extend marketing monies through co-operative marketing
programs including viewer research information gathering.
(7) Provide technology for error-free common pooling.
(8) Include RACINGO information on the TVGN website and link the
PWIN RACINGO web site to the TVGN web site.
(9) Work together with Autotote to make filings as required on a
state to state basis.
(10) Cause a RACINGO fantasy game show to be produced as a
promotional vehicle to raise the awareness of RACINGO in advance
of the actual game launch.
(11) Use best efforts to cause TVGN affiliated companies to take
part in RACINGO promotional and game opportunities.
(12) Where the RACINGO Concept is used in a major stakes race and
that race is not currently covered by TVGN, TVGN will broadcast
that race as part of its RACINGO television programming to a
maximum of twice per month.
3. Scopes of Services to be Covered
The services to be provided by Newco under this Agreement as
described in Section 1 cover the RACINGO Licenses which for
greater certainty is confirmed to the North American land-based,
Worldwide Internet and any other land-based RACINGO License PWIN
may operate in the future.
4. PWIN's Obligations to Newco
PWIN acknowledges that in order for Newco to carry out its
services hereunder, PWIN is obligated to do the following:
(1) PWIN will extend its minimum jackpot of One Million
($1,000,000.00) Dollars U.S. to cover "at home" RACINGO Licenses
operations by TVGN.
(2) Establish PWIN corporate offices in the United States,
Europe and Asia as are required to support the rollout of
RACINGO.
(3) Determinations of sales and marketing strategies of RACINGO.
(4) Funding of all sales and marketing programs for RACINGO
where PWIN holds the license.
(5) Provide personnel and materials for racetrack and other
promotional programs.
(6) Continual development and enhancements to RACINGO.
(7) Co-mingle the pools to include licensed RACINGO Product
granted to TVGN.
5. Compensation for Services
(1) PWIN shall pay Newco a fee each month for services rendered
under Section 1 above regarding the scope of work based on:
(1) $350.00 per hour;
(2) $2,400.00 per day;
(3) $21,000.00 per month;
and with respect to any fees payable under this
subsection 5(a), payment will be made as to 60% in cash
(Canadian Dollars) and the balance in PWIN publicly
traded stock (currently common shares only) which will
be transferred to Newco. The price per share of stock
given to Newco under this subsection 5(a), shall be
based on the previous thirty (30) days weighted average
trading price of such stock as quoted by the NASDAQ
Stock Market for OTC trades in such stock and the stock
paid to Newco shall be fully free trading and without
escrow or holdback periods. It is further agreed that
an estimate of the total stock component of payment
will be made and paid in quarterly instalments in
advance. By way of illustration, if the Parties select
a monthly fee of $21,000.00 for each month and a term
of one year, the total stock payment would be
calculated as follows: $21,000.00 x 12 x .4 =
$100,800.00. Where the weighted average trading price
during the previous thirty (30) days was $2.50 per
share, the total number of shares would be 40,320
shares, which shares would be issued in four tranches
of 10,080 shares in advance at the beginning of each of
the next four quarters immediately following the date
of signing. The Parties shall adjust such payments of
shares at least once per year on a retro-active basis.
(2) PWIN shall in addition to the hourly, daily or monthly rates
already described, pay to Newco, if the direct benefit
deliverables under Section 2 above are accomplished, a fee equal
to one-half of one percent (0.5%) of PWIN's Gross Licensed
Product Revenues as defined in Schedule A of the Internet License
Agreement between RACINGO Investments Ltd. and Playandwin, Inc.
dated the 7th day of October, 1999 and in Schedule A of the On-
and Off-Track Betting License Agreement between the same parties
of the same date, respectively, and any further similar revenues
derived by PWIN under other RACINGO License Agreements that may
be entered into by PWIN.
(3) With respect to arrangements for services and payments under
subsection (a) of this Section 5, the Parties may select the
hourly, daily or monthly fee upon signing and if no choice is
made the monthly rate shall apply. All hours spent to date prior
to signing will be converted to the appropriate fee schedule and
invoiced on signing. Out-of-pocket costs will be reimbursed
without xxxx-up.
(4) Personnel provided by Newco shall keep accurate time sheets
with respect to services provided by them relating to this
Agreement, and such time sheets shall be made available to PWIN
for PWIN's review on a "when asked" basis.
(5) Newco shall be reimbursed at cost for all travel,
accommodation, and third party expenses when agreed to by PWIN
and the Newco. Examples of such agreed third party expenses
would include purchased market data, specified video or print
production, or specialized legal or other professional advice
pertaining to the specific issues referred to in Section 2
hereof.
(6) All payments shall be made to Newco within thirty (30) days.
Newco may audit PWIN's financial records to ensure full
compliance of the payment of the track fees referred to in
Section 5(b) above.
6. Term and Cancellation
(1) Services to be provided by Newco under subsection (a) of
Section 5 of this Agreement shall begin on December 1, 1999 and
continue for one (1) year until November 30, 2000. Such services
shall be renewable if the Parties mutually agree. All other
parts of this Agreement shall continue and be enforceable by each
Party against the other, so long as PWIN or any successor company
owned or controlled by PWIN is a Licensee of any RACINGO concept
or a Licensee under the RACINGO Licenses.
(2) Newco may without penalty on ninety (90) days' prior written
notice given to PWIN, terminate the consulting services aspect of
this Agreement (i.e., the services to be provided under Section
1), save that services and fees for services, and reimbursement
for expenses incurred shall continue during the said ninety (90)
day period, and for greater certainty the one-half of one percent
(0.5%) fee referred to it in Section 5(b) above and the balance
of this Agreement shall continue notwithstanding such
termination.
(3) PWIN may without penalty on ninety (90) days' prior written
notice given to Newco, terminate the consulting services aspect
of this Agreement (i.e., the services to be provided under
Section 1), save that services and fees for services, and
reimbursement for expenses incurred shall continue during the
said ninety (90) day period, and for greater certainty the one-
half of one percent (0.5%) fee referred to it in Section 5(b)
above and the balance of this Agreement shall continue
notwithstanding such termination.
7. Notices
Any notice or other communication required or permitted
hereunder will be in writing and will be deemed sufficiently
given if delivered by personal delivery or sent by confirmed
telex, acknowledged facsimile transmission, or by registered mail
(return receipt requested), postage pre-paid, addressed to the
party to which it is given:
(1) In the case of PWIN:
c/o Playandwin, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xx. Xxxxxxx Xxxxxx, President
Telephone: 000-000-0000
Facsimile: 000-000-0000
(2) In the case of the Newco:
c/o PacCanUs Inc.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xx. Xxxxxxx Xxxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
or to such other address as the party to be addressed may have
specified in a notice duly given to the other parties as provided
herein. Such notice or communication will be deemed to have been
given as of the date so delivered, facsimiled, telecopied, or, if
mailed, the earlier of the date received and ten (10) days after
the date mailed.
8. Public Announcements and General Provisions
(1) In the ordinary course of business PWIN may issue press
releases that highlight the successes of the Newco/TVGN alliance.
These shall be reviewed by Newco and TVGN prior to release and
accent the promotional and business building aspects of RACINGO.
PWIN has the right to publish a release as is, unless comments
are received from the Newco/TVGN alliance within three (3)
business days of the draft form of the release being formally
presented in writing to Newco by PWIN.
(2) Terms of this Agreement may not be amended or varied in any
respect except by an instrument in writing duly signed by all the
Parties, hereto, prior to such amendment or variation taking
effect.
(3) The headings in this Agreement are solely for the
convenience of reference and shall be given no effect in its
construction or interpretation.
(4) This Agreement shall enure to the benefit of and be binding
upon the Parties hereto and upon the heirs, executors,
administrators and legal personal representatives of each of the
Parties and their successors. This Agreement shall not be
assigned by either Party hereto without the consent of the other
Party hereto.
(5) The Parties agree that this Agreement contains the whole
understanding of the Parties and supersedes and replaces all oral
or written representations and that this Agreement cannot be
amended, modified or supplemented in any respect except by
subsequent written agreement signed by both Parties hereto.
(6) This Agreement shall be governed by and construed in
accordance with the laws of Ontario, Canada, where it is made.
(7) The payments to be received under subsection (a) of Section
5, shall be calculated and paid in Canadian Dollars. The
payments to be received under subsection (b) of Section 5, shall
be calculated and paid in US funds and shall reflect directly
one-half of one percent (0.5%) of the funds PWIN receives under
its RACINGO licenses. In all other cases, dollar amounts as
referred to are dollars of the United States of America, unless
the context otherwise requires.
(8) Time shall be of the essence of this Agreement.
(9) This Agreement shall take effect upon the signing of this
Agreement by the appropriate Parties.
IN WITNESS WHEREOF the Parties hereto have executed
this Agreement on the date first above written.
PLAYANDWIN, Inc.
Per: /s/ Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxx
President
PacCanUs Inc. (for Newco, a company
to be incorporated)
Per: /s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
Chairman & Chief Executive
Officer
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange
Act, the Registrant caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Playandwin, Inc.
By: /s/ Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxx, President
