Exhibit 10.16


 


AGREEMENT


 


THIS
AGREEMENT, made and entered into this 20th day of
February, 2009, by and between PNGI
CHARLES TOWN GAMING LIMITED LIABILITY COMPANY, a West Virginia Limited Liability Company
(hereinafter “Charles Town Races”), and CHARLES TOWN HBPA, INC., a
West Virginia not-for-profit corporation (hereinafter “HBPA”).


 


W I T N E S S E T H:


 


WHEREAS,
Charles Town Races is licensed by the West Virginia Racing Commission, pursuant
to Chapter 19, Article 23-1, et seq., of the West Virginia Code, to
conduct live thoroughbred horse racing with pari-mutuel wagering and, in
accordance with that licensure, Charles Town Races owns and operates a
thoroughbred racing facility under the trade name Charles Town Races
(hereinafter the physical facility will be referred to as the “Racetrack”); and


 


WHEREAS,
the HBPA is an Association comprised of owners, trainers and owner-trainers
(the “members”) of thoroughbred racing horses; and


 


WHEREAS,
the HBPA provides benevolent programs and other services for its members and
their employees who are engaged in live thoroughbred racing at the Racetrack;
and


 


WHEREAS,
Charles Town Races and the HBPA validly extended the prior Agreement between
the parties through February 28, 2009 and cooperatively worked toward a
new agreement; and


 


WHEREAS,
the parties desire to reaffirm their mutual interest in the promotion,
preservation, and enhancement of live thoroughbred racing at the Racetrack; and


 

















 


WHEREAS,
the parties hereto reaffirm their support for quality live thoroughbred racing
activities and reaffirm their desire for the promotion of such
activities in the State of West Virginia; and


 


WHEREAS,
Charles Town Races acknowledges that the HBPA is the exclusive bargaining agent
and representative of its members, as certified by the West Virginia Racing
Commission. Charles Town Races shall only negotiate with the exclusive
bargaining agent and representatives of the Horsemen as certified by the West
Virginia Racing Commission during the term of this Agreement and any amendments
thereto or any Agreement which shall supersede this Agreement for the provision
of services in connection with live thoroughbred racing activities, safety and
back stretch conditions; and


 


WHEREAS,
the parties hereto desire to memorialize and set forth in writing the
contractual agreements by and between Charles Town Races and the HBPA
concerning live thoroughbred racing at the Racetrack.


 


NOW,
THEREFORE, in consideration of the promises and the mutual covenants contained
herein, the parties desire to be legally bound, do agree as follows:


 


1.                                       Term of Agreement. This Agreement shall become effective as of March 1,
2009, and shall remain in full force and effect until December 31, 2011
(the “ Initial Term”). At the end of the Initial Term, the term of this Agreement
shall automatically be extended under the
same terms and conditions for a period of one (1) year (hereinafter
the “First Extension Term”) unless either party shall give notice to the other
party, in writing, of its intent to terminate the Agreement not later than September 30,
2011. At the end of the First Extension Term, the term of the Agreement shall
automatically be extended under the same terms and conditions for a period of
an additional one (1) year (hereinafter the


 


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“Second
Extension Term”), unless either party shall give notice to the other party, in
writing, of its intent to terminate the Agreement not later than September 30,
2012.


 


Notwithstanding
the term of this Agreement or anything else in this Agreement to the contrary,
in the event of a cessation of Video Lottery activity at Charles Town Races for
any reason, the obligations of the parties under this Agreement are suspended
for such period of inactivity. For clarity, neither Charles Town Races nor any
of its affiliates shall be responsible for any expenses or lost profits of the
HBPA or its members during any such period of inactivity.


 


2.                                       Exclusive Representation. The HBPA is currently recognized by the West
Virginia Racing Commission as the duly qualified and exclusive representative
of the owners, trainers, and owner-trainers of live thoroughbred horse racing
at the Racetrack as certified by the West Virginia Racing Commission. Charles
Town Races shall only negotiate with the exclusive bargaining agent and
representative of the Horsemen as certified by the West Virginia Racing
Commission. Any negotiation or discussion of the terms and provisions of this
Agreement, or any amendment thereto, or any Agreement which shall supersede the
terms and provisions of this Agreement with any person, entity or
representative of an entity that is not the exclusive bargaining agent and
representative of the Horsemen, as certified by the West Virginia Racing
Commission, shall constitute a breach of this Agreement.


 


Charles
Town Races agrees that it shall negotiate with and conduct any and all business
which is the subject of this Agreement and any matters reasonably related to
any provision of this Agreement with the duly elected officers of the HBPA or
their duly designated representatives.


 


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The
HBPA agrees that it shall provide to Charles Town Races, in writing, on an
annual basis, the name and address of each and every duly elected member of the
Board of Directors, the name and address of each duly elected officer of the
HBPA who shall have the authority to negotiate with the Charles Town Races, and
the name and address of each representative duly designated by the Board of
Directors of the HBPA to negotiate on its behalf.


 


3.                                       Racing Schedule. During the term of this Agreement, Charles
Town Races shall request a license each year from the West Virginia Racing
Commission to conduct racing, and in fact conduct racing, for not less than the
minimum number of days required by the West Virginia Code, which is currently
two hundred twenty (220) days per year. Charles Town Races shall provide a copy
of its Annual License Application filed with the West Virginia Racing
Commission to the HBPA within three (3) days of the date of its filing.
Notwithstanding the first sentence of this paragraph, it is understood and
agreed that, subject to receiving approval from the West Virginia Racing
Commission, Charles Town Races shall schedule a total of 235 racing days, with
not less than 9 races per racing day, during each year of this Agreement. Any
reduction in race days below 235 shall be subject to the prior approval of the
HBPA, which shall not be unreasonably withheld or unduly delayed, and the West
Virginia Racing Commission In the event racing days are cancelled due to
weather, track conditions, unavailability of horses or any other reason beyond
the reasonable control of Charles Town Races, any such cancellation and the
fact that 235 racing days are not held, shall not be considered a breach of
this Agreement.


 


Charles
Town Races shall reschedule such race day and provide notice to the HBPA of the
rescheduled date as soon as practicable.


 


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Charles
Town Races agrees that it will not discontinue racing for a period of more than
one (1) three (3) week period in any calendar year, unless agreed
upon by the HBPA, except in the event of an act of God or other catastrophe, or
conditions beyond the reasonable control of Charles Town Races.


 


4.                                     Minimum Purse and Purse
Scheduling.


 


A.                                   Minimum Daily Purses. With respect to the daily minimum purse distribution,
Charles Town Races shall make reasonable efforts to maintain a ratio of the
then current minimum daily purse schedule for a given month to the then
current amount generated for
daily purses for that month that is equal to the historical ratio of One
Hundred Twenty-Five Thousand Dollars ($125,000) to the average daily amount
generated for purses between January 1, 2005 and December 31, 2008.


 


It
is mutually agreed that, as far as possible and consistent with the foregoing,
the principle of “better purse for better horses” shall be followed in
establishing the purse payable for any one race. Charles Town Races further
agrees that, if necessary, better purses will be reduced to maintain minimum
purse schedules.


 


Notwithstanding
anything in this Agreement to the contrary, it is understood and agreed that
the funding of purses shall be solely in accordance with applicable provisions
of W.Va. Code §19-23-1, et seq., Horse and Dog Racing; W.Va. Code §29-22-A-1,
et seq., The Racetrack Video Lottery Act; W.Va. Code 29-22C-1, West Virginia
Lottery Table Games Act, and  any such
further legislation that may be enacted which provides for the payment of
monies into the purse fund as more fully provided for in Section 7 of this
Agreement, and that Charles Town Races shall not be required to otherwise fund
the payment of purses.


 


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Except
as provided below with respect to Stake Races, Charles Town agrees to pay one
hundred dollars ($100.00) to the owner’s account for horses finishing in places
seven through ten which shall be paid from the purse fund.


 


B.                                     Purse
Schedule Distribution. Charles
Town Races and HBPA will establish and publish a purse schedule distribution,
which shall show the purse distribution planned for various classes of horses
at various distances. Such schedule shall be updated as necessary. Said
schedule with any amendments thereto shall be posted in the Racing Secretary’s
office and the Condition Book. In the event of a purse schedule distribution
decrease, the purses for bottom claiming races shall not be reduced unless the
purses for all races are also reduced (though not necessarily by the same
percentage).


 


C.                                     Stakes
Schedule. Each year purses for
Stake races shall not exceed, in the aggregate, eight percent (8%) of the total
purses paid, from the purse account, in the immediately preceding calendar year
excluding the amounts paid for stake races and amounts received for sponsorship
of races unless otherwise authorized by the HBPA. Charles Town Races shall
determine the number of and purses for stake races and submit the stakes
schedule to HBPA for written comment prior to submission of the stakes schedule
to the West Virginia Racing Commission.


 


D.                                    Charles Town Races agrees to pay purses for
Stakes Races back through not less than five (5) places.


 


E.                                      It is understood by both parties that purse
schedules shall not be in conflict with the rules of racing of the West
Virginia Racing Commission as presently constituted or as may be
reconstituted..


 


F.                                      West
Virginia Accredited Races. Charles
Town Races shall include in its Condition Book a minimum of two (2) races
on every live racing day devoted exclusively for


 


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West
Virginia accredited horses unless sufficient horses and purse funds are not
available therefore, in accordance with the requirements of the West Virginia
Racing Commission pursuant to the provisions of §19-23-13(b) of the West
Virginia Code. Races devoted exclusively for West Virginia accredited horses
shall be run if no less than seven (7) betting interests have been entered
therein.


 


5.                                       Purse Funds.


 


A.                                   During the term of this Agreement, Charles
Town Races shall allocate and pay purse moneys as required by applicable state
law


 


B.                                     In the event any Underpayment Money exists in
the purse account at the end of any calendar year, then said Underpayment Money
shall be added to the sum available for the payment of purses for the next
year.


 


C.                                     This is the Agreement regarding the proceeds
from video lottery terminals as provided in West Virginia Code §29-22A-7(a) (6).


 


6.                                       Simulcasting.   Charles
Town Races shall conduct simulcasting, both import and export, in accordance
with applicable provisions of State and Federal Law, including the West
Virginia Horse Racing Statute, §19-23-1 et seq, and the Interstate Horseracing
Act of 1978, as amended, 15 U.S.C. §3001, et seq.


 


With
respect to obtaining the approval of the HBPA of each simulcast contract,
Charles Town Races shall make commercially reasonable efforts to get either the
proposed contract or a summary of the principal terms of the contract,
including the name and location of the entity, any secondary recipients of said
entity for exports, commission rates charged to, for exports, or from, for
imports, the simulcast entity and the term of the contract to the HBPA for its
review and approval not less than fifteen


 


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(15)
days prior to the commencement date of the contract. The HBPA shall have
seventy-two (72) hours from receipt of the proposed contracts to either approve
or disapprove. The HBPA agrees not to unreasonably withhold or unduly delay its
approval of simulcast contracts and, in the event it elects to disapprove a
contract, to promptly support its disapproval with the detailed written reasons
therefore. Charles Town Races shall provide the HBPA with copies of any contract
for which it has provided the HBPA a summary of contract terms, within two days
of receipt.


 


To
enable the HBPA to verify receipts for simulcasting, commissions retained or
deducted, costs of transmission, taxes paid and payments into the purse fund,
Charles Town Races shall provide the HBPA with copies of any and all
documentation within its possession or under its control or which it is able to
obtain by written request, reflecting such payments and expenses.


 


7.                                       Revenue
from Off-Track Betting, Telephone Wagering, Table Gaming, or any other form of
Gaming. In the event additional
revenue or payments from telephone wagering, off-track betting, table gaming,
or any other form of gaming of any kind or nature is available as a result of
legislation, the percentage distribution as set forth in the legislation shall
determine the party’s interest in such additional revenue. In the event there
is no division of revenue in the statutory legislation, the parties agree to
negotiate in good faith whether a division of revenue is to occur and if so,
the amount thereof.


 


8.                                       Condition
Book. The HBPA shall create a
condition book committee which shall be comprised of not less than three nor
more than five individuals, being trainers and owners who are actively racing a
cross section of thoroughbred horses at Charles Town Races (“the HBPA Condition
Book Committee”). Charles Town Races


 


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will
provide the HBPA Condition Book Committee with a draft copy of each Condition
Book not less than five days prior to the printing date and the HBPA Condition
Book Committee shall have three days from receipt to review and provide its recommendations
to the Charles Town Races Racing Secretary for inclusion in the Charles Town
Races Condition Book. Charles Town Races promises to give good faith
consideration and not unreasonably refuse the recommendations of the HBPA
Condition Book Committee. However, the decision of Charles Town Races with
respect to the contents of the Condition Books shall be final and unappealable.


 


9.                                      Horsemen’s
Bookkeeper. A Horsemen’s
Bookkeeper shall be employed by Charles Town Races and shall be subject to the
policies generally applicable to Charles Town Races’ employees. The Horsemen’s
Bookkeeper shall perform those functions set forth from time to time by statute
and the West Virginia Rules of Racing, and Charles Town Races shall
provide such equipment as shall be reasonably necessary for the performance of
the Horsemen’s Bookkeeper’s statutory duties.


 


10.                                Segregated
Bank Accounts. The following
bank accounts shall be maintained by Charles Town Races in a bank approved by
the West Virginia Racing Commission. Currently, the approved bank is United
Bank.


 


A.                                   Purse Account. Charles Town Races shall establish and maintain
a separate overnight investment account and a separate checking account into
which all monies received for the future payment of purses are to be deposited.
All disbursements from these accounts shall be solely for the payment of earned
purses and such other disbursements as may be authorized by law or as otherwise
directed by the West Virginia Racing Commission. All interest earned on this
Purse Account shall be added to the funds available for the payment of purses.
These accounts shall be subject to inspection and


 


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audit
by the Racing Commission at any time. The HBPA shall also be permitted to
review these accounts upon request during normal business hours.


 


B.                                     Horsemen’s Trust Accounts. Charles Town Races shall establish and maintain
a separate investment account (the “Horsemen’s Investment Account”) and a
separate checking account (the “Horsemen’s Daily Account”) (collectively
hereafter the “Horsemen’s Trust Accounts”) into which the Horsemen’s Bookkeeper
shall receive, maintain and disburse the purses of each race and all stakes,
entrance money, jockey fees, purchase money in claiming races, along with all
applicable taxes and other monies that properly come into the Horsemen’s
Bookkeepers’ possession in accordance with the provisions of the Racing
Commission Rules.


 


All
of the funds in Horsemen’s Trust Accounts are recognized as being trust funds
held for the benefit of all of the respective account owners, as reflected by
the records maintained by the Horsemen’s Bookkeeper.


 


Charles
Town Races agrees to transfer from the Purse Account and deposit into the
Horsemen’s Daily Account the full amount of daily earned purses within two (2) business
days. Purse winnings will be posted within two (2) business days and made
available to the earners thereof when the race results are declared official,
i.e. once drug test results have been received; provided further, however, that
in the event of any dispute as to the result of a race due to a drug test or
other regulatory inquiry, the purse money shall not be made available to the
earners thereof until there has been a final non-appealable resolution thereof
by the Charles Town Races Stewards, the West Virginia Racing Commission, or a
court of competent jurisdiction, as the case may be.


 


The
Horsemen’s Bookkeeper will deduct from the owner ledger accounts, jockey fees,
pony fees, track lasix fees, nomination fees, entry fees, starting fees,
photographs,


 


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veterinary
lasix charges, and sales tax on claiming amounts. No other deductions shall be
made by the Horsemen’s Bookkeeper unless requested in writing by the person,
persons or entities to whom such monies are payable, or to his, her or its duly
authorized representative, or as required by order of the Charles Town Races
Stewards, the West Virginia Racing Commission, or a court of competent
jurisdiction. Notwithstanding the preceding clause, nothing herein shall be
construed as requiring the Horsemen’s Bookkeeper to provide personal accounting
services to any horseman and/or the payment of any expenses of any horsemen not
contemplated by the provision of this paragraph, even if authorized in writing.


 


The
Horsemen’s Trust Accounts shall be subject to inspection by the Racing
Commission at any time and may be examined by the President of the HBPA or his
or her duly designated representative at the offices of Charles Town Races at
such reasonable time or times as shall be determined upon the mutual agreement of
Charles Town Races and the HBPA. Such consent shall not be unreasonably
withheld.


 


The
interest earned on monies invested in the Horsemen’s Investment Account will be
transferred to the Horsemen’s Daily Account and paid to a joint account to be
set up by the HBPA Welfare Benefit Trust and the HBPA as more fully set forth
in a written agreement between the HBPA and the Charles Town Welfare Benefit
Trust , a copy of which will be provided to Charles Town Races. The HBPA and
the HBPA Welfare Benefit Trust shall jointly establish a bank account dedicated
to the receipt of the funds paid by Charles Town Races pursuant to this section
and divide the money between them pursuant to that agreement..


 


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11.                                 Racing Committee.


 


Charles
Town Races and the HBPA shall organize and maintain a joint committee
(hereinafter the “Racing Committee”) to address issues related to and
associated with live thoroughbred racing at the Racetrack. The HBPA and Charles
Town shall each appoint three (3) representatives to the Racing Committee.
This Committee shall meet at the request of any member of the Racing Committee.
The Racing Committee shall have no authority to alter the terms and conditions
of this Agreement.


 


12.                                 Stalls.


 


A.                                   Charles Town Races shall make available a
minimum of 1,148 stalls, free of charge, to Horsemen each race meeting. It is
recognized by both parties that effective stall utilization is important to
Charles Town Races management and that equitable allocation is essential to the
livelihood of Horsemen. During the Initial Term of this Agreement, Charles Town
Races agrees that it will not tear down or demolish the existing Charles Town
stalls unless required to do so as a result of governmental order or an act of
God beyond the reasonable control of Charles Town Races.


 


B.                                     Charles Town Races shall not discriminate in
the allocation of stalls by reason of HBPA membership or activity or condone
its representatives or employees discriminating in the allocation of stalls.
Subject to this limitation, the allocation of stalls shall be in the discretion
of Charles Town Races.


 


C.                                     Charles Town Races shall establish a cut-off
date for stall applications. Charles Town Races shall make every effort to
provide Horsemen with five (5) days prior notice of the acceptance or
rejection of stall applications and may demand immediate confirmation from the
Horsemen of their intent to use allotted stalls.


 


D.                                    The terms and conditions for all stall
applications shall be determined by and set forth in an application by Charles
Town Races. Charles Town Races shall send to the


 


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HBPA,
not later than ten (10) days prior to the first day of each Race Meeting, a copy of its current
Stall Application Agreement.


 


E.                                      Charles Town Races agrees to provide the
stall and shed row area with proper fill within a reasonable time period, upon
written request of HBPA.


 


13.                                 Barn Area.


 


A.                                   The Barn area will be available to Horsemen
at all times and the Racetrack will be available to Horsemen during scheduled
training times (including scheduled training times during the period racing is
discontinued).


 


B.                                     The HBPA recognizes an obligation of Horsemen
and backside personnel to maintain the stable area in a sanitary condition,
free from litter and other foreign objects. HBPA will use its best efforts to
ensure that Horsemen and their employees fulfill their obligations in this
regard. Horse washing will only be permitted in certain areas designated by
Charles Town Races for such purposes, which is consistent with the Rules of
the West Virginia Department of Environment Protection. Charles Town Races
retains its right to discipline (including removal) Horsemen or
their employees who fail to obey Charles Town Races’ published rules and
regulations.


 


C.                                     Charles Town Races shall maintain all barn
area restroom facilities in a safe and healthy environment.


 


D.                                    During winter months, Charles Town Races
agrees to maintain both main roads leading to and from the Racetrack, between
all barns and all Horsemen parking lots, for both training and racing purposes. Charles Town Races further
agrees to make necessary repairs
to the backside and stall areas as Charles Town Races considers appropriate
giving consideration to any input provided by the HBPA.


 


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E.                                      Charles Town Races agrees to remove all
manure from the barn area at no cost to the Horsemen.


 


F.                                      Charles Town Races, in conjunction with the
HBPA, shall establish Barn Area Rules and Regulations for the purpose of
promoting safety and security on the backstretch, which shall remain in full
force and effect and shall be binding upon the parties pursuant to their own
terms and provisions during the term or terms of these agreements. Charles Town
Races agrees to provide a copy of barn area rules to the HBPA and post the
rules in the Track kitchen.


 


14.                                 Racing Surfaces.


 


A.                                   The Track Surface Committee, consisting of
two Horsemen, two jockeys (appointed by their respective associations), the
Charles Town Races’ Superintendent, at least one steward, and a representative
of Charles Town Races, shall meet pursuant to a published schedule to assess
track surface conditions. Charles Town Races shall maintain the Racetrack as it
determines to be appropriate giving consideration to input provided by the
Track Surface Committee.


 


B.                                     Trainers shall have the right to enter onto
the Racetrack for the purpose of determining the safety of the racing surface.


 


15.                                 Racetrack Facilities. The racing strip, the barns, and related
backside facilities at the Racetrack (collectively known as the “backside
facilities”) necessary for training purposes shall be made available by Charles
Town Races without charge to Horsemen who have horses training for the immediate
upcoming live race meet. Charles Town Races will, at its own expense, make
water, hot water, tack room heating, and electricity available to each barn in
use and keep the racing surface harrowed and watered.


 


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The
racing strip, barns, tack rooms and other facilities of Charles Town Races
useful for training purposes, shall be made available for Horsemen without
charge. Charles Town Races agrees that these facilities shall be made available
to Horsemen during reasonable hours for training purposes, subject to weather
conditions.


 


At
least thirty (30) days written notice shall be given to the HBPA of any
intended shut-down of the Racetrack. Included with such notice shall be the
date of closing, the date of re-opening, and any plans concerning the
availability of stalls in the stable area during the shutdown. The notice
period shall be calculated from the last scheduled race meeting day of the then
current race meeting.


 


16.                                 Training
Facility. The track surface of
the Training Facility shall be the same as the track surface on the Charles
Town track. There shall be a chute with a small starting gate together with a
necessary crew of not less than three (3) individuals for training
purposes only as well as a warning system for loose horses. An outrider during
training hours, a general shack for trainers and proper guards to manage the
facility shall likewise be provided. Charles Town agrees to provide the HBPA’s
consultant with a copy of the design plans for review.


 


17.                                 Training Track Gate. Charles Town Races agrees to allow ingress
and egress to the training track, main track and barn area of horses on foot
through a gate to be constructed on the Northwest side of 5th Avenue
(“the Training Track Gate”), subject to the following conditions:


 


a)                                      the HBPA will reimburse Charles Town Races
its actual cost of constructing and installing the gate and constructing and
outfitting a guard shack at the Training Track Gate. Charles Town Races will
provide the HBPA with a detailed accounting of its costs associated with the
construction and outfitting of the guard shack


 


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and
the HBPA will reimburse Charles Town Races within fifteen (15) days of receipt
of such accounting;


 


b)                                     the HBPA shall reimburse Charles Town Races
each calendar quarter its costs of operating the Training Track Gate including,
but not limited to, Charles Town Races labor costs to man the Training Track
Gate, and for maintenance, repair and replacement of the guard shack and
equipment. Charles Town Races will provide the HBPA with a detailed accounting
of all operating costs for which it seeks reimbursement;


 


c)                                      ingress and egress through the Training Track
Gate may only take place during training hours and such other times as may be
specified by Charles Town Races;


 


d)                                     ingress and egress shall be subject to
reasonable policies and procedures established by Charles Town Races and
provided to the HBPA in writing which are designed to ensure the biosecurity of
the track, enforce the health certificate and Coggins rules of the State
of West Virginia, and


 


e)                                      initial and continuing approval of the West
Virginia Department of Agriculture and/or any other governmental agency having
jurisdiction over Charles Town Races, of the use of the Training Track Gate and
the policies and procedures in place.
In the event the West Virginia Department of Agriculture and/or any other
governmental agency having jurisdiction over Charles Town Races, disapproves of
the use of the Training Track Gate, the parties shall use their reasonable
efforts to promptly obtain such approval and shall implement such procedures as
may be required to keep the training gate open during the approval process.


 


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18.                                 Racetrack Kitchen. Charles Town Races has constructed a new
Racetrack kitchen which has received the approval of the HBPA and which
includes a seating area, for use by the Horsemen. Charles Town Races shall
continue to provide and not reduce the size of the Racetrack kitchen during the
Term of this Agreement. The Racetrack kitchen shall continue to be equipped
with customary fixtures and equipment for the operation of a food service
operation of its type. It is understood and agreed that the space provided for
the Racetrack kitchen and the fixtures and equipment shall be provided by
Charles Town Races at no cost to the HBPA or the operator of the kitchen. The
HBPA shall be permitted to select an operator of its choice to provide provisions
and prepare food, subject to the approval of Charles Town Races which shall not
be unreasonably withheld or unduly delayed. The Racetrack kitchen must be
operated in compliance with all health, sanitation and regulatory requirements
for the legal and safe operation of the Racetrack kitchen. The operator
selected by the HBPA shall be required to have general liability and personal
injury insurance coverage in amounts customarily required of similarly situated
vendors conducting business on Charles Town Races’ property. Evidence of such
coverage shall be provided and the operator shall be required to name Charles
Town Races and the HBPA as an additional insured on such policy(ies).


 


19                                    Paddock Blacksmith. Charles Town Races shall provide a paddock blacksmith
to be available in the paddock for each and every race day.


 


20.                                 HBPA Amenities.


 


A.                                 Charles Town Races shall provide one (1) grandstand
box with twelve (12) seats available to Horsemen on each racing day.


 


B.                                   Charles Town Races shall provide parking consisting
of seventy-five (75) spaces designated for trainers only.


 


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C.                                   Charles Town Races shall provide seventy-five
(75) parking spaces for owners.


 


D.                                  Charles Town Races shall provide the HBPA
with at least two hundred (200) programs each racing day during the week and
three hundred (300) programs on each racing day that falls on a Saturday,
Sunday, or holiday at an agreed upon location.


 


21.                                 Other Agreements. The parties shall also use their best efforts
to address and resolve in a timely and expeditious manner the following matters
of mutual concern to the parties:


 


A.                                 Rodent and pest control and eradication.


 


B.                                   Uniform rules and regulations concerning
the operation of all vending or concession enterprises in the stable area.


 


C.                                   Creation and continuing maintenance of a
common fund for the payment of rewards for information leading to a conviction
for theft, conversion, or malicious destruction of personal property belonging
to Horsemen or their employees, Charles Town Races or its employees, and the
general public.


 


22                                    Racing Officials. Charles Town Races shall mail the President
of the HBPA a written list of the persons appointed by Charles Town Races to
serve as racing officials during any race meeting on the same date that it
submits said list to the West Virginia Racing Commission in accordance with the
provisions of the West Virginia Rules of Racing.


 


23.                                 HBPA Administrative Fund. In accordance with Chapter 19, Article 23,
Section 9(b) (1) of the West Virginia Code, Charles Town Races
agrees to pay to HBPA during the term of this Agreement an amount equal to two
percent (2%) of regular purses actually paid during the preceding month from
the special fund required by this section, i.e.,


 


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“purse
account”, (excluding, however, all purses funded from sources other than the
purse account, including by way of example and not limitation accredited stakes
races and other sponsored races, and as may be otherwise excluded by applicable
law) to be divided between the HBPA Welfare Benefit Trust for backstretch
personnel and the HBPA for administrative fees, as more fully set forth in a
written agreement between the HBPA and the HBPA Welfare benefit Trust, a copy of
which will be provided to Charles Town Races. The HBPA and the HBPA Welfare
Benefit Trust shall jointly establish a bank account dedicated to the receipt
of the funds paid by Charles Town Races pursuant to this section which shall be
promptly paid after the end of each month.


 


24.                                 Indemnification. The HBPA shall indemnify and save harmless
Charles Town Races, its agents, representatives, employees, officers, directors
and shareholders, and their respective successors and assigns, and all persons
acting by, through, under or in concert with any of them, from any and all
loss, costs or expenses (including reasonable attorneys’ fees), arising out of
any claim of a person or entity pertaining to the Charles Town Race’s
performance, excluding Charles Town Race’s negligence or willful misconduct,
under paragraph 23 of this Agreement relating to contributions to the HBPA,


 


25.                            No
Monopoly on Goods and Services.
Charles Town Races shall not establish or impose upon Horsemen a monopoly,
restriction or requirement regarding the use of blacksmiths, feed men, track
suppliers, veterinarians or other services customarily used by Horsemen.
Charles Town Races will permit any supplier of commodities or services to enter
the stable area; provided, however, that such supplier of services or
commodities has received a clearance from management and the West Virginia
Racing Commission, which will authorize admission to the stable area. Charles
Town Races


 


19














 


agrees
not to unreasonably withhold said clearance. Any owner or trainer stabled on
grounds will be permitted at any time to haul in hay or grain for his own use
only.


 


26.                                 Security. Charles Town Races agrees to provide and
maintain reasonable security at its main gate and such other gates providing
ingress and egress to its stable areas.


 


27.                                 Starting Gate.


 


A.                                 Charles Town Races agrees to provide a
minimum of ten (10) assistant starters for the safety of jockeys and
horses for each and every race and on each and every race day.


 


B.                                   Unless prohibited by applicable law, Charles
Town Races agrees to double load horses into the starting gate for each and
every race.


 


28.                                 Daily Meeting Figures. The pari-mutuel handle and
purse distribution figures as
well as the percentage figures which represent the relationship between purses
and the total of pari-mutuel handle, shall be provided to the HBPA office each
day of a race meet in progress.


 


29.                                 Valuable Property Right. Charles Town Races recognizes that the
horses and participants in races and related events occurring prior or
subsequent to the running of a race are valuable property rights belonging to
the owners and trainers, and Charles Town Races will not produce or exhibit
still or motion pictures, videotapes, radio or television programs, or
authorize or license others to make or exhibit motion pictures or television
programs of any of said events without prior consultation and written agreement
of the HBPA. Notwithstanding the preceding sentence, it is understood and
agreed that Charles Town Races shall have the right to use pictures, still or
moving, of the horses and


 


20

















 


participants
to advertise and/or promote the Racetrack facility at no cost and without prior
consultation and written agreement of the HBPA.


 


30.                                 HBPA
Fire and Hazard Insurance.
Charles Town Races agrees to pay to HBPA’s national office on or before May 15th
of each year during the term of this Agreement, its proportional share of the
total annual premium as determined annually by the National HBPA for a national
policy of fire and other hazards insurance covering horses and tack belonging
to HBPA members stabled at Charles Town Races or at locations covered by such
HBPA policy. It is understood, however, by and between the parties, that the
limits and types of coverage and the annual premium amount will not be
increased without the prior written consent of Charles Town Races.


 


31.                                 Dead
Horse Removal. The cost of
removing dead horses from the racing strip shall be paid  by Charles Town Races. The cost of removing
dead horses from the Racetrack facility generally shall be paid one-half by the
HBPA and one-half by Charles Town Races.


 


32.                                 Arbitration. Any all disputes between the parties arising
out of this Agreement or the alleged breach thereof, which the parties are
unable to amicably resolve on their own, shall, upon the written demand of
either party, be submitted to arbitration by the American Arbitration
Association (“AAA”). The arbitration shall be conducted in accordance with rules and
guidelines of the AAA, with each party selecting an arbitrator from the list of
qualified arbitrators provided by the AAA. The two chosen arbitrators shall
select a third arbitrator from the same list. If they cannot agree to a
selection, the AAA shall make the selection for them. Each party shall bear the
costs of its arbitrator and shall share equally the costs of the third
arbitrator and the arbitration process. A decision agreed to by two of the
arbitrators shall be binding and


 


21

















 


enforceable
by a court of competent of competent jurisdiction. The locale for all arbitration
proceedings shall be Charles Town, West Virginia, unless otherwise agreed to by
the parties.


 


By
execution of this Agreement, the parties acknowledge that arbitration is
intended to be the exclusive means of resolving grievances, disputes and
disagreements between the parties arising out of this Agreement, except that
this provision shall not foreclose a party from obtaining initial equitable
relief from a court of compentent jurisdiction pending outcome of arbitration.


 


33.                                 Right
to Terminate. Each party may
terminate this Agreement upon the other party’s failure to substantially
perform its duties and obligations as required under the terms and provisions
of this Agreement, and such failure continues for thirty (30) days following
the date in which written notice of default is mailed in accordance with
paragraph 36, Notices, of this
Agreement. Such termination shall not constitute an election of remedy, nor
shall it constitute a waiver of a party’s other remedies at law or in equity.


 


34.                                 Further
Assurances. The HBPA and
Charles Town Races shall execute such instruments and documents, and give such
further assurances as may be necessary to accomplish the purposes and intent of
this Agreement.


 


35.                                 Counter-part
Originals. This Agreement may
be executed in two or more counter-part originals, each of which shall be
deemed an original, but all of which shall constitute one and the same
instrument.


 


36.                                 Notices. All notices, requests, demands or other communications which may be
required by this Agreement shall be in writing, and if mailed, shall be mailed
by certified mail, return receipt requested, and shall be deemed to have been
given when received by


 


22

















 


personal
delivery or otherwise. A courtesy copy of such communication shall also be sent
via facsimile to the last known facsimile number of the other party. Current
addresses of the persons to whom communications are to be sent are as follows:


 


	
   

  	
  Charles Town RACES:

  	
  General
  Manager

  Charles Town Races

  U. S. Route 340
 P. O. Box 551
 Charles Town, WV 25414

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Copy
  to:

  	
  President

  Penn National Gaming, Inc.
 Wyomissing Professional Center

  825 Berkshire Blvd., Suite 203

  Wyomissing, PA 19610

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Copy
  to:

  	
  VP/Deputy
  General Counsel

  Penn National Gaming, Inc.

  Wyomissing Professional Center

  825 Berkshire Blvd., Suite 203

  Wyomissing, PA 19610

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Copy
  to:

  	
  VP/Legal
  Affairs

  Charles Town Races
 P. O. Box 551
 Charles Town, WV 25414

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HBPA:

  	
  President

  Charles Town HBPA, Inc.

  P. O. Box 581
 Charles Town, WV 25414

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Copy
  to:

  	
  Clarence
  E. Martin, Esq.

  Martin & Seibert

  P. O. Box 1286
 Martinsburg, WV 25402

  	
   

  



 


37.                                 Waivers. No waiver of any breach of this Agreement or
any term hereof shall be effective unless such waiver is in writing. No waiver
of any breach shall be deemed a waiver of any other or subsequent breach.


 


23

















 


38.                                 Applicable
Law. This Agreement shall be
executed and delivered by the parties hereto in the State of West Virginia, and
shall be interpreted, construed and enforced in accordance with the laws of the
State of West Virginia. Nothing in this Agreement is intended to or has the
effect of contradicting, superseding or construing the provision of Article 23,
Chapter 19 (§§19-23-1 et seq.), Horse and Dog Racing,Article 29, Chapter
22A (§§22-A-1 et seq.) The Racetrack Video Lottery Act, and/or Article 29,
Chapter 22C (§§29-22C-1, et seq.) Reference in this Agreement to the West
Virginia Racing Commission will refer to the present Commission or to any
successor regulatory body having jurisdiction over thoroughbred racing at
Charles Town Races.


 


39.                                 Severability. If any provision of this Agreement is
declared invalid by any Court of competent jurisdiction, or becomes invalid or
inoperative by the operation of law, the remaining provisions of this Agreement
shall not be affected thereby and shall remain in full force and effect.


 


40.                                 Entire
Agreement; Modification. This
Agreement contains the entire agreement between the parties and, as of the date
of this Agreement, supersedes all prior agreements and understandings, both
written and oral, between the parties with respect to the subject hereof. No modification, variation or amendment of this
Agreement shall be effective unless
such modification, variation or
amendment shall be in writing and has been signed by all parties to this
Agreement.


 


41.                                 Binding
Effect. This Agreement shall be
binding upon the parties, their successors and assigns.


 


WITNESS
the following signatures:


 


SIGNATURE PAGES FOLLOW


 


24

















 


CHARLES TOWN H.B.P.A., INC.


 


	
  By:

  	
  /s/ Raymond J. Funkhouser

  	
   

  
	
   

  	
  Raymond J.
  Funkhouser

  	
   

  
	
   

  	
  President

  	
   

  



 


STATE OF WEST VIRGINIA


 


COUNTY OF JEFFERSON, to wit:


 


 


I, Patricia
M. Evans, a notary public for
the County and State aforesaid, certify that Raymond J. Funkhouser, whose
name is signed to the foregoing Agreement by and between PNGI Charles Town
Gaming, Limited Liability Company and Charles Town H.B.P.A., Inc. as the
President of the Charles Town H.B.P.A., Inc., a West Virginia
not-for-profit Corporation, dated the
20th day
of February, 2009, acknowledged the same on behalf of
the Corporation before me in the County aforesaid.


 


 


Given under my hand and official seal this 20th day
of February, 2009.


 


 


	
  Patricia M. Evans

  	
   

  
	
  Notary
  Public

  	
   

  



 


 


My commission expires on September 18, 2016.


 


 





 

















 


PNGI
CHARLES TOWN GAMING LIMITED LIABILITY COMPANY


 


 


	
  By:

  	
  /s/ Albert Britton

  	
   

  
	
   

  	
  Albert
  Britton

  	
   

  
	
   

  	
  General
  Manager

  	
   

  



 


 


STATE
OF WEST VIRGINIA


 


COUNTY
OF JEFFERSON, to wit:


 


I, Margaret
A Fineagan, a notary public for the County and State aforesaid, certify
that Albert Britton, whose name is signed to the foregoing
Agreement by and between PNGI Charles Town Gaming, Limited Liability Company
and the Charles Town HBPA, Inc. as the General Manager of PNGI Charles Town
Gaming, Limited Liability Company, a West Virginia Limited Liability Company,
dated the 20th day of
February 2009, acknowledged the same on behalf of the Limited Liability
Company before me in the County aforesaid.


 


 


Given under my hand and official seal this 20th day of February, 2009.


 


 


	
  Margaret A Fineagan

  	
   

  
	
  Notary Public

  	
   

  



 


 


My commission expires on June 21, 2012.