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EXHIBIT 10.8    
  

EMPLOYMENT AGREEMENT  

        This EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of September 3, 2002, by and between PENN NATIONAL GAMING, INC., a Pennsylvania
corporation (the "Company"), and JORDAN SAVITCH ("Executive"), an individual residing in Pennsylvania. 

        WHEREAS,
Executive desires to become employed by the Company, and the Company desires to employ Executive upon the terms and conditions hereinafter set forth. 

        NOW,
THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows: 

        1.    Employment.    The Company hereby agrees to employ Executive and Executive hereby accepts such employment, in
accordance with the terms, conditions and provisions hereinafter set forth. 

        1.1    Duties and Responsibilities.    Commencing on September 3, 2002 (the "Commencement Date"), Executive
shall serve as the Senior Vice President and General Counsel of the Company. Executive shall perform all duties and accept all responsibilities incident to such position as may be reasonably assigned
to him by the Company's Chief Executive Officer or by the Board of Directors (the "Board"). 

        1.2    Term.    The term of this Agreement shall begin on the date hereof and shall terminate on the second
anniversary of the Commencement Date (the "Initial Term") unless earlier terminated in accordance with Section 3 hereof. This Agreement shall automatically renew for additional
one-year periods (each, a "Renewal Term" and, together with the Initial Term, the "Employment Term") unless either party has delivered written notice of non-renewal at least
90 days prior to the start of a Renewal Term or unless earlier terminated in accordance with Section 3 hereof. 

        1.3    Extent of Service.    Executive agrees to use Executive's best efforts to carry out Executive's duties and
responsibilities and, consistent with the other provisions of this Agreement, to devote substantially all of Executive's business time, attention and energy thereto. The foregoing shall not be
construed as preventing Executive from engaging in other business activities, provided that Executive agrees not to become engaged in any other business activity which, in the reasonable judgment of
the Board, is likely to interfere with Executive's ability to discharge Executive's duties and responsibilities to the Company. 

        2.    Compensation.    For all services rendered by Executive hereunder, the Company shall compensate the Executive as
set forth below. 

        2.1    Base Salary.    The Company shall pay Executive a base salary ("Base Salary"), commencing on the Commencement
Date, at the annual rate of $275,000, payable in installments at such times as the Company customarily pays its other senior level executives. Executive's Base Salary shall be reviewed annually for
appropriate increases, but not decreases, by the Company pursuant to the Company's performance review policies for senior level executives. 

        2.2    Cash Bonus.    Executive shall be eligible for an annual cash bonus determined in accordance with the Senior
Management Incentive Compensation Plan provided that the maximum bonus percentage may, in the discretion of the Board, be limited to 50% of the Base Salary. Executive may also be eligible to receive
such other cash bonuses as the Board or the Chief Executive Officer may elect, in their sole discretion, to grant to Executive to award meritorious performance or such other criteria as the Board or
the Chief Executive Officer may, from time to time, establish. 

        2.3    Other Benefits.    Executive shall be entitled to participate in all other employee benefit plans and programs,
including, without limitation, health, vacation, retirement, deferred compensation or SERP, made available to the Company's senior level executives as a group (excluding the Company's Chief Executive
Officer) ("Peer Executives"), as such plans and programs may be in effect from time to time and subject to the eligibility requirements of the each plan. Nothing in this Agreement shall prevent the
Company from amending or terminating any retirement, welfare or other employee benefit 

 

plans or programs from time to time, as the Company deems appropriate. Company shall maintain life insurance on the Executive in the amount of two times initial annual Base Salary, to the extent it
can be issued at standard rates, and Executive may name the beneficiary of such policy. Some or all of such coverage may be maintained pursuant to the Company's group-term life insurance
policy. 

        2.4    Vacation, Sick Leave and Holidays.    Executive shall be entitled in each calendar year to four weeks of paid
vacation time, prorated for 2002. Each vacation shall be taken by Executive at such time or times as agreed upon by the Company and Executive, and any portion of Executive's allowable vacation time
not used during the calendar year shall be subject to the Company's payroll policies regarding carryover vacation. Executive shall be entitled to holiday and sick leave in accordance with the
Company's holiday and other pay for time not worked policies. 

        2.5    Reimbursement of Expenses.    Executive shall be provided with reimbursement of reasonable expenses related to
Executive's employment by the Company on a basis no less favorable than that which may be authorized from time to time for Peer Executives. 

        2.6    Relocation Expenses.    Company will pay or reimburse the Executive, for reasonable relocation expenses (net of
taxes, if any) related to his and his immediate family's relocation closer to corporate headquarters. Such payment/reimbursement will be based upon the Company's relocation policy. 

        2.7    Incentive Compensation.    

        (a)    Initial Equity Compensation.    The Company shall grant to Executive a non-qualified stock option
(the "Initial Option"), substantially in the form of Exhibit A hereto, to purchase 115,000 shares of common stock of the Company at a price per share of $17.46. The terms of the Initial Option
shall be governed by the Penn National Gaming, Inc. 1994 Stock Option Plan and, provided that Executive remains employed by the Company as of the relevant vesting date, shall vest in equal
quarterly installments over four years, with the first installment vesting on September 3, 2002, and with each subsequent installment vesting on the same date of the third month immediately
following the prior installment. 

        (b)    Subsequent Equity Compensation.    Executive shall be entitled to receive subsequent equity compensation grants
on substantially the same terms and conditions as equity compensation grants provided to Peer Executives taking into account Executive's position as the Senior Vice President and General Counsel and
the Board's assessment of Executive's performance. 

        (c)    Other Incentive Compensation.    Executive shall be entitled to participate in any short-term and
long-term incentive programs established by the Company for Peer Executives, at levels commensurate with the benefits provided to Peer Executives taking into account his position as the
Senior Vice President and General Counsel. 

        2.8    Change of Control.    In the event that a change in control of the Company occurs, Executive shall be entitled
to any payments and/or benefits that may become payable as a result of such event on substantially the same terms and conditions as any payments and/or benefits provided to Peer Executives taking into
account Executive's position as the Senior Vice President and General Counsel. 

        3.    Termination.    Executive's employment may be terminated prior to the end of the Employment Term in accordance
with, and subject to the terms and conditions, set forth below. 

        3.1    Termination by the Company.    

        (a)    Without Cause.    The Company may terminate Executive at any time without Cause (as defined in subsection
(b) below) effective upon not less than 60 days' prior written notice to Executive; provided, however, that, in the event that such notice is given, Executive shall be under no
obligation to render any additional services to the Company and shall be allowed to seek other 

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employment (in which case Executive shall notify the Company in writing as to the effective date of termination). 

        (b)    With Cause.    The Company may terminate Executive at any time for Cause effective immediately upon delivery of
written notice to Executive. As used herein, the term "Cause" shall mean: 

        (i)    Executive
shall have been convicted of a felony; 

        (ii)    Executive
is found disqualified or not suitable to hold a casino or gaming license by a gaming authority in any such jurisdiction where the Executive is required to be
found qualified, suitable or licensed, as the case may be; 

        (iii)    Executive
materially breaches any Company policy and fails to cure such breach within 30 days after receipt of written notice thereof to Executive from the
Company or Executive materially breaches the terms of Sections 4 or 5 this Agreement (regarding Confidentiality and Non-Competition); or 

        (iv)    Executive
misappropriates corporate funds or commits other acts of dishonesty. 

        3.2    Termination by the Executive.    

        (a)    Voluntary Termination.    Executive may voluntarily terminate his employment for any reason effective upon
60 days' prior written notice to the Company, unless such notice requirement is waived by the
Company (in which case the Company shall notify Executive in writing as to the effective date of termination). 

        (b)    For Good Reason.    Executive may terminate his employment for Good Reason (as defined below) effective
immediately upon delivery of written notice to the Company provided such notice is delivered within 60 days of Executive's actual knowledge of the occurrence of all circumstances or events
constituting Good Reason. As used herein, the term "Good Reason" shall mean the Company hiring or otherwise designating another employee to serve as chief legal officer of the Company or the Company's
election not to renew this Agreement. Notwithstanding anything herein to the contrary, the Company's reliance on or use of outside legal counsel or other independent contractors shall not under any
circumstances constitute Good Reason. 

        3.3    Termination for Death or Disability.    In the event of the death or total disability of Executive, this
Agreement shall terminate effective as of the date of Executive's death or total disability. The term "total disability" shall have the definition set forth in the Company's Long Term Disability
Insurance Policy in effect at the time of such determination. 

        3.4    Payments Due Upon Termination.    

        (a)    Generally.    Upon any termination described in Sections 3.1, 3.2 or 3.3 above, Executive shall be entitled to
receive any amounts due for Base Salary earned or expenses incurred through the effective date of termination and any benefits accrued or earned in accordance with the terms of any applicable benefit
plans and programs. Executive shall also be entitled to receive such amounts as may be due under the Company's then current severance pay plan, if any, for Peer Executives ("Standard Severance")
provided the circumstances of Executive's termination have not otherwise disqualified him under the terms of such plan. 

        (b)    Without Cause; For Good Reason.    In the event employment is terminated by the Company without Cause under
Section 3.1(a) or by Executive for Good Reason under Section 3.2(b) and subject to Executive executing a mutual release in a form reasonably acceptable 

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to the Company and Executive, Executive shall be entitled to receive the following in lieu of any Standard Severance: 

        (i)    Executive
shall receive a cash payment equal to the Executive's monthly Base Salary at the rate in effect on the effective date of termination multiplied by the greater
of (x) the number of months remaining in the Employment Term or (y) twelve months (the "Severance Period"). 

        (ii)    Executive
shall continue to receive the health benefits coverage in effect on the effective date of termination (or as the same may be changed from time to time for
Peer Executives) for himself and, if any, his spouse and dependents for the Severance Period. In the event such coverage can not be continued (or where such continuation would adversely affect the tax
status of the plan pursuant to which the coverage is provided), the Company may elect to pay Executive cash in lieu of such coverage in an amount equal to Executive's after-tax cost of
obtaining generally comparable coverage. 

        (c)    Payments.    All payments due under this Section 3.4 shall be made within 15 days of the
effective date of termination. Except as otherwise provided in this Section 3.4, no other payments or benefits shall be due under this Agreement to Executive. 

        3.5    Options.    Except as otherwise provided in the relevant option plan or option agreement, all Options granted
under this Agreement shall cease vesting upon termination of Executive's employment for any reason. 

        3.6    Notice of Termination.    Any termination of Executive's employment shall be communicated by a written notice
of termination delivered within the time period specified in this Section 3. The notice of termination shall (i) indicate the specific termination provision in this Agreement relied
upon, (ii) briefly summarize the facts and circumstances deemed to provide a basis for a termination of employment and the applicable provision hereof, and (iii) specify the termination
date in accordance with the requirements of this Agreement. 

        4.    Confidentiality.    The Executive recognizes and acknowledges that he will have access to certain confidential
information of the Company and that such information constitutes valuable, special and unique property of the Company (including, but not limited to, information such as business strategies, marketing
plans, customer lists, and other business related information for the Company's customers). The Executive agrees that he will not, for any reason or purpose whatsoever, during or after the term of his
employment, disclose any of such confidential information to any party, and that he will keep inviolate and secret all confidential information or knowledge which he has access to by virtue of his
employment hereunder, except as necessary in the ordinary course of performing his duties hereunder. 

        5.    Non-Competition.    

        (a)    During
his employment by the Company and for a period of one year thereafter (provided that the benefits to which Executive is entitled under Section 3.4 have
been paid in full or continue to be paid), Executive shall not, except with the prior written consent of the Company, directly or indirectly, own, manage, operate, join, control, finance or
participate in the ownership, management, operation, control or financing of, or be connected as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise
with, or use or permit his name to be used in connection with, any business or enterprise which is primarily in the business of owning and operating gaming establishments or in any other business in
which the Company is primarily engaged at the time of Executive's termination of employment. 

        (b)    The
foregoing restrictions shall not be construed to prohibit Executive's ownership of less than three percent of any class of securities of any corporation which is
engaged in any of the foregoing businesses and has a class of securities registered pursuant to the Securities Exchange 

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Act of 1934, provided that such ownership represents a passive investment and that neither Executive nor any group of persons including Executive in any way, either directly or indirectly, manages or
exercises control of any such corporation, guarantees any of its financial obligations, otherwise takes any part in its business, other than exercising Executive's rights as a shareholder, or seeks to
do any of the foregoing. 

        6.    Non-Solicitation.    During his employment by the Company and for the period of one year thereafter,
Executive will not, except with the prior written consent of the Company, directly or indirectly, solicit or hire, or encourage the solicitation or hiring of, any person who is, or was within a six
month period prior to such solicitation or hiring, an employee of the Company for any position as an employee, independent contractor, consultant or otherwise. 

        7.    Document Surrender.    Executive, at the expiration of his employment for any reason whatsoever, shall surrender
and deliver to the Company all documents, correspondence and any other information, of any type whatsoever, from the Company or any of its agents, servants, employees, suppliers, and existing or
potential customers, that come into Executive's possession by any means whatsoever, during the course of employment. 

        8.    Governing Law.    This Agreement shall be governed by and construed in accordance with the internal laws (and
not the law of conflicts) of the Commonwealth of Pennsylvania. 

        9.    Notices.    All notices and other communications required or permitted under this Agreement or necessary or
convenient in connection herewith shall be in writing and shall be deemed to have been given when hand delivered, delivered by guaranteed next-day delivery or sent by facsimile (with
confirmation of transmission) or shall be deemed given on the third business day when mailed by registered or certified mail, as follows (provided that notice of change of address shall be deemed
given only when received): 

        If
to the Company, to: 

                Penn
National Gaming, Inc.

                825 Berkshire Boulevard, Suite 200

                Wyomissing, PA 19610

                Attention: President

                Fax: 610-373-4966 

        With
a required copy to: 

                Morgan,
Lewis & Bockius LLP

                1701 Market Street

                Philadelphia, PA 19103-2921

                Attention: Joseph Ronan, Esquire

                Fax: 215-963-5299 

        If
to Executive, to: 

                Jordan
Savitch

                60 Garlor Drive

                Havertown, PA 19083

                Fax: 801-838-5712 

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        With
a required copy to: 

                Andrew
J. Rudolph, Esq.

                Pepper Hamilton LLP

                2 Logan Square

                Philadelphia, PA 19103

                Fax: 215-981-4750 

or
to such other names or addresses as the Company or Executive, as the case may be, shall designate by notice to each other person entitled to receive notices in the manner specified in this Section. 

        10.    Contents of Amendment; Amendment and Assignment.    

        (a)    This
Agreement sets forth the entire understanding between the parties hereto with respect to the subject matter hereof and cannot be changed, modified, extended, waived
or terminated except upon a written instrument signed by the party against which it is to be enforced. 

        (b)    All
of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors,
administrators, legal representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Executive under this Agreement are of a personal nature and shall
not be assignable or delegatable in whole or in part by Executive. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise)
to all or substantially all of the business or assets of the Company, within 15 days of such succession, expressly to assume and agree to perform this Agreement in the same manner and to the
same extent as the Company would be required to perform if no such succession had taken place 

        11.    Severability.    If any provision of this Agreement or application thereof to anyone or under any circumstances
is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect
without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. If any provision is held void,
invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances. 

        12.    Remedies Cumulative; No Waiver.    No remedy conferred upon a party by this Agreement is intended to be
exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given under this Agreement or now or hereafter existing at law or in
equity. No delay or omission by a party in exercising any right, remedy or power under this Agreement or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy
or power may be exercised by such party from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion. 

        13.    Beneficiaries/References.    Executive shall be entitled, to the extent permitted under any applicable law, to
select and change a beneficiary or beneficiaries to receive any compensation or benefit payable under this Agreement following Executive's death by giving the Company written notice thereof. In the
event of Executive's death or a judicial determination of Executive's incompetence, reference in this Agreement to Executive shall be deemed, where appropriate, to refer to Executive's beneficiary,
estate or other legal representative. 

        14.    Withholding.    All payments under this Agreement shall be made subject to applicable tax withholding, and the
Company shall withhold from any payments under this Agreement all federal, state and local
taxes as the Company is required to withhold pursuant to any law or governmental rule or regulation. Except as specifically provided otherwise in this Agreement, Executive shall bear all 

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expense of, and be solely responsible for, all federal, state and local taxes due with respect to any payment received under this Agreement. 

        15.    Regulatory Compliance.    The terms and provisions hereof shall be conditioned on and subject to compliance
with all laws, rules, and regulations of all jurisdictions, or agencies, boards or commissions thereof, having regulatory jurisdiction over the employment or activities of Executive hereunder. 

        IN
WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Agreement as of the date first above written. 

	 	 	PENN NATIONAL GAMING, INC.
	

 	
 	

By:	

/s/  PETER M. CARLINO      
 Peter M. Carlino

Chairman and CEO
	

 	
 	

By:	

/s/  JORDAN SAVITCH      
 Jordan Savitch

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Exhibit A  

STOCK OPTION AGREEMENT 

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Exhibit 10.42    
  

 
 

AGREEMENT BETWEEN THE DOWNS RACING, INC. AND PENNSYLVANIA
  HARNESS HORSEMEN'S ASSOCIATION, INC.    
  

        THIS AGREEMENT is made and entered into on the 27 day of February, 2003, by and between The Downs Racing, Inc situated at RT 315,
Wilkes-Barre, Pa., (hereinafter called "The Downs") and The Pennsylvania Harness Horsemen's Association, Inc., a Pennsylvania Corporation (hereinafter called "PHHA") and, 

        WITNESSETH
THAT: WHEREAS, The Downs is licensed to conduct and is engaged in the business of conducting harness racing meetings, simulcasting and account wagering of races to and from
other locations, at, to and from The Downs, and 

        WHEREAS,
PHHA's membership consists of owners, trainers, and drivers of harness horses participating in harness race meetings at The Downs and elsewhere in the United States and Canada,
and PHHA has been organized and exists for the purpose of promoting the sport of harness racing; improving the lot of owners, trainers, drivers, breeders and grooms of harness racing horses
participating in race meetings; establishing health, welfare and insurance programs for drivers, trainers and grooms of harness racing horses; negotiating with harness racing tracks on behalf of
owners, trainers, drivers and grooms of harness racing horses; and generally rendering assistance to them whenever and wherever possible, and 

        WHEREAS,
the parties hereto believe that the amount of pari-mutuel wagering at The Downs is the best basis upon which to fix the financial arrangements between the parties,
and 

        WHEREAS,
the parties have agreed that all existing agreements shall remain in full force and effect until the effective date of this agreement (January 16,
2003 - 12:01 AM). 

        NOW,
THEREFORE, in consideration of the promises and covenants contained herein, it is agreed as follows: 

	1.
	TERM
OF AGREEMENT 

The
provisions of this Agreement shall apply to and govern every harness racing meeting, and all simulcasting, and account wagering conducted at, from or to The Downs from 12:00 AM on
January 16, 2003 (Effective Date) through 12:00 AM January 15, 2004. 

	2.
	PURSE
DISTRIBUTION

	A.
	The
parties hereto have agreed that The Downs shall pay to the PHHA horsemen's account a fixed percentage of 4.3% (for the term through January 15, 2003 through
January 15, 2004) of total system handle. Total system handle shall mean all wagering conducted at the primary location, all non-primary locations and all telephone wagering.

	(1)
	Interactive
Wagering—All interactive wagering conducted via an authorized personal computer connection to The Downs (eBetUSA or its equivalent) will be handled separately
from the formula for total system handle. The parties hereto agree that net commissions for this purpose will also be less host fees paid to other tracks or trade organizations and less any service
charges from an interactive company. For this section only, The Downs agrees to pay PHHA purses equal to the following percentages of the net commissions for this product 331/3%. 

	B.
	AGREEMENT
FOR PHHA EXPENSES AND PERCENTAGES

	(1)
	During
the Term of this Agreement, The Downs shall pay to the PHHA the sum of Four Hundred Twenty Thousand Dollars ($420,000) to be used for the purposes described in
Paragraph 5 below. 

 

	(2)
	Each
Contract Year, the balance of the amounts determined under paragraph 2A, after deducting the amounts payable under (1) above, shall be paid in racing purses.

	(3)
	The
amount due to the PHHA annually shall be accrued at the rate of Thirty Five Thousand Dollars ($35,000) per month every Contract Year. Payment shall be made in equal monthly
payments to the PHHA to be used for purposes described in Paragraph 5 below. At the written request of the PHHA, The Downs shall make direct payments for insurance or for other purposes allowed
under Paragraph 5 below, or shall make direct payment to the PHHA up to any amount payable to the PHHA. However, the total amount paid out in any Contract Year to or on behalf of the PHHA for
purposes described in Paragraph 5 below may EXCEED Four Hundred Twenty Thousand Dollars ($420,000).

	(4)
	A
maximum of three percent (3%) of the total overnight purse payments in each Contract Year may be paid out in racing purses for early and late closing events and stake event. Stake
events requiring funding exceeding the three percent (3%) limit herein may be scheduled if agreed to by both parties. 

	C.
	INTERSTATE
SIMULCASTING

	(1)
	In
addition to the amounts otherwise provided for in this Agreement, The Downs shall distribute in racing purses of total handle during each Contract Year throughout the Term of this
Agreement, 1% of the first Twelve Million Dollars ($12,000,000.00) in fees earned by The Downs for live programs simulcast to wagering locations outside Pennsylvania (export signal) and 50% of any
amount over Twelve Million Dollars ($12,000,000).

	(2)
	It
is also specifically understood and agreed that if the host track (e.g. the track from which the live racing is being broadcast) requires written agreement or permission from PHHA
for receipt of a simulcast for any race(s), then PHHA will automatically and immediately provide its written agreement and/or permission (whichever is required) on the forms required. The PHHA's
granting of such agreement or permission or its prompt execution of the forms supplied to it, as referenced above, will not be unreasonably withheld or delayed. If The Downs believes that PHHA has
unreasonably withheld or delayed such agreement or permission or execution, then it shall have the right to initiate an immediate expedited arbitration to resolve such dispute. 

	D.
	INTRASTATE
SIMULCASTING 

In
addition to the amount(s) otherwise provided for in Paragraph 2, The Downs shall distribute in racing purses the following amounts based upon handle on racing conducted within Pennsylvania
and simulcast to Primary Locations within Pennsylvania. 

	(1)
	Two
and one-half (21/2%) percent of the total handle on The Downs live races simulcast to the Primary Location of another Pennsylvania Racetrack shall be
distributed, throughout the entire Term of this Agreement. 

	E.
	NON-PRIMARY
LOCATIONS 

The
percentage to be applied to the purses from wagering at other Pennsylvania Horse Racing Association Non-Primary Locations is as provided by applicable Pennsylvania statute. All revenue
from section 2A, 2A1, C1, Dl, and E shall be paid to the horsemen's purse account on a daily basis. 

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	3.
	MINIMUM
PURSES/MAXIMUM PURSES

	A.
	During
the Term of this Agreement the minimum purse payable by The Downs for any pari-mutuel betting race shall be One Thousand Two Hundred Dollars ($l,200.00) unless
circumstances warrant a change which shall be mutually agreeable to both parties.

	B.
	During
the Term of this Agreement, the maximum purse payable by The Downs for any overnight pari-mutuel race from the purse account created by this Agreement shall be Ten
Thousand Dollars ($10,000.00) unless circumstances warrant a change which shall be mutually agreeable to both parties. 

	4.
	RACING
SCHEDULE

	A.
	The
Downs will schedule a minimum of one hundred twenty-five (125) race days and one thousand three hundred fifty (1,350) live overnight races at The Downs during
each race season during the Term of this Agreement, subject however to conditions beyond its control. Additional race days beyond one hundred twenty five (125) may be allowed only with the
consent of the PHHA or by request made to the PHHA.

	B.
	The
Downs management will prepare a weekly schedule showing the number of live races and simulcast races to be presented each day during a given week. That schedule will be presented
to the PHHA at least two weeks prior to the first racing day of the scheduled week. If the live overnight races do not fill, then his will be considered a condition beyond the control of The Downs and
the minimum
number of one thousand three hundred fifty (1,350) live overnight races will be reduced by the number of races not filled. 

	5.
	ARRANGEMENTS
WITH PHHA

	A.
	As
per Paragraph 2(B)(3) of this Agreement said amounts shall be used for:

	(1)
	To
defray PHHA's operating expenses;

	(2)
	To
pay PHHA's dues to any national organization of horsemen to which it belongs;

	(3)
	To
pay premiums for a group health and medical insurance policy for drivers, trainers and grooms;

	(4)
	To
pay premiums for any accident and disability insurance policy which covers trainers and drivers that are involved in accidents while training or racing;

	(5)
	To
cover the cost for marketing and promotional items. 

	B.
	The
Downs shall provide an office for the use of the PHHA representative on its racing grounds.

	C.
	Representatives
of The Downs and PHHA will be available to consult with each other at reasonable convenient times concerning any matters pertaining to the operation of race meetings of
The Downs or the provisions of this Agreement. Specifically, representatives of The Downs and PHHA shall meet before each racing season and throughout the same on a bi-weekly basis
whenever possible to discuss and agree on racing dates, purse structures and races offered on the condition sheet and qualifying standards. 

	6.
	STALL
ASSIGNMENTS 

Nothing
in this Agreement shall be deemed to limit or restrict in any manner the absolute discretion of The Downs to assign stalls to owners and trainers whether or not members of PHHA, except that
stall space shall not be denied by reason of membership in, or activity on 

3

 

behalf of, PHHA or duly constituted horsemen's committees, or as otherwise prohibited or restricted by law. 

	7.
	RACING
APPLICATION 

Each
owner and/or trainer having horses racing at The Downs shall be required to complete a racing application that details the complete inventory of horses in that owner's or trainer's racing stable.
Such form may be required to be updated on a monthly basis. 

	8.
	PENNSYLVANIA-OWNED
AND /OR SIRED RACES OR HORSES WHO HAVE RACED A NUMBER OF TIMES AT THE MEET

	A.
	At
the request of PHHA, The Downs shall offer on each weekly condition sheet 10 Pennsylvania-Owned and/or Sired Races or races for horses that have started a certain number of times at
the meet per live race week during the Term of this Agreement. The number of those races will be determined by the PHHA. "Pennsylvania-Owned Races" when used above means races restricted to horses
which are (a) wholly owned and declared by Pennsylvania resident(s) or (b) wholly owned by Pennsylvania resident(s) and declared by a Pennsylvania resident lessee of the horse.
Pennsylvania Harness Racing Commission Regulations/definitions shall govern the term "Pennsylvania-Sired Races". "Pennsylvania Residence" shall be established by presentation, on request of The Downs
and/or PHHA representative, (a) a valid Pennsylvania Vehicle Registration and a valid Pennsylvania Driver's License or (b) Pennsylvania State Income Tax Return showing permanent domicile
in Pennsylvania for the previous two (2) years. 

	9.
	PHHA
INSURANCE PROGRAM

	A.
	PHHA
hereby agrees to provide, at its expense, on track insurance to cover trainers and drivers participating in training and racing activities at The Downs. The coverage will be
$200,000 accident medical, $25,000 accidental death and dismemberment, and $250 weekly disability with a maximum of 104 weeks. 

	10.
	CONTROLLING
LAW AND REGULATIONS; ARBITRATION

	A.
	The
interpretation of the provision of this Agreement shall be governed by the laws of Pennsylvania.

	B.
	The
performance and operation of this Agreement, during the entire term hereof, shall be subject in all respects to the provisions of the Pennsylvania Race Horse Industry Reform Act,
all the Commonwealth's rules and regulations, and subject to the approval of the Pennsylvania State Harness Racing Commission.

	C.
	This
is the entire agreement between the parties. Any modification or amendment to this Agreement must be in writing and signed by the parties or their duly authorized representatives.

	D.
	Any
and all disputes between the parties hereto arising out of or relating to this Agreement or any breach thereof shall be resolved by arbitration to be held in Wilkes-Barre,
Pennsylvania, in accordance with the Rules of the American Arbitration Association then in effect. Any award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The
costs of such arbitration shall be borne equally by the parties hereof. 

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	11.
	ASSIGNMENT,
TRANSFER, ADOPTION OF AGREEMENT 

Any
assignment of all the rights and obligations of The Downs or transfer or adoption of this Agreement shall require PHHA's consent and upon such assignment, transfer or adoption, such assignee of
transferee shall be substituted as a party to this Agreement. 

	12.
	NINE
HORSE FIELDS 

Nine
horse or larger fields may be permitted in any overnight, early or late closer, or stake race only with the permission of the PHHA. There will be no nine horse fields for maidens or
non-winners of two (2) pari-mutuel races life, unless approved by the PHHA. All two year olds will be limited to eight in a field unless approved by the PHHA. 

	13.
	NEW
INCOME SOURCES 

If
The Downs becomes aware of a new source of wagering or simulcasting income not addressed in this Agreement, The Downs will notify the PHHA of such income source and PHHA will enter negotiations
concerning such income. In the event legislation is passed to allow slot machines at the Pennsylvania
Race tracks and exercising its rights under Paragraph 6 above, The Downs shall take into consideration when assigning stalls the history of each applicant in racing at The Downs. In exercising
such considerations all things being approximately equal, The Downs shall use best efforts to assign stalls to allow applicants to continue with the number of stalls substantially consistent with the
average over the previous three (3) years. 

The
parties will negotiate in good faith and mutually agree to establish a formula concerning the assignment of stalls. 

        IN
WITNESS WHEREOF, with the intentions of being legally bound, the parties by their respective chief officers who are authorized and empowered to bind the respective parties, have
caused this Agreement to be duly executed as of this            day of February 2003. 

	THE DOWNS, INC.	 	PENNSYLVANIA HARNESS HORSEMEN'S ASSOCIATION, INC.
	

BY:	

/s/  RICHARD ORBANN      
	
 	

BY:	

/s/  EARL E. BEAL, JR.      
 PRESIDENT
	

BY:	

    
 SECRETARY	
 	

BY:	

/s/  LYNN B. FRY      
 SECRETARY
	

(CORPORATE SEAL)	
 	

(CORPORATE SEAL)
	

ATTEST:	

    
	
 	

ATTEST:	

/s/  RONALD P. BATTONI      

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QuickLinks

Exhibit 10.42

AGREEMENT BETWEEN THE DOWNS RACING, INC. AND PENNSYLVANIA HARNESS HORSEMEN'S ASSOCIATION, INC.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00049-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00049-of-00352.parquet"}]]