Document:

Exhibit 10.17

 

LIVE RACING
AGREEMENT

 

THIS LIVE RACING AGREEMENT (the “Agreement”)
is effective as of October 1, 2004 by and among PENNSYLVANIA NATIONAL TURF
CLUB, INC.  (PNTC) and MOUNTAINVIEW
THOROUGHBRED RACING ASSOCIATION (MTRA) (hereinafter collectively referred to as
the “Associations”) and PENNSYLVANIA HORSEMEN’S BENEVOLENT AND PROTECTIVE
ASSOCIATION, INC.  (“PA HBPA”).

 

WITNESSETH

 

WHEREAS, the Associations operate and conduct
thoroughbred horse race meetings with pari-mutuel wagering at the track facility
located in Grantville, Pennsylvania, known as Penn National Race Course (“Perm
National”);

 

WHEREAS, the PA HBPA represents the horsemen,
during the Term of this Agreement, who own, train and/or race horses at Penn
National;

 

WHEREAS, the term of the March 23,1999
Agreement between the Associations and the PA HBPA ended January 1, 2004,
but was extended by mutual agreement of the parties;

 

WHEREAS, nothing in this Agreement is
intended to or has the effect of contradicting, superseding or construing the
provisions of the Pennsylvania Race Horse Development and Gaming Act, July 5,
2004, Act 71; and

 

WHEREAS, the Associations and the PA HBPA
have agreed to enter into the following Agreement with regards to the conduct
of thoroughbred horse racing at Penn National.

 

NOW, THEREFORE, for and in consideration of
the foregoing recitals and the mutual undertakings contained herein, and other
good and valuable consideration, the receipt

 

 

and
sufficiency of which are hereby mutually acknowledged, the parties hereto
intending to be legally bound, hereby agree as follows:

 

1.                                       Purses

 

Purses shall be calculated by adding the
totals in Section l(a) and l(b) of this Agreement.

 

(a)                                  The Associations agree to
allocate and pay horsemen purses equal to 33 1/3% of the Associations’
receipts, fees and revenues described below:

 

(i)                                     Net Commissions from the
pari-mutuel handle, including the Telephone Account Betting handle, and the
Associations’ and horsemen’s share of the breakage received from the
pari-mutuel handle on Penn National live races.

 

(ii)                                  Net Commissions from the gross
handle on Penn National’s live races being simulcast to the Associations’
off-track betting sites, including horsemen’s share of breakage.

 

(iii)                               Total Commissions from the
handle for send intertrack wagering of Penn National’s live races, including
track handle, Telephone Account Betting handle and off-track betting handle.

 

(iv)                              Total out-of-state host fee when
the Associations’ are sending a full card of interstate simulcasting wagering (“ISW”)
on Penn National’s live races.

 

(v)                                 Net Commissions from the handle
for receive intertrack wagering of Pocono Downs, Meadows and Philadelphia Park
live races,

 

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including
track handle, Telephone Account Betting handle, off-track betting handle and
horsemen’s share of breakage.

 

(vi)                              Net Commissions from the handle
for on-track, off-track and Telephone Account Betting, including horsemen’s
share of breakage, when the Associations are receiving a full card of ISW,
regardless of in-state host association.

 

(vii)                           Host fees received from
intrastate and interstate tracks or the NTRA on account of telephone or
electronic wagering by persons in geographic proximity.

 

(b)                                 Revenue from slot machines at
Penn National shall be allocated in the manner as set forth in the Pennsylvania
Race Horse Development and Gaming Act, July 5, 2004, Act 71.

 

(c)                                  Two percent (2%) of purses shall
be paid monthly to PA HBPA from the purse account, which may be
increased by mutual written consent of the parties.  For purposes of this Article, Net Commissions
are defined as the gross handle at the racetrack, telephone account betting,
non-primary betting locations (OTB’s), less the amounts returned to the betting
public, less the amounts paid to the Commonwealth of Pennsylvania as required
by statute, less host fees paid to intrastate and interstate tracks or host
fees paid to the NTRA for races received or for telephone or electronic
wagering received from persons in geographic proximity.

 

(d)                                 The Associations will use
commercially reasonable best efforts to maximize each existing component of the
“gross handle” described in

 

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Section 1
(a)(i) through (vii) above, as well as any additional source of gross
handle that becomes available during the term of this Agreement.

 

2.                                       Simulcasting Consents

 

(a)                                  The PA HBPA grants its consent
and approval to the Associations as provided for under Sections 216, 216a and
234 of the Race Horse Industry Reform Act and the provisions of the Interstate
Horse Racing Act of 1978, so that the Associations may act as “host licensees”
for the purpose of transmitting and receiving intrastate, international and
interstate simulcast races, said consent and approval to be effective for any
agreement that existed prior to the effective date of this Agreement.  As to any new racetracks the Associations
shall present any proposed new simulcast agreement to PA HBPA for its review
and approval, which shall not be unreasonably withheld.  Such approval to be given or denied within
two (2) days of presentation to PA HBPA.

 

(b)                                 If PA HBPA determines that an
existing simulcast agreement is not in the best interest of racing or that a
new simulcast agreement would be in the best interest of racing, it shall
notify the Associations and the parties shall meet and discuss the existing or
proposed simulcast agreement.

 

(c)                                  The PA HBPA will use
commercially reasonable best efforts to maximize participation of its members
and their horses to assist in the goals described in Section l(d) above.

 

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3.                                       Compatibility of Purses

 

(a)                                  It is the intent of Associations
and PA HBPA to promote competitive horse racing at Penn National to (i) avoid
any underpayment or overpayment of purses (except seasonal adjustments) and (ii) assure
the payment, as far as practical and feasible, of consistent purses throughout
the contract year.

 

(b)                                 Associations shall notify PA
HBPA of the racing dates applied for to the SHRC for the next following
calendar year by promptly sending to the PA HBPA a copy of their application
filed with the SHRC.  The actual pari-
mutuel handles and slot machine revenue from Penn National directed to purses
from the current year for the comparable dates will be used as a guide in
projecting the approximate handle for the ensuing year.  The purse formula as described under
paragraph 1 of this agreement will be applied to establish an average purse per
day for a beginning guideline.

 

(c)                                  Except with respect to the
overpayment in Section in 3(f) of this Agreement, should a purse
overpayment or underpayment develop in excess of $150,000, then the parties
agree to automatically adjust purses down or up, in the next published
condition book, by 5%.  This triggering
mechanism may be waived by mutual consent of the PA HBPA and Associations.

 

(d)                                 If, in the opinion of the Penn
National Racing Secretary, the agreed adjustment in the condition book does not
alleviate the overpaid purse condition, the Associations have the right, and
are required, to make immediate purse cuts in accordance with formulas mutually
agreeable, to

 

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eliminate
the purse overpayment.  The Associations,
without prejudice, shall have the right to not exercise this right, should they
so desire.

 

(e)                                  If, in the opinion of the PA
HBPA Condition Book Committee, the agreed adjustment in the condition book does
not alleviate the underpaid purse condition, the PA HBPA shall have the right
to require the Associations to make and the Associations shall make immediate
purse increases in accordance with formulas mutually agreeable, to eliminate
the purse underpayment.  The PA HBPA,
without prejudice shall have the right not to exercise this right, should it so
desire.

 

(f)                                    Notwithstanding Sections 3(a), (c) and
(d) of this Agreement, in anticipation of slot machine revenue, the
Associations will implement purse increases of fifteen (15%) percent on October 27,
2004 and, to the extent possible, another change (or changes) at a date (or
dates) mutually agreed upon by the HBPA/ Management Committee (at meetings to
be held monthly to address this issue), all with the objective of ensuring that
the overpayment described in this subparagraph lasts through the commencement
of slots at PNRC.  These increases shall
be based on the purse structure reflected in the condition book in place on October 1,
2004.  The effect of the purse increases
shall be periodically monitored and, to the extent necessary, adjusted by the
PA HBPA/Management Committee to ensure, among other things, that the
overpayments are spread as evenly as practicably between the effective date of
this Agreement and the eventual commencement of operational slot machines at
Penn National.

 

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This
payment schedule assumes that slot machines will be operational at Penn
National by approximately April 1, 2006. 
Should the April 1, 2006 start date reasonably appear to be
delayed, the parties will mutually agree to equitably adjust the rate of
overpayment.  The overpayment, which will
not exceed $4,000,000.00, will be repaid from purses within one (1) year
after there are 2,000 operating slot machines at Penn National. In the event
the commencement of operational slot machines at Penn National is substantially
delayed or cancelled, the PA HBPA shall repay the overpayment to Penn National
by way of purse reductions over the course of no more than four years (in
pro-rata amounts) beginning on July 1, 2007

 

4.                                       Horsemen’s Bookkeeper Account

 

                Section 235 of the Race
Horse Industry Reform Act shall govern the operation of the Horsemen’s
Bookkeeper Account.

 

5.                                       Inactive Accounts In Horsemen’s
Bookkeeper Account

 

(a)                                  Associations will furnish
annually to PA HBPA a list of all accounts in the Horsemen’s Bookkeeper Account
which have been inactive for a period of four years, giving the names of such
accounts, the amount thereof and the last known addresses.  This list will be rendered annually prior to
each June 15 during the Term hereof.

 

(b)                                 PA HBPA will advertise the
four-year-old inactive accounts in a Horsemen’s publication of general
circulation.  All unclaimed inactive
accounts one year

 

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after
they are advertised shall be paid to the PA HBPA’s Benevolent Fund.  PA HBPA agrees to hold Associations harmless
and to indemnify them as to any claim, liability, cost or expense (including
reasonable attorney’s fees) as a result of the payment of inactive accounts to
the PA HBPA’s Benevolent Fund.

 

6.                                       PA HBPA Fire And Hazard
Insurance

 

Associations agree to pay 1:0 HBPA National
office, on or before May 15 of each year during the term hereof, their
proportionate 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 belongings to PA HBPA members stabled at Penn National
or at locations as covered by said HBPA policy. 
It is understood, however, that the limits and types of coverage will
not be increased without the prior written agreement of Associations.

 

7.                                       Track Committees

 

(a)                                  Equine Safety Committee

 

The Associations and the PA HBPA agree to
establish an Equine Safety Committee. 
The membership will consist of representatives from all constituent
groups That affect live racing at Penn National.  The committee will meet at least once a
month, if not more frequently, to discuss the variety of issues that affect all
aspects of equine safety at Penn National.

 

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(b)                                 Condition Book Committee

 

The PA HBPA may appoint a committee of not
more than five individuals, which will be known as the “Condition Book
Committee”.  The Condition Book Committee
shall be entitled to meet with the Associations and/or the Racing Secretary
and/or General Manager in order to establish guidelines for preparing the
condition book and for filling and carding races and other matters of concern
to the horsemen, including the mix of races and purse levels for particular
condition books consistent with Section 3(a) above.

 

(c)                                  PA HBPA/Management Committee

 

During the term of this Agreement,
Associations and the PA HBPA shall organize and maintain a joint committee to
be known as the “PA HBPA/Management Committee.” 
This Committee shall be composed of not more than five representatives
from the PA HBPA (including the President) and not more than five
representatives from Associations (including the General Manager).  This Committee shall meet regularly at the
request of any member of said Committee. 
The Committee shall discuss such things as barn area issues, track
conditions, racing program, track kitchen, other matters which relate to
attendance, pari-mutuel handle, the quality of racing and any other issue not
specifically addressed in this Agreement which will assist the Pennsylvania
thoroughbred horse racing industry to be progressive and competitive.  The Committee shall determine how to

 

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resolve any of the foregoing issues and it
may recommend any impose to arbitration in accordance with Section 8.(b) of
this Agreement.

 

8.                                       PA HBPA Covenant

 

(a)                                  PA HBPA covenants that so long
as Associations comply with the provisions of this Agreement, PA HBPA will not
institute or instigate, promote, encourage, condone, or engage in any boycott,
close down, slow down, stoppage of, or interference with any race meet or
race meets of Associations at Perm National. 
PA HBPA will use its best efforts to ensure that its members comply with
this paragraph.

 

(b)                                 In the event that there is a
disagreement between the parties as to whether any party has complied with the
terms or conditions in this Agreement, then the Associations shall choose an
Arbitrator and the PA HBPA shall choose an Arbitrator.  The two Arbitrators shall choose a third
Arbitrator, and the Board of Arbitrators shall decide the issues involved and
each party agrees to be bound by the decision of the arbitration panel.  No action shall be taken by PA HBPA
prohibited by paragraph 8(a) unless and until the Arbitrators have
determined that Associations are not in compliance with the terms hereof.

 

9.                                       Associations’ Covenants

 

(a)                                  The Associations will not, by
means of agreement or otherwise, seek to establish or impose upon the horsemen
a monopoly concerning horseshoers, feedmen, tack suppliers, jockeys or any
other suppliers or

 

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servicemen
customarily used by horsemen. 
Notwithstanding the foregoing, the Associations reserve the right to
impose reasonable nondiscriminatory requirements for security, safety and
environmental reasons on the Associations’ premises and to limit access to only
those vendors, suppliers and servicemen who are properly licensed by the State
Horse Racing Commission and conditioned upon their compliance with reasonable rules and
regulations promulgated by the Associations.

 

(b)                                 The Associations will not, in
making their stall allocations, discriminate against any horsemen because of the
horseman’s participation in lawful PA HBPA activities.  Allocations of stalls shall, subject to the
limitations and conditions described throughout this Agreement, remain the
prerogative of the Associations.

 

10.                                 Recognition of PA HBPA

 

Subject to applicable law, Associations
recognize PA HBPA as the exclusive representative of the horse owners and
trainers racing at Penn National, the majority of whom are members of the PA
HBPA and, during the term of this Agreement, and any extension, for purposes of
negotiating a successor live racing agreement. 
During the term of the Agreement, and any extension, Associations agree
that they will not negotiate with any other group purporting to represent
horsemen at Penn National and Associations further agree that they will not
revoke the foregoing recognitions, and will not supplant, attempt to supplant
or encourage the supplanting of the PA HBPA as the exclusive representative of
horsemen at Penn National.

 

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11.                                 Term of Agreement

 

This Agreement will continue for a term
commencing October 1, 2004 and ending September 30, 2011.  This Agreement shall continue for a further
Term of two years without change unless any party shall, at least ninety days
prior to September 30, 2011, or each successive two-year Term thereafter,
give notice to the other of its intention that this Agreement shall not be
automatically renewed pursuant to the provisions of this paragraph.  In the event notice of intent not to renew is
given by either party, the parties agree that weekly negotiation sessions shall
be held commencing no later than 75 days prior to the expiration of the term or
successive term and the parties mutually agree to bargain in good faith,
without waiving rights or prerogatives of either party.  In the event that a successor agreement is
not reached on or before 30 days prior to the expiration of the term or
successor term, the parties agree to utilize the services of the Pennsylvania
Bureau of Mediation for non-binding negotiation.  Subject to all applicable laws, if a
successor Live Racing Agreement is not signed by the expiration of the term or
any extensions thereof (the “Expiration”) and the PA HBPA fails to honor all
the terms and conditions of this Agreement (including without limitation the
obligation to race in accordance with past practices) following the Expiration,
Associations agree that the horsemen shall have 30 days thereafter within which
to remove their horses from the backstretch area at Penn National and that the
facilities listed in paragraph 16 shall be available during that 30 day period
of time.  This additional 30-day
period of time shall not be construed as evidence of the Associations’
recognition of the PA HBPA as the exclusive representative of

 

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the horsemen subsequent to the expiration of
the term of this Agreement.  Nothing in
this paragraph or in this Agreement is intended to or may be construed as
superseding applicable law, including without limitation Act 71.

 

12.                                 Notices

 

All notices or other communication pursuant
hereto by any party shall be sent by certified mail, return receipt requested
to:

 

PNTC:                                                                                                             Pennsylvania
National Turf Club, Inc.

P.O. Box 100

Grantville, Pa.  17128

Attn: General Manager

 

With a copy to General Counsel 

Penn National Gaming, Inc.

825 Berkshire Boulevard 

Wyomissing, PA 19610

 

MTRA:                                                                                                       Mountainview
Thoroughbred Racing Association

P.O. Box 32

Grantville, Pa.  17128 

Attn: General Manager

 

PA HBPA:                                                                                      Pennsylvania
Division, Horsemen’s Benevolent and 

Protective Association, Inc.

P.O. Box 88

Grantville, Pa.  17028 

Attn: President

 

13.                                 Stakes Schedule

 

The PA HBPA/Management Committee shall
determine the stakes schedules.  It is
understood by both of the Associations and the PA HBPA that the overnight
purses will be the first priority in purse increases followed by stakes races.

 

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14.                                 Application For Racing Days In
Penn National Live Program

 

Associations agree to apply for the maximum
number of racing days during each calendar year as can be raced for the maximum
benefit of Associations and consistent with their leases, with the owner of
Penn National.  The determination of the
number of racing days shall be decided exclusively by the Associations, but in
no event shall it be less than 199 days without the approval of the Board of
HBPA.

 

15.                                 Availability of Facilities

 

During the term of this Agreement and any
extension, the racing strip, barns, dormitories, track kitchen, tack rooms and
all other facilities of Penn National useful for training purposes, shall be
made available to Horsemen approved by Associations, without charge.  Associations agree that these facilities
shall be available for at least twenty-one days prior to the opening date of
each thoroughbred race meet or reopening after a shutdown.  Associations shall also make water and
electricity available without charge, and shall, at their own expense, keep the
track properly harrowed and watered daily and available during reasonable hours
for training purposes, all subject to weather conditions.  Associations shall continue to provide PA
HBPA offices and restroom facilities on a year round basis.  Heating, cooling and electric services are to
be provided.  PA HBPA shall be
responsible for cleaning and interior maintenance of its facilities.  Structural maintenance of roofs, wall, floor
and restrooms shall be the responsibility of Associations.

 

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16.                                 Approval By SHRC

 

This Agreement shall be subject to approval
by the Pennsylvania State Horse Racing Commission.

 

17.                                 Binding Effect

 

This Agreement shall be binding upon and
inure to the benefit of the parties hereto or their respective successors and
approved assigns.  Each party will supply
all parties with a certified copy of a Resolution approving this Agreement.

 

18.                                 Mutual Cooperation

 

The Associations and PA HBPA agree that there
will be opportunities where there will be a need for cooperation between the
parties because of the mutual benefit to racing.  The parties agree to support each other’s
positions where there is a mutual benefit.

 

19.                                 Entire Agreement

 

This Agreement contains the entire agreement
and understanding of the parties hereto with respect to the subject matter
interest and supersedes all prior or contemporaneous agreements with respect to
such subject matters; and may not be modified or amended except in writing
signed by all parties hereto. 
Notwithstanding the aforementioned, the Stall Agreements shall remain in
full force and effect.  This Agreement
further incorporates, and supersedes the York and Lancaster OTW Agreements.

 

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20.                                 Headings

 

The paragraph headings of this Agreement are
for convenience of reference only and do not form a part of the terms or
conditions of this Agreement or give full notice thereof.

 

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IN WITNESS WHEREOF, the Associations and PA
HBPA have executed this Live Racing Agreement this 1st day of October 2004.

 

 

	
   

  	
   

  	
   

  	
  ASSOCIATIONS:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
  PENNSYLVANIA NATIONAL TURF

  CLUB INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/Frederick D. Lipkin

  	
   

  	
  /s/ Richard T. Schnaars

  	
   

  
	
   

  	
   

  	
  Witness

  	
   

  	
  Name: Richard T. Schnaars

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Vice President/General
  Manager

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
  MOUNTAINVIEW THOROUGHBRED

  RACING ASSOCIATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/Witness

  	
   

  	
  /s/ Richard T. Schnaars

  	
   

  
	
   

  	
   

  	
  Witness

  	
   

  	
  Name: Richard t. Schnaars

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Vice President/General
  Manager

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
  PENNSYLVANIA HORSEMEN’S

  BENEVOLENT AND PROTECTIVE

  ASSOCIATION, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/Witness

  	
   

  	
  /s/ John J. Wames

  	
   

  
	
   

  	
   

  	
  Witness

  	
   

  	
  Name: John J. Wames

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title: President

  	
   

  

 

 

17Exhibit 10.18

 

A G R E E M E N T

 

THIS
AGREEMENT, made and entered into this as of the 21st day of December, 2004, by
and between PNGI CHARLES TOWN GAMING LIMITED
LIABILITY COMPANY, a West Virginia Limited Liability Company
(hereinafter “Charles Town Races”), and CHARLES
TOWN HORSEMEN’S BENEVOLENT AND PROTECTIVE ASSOCIATION, 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, 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 to 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 premises 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 January 1,
2005, and shall remain in full force and effect until December 31, 2007
(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,
2007.  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 “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, 2008.

 

2

 

2.  Exclusive  Representation.  The HBPA is currently recognized by the West
Virginia Racing Commission to be 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 does agree 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.

 

The HBPA does
agree 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 each year request a license 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 racing statute, which is
currently two hundred ten (210) days per year. 
Charles Town Races shall

 

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provide a copy of it’s 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 245 racing days, with not less than 10 races per
racing day, during 2005.  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 245 racing days are not held, shall not
be considered a breach of this Agreement.

 

Within seven (7) days
of cancellation of a race day, Charles Town Races shall reschedule such
race day and provide notice to the HBPA of the rescheduled date to the extent
necessary to achieve the minimum number of racing days required by the West
Virginia racing statute.  Charles Town
Races agrees, subject to availability of horses, to program no less than the
minimum number of races per day for not less than the minimum number of days
per year, as required under applicable law for the remaining months of the
year.

 

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.  The daily minimum purse schedule payable
by Charles Town Races during the term of this Agreement shall be not less than
One Hundred Twenty-five Thousand Dollars ($125,000.00) per day, except as
provided herein below.  It is mutually
agreed that, as far as possible and consistent with the foregoing, the
principle of “better

 

4

 

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. 
Charles Town Races may increase or decrease the purse schedule each
year by up to 20%.  The daily purse schedule as
of January 1, 2005, is deemed to be One Hundred Eighty-five Thousand
Dollars ($185,000.00) as an average for each Condition Book.  Any increase or decrease in the purse schedule of
more than twenty percent (20%) during any calendar year shall be subject to the
approval of HBPA, which approval shall not be unreasonably withheld or unduly
delayed.  Except as provided below with
respect to Stake Races, Charles Town agrees to pay purses back through not less
than six (6) places.

 

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.  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).

 

At such time
as the Underpayment Money reaches One Million Dollars ($1,000,000.00) or below,
Charles Town Races and HBPA shall mutually agree to decrease the daily purse
distribution in an attempt to avoid an overpayment.

 

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

 

5

 

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 maybe
amended.

 

F.                                      West Virginia Accredited Races.  Charles Town Races shall include in its
Conditions Book a minimum of one (1) race one very live racing day devoted
exclusively for 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 provided
by state law, including any additional percentage of the mutual handle, which
maybe legislated and incorporated into the West Virginia Code during the period
of this Agreement, if specifically legislated for purses.

 

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.

 

6

 

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

 

6.  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.

 

7.  Condition Book.  HBPA represents that it has created a
Condition Book Committee to consult with Horsemen concerning the conditions of
racing and to make known to Charles Town Races the results of their
consultations.  Charles Town Races agrees
that this Committee shall have the right to meet with appropriate Charles Town
Races personnel to discuss and approve each Condition Book at least seventy-two
(72) hours before printing in order to permit Committee review, suggestions,
and recommendations.  Charles Town Races
shall make an effort to comply with the Committee’s suggestions and
recommendations.

 

8.  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.

 

7

 

9.  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 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.

 

8

 

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,
valet fees, track lasix fees, nomination fees, entry fees, starting fees, valet
pool, photographs, 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

 

9

 

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 Charles Town Horsemen’s
Welfare & Benefit Trust.

 

10.  Racing Committee/Arbitration.

 

A.                                   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.

 

B.                                     Arbitration.  In the event there is a disagreement between
the parties as to whether any party has complied with the terms or conditions
in this Agreement, then Charles Town Races and the HBPA shall each choose an Arbitrator
and the two Arbitrators shall choose a third Arbitrator.  The Board of Arbitrators shall decide the
issues involved and each party agrees to be bound by the decision of the
arbitration panel.

 

11.  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

 

10

 

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 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 stall and shed row area with proper fill within a reasonable time
period, upon written request of HBPA.

 

12.  Barn Area.

 

A.                                   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.                                     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

 

11

 

this regard.  Horse washing will
only be permitted in certain areas designated by Charles Town Races for such
purposes.  This provision has been made
mandatory by 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.

 

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.

 

13.  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

 

12

 

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.

 

14.  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.

 

The racing
strip, barns, tack rooms and other facilities of Charles Town Races useful for
training purposes, shall be made available for Horsemen approved by Charles
Town Races, 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.

 

15.  New Training Facility.  Charles Town Races has agreed to construct a
new training track.  The training track
shall be a minimum 3/8 of a mile in length with a width of 45 feet. However,
Charles Town Races acknowledges the HBPA’s desire for a longer training
track.  The track surface shall be the
same as the track surface on the Charles Town track after the

 

13

 

resurfacing project.  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.

 

In connection
with the training track, three (3) new barns for approximately two hundred
forty (240) horses with not less than two washing stalls per barn shall be
constructed.

 

Until such
time as the training track and barns are completed, the existing Agreement
between Charles Town Races and HBPA relative to use of Shenandoah Downs
Racetrack as a training track facility shall remain in full force and effect.

 

16.  Racetrack Kitchen.  As of this date of this Agreement, Charles
Town Races provides a Racetrack kitchen which includes a seating area, for use
by the Horsemen and Charles Town Races shall continue to provide and not reduce
the size of the Racetrack kitchen during the Term of this Agreement.  The HBPA may propose modifications and
improvements to the Racetrack kitchen for review and consideration by Charles
Town Races provided that the HBPA shall pay the cost and expense of such
modifications and improvements.  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

 

14

 

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).

 

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

 

18.  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.

 

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.

 

19.  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.

 

15

 

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.

 

20.  Racing Officials.  Charles Town Races shall mail to 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 Regulations.

 

21.  HBPA Facilities.  Charles Town Races shall provide, at no cost
to the HBPA, an office for its use.  The
office shall be located on Charles Town Races property, shall be approximately
17 feet 8 inches by 12 feet 10 inches and shall have separate access from the
exterior of the building.  The office
shall be provided with lighting, heat and air conditioning at no cost to the
HBPA.  The HBPA shall be responsible for
providing its own office furniture and equipment and for the interior cleaning
of the office.  It is understood and
agreed that the HBPA shall be permitted, at HBPA’s cost, to partition the
interior of the office to create a separate office.

 

22.  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 (excludings takes races, accredited races and other
sponsored races) actually paid during the preceding month from the special
fund, i.e., “purse account” required by this section for the HBPA’s
medical trusts for backstretch personnel and administrative fees.  The sums due HBPA shall be paid by the end of
each month.

 

16

 

23.  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 and against any
and all demands, liabilities, loss, cost, damages or expenses of whatever
nature or kind, including attorney’s fees and all other expenses, costs or loss
arising out of or in any way related to or occasioned by Charles Town Races’
performance under paragraph 22 of this Agreement relating to contributions to
the HBPA.

 

24.  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 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.

 

25.  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.

 

26.  Starting Gate.

 

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

 

17

 

B.                                     Charles Town Races agrees to
double load horses into the starting gate for each and every race.

 

27.  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 given to the HBPA
office each day of a race meet in progress.

 

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

 

29.  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.

 

18

 

30.  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.

 

31.  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 35, 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.

 

32.  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.

 

33.  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.

 

34.  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 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:

  	
  Albert Britton, General Manager

  
	
   

  	
  U. S. Route 340

  
	
   

  	
  P. O. Box 551

  
	
   

  	
  Charles Town, WV 25414

  

 

19

 

	
  Copy to:

  	
  Kevin DeSanctis, President

  
	
   

  	
  c/o Penn National Gaming, Inc.

  
	
   

  	
  Wyomissing Professional Center

  
	
   

  	
  825 Berkshire Blvd., Suite 203

  
	
   

  	
  Wyomissing, PA 19610

  
	
   

  	
   

  
	
  Copy to:

  	
  Carl Sottosanti, VP/Deputy General Counsel

  
	
   

  	
  c/o Penn National Gaming, Inc.

  
	
   

  	
  Wyomissing Professional Center

  
	
   

  	
  825 Berkshire Blvd., Suite 203

  
	
   

  	
  Wyomissing, PA 19610

  
	
   

  	
   

  
	
  Copy to:

  	
  Phyllis LeTart, VP/Legal Affairs

  
	
   

  	
  c/o Charles Town Races

  
	
   

  	
  P. O. Box 551

  
	
   

  	
  Charles Town, WV 25414

  
	
   

  	
   

  
	
  HBPA:

  	
  Wayne Harrison, President

  
	
   

  	
  Charles Town HBPA, Inc.

  
	
   

  	
  P. O. Box 581

  
	
   

  	
  Charles Town, WV 25414

  
	
   

  	
   

  
	
  Copy to:

  	
  Harry L. Buch, Esquire

  
	
   

  	
  Bailey, Riley, Buch & Harman, L.C.

  
	
   

  	
  P. O. Box 631

  
	
   

  	
  Wheeling, WV 26003

  

 

35.  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.

 

36.  Simulcasting.  Simulcasting at Charles Town Races shall be
governed by the West Virginia statutes and the Federal Interstate Horse Racing
Act of 1978.  Prior to February 1,
2005, and prior to February 1 of each year of this Agreement, a
Simulcasting Agreement in the form attached as Exhibit ”A”, for a term of
twelve calendar months, being February 1 of each year through January 31
of the following year, containing site approvals will be executed by the
parties and shall be a part of this Agreement. Any additions or deletions to
the scheduled

 

20

 

simulcasting locations will be provided to the HBPA for review and
approval, which shall not be unreasonably withheld or unduly delayed.

 

37.  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 and/or Article 29, Chapter
22A (§ § 22-A-1 et  seq.)  The Racetrack Video Lottery Act.

 

38.  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.

 

39.  Entire Agreement; Modification.  This Agreement contains the entire agreement
between the parties and 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.

 

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

 

WITNESS the
following signatures:

 

	
  PNGI CHARLES TOWN GAMING

  	
  CHARLES TOWN HORSEMEN’S

  
	
  LIMITED LIABILITY COMPANY

  	
  BENEVOLENT AND PROTECTIVE

  
	
   

  	
  ASSOCIATION, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Richard Moore

  	
   

  	
  By:

  	
  /s/ Wayne A. Harrison

  	
   

  
	
   

  	
  Richard Moore

  	
   

  	
   

  	
  Wayne A. Harrison

  
	
  Its:

  	
  General Manager Racing

  	
   

  	
  Its:

  	
  President

  

 

21

 

EXHIBIT A

 

Re:                               Simulcast
Agreement and Site Approval

 

Charles Town
Horsemen’s Benevolent & Protective Association (the “HBPA”) hereby
authorizes Charles Town Race Track (the “Track”) to export live thoroughbred
horse races conducted at the Track to the attached list of guest site and to
import live thoroughbred and harness horse races and dog races from the
attached list of host sites from February 1, 2005 through January 31,
2006, subject to the following conditions:

 

1.                                       That fees derived therefrom
shall be divided according to the mandates of the West Virginia statutes;

 

2.                                       That any thoroughbred racetrack
approved as an interstate off-track betting (“OTB”) outlet maintains a contract
with the applicable thoroughbred horsemen’s group as defined in the 1978
Interstate Horse Racing Act;

 

3.                                       That present circumstances at
any approved OTB outlet do not materially change hereafter such that live
thoroughbred horse racing becomes threatened or adversely affected;

 

4.                                       That no approved OTB outlet
combines with other OTB outlets to threaten not to, or refuse to purchase
interstate simulcasts except upon similar terms and conditions for purchase
being made to each of any combination of such outlets;

 

5.                                       That all approved OTB outlets
obtain all other consents or approvals required by the 1978 Interstate Horse
Racing Act;

 

6.                                       That the Track agrees, upon five
(5) days written notice from the HBPA, to discontinue export/import of
live races to/from any guest/host site that is deemed not to be in good
standing with such site’s local HBPA or the National HBPA, at the discretion of
the HBPA;

 

7.                                       That re-disseminating the Track’s
races to facilities not named on the attached list is prohibited without the
prior written approval of the HBPA and the Track;

 

8.                                       That the Track agrees to provide
a copy of all executed contracts with host/guest tracks and their sites to the
HBPA; and

 

9.                                       That the HBPA agrees that from
time to time the Track may choose to add new sites to the attached list of
guest/host sites and may do so with written approval of the HBPA.

 

 

The HBPA
expressly reserves the right to rescind this consent hereafter should any of
the foregoing conditions be violated.

 

 

	
  /s/ Wayne
  A. Harrison

  	
   

  	
  /s/ Richard
  Moore

  	
   

  
	
  Wayne A.
  Harrison

  	
  Richard
  Moore

  
	
  President

  	
  General
  Manager – Racing

  
	
  Charles Town
  HBPA

  	
  Charles Town
  Race Track

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