PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT entered into on November 17, 1998 is by
and among GTECH CORPORATION ('GTECH'), a Delaware corporation with its corporate
headquarters at ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, PENN
NATIONAL GAMING, INC., a Pennsylvania corporation with a place of business at
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("PENN") and PNGI
▇▇▇▇▇▇▇ TOWN GAMING, LLC ("PNGI"), a West Virginia limited liability company
with a place of business at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("PNGI,).
WITNESSETH:
WHEREAS, PNGI, a subsidiary of PENN, and GTECH are each party to that
certain Agreement dated as of June 25, 1997 (the "June 1997 Agreement") pursuant
to which GTECH provides a video lottery system that is operated at the ▇▇▇▇▇▇▇
Town Racetrack in ▇▇▇▇▇▇▇ Town, West Virginia;
WHEREAS, PENN wishes to purchase, and GTECH wishes to sell the video
lottery system upon the terms and conditions set forth herein and PENN and PNGI,
on the one hand, and GTECH, on the other hand (collectively, the "Parties"),
wish to provide for an orderly resolution of their business relationship,
including the termination of the June 1997 Agreement, upon terms set forth
herein; and
WHEREAS, the Parties have agreed that nothing herein shall affect any
agreement, or understanding between AmTote International, Inc. and any of the
Parties
hereto.
NOW THEREFORE, in consideration of the foregoing and the material promises
and covenants contained herein, the Parties hereto, intending to be legally
bound, agree as follows:
I - Definitions. Terms used but not defined herein shall have the respective
meanings set forth in the June 1997 Agreement.
2.Purchase and Sale. Subject only to the receipt by GTECH of the payment
described in paragraph 4 hereof, effective on the date hereof:
2.1 GTECH hereby transfers, sells and assigns to PENN GTECH's entire right,
title and interest in and to the VLS System (other than Software)
installed at ▇▇▇▇▇▇▇ Town Race Track on the date hereof and described
more particularly in Exhibit A hereof (the "Transferred Property");
2.2 PENN hereby purchases the Transferred Property and accepts delivery of the
Transferred Property "as is where is"; and
2.3 title to the Transferred Property hereby passes from GTECH to PENN.
3. The Software.
3.1 PNGI and PENN acknowledge that the Software installed at ▇▇▇▇▇▇▇ Town
Race Track on the date hereof and described more particularly on Exhibit
B hereof (the "Transferred Software") is comprised exclusively of
software developed by IGT.
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3.2 GTECH hereby transfers, sells and assigns to PENN GTECH's entire right,
title and interest in and to the Transferred Software for use by PENN in
connection with the operation of the VLS System at the ▇▇▇▇▇▇▇ Town Race
Track.
3.3 As between GTECH and PENN, PENN hereby accepts the Transferred Software
"as is where is" and acknowledges and agrees that GTECH shall have no
continuing obligations of support or maintenance with respect to the
Transferred Software.
3.4 PENN hereby covenants and agrees with GTECH that simultaneously with the
execution of this Agreement, PENN and IGT shall enter into the software
license agreement set forth on Exhibit B (the "Software License") and
that thereafter PENN shall use the Transferred Software strictly in
accordance with the terms of the Software License.
4.Compensation. In consideration of the transfer, sale and assignment by GTECH
to PENN of the Transferred Property, as provided in paragraph 2 hereof, and
the transfer, sale and assignment by GTECH to PENN of the Transferred
Software, as provided in paragraph 3 hereof, PENN shall simultaneously with
the execution of this Agreement pay to GTECH by wire transfer to the bank
account identified on Exhibit C hereof, cash proceeds in United States Dollars
in an amount equal to $12,999,999.00.
5. GTECH Warranties., Limitations.
5.1 GTECH has good and merchantable title, free and clear of all third party
claims, to the Transferred Property. 5.2 GTECH has all requisite power and
authority to transfer, sell and assign to PENN the Transferred Software
pursuant to paragraph 3 hereof.
5.3 THE TRANSFERRED PROPERTY AND THE TRANSFERRED SOFTWARE SOLD "AS IS WHERE,
IS" WITHOUT BY GTECH OF ANY KIND, EXPRESS OR IMPLIED. GTECH EXPRESSLY
DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
6. Additional Representations and Warranties. Each Party represents and
warrants to the others:
6.1 It is duly organized, validly existing and in good standing under the laws
of its state of incorporation or organization, and has all requisite power
and authority to conduct its businesses and to own its properties, and is
duly qualified and in good standing in all jurisdictions where such
qualification is required in order to perform its respective obligations
under this Agreement.
6.2 The execution, delivery and performance of its respective obligations under
this Agreement has been duly authorized by all necessary action and does
not and will not violate any provision of law or of its articles of
incorporation, bylaws and/or organization, or result in a breach of or
constitute a default under any agreement, indenture or instrument to which
it is a party.
6.3 This Agreement and its terms constitute valid legally binding and
enforceable obligations enforceable in accordance with its terms.
6.4 No governmental or other authorization, approval or filing is required for
the performance by it of its obligations hereunder and the transaction
contemplated herein.
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7.Settlement of October and November Invoices. PNGI agrees to pay to GTECH
amounts due under the June 1997 Agreement with respect to services performed
from October 16, 1998 through November 17, 1998 not later than 10 days after
receipt of each invoice from GTECH, prepared in a manner consistent with the
manner in which invoices issued heretofore have been prepared, respecting
services performed for such period or portion thereof. For purposes of
calculating amounts due hereunder for services performed during the month of
November 1998, applicable expenses for the entire calendar month of November
shall, where practicable, be prorated on a daily basis for the period November
1 - 17, 1998.
8. Mutual Release.
8.1 Effective on the date hereof, and except to the extent provided in
paragraph 7 hereof with respect to amounts due to GTECH for services
performed through the date hereof, the June 1997 Agreement is hereby
terminated, null and void and of no further force or effect. Without
limiting the foregoing, GTECH shall hereafter have no continuing obligation
to provide, and PENN no continuing obligation to use, any GTECH Services
whatsoever.
8.2 In consideration of the foregoing, PENN and PNGI, on behalf of themselves
and each of their present and former directors, officers, employees,
agents, subsidiaries, shareholders, successors and assigns (each, a
"Releasing Party"), each hereby release and forever discharge GTECH, its
present and former directors, officers, employees, agents, subsidiaries,
shareholders, successors and assigns from any and all liabilities, causes
of action, debts, claims and demands both in law and in equity, known or
unknown, fixed or contingent, which any Releasing Party may have or claim
to have, in its own right or as assignee, from the beginning of time
through the date hereof, including, without limitation, any claim based
upon or in any way related to the June 1997 Agreement, the goods or
services fumished under the June 1997 Agreement or the termination of the
June 1997 Agreement, and PENN and PNGI each hereby covenants not to file a
lawsuit or charge or commence any arbitration or other proceeding to assert
any such claim.
8.3 In consideration of the foregoing, GTECH, on behalf of itself and each of
its present and former directors, officers, employees, agents,
subsidiaries, shareholders, successors and assigns (each, a "Releasing
Party"), hereby releases and forever discharges PENN and PNGI, each of
their respective present and former directors, officers, employees, agents,
subsidiaries, shareholders, successors and assigns from any and all
liabilities, causes of action, debts, claims and demands both in law and in
equity, known or unknown, fixed or contingent, which any Releasing Party
may have or claim to have, in its own right or as assignee, from the
beginning of time through the date hereof (other than amounts due pursuant
to paragraph 7 hereof), including, without limitation (other than as
provided in such paragraph 7), any claim based upon or in any way related
to the June 1997 Agreement, the goods or services furnished under the June
1997 Agreement or the termination of the June 1997 Agreement, and GTECH
hereby covenants not to file a lawsuit or charge or commence any
arbitration or other proceeding to assert any such claim.
9. Confidentiality. Notwithstanding the termination of the June 1997
Agreement, paragraph 18 thereof is hereby incorporated by reference in this
Agreement as if set forth herein in its entirety.
10. Binding Nature of Agreement.
10.1 This Agreement shall be binding upon and inure to the benefit of the
Parties and to their respective permitted successors, assigns, heirs,
executors and administrators.
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10.2 If any one or more of the provisions contained in this Agreement shall for
any reason be held to be excessively broad as to duration, scope, activity
or subject, it shall be construed as compatible with the applicable law as
it shall then appear. Each Party acknowledges that the duration and other
restrictions set forth therein, are reasonable to protect the other
Parties' business interests.
11. Governing Law.
11.1 The validity, interpretation and enforcement of this Agreement shall be
governed by the laws of the State of West Virginia, without resort to its
rules regarding conflicts of laws.
12. Notices-, Press Releases.
12.1 All notices and other communications required or permitted to be given
under this Agreement to a Party shall be in writing and (a) personally
delivered, (b) mailed by registered or certified mail, postage prepaid,
return receipt requested, or (c) sent by prepaid overnight courier service
(e.g. Federal Express, Airborne, DHL), in any case to the address of the
relevant Party set forth on the first page of this Agreement, or at such
other addresses such Party may, by written notice, designate as its address
for purposes of notice, hereunder. In addition, notices and communications
to GTECH shall be sent to the attention of the President, and notices and
communications to PENN or to PNGI shall be sent to the attention of their
respective Chief Operating Officers.
12.2 If mailed by registered or certified mail, notices shall be deemed to be
given five (5) days after being sent; if sent by personal delivery, notice
shall be deemed to be given when delivered; and if sent by prepaid
overnight courier service, notice shall be deemed to be given one (1)
business day following deposit with the courier.
12.3 PENN, PNGI and GTECH agree jointly to the respective press releases set
forth as Exhibit D hereto respecting this Agreement and the termination of
the June 1997 Agreement. PENN, PNGI and GTECH each agree not to issue any
other press or other releases, or otherwise make any disclosure to any
third party concerning this Agreement or performance under or termination
of the June 1997 Agreement except with the prior written approval of the
other Parties hereto, it being expressly understood and agreed in such
connection that no Party shall disparage or speak negatively of the other
Parties to any third party.
13. Headings.
13.1 Section headings of this Agreement are for convenience only and shall
neither form a part nor affect the interpretation hereof.
14. Counterparts.
14.1. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original but all of which together shall
constitute but one instrument. This Agreement shall become effective
when such counterparts have been executed and delivered by the Parties
to each other.
14.2. This Agreement may be executed and delivered by facsimile transmission
and any such facsimile copy shall have the same force and effect as if
an original had been executed and delivered.
15. Scope of Agreement-, Amendments.
15.1 This Agreement constitutes the entire agreement and understanding of the
Parties with respect to its subject matter, and supersedes all prior
agreements and understandings of the Parties, written and oral, related
thereto.
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15.2 This Agreement may not be amended, supplemented or modified except by a
written agreement signed by the Parties.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
PENN NATIONAL GAMING, INC. ATTEST
BY: \s\▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Chairman \s\▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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PNGI ▇▇▇▇▇▇▇ TOWN GAMING, LLC ATTEST
By:\s\▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Title: \s\ Vice President \s\▇▇▇ ▇▇▇▇▇▇▇▇▇
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GTECH CORPORATION ATTEST
By:▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Chief Operating Officer \s\▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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