Exhibit 10.3

 

AGREEMENT

 

This Agreement is made and entered into August 16, 2016 (“Agreement”),
superseding the agreement entered into on July 1, 2014 by and between Dover
Downs, Inc., a Delaware corporation (“Dover Downs”), and Delaware Standardbred
Owners Association, Inc., a Delaware corporation (“DSOA”), and is executed in
duplicate original copies.

 

WHEREAS, Dover Downs is licensed to conduct and is engaged in the business of
conducting harness racing meetings at a harness racing track known as Dover
Downs, located in Dover, Delaware; and

 

WHEREAS, DSOA’s membership consists of owners, trainers, and drivers of harness
horses participating in harness race meetings at Dover Downs and elsewhere in
the United States and Canada, and DSOA has been organized and exists for the
purpose of promoting the sport of harness racing; improving the lot of owners,
drivers, and trainers of harness racing horses participating in race meetings;
establishing health, welfare and insurance programs for owners, drivers, and
trainers 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 desire to cooperate in promoting the popularity of
the sport of harness racing, and in insuring the continuity of harness racing at
Dover Downs for the best interests of the parties hereto and the public; and

 

IN CONSIDERATION OF the promises, the covenants set forth herein, and other
considerations, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows:

 

1.                                      TERM OF AGREEMENT

 

The provisions of this Agreement shall apply to and govern every harness racing
meeting conducted by or at Dover Downs effective August 1, 2016, and continuing
through August 31, 2018.  The parties agree that this Agreement shall
automatically renew for successive one year periods after August 31, 2018 unless
either party notifies the other party by June 1 of its intention to not renew
this Agreement in which event the Agreement shall terminate at the end of the
then current term.

 

During the first year of this Agreement Dover Downs will schedule ninety-five
days of racing.  However, any days of racing lost to weather, acts of God,
technical problems, or human error that exceed three in number shall be
rescheduled, if necessary, as additional races added to previously scheduled
days. The scheduled days are subject to the availability of horses and may be
reduced if the races are not adequately filled by available horses. If such a
reduction is necessary, Dover Downs will consult with the DSOA to determine the
best manner in which to conduct the reduced number of races.

 

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The above racing schedule shall remain in effect beyond year one unless
notification is given by either party to the other party prior to June 1 of each
year during the term of this Agreement.  If such notice is given and the parties
are unable to agree on a future race schedule, then Dover Downs will race not
less than the scheduled days of the previous live racing meet subject to the
availability of horses.

 

The terms of this Agreement shall terminate regardless of the August 31, 2018
date above if one of the following events occurs after the date of this
Agreement and either party notifies the other party of their intent to terminate
the Agreement:

 

(a)                     Delaware legalizes additional video lottery terminals
and/or table venues and a venue opens and is operational;

 

(b)                     Delaware statutorily changes the video lottery
distribution of Dover Downs or the purse funds to be distributed at Dover Downs;
or

 

(c)                      Standardbred race days are legislatively changed or a
track other than Harrington Raceway is awarded and conducts standardbred races.

 

2.                                      BASIC PURSE DISTRIBUTION

 

A.                                    Dover Downs will distribute as racing
purses at all meetings conducted at Dover Downs during the term of this
Agreement ten (10%) percent of the live handle wagered at Dover Downs.  Except,
however, when Dover Downs races more than 13 races per day, Dover Downs will
retain all monies received from the live handle wagered on the last race each
day.

 

In the event of any legislation which changes Dover Downs’ share of the
pari-mutuel commission, the amount calculated above shall be adjusted so that
fifty (50%) percent of any increase shall be added to the purses and fifty (50%)
percent of any decrease shall be subtracted from the purses.

 

B.                                    Dover Downs agrees to distribute to DSOA
via the purse pool and subject to the provisions of Paragraph 5, twenty-five
percent (25%) of any monies received from Dover Downs’ export signal of the live
race meets conducted during the term of this agreement.  Except, however, when
Dover Downs races more than 13 races per day, Dover Downs will retain all monies
received from Dover Downs’ export signal on the last live race each day.

 

C.                                    Over and above the purses payable under
Paragraphs 2.A. and 2.B., Dover Downs shall pay additional purses in an amount
calculated pursuant to 29 Del.C.4815 (b)(3)b et seq.

 

D.                                    In consideration of Dover Downs agreeing
to many provisions relating to race conditions, qualifying standards, qualifying
races, physical improvements, and other accommodations for the horsemen,  the
share of pari-mutuel commissions for purses has been negotiated to the amounts
specified in Paragraphs 2.A. and 2.B. above.

 

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E.                                     Delaware owned or bred horses, approved
and qualified as Delaware owned or bred by the Delaware Harness Racing
Commission (“DHRC”) and accepted to race by Dover Downs, will receive a bonus
agreed upon by Dover Downs and the DSOA.  The bonus is not to exceed twenty
(20%) percent of the advertised purse money earned by the DHRC-qualified horse
in each race the horse earns purse money.  All bonus money earned will be added
to the earnings of the horse in the same manner that the normal purse won is
added.

 

F.                                      During the term of this Agreement, Dover
Downs, on a weekly basis during any race meeting conducted by Dover Downs, shall
pay directly to the drivers and trainers of the horses whose owners are entitled
to receive a portion of the purse money, an amount equal to five (5%) percent of
the owners’ purse money, which amount shall be credited against the purses
required to be paid to the owners of such horses.  In no event shall the
aggregate payment made by Dover Downs on account of purses and other items
specified in Paragraph 5 be increased beyond the applicable amount for purses.

 

3.                                      PROJECTION OF PURSES AND CARRY-OVER OF
PURSE MONEY

 

A.                                    The specifications of the applicable
purses for the race meet, in accordance with Paragraph 2, shall be projected on
the basis of the total estimated purse funds to be accrued during the live race
meeting, with consideration given to seasonal fluctuation of purse accruals, so
as to maintain a reasonably uniform purse distribution schedule throughout the
Dover Downs meetings each year.

 

B.                                    (i)                                     If
any purse money due under Paragraph 2 has not been fully distributed at any
meeting covered by this Agreement, the amount due shall be carried over and
distributed in purses at the next meeting covered by this Agreement. Any
underpayment of purse money under the preceding agreements between Dover Downs
and DSOA shall likewise be added to the purse money payable under Paragraph 2.

 

(ii)                                  If the purses actually paid at any meeting
covered by this Agreement exceed the amount due under Paragraph 2, the amount of
the excess payment shall be deducted from the purses otherwise payable at the
next meeting covered by this Agreement.  Any overpayment of purses during the
last meeting conducted under the previous agreement between Dover Downs and DSOA
shall likewise be deducted from the purse money payable under Paragraph 2 of
this Agreement.

 

4.                                      MINIMUM AND MAXIMUM PURSES

 

At all meetings conducted at Dover Downs, the minimum and maximum purse payable
by Dover Downs for any pari-mutuel betting race shall be agreed upon by DSOA
representatives and Dover Downs prior to the beginning of each race meet. In the
event the parties are unable

 

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to reach an agreement, the minimum and maximum purse payable will be the same as
the start of the previous race meet conducted at Dover Downs.

 

5.                                      ARRANGEMENTS WITH DSOA

 

A.                                    Dover Downs will pay to DSOA, in
diminution of and as a credit against the percentages specified in Paragraph 2,
requested funds to compensate DSOA for its expenses provided that DSOA’s
representation of the horsemen racing at meetings conducted by Dover Downs has
been demonstrated by the horsemen’s adherence to and recognition of this
Agreement.  Such sum shall not exceed one hundred ten (110%) percent of the
amount requested the prior year and shall be paid in monthly installments no
later than seven (7) days after the conclusion of each month of each racing
meeting covered by this Agreement unless mutually agreed by the parties.

 

B.                                    When this Agreement and any succeeding
agreement between DSOA and Dover Downs has expired and there is no agreement in
effect between them providing otherwise, any underpayment of purses due under
this Agreement shall be payable to horsemen who participated in the last Dover
Downs’ meet covered by this Agreement and both parties shall take whatever
action is required to accomplish such payment.

 

In order to minimize any underpayment or overpayment of purses at the conclusion
of the live race meet under this Agreement, DSOA and Dover Downs will meet
regularly to make adjustments to the purse account if necessary.  These
adjustments to the purses will be in a fair and reasonable manner and will
include lowering the minimum purse if such action is warranted.  The base purse
for any claiming race will not exceed eighty (80%) percent of the claiming
price.

 

C.                                    Dover Downs shall provide an office for
the use of a DSOA representative on its racing grounds.

 

D.                                    Representatives of Dover Downs will be
available at reasonable times to consult with DSOA representatives upon request
of either party concerning any matters pertaining to the provisions of this
Agreement and/or the conduct of races, maintenance of the receiving stable area,
the race track, paddock and training areas.

 

E.                                     Dover Downs shall pay to DSOA as part of
its expenses in Paragraph 5.A. the incurred premiums of insurance administered
by DSOA for grooms, second trainers, trainers, and drivers.  Insurance premiums
shall be paid monthly upon presentation of a bill from DSOA.  The premiums shall
be in diminution of and as a credit against purse money payable under this
Agreement as specified in Paragraph 2.

 

F.                                      Dover Downs agrees to cooperate with
DSOA in its effort to provide education, promotional material and public
relations regarding harness racing, pari-mutuel betting, and horse ownership.

 

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G.                                  DSOA acknowledges that from time to time
certain legislative effort will be required in Delaware pertaining to
pari-mutuel wagering, horse racing, the video lottery as well as other matters
that will affect Dover Downs.  DSOA will fully support and help lobby for all
reasonable legislation and oppose all harmful legislation insofar as it does not
adversely impact horsemen’s issues.

 

H.                                   The minimum “claiming priced race” and the
minimum “nonwinners (“NW”) last 6 condition race” will be for Delaware owned or
bred horses only unless changed by mutual agreement.

 

I.                                        Unless changed by mutual agreement,
the qualifying times during the term of this Agreement shall be 2:00 for pacers
and 2:02 for trotters, plus applicable allowances for weather, and track
conditions.  Two year olds will receive a two second allowance.  Three year olds
will receive a one second allowance.

 

J.                                        During this Agreement, horses
permitted at Dover Downs will have the opportunity to qualify two times per
calendar month. Horses that are two year olds and three year olds, and are
nominated to the Delaware Breeders program, will have unlimited opportunity to
qualify during each of the three (3) months leading up to the first event of the
program to which it is nominated.

 

K.                                    There shall not be any general age
restrictions in condition races that are written as NW of $6,000 or higher in
last (x) starts.  This does not apply to NW of (x) races lifetime, NW of ($x)
lifetime, or any other type of condition race written according to the available
horse population in an effort to enhance the quality and competitiveness of the
racing at Dover Downs.  All races written for NW of (x) races lifetime shall
exclude as a win only, any win in which the first place money was less than or
equal to $750.

 

L.                                     During the term of this Agreement, if
Dover Downs has races with nine horse fields, a bonus will be added to the base
purse as follows:

 

Base purse is:

 

Bonus is:

 

Less than $20,000

 

$

500

 

$20,000 or more

 

$

1,000

 

 

M.                                 Dover Downs, upon request, shall furnish to
DSOA a summary of the handle.

 

6.                                      SIMULCAST WAGERING

 

A.                                    As consideration for the distribution to
the purse pool in accordance with Paragraph 2.B., DSOA agrees, as is standard in
the industry, to share the daily cost incurred by Dover Downs for the daily
export of the live signal throughout each season.  These incremental costs
incurred by Dover Downs for the exporting of live races will be calculated and
shared twenty-five (25%) percent by DSOA and seventy-five (75%)

 

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percent by Dover Downs.  These daily costs will be detailed on the purse
reconciliation report submitted to DSOA at the end of each month.

 

B.                                    As consideration for the covenants set
forth herein, and other considerations, DSOA agrees that it will not share in
any of the revenues or expenses from intrastate and interstate simulcasting of
standardbred and thoroughbred races from such tracks as approved per Paragraph
6.C.

 

C.                                    All simulcasting agreements need the
approval of DSOA prior to Dover Downs accepting wagering on those races.  DSOA
agrees not to unreasonably withhold their approval.

 

Should either DSOA or Dover Downs deny an approval or elect to terminate an
agreement, they must provide the other party written notice at least 15 days
prior to termination or disapproval with reasonable explanation for their
action.

 

7.                                      STAKE AND EARLY CLOSING EVENTS

 

Not more than eight (8%) percent of the total purse money payable to the
horsemen during each race meet shall be paid for stake and early closing
events.  Purse money payable to the Delaware Standardbred Breeders Program, or
any other Delaware owned or bred stakes or early closing events, shall not be
part of the eight (8%) percent limitation.

 

8.                                      ON-TRACK DRIVER INSURANCE

 

Dover Downs shall provide on-track driver accident and disability insurance with
minimums of $100,000 death benefit, $100,000 medical expenses and $350 a week
disability income for 104 weeks subject to no more than a seven-day waiting
period.  Up to an additional $150 per week disability income will be provided
for the first 26 weeks of disability based on the prior six months earnings of
the injured person as a driver/trainer on a dollar for dollar disability to
earnings per week over $350 up to $500 per week.  This coverage shall have no
deductible to the horsemen and will be provided on race days, non-race days
during the race meet when the track is available for training and for three
(3) days prior to each race meeting covered under this Agreement.

 

9.                                      STALL ASSIGNMENTS AND RACING PRIVILEGES

 

Nothing in this Agreement shall be deemed to limit or restrict in any manner the
absolute discretion of Dover Downs to assign stalls and/or grant racing
privileges to owners and trainers whether or not members of DSOA, except that
stall space and/or racing privileges shall not be denied by reason of membership
in, or activity on behalf of, DSOA or a duly constituted horsemen’s committee. 
Notwithstanding this paragraph, it is understood that Dover Downs does not
contemplate opening its barn area and providing stabling facilities during the
term of this Agreement.  Dover Downs does, however, agree to make reasonable

 

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attempts to restrict the horse population to a manageable level with preference
being given to Delaware owned horses.

 

10.                               INDEMNITY AND COOPERATION

 

DSOA shall indemnify and hold Dover Downs harmless against any claims, losses,
expenses, judgments, penalties or extra distributions imposed upon or suffered
by Dover Downs arising out of, or in connection with, the payment provided in
Paragraph 5 above.  In the event any other organization shall claim to represent
the horsemen participating in any Dover Downs meeting during the term of this
Agreement, Dover Downs shall promptly notify DSOA.

 

Dover Downs agrees and acknowledges that the DSOA during the term of this
Agreement is and shall be the sole and exclusive representatives and bargaining
agent for harness horse people in respect to all matters related to harness
racing and ancillary and appurtenant activities carried on by Dover Downs, as
long as DSOA represents a majority of the horsemen racing at Dover Downs.

 

11.                               CONTROLLING LAW AND REGULATION

 

The interpretation of the provisions of this Agreement shall be governed by the
law of Delaware.  If and to the extent that any provision(s) of this Agreement
is and/or becomes inconsistent with any Delaware statute, law or any regulation
of the DHRC not in effect or hereinafter enacted, such provision or provisions
shall be deemed to be superseded by such law or regulation as the case may be. 
The validity of the remaining provisions of this Agreement shall be construed
and enforced as if the Agreement did not contain the particular provision held
to be invalid.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
on their behalf by their respective Officers as of the date first above written.

 

DOVER DOWNS, INC.

 

 

 

 

 

By:

/s/ Charles B. Lockhart

 

 

Charles B. Lockhart

 

 

Vice-President, Horse Racing

 

 

 

 

 

DELAWARE STANDARDBRED OWNERS ASSOCIATION, INC.

 

 

 

 

By:

/s/ Andrew D. Markano

 

 

Andrew D. Markano

 

 

President

 

 

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