Exhibit 10.5


 


AGREEMENT


 


This Agreement is made and entered into this 1st day of May, 2007,
superseding the agreement entered into on the 22nd day of October, 2003 by and
between Dover Downs, Inc., a Corporation of the State of Delaware
(hereinafter called Dover Downs), and Delaware Standardbred Owners Association, Inc.,
a Delaware Corporation (hereinafter called D.S.O.A.) and is executed in
duplicate original copies.


 


WITNESSETH:


 


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, D.S.O.A.’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 D.S.O.A. 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 May 1,
2007, and continuing through July 31, 2010. The parties agree that this
Agreement shall automatically renew for two successive one year periods unless
either party notifies the other party by May 1st of its
intention to not renew this Agreement in which event the agreement shall
terminate at the end of the then current term (i.e., on July 31, 2010 in
the event there is no renewal or July 31, 2011 in the event that the
Agreement is renewed only once or July 31, 2012 in the event that the
Agreement is renewed for both option years.


 


During the term of this agreement Dover Downs will schedule
not less than 133 days of live racing each year, where a live day of racing
shall consist of a minimum of 13 programmed races per day, and the minimum
number of races each year shall be 1995 unless otherwise mutually agreed by the
parties provided however, that any days or races lost to weather, acts of God,
technical problems, or human error, shall not be required to be rescheduled.
These days and races 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 D.S.O.A. to determine
the best manner in which to conduct the reduced number of races.


 


 


 


2

















 


 


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 10% 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
50% of any increase shall be added to purses and 50% of any decrease shall be
subtracted from the purses.


 


B. Dover Downs agrees to distribute to D.S.O.A. 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 racing more
than 1560 races per race meet and agreeing to many provisions relating to race
conditions, qualifying standards, qualifying races, physical improvements, and
other accommodations for the horsemen, 
the 


 


 


3

















 


share of pari-mutuel
commissions for purses has been negotiated to the amounts specified in
Paragraphs 2 (A) and 2 (B) above.


 


E.  An average of 6 races per
program shall be written and if possible filled for Delaware owned or bred
horses.  The race secretary shall make
every effort to write Delaware owned horses in all classes permitted to race at
Dover Downs.  The purses for these races
shall be twenty (20%) percent greater than purses for the same class not
restricted to Delaware owned or bred horses rounded to the nearest $100. Should
these races not fill with all Delaware owned or bred horses the racing
secretary may open the class to non-Delaware owned or bred horse, with the
Delaware owned or bred horses having first preference in accordance with
D.H.R.C. rules.


 


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.


 


 


4

















 


 


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 D.S.O.A. 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 D.S.O.A. 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
D.S.O.A. representatives and Dover Downs prior to the beginning of each race
meet. In the event the parties are unable 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 D.S.O.A.


 


A.  Dover Downs will pay to
D.S.O.A., in diminution of and as a credit against the percentages specified in
Paragraph 2, requested funds to compensate D.S.O.A. for its expenses provided
that D.S.O.A.’s representation of the horsemen racing at meetings conducted by
Dover Downs has been demonstrated by the horsemen’s adherence


 


 


5

















 


to and recognition of this Agreement. 
Such sums, other than health insurance premiums payable under paragraph
5(E), shall not exceed 110% 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 D.S.O.A. 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, D.S.O.A. 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 80% of the claiming price.


 


C.  Dover Downs shall provide an
office for the use of a D.S.O.A. representative on its racing grounds.


 


D.  Representatives of Dover
Downs will be available at reasonable times to consult with D.S.O.A.
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.


 


 


6

















 


 


E.  Dover Downs shall pay to
D.S.O.A. as part of its expenses in paragraph 5(A.), the incurred premiums of
insurance administered by D.S.O.A. for grooms, second trainers, trainers, and
drivers.  Insurance premiums shall be
paid monthly  upon presentation of a bill
from D.S.O.A..  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 D.S.O.A. in its effort to provide education, promotional
material and public relations regarding harness racing, pari-mutuel betting,
and horse ownership.


 


G.  D.S.O.A. 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 effect Dover Downs.  D.S.O.A. 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.  During the term of this
contract the minimum claiming price for Delaware Owned and Bred races shall be
($7,500) seventy five hundred dollars. The minimum open claiming price shall be
($12,500) twelve thousand five hundred dollars 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 two second allowance from January 1
through April 30 and a one second allowance after April 30.


 


 


7

















 


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 $500.


 


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

  	
   

  	
  $1000

  






 


M.  Dover Downs, upon request,
shall furnish to D.S.O.A. a summary of the handle.


 


N.   During the term of this
agreement, Dover Downs will provide an outrider, if one can be obtained at a
comparable cost to that paid by area racetracks, that is acceptable to the
D.S.O.A..


 


O.   Dover Downs will provide
drainage in each stall of the paddock in order to permit bathing of horses in
the race stalls in the paddock.


 


 


8






 












 


6.  Simulcast Wagering


 


A.  As consideration for the
distribution to the purse pool in accordance with paragraph 2(B.)  D.S.O.A. 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 25% by D.S.O.A. and 75% by  Dover Downs.  These
daily costs will be detailed on the purse reconciliation report submitted to
D.S.O.A. at the end of each month.


 


B. As consideration for the covenants set forth herein, and other
considerations, D.S.O.A. 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 D.S.O.A. prior to Dover Downs accepting wagering on those
races. D.S.O.A. agrees not to unreasonably withhold their approval.


 


    Should either D.S.O.A. 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 8% 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 Breeders Program, or any other Delaware
owned/bred Stakes or early closing events, shall not be part of the 8%
limitation.


 


 


9

















 


8.  On-Track Driver Insurance


 


Dover Downs shall provide On-track driver accident and disability
insurance with minimums of $50,000 death benefit, $100,000 medical expenses and
$500 a week disability income extending for 26 weeks then $350 a week
disability income for an additional 78 weeks subject to no more than a
seven-day waiting period.  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 D.S.O.A.,
except that stall space and/or racing privileges shall not be denied by reason
of membership in, or activity on behalf of, D.S.O.A. 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 attempts to restrict the horse population to a
manageable level with preference being given to Delaware owned horses.


 


10.  Indemnity and Cooperation


 


D.S.O.A. 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


 


 


10

















 


 


horsemen participating in any Dover Downs meeting during the term of
this Agreement, Dover Downs shall promptly notify D.S.O.A.


 


Dover Downs agrees and acknowledges that the D.S.O.A. 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 D.S.O.A. 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 Delaware
State Harness Racing Commission 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 the contract shall be construed and
enforced as if the contract did not contain the particular provision held to be
invalid.


 


12.  Miscellaneous


 


This agreement acknowledges and incorporates by reference the letter
from Charles Lockhart, Vice President of Horse Racing, under date of April 20,
2007 attached hereto, addressing some issues that the parties have agreed to.


 


 


11

















 


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.


 


	
  Witness:

  	
   

  	
  DOVER DOWNS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Denis McGlynn

  	
   

  	
  By 

  	
   

  	
  /s/ Charles B. Lockhart

  
	
   

  	
   

  	
   

  	
   

  	
       Charles B. Lockhart

  
	
   

  	
   

  	
   

  	
   

  	
       Vice President—Horse
  Racing

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Witness:

  	
   

  	
  DELAWARE STANDARDBRED
  OWNERS

  ASSOCIATION, INC. 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Salvatore DiMario

  	
   

  	
  By

  	
   

  	
  /s/ James T. Case

  
	
   

  	
   

  	
   

  	
   

  	
       James T. Case

  
	
   

  	
   

  	
   

  	
   

  	
       President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
						



 


 


12