**Exhibit 10.9**

 

AGREEMENT

 

This Agreement is made and entered into this22nd day of October, 2003, superseding the agreement entered into on the 24thday of August, 2000 by and between Dover Downs, Inc., a Corporation of theState of Delaware (hereinafter called Dover Downs), and Delaware StandardbredOwners Association, Inc., a Delaware Corporation (hereinafter called DSOA) andis executed in duplicate original copies.

WITNESSETH:

 

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

 

WHEREAS, DSOA’s membership consists ofowners, trainers, and drivers of harness horses participating in harness racemeetings at Dover Downs and elsewhere in the United States and Canada, and DSOAhas been organized and exists for the purpose of promoting the sport of harnessracing; improving the lot of owners, drivers, and trainers of harness racinghorses participating in race meetings; establishing health, welfare andinsurance 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 themwhenever and wherever possible; and

 

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WHEREAS, the parties hereto desire tocooperate in promoting the popularity of the sport of harness racing, and ininsuring the continuity of harness racing at Dover Downs for the best interestsof the parties hereto and the public; and

 

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

 

1.         Termof Agreement

 

The provisions of this Agreement shall applyto and govern every harness racing meeting conducted by or at Dover Downseffective August 1, 2003, and continuing through July 31, 2007. The partiesagree that this Agreement shall automatically renew for two successive one yearperiods unless either party notifies the other party by May 1st ofits intention to not renew this Agreement in which event the agreement shallterminate at the end of the then current term (i.e., on July 31, 2007 in theevent there is no renewal or July 31, 2008 in the event that the Agreement isrenewed only once or July 31, 2009 in the event that the Agreement is renewedfor both option years.

 

**Duringthe term of this agreement Dover Downs will schedule not less than 133days of live racing each year, where a live day of racing shall consist of aminimum of 13 programmed races per day, and the minimum number of races eachyear shall be 1995 unless otherwise mutually agreed by the parties providedhowever, that any days or races lost to weather, acts of God, technicalproblems, or human error, shall not be required to be rescheduled. These daysand races are subject to the availability of horses and may be reduced if theraces are not adequately filled by available horses.**

 

2.         BasicPurse Distribution

 

A.  Dover Downs willdistribute as racing purses at all meetings conducted at Dover Downs during theterm 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 willretain all

 

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moniesreceived from the live handle wagered on the last race each day.

 

In the event of any legislation which changesDover Downs’ share of the pari-mutuel commission, the amount calculated aboveshall 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.        DoverDowns agrees to distribute to DSOA via the purse pool and subject to theprovisions of paragraph 5, twenty five percent (25%) of any monies receivedfrom Dover Downs’ export signal of the live race meets conducted during theterm of this agreement. Except, however, when Dover Downs races more than 13races per day, Dover Downs will retain all monies received from Dover Downs’export signal on the last live race each day.

 

C*.*        Overand above the purses payable under paragraphs 2 *A) and 2*(B), Dover Downsshall pay additional purses in an amount calculated pursuant to 29 Del.C.4815(b)(3)b et seq.

 

D.        Inconsideration of Dover Downs racing more than 1560 races per race meet andagreeing to many provisions relating to race conditions, qualifying standards,qualifying races, physical improvements, and other accommodations for thehorsemen, the share of pari-mutuel commissions for purses has been negotiatedto the amounts specified in Paragraphs 2 (A) and 2 (B) above.

 

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

 

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E.         Duringthe term of this Agreement, Dover Downs, on a weekly basis during any racemeeting conducted by Dover Downs, shall pay directly to the drivers andtrainers of the horses whose owners are entitled to receive a portion of thepurse money, an amount equal to five (5%) percent of the owners’ purse money, whichamount shall be credited against the purses required to be paid to the ownersof such horses.  In no event shall theaggregate payment made by Dover Downs on account of purses and other itemsspecified in Paragraph 5 be increased beyond the applicable amount for purses.

 

3.         Projectionof Purses and Carry-Over of Purse Money

 

A.   The specifications of the applicablepurses for the race meet, in accordance with Paragraph 2, shall be projected onthe basis of the total estimated purse funds to be accrued during the live racemeeting, with consideration given to seasonal fluctuation of purse accruals, soas to maintain a reasonably uniform purse distribution schedule throughout theDover Downs meetings each year.

 

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B.        (i) If any purse money due under Paragraph 2 has not been fully distributedat any meeting covered by this Agreement, the amount due shall be carried overand distributed in purses at the next meeting covered by this Agreement. Anyunderpayment of purse money under the preceding Agreements between Dover Downsand 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 Agreementexceed the amount due under Paragraph 2, the amount of the excess payment shallbe deducted from the purses otherwise payable at the next meeting covered bythis Agreement.  Any overpayment ofpurses during the last meeting conducted under the previous agreement betweenDover Downs and DSOA shall likewise be deducted from the purse money payableunder Paragraph 2 of this Agreement.

 

4.         Minimumand Maximum Purses

 

At all meetings conducted at Dover Downs, theminimum and maximum purse payable by Dover Downs for any pari-mutuel bettingrace shall be agreed upon by DSOA representatives and Dover Downs prior to thebeginning of each race meet. In the event the parties are unable to reach anagreement, the minimum and maximum purse payable will be the same as the startof the previous race meet conducted at Dover Downs.

 

5.         Arrangementswith DSOA

 

A.        DoverDowns will pay to DSOA, in diminution of and as a credit against thepercentages specified in Paragraph 2, requested funds to compensate DSOA forits expenses provided that DSOA’s representation of the horsemen racing atmeetings conducted by Dover Downs has been demonstrated by the horsemen’sadherence to and recognition of this Agreement.  Such sum shall not exceed 105% of the amount requested theprior 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 bythis Agreement unless mutually agreed by the parties.

 

B.        Whenthis Agreement and any succeeding Agreement between DSOA and Dover Downs hasexpired and there is no agreement in effect between them providing otherwise,any underpayment of purses due under

 

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this Agreement shall be payable to horsemenwho participated in the last Dover Downs’ meet covered by this Agreement andboth parties shall take whatever action is required to accomplish such payment.

 

In order to minimize any underpayment****or****overpaymentof purses at the conclusion of the live race meet****under this Agreement, DSOAand Dover Downs will meet regularly to make adjustments to the purse account ifnecessary.  These adjustments to the purseswill be ina fair and reasonable manner and****will include lowering the minimum purse ifsuch action is warranted.  The basepurse for any claiming race will not exceed 80% of the claiming price.

 

C.        DoverDowns shall provide an office for the use of a DSOA representative on itsracing grounds.

 

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

 

E.         DoverDowns shall pay to DSOA as part of its expenses in paragraph 5(A.), theincurred premiums of insurance administered by DSOA for grooms, secondtrainers, trainers, and drivers. Insurance premiums shall be paid monthly******upon presentation of a bill from DSOA.  The premiums shall be in diminution of andas a credit against purse money payable under this Agreement as specified inParagraph 2.

 

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

 

G.        DSOAacknowledges that from time to time****certain legislative effort will berequired in Delaware pertaining to pari-mutuel wagering, horse racing, thevideo lottery as well as other matters that will effect Dover Downs.****DSOAwill fully support and help lobby for all reasonable legislation****andoppose all harmful legislation insofar as it****does not adversely impacthorsemen’s issues.

 

H.        Duringthe term of this contract the minimum claiming price for Delaware Owned andBred races shall be ($7,500) seventy five

 

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hundred dollars. The minimum open claimingprice shall be ($12,500) twelve thousand five hundred dollars unless changed bymutual agreement.

 

I.          Unlesschanged by mutual agreement, the qualifying times during the term of thisagreement shall be 2:00 for pacers and 2:02 for trotters, plus applicableallowances for weather, and track conditions. Two year olds will receive a twosecond allowance. Three year olds will receive a two second allowance fromJanuary 1 through April 30 and a one second allowance after April 30.

 

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

 

K.        Thereshall not be any general age restrictions in condition races that are writtenas 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 racewritten according to the available horse population in an effort to enhance thequality and competitiveness of the racing at Dover Downs.  All races written for NW of (x) raceslifetime shall exclude as a win only, any win in which the first place moneywas less than or equal to $500.

 

L.         Duringthe term of this agreement, if Dover Downs has races with nine horse fields, abonus 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.       DoverDowns, upon request, shall furnish to DSOA a summary of the handle.

 

6.             SimulcastWagering

 

A.        Asconsideration for the distribution to the purse pool in accordance withparagraph 2(B.)****DSOA agrees, as is standard in the industry, to share**thedaily cost incurred by Dover Downs for the daily

 

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export of the live signal throughout eachseason.  These incremental costsincurred by Dover Downs for the exporting of live races will be calculated andshared 25% by DSOA and 75% by****Dover Downs.  These daily costs will be detailed on the purse reconciliationreport submitted to DSOA at the end of each month.

 

B.        Asconsideration 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 fromintrastate and interstate simulcasting of standardbred and thoroughbred racesfrom such tracks as approved per paragraph 6 (c).

 

C.        Allsimulcasting agreements need the approval of DSOA prior to Dover Downsaccepting wagering on those races. DSOA agrees not to unreasonably withholdtheir approval.

 

Should either DSOA or Dover Downs deny anapproval or elect to terminate an agreement, they must provide the other partywritten notice at least 15 days prior to termination or disapproval withreasonable explanation for their action.

 

 

7.         Stakeand Early Closing Events

 

Not more than 8% of the total purse moneypayable to the horsemen during each race meet shall be paid for Stake and EarlyClosing events. Purse money payable to the Delaware Breeders Program, or anyother Delaware owned/bred Stakes or early closing events, shall not bepart of the 8% limitation.

 

8.         On-TrackDriver Insurance

 

Dover Downs shall provide On-track driver accidentand disability insurance with $50,000 death benefit, $100,000 medical expensesand $350 a week disability income extending for 104 weeks subject to no morethan a seven-day waiting period.  Thiscoverage shall have no deductible to the horsemen and will be provided on racedays, non-race days during the race meet when the track is available fortraining and for three (3) days prior to each race meeting covered under thisAgreement.

 

9.         StallAssignments and Racing Privileges

 

Nothing in this Agreement shall be deemed tolimit or restrict in any manner the absolute discretion of Dover Downs toassign

 

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stalls and/or grant racing privileges toowners and trainers whether or not members of DSOA, except that stall spaceand/or racing privileges shall not be denied by reason of membership in, oractivity on behalf of, DSOA or a duly constituted horsemen’s committee.  Notwithstanding this paragraph, it isunderstood that Dover Downs does not contemplate opening its barn area andproviding stabling facilities during the term of this Agreement.  Dover Downs does, however, agree to makereasonable attempts to restrict the horse population to a manageable level withpreference being given to Delaware owned horses.

 

10.       ControllingLaw and Regulation

 

The interpretation of the provisions of thisAgreement shall be governed by the law of Delaware.  If and to the extent that any provision(s)of this Agreement isand/or becomes inconsistent with any Delaware Statute, law or any regulation ofthe Delaware State Harness Racing Commission not in effect or hereinafterenacted, such provision or provisions shall be deemed to be superseded by suchlaw or regulation as the case may be. The validity of the remaining provisions of the contract shall beconstrued and enforced as if the contract did not contain the particularprovision held to be invalid.

 

IN WITNESS WHEREOF, the parties hereto havecaused this Agreement to be signed on their behalf by their respective Officersas of the date first above written.

 
|   |                                            |                                | DOVER DOWNS,  INC. |
|--------|-------------------------------------------------|-------------------------------------|--------------------|
|   |                                            |                                |               |   |   |
|   |                                            |                                |               |   |   |
|   | By                                              | /s/    Denis McGlynn |               |
|   |                                            |                                | Denis  McGlynn     |   |
|   |                                            |                                |               | President |   |
|   |                                            |                                |               |   |   |
|   | DELAWARE STANDARDBRED OWNERS  ASSOCIATION, INC. |
|   |                                            |                                |               |   |   |
|   |                                            |                                |               |   |   |
|   | By                                              | /s/    James T. Case |               |
|   |                                            |                                |               | James  T.  Case |   |
|   |                                            |                                |               | President |   |
|        |                                                 |                                     |                    |  |  |  |

 

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