Document:

nxst-ex1077_524.htm

Exhibit 10.77

SHARED SERVICES AGREEMENT

This Shared Services Agreement (“Agreement”) is entered into as of July 1, 2017 by and between Mission Broadcasting, Inc. (“Mission”) and Nexstar Broadcasting, Inc. (“Nexstar”).  Mission and Nexstar are each a “Party” and collectively the “Parties.”

WHEREAS, Mission owns the television broadcast stations set forth on Exhibit A hereto (each a “Mission Station” and collectively the “Mission’s Stations”) and Nexstar owns television stations that operate in the Designated Market Areas (“DMAs”) as Mission’s Stations (“Nexstar’s Stations”).

WHEREAS, Mission’s Stations and Nexstar’s Stations are collectively referred to as the “Stations.”

NOW, THEREFORE, for their mutual benefit and in order to enhance the respective abilities of Nexstar and Mission to compete with other television and media outlets serving the DMAs, Nexstar and Mission agree as follows:

1.SHARING ARRANGEMENTS GENERALLY.  From time to time, Nexstar and Mission may agree to share the costs of certain services and procurements which they individually require in connection with the operation of the Stations.  Such sharing arrangements may take the form of joint or cooperative buying arrangements, or the performance of certain functions relating to the operation of one party’s Stations by employees of the operator of the other party’s Stations (subject in all events to the supervision and control of personnel of the operator of the Stations to which such functions relate), or may be otherwise structured, and will be governed by terms and conditions upon which Nexstar and Mission may agree from time to time.  Such sharing arrangements may include the co-location of the Stations’ studios, non-managerial administrative and/or master control and technical facilities of the Stations, the sharing of grounds keeping, maintenance, security, technical and other services relating to those facilities.  In performing services under any such sharing arrangement (including those described in Section 4), personnel of one Party will be afforded access to, and have the right to utilize, assets and properties of the other Party to the extent necessary or desirable in the performance of such services.  

2.CERTAIN SERVICES NOT TO BE SHARED.

(a)Senior Management Personnel.  At all times, each of the Mission Stations and Nexstar Stations will have personnel performing the typical functions of a station manager and a business manager.  Such personnel will (i) be retained solely by the Party which operates the Station and will report solely to such Party, and (ii) have no involvement or responsibility in respect of the operation of the other party’s Stations.

(b)Programming.  Each Party will maintain for the Stations operated by it separate managerial and other personnel to carry out the selection and procurement of programming for such Stations, and in no event will the Parties or the Stations share services, personnel, or information pertaining to such matters, except as set forth in Section 4(f) below.  

(c)Sales.  Nexstar and Mission are party to certain Agreements for the Sale of Commercial Time for the Mission Stations.  Such agreements govern the terms of Nexstar’s sales of commercial time on Mission’s Stations.

3.GENERAL PRINCIPLES GOVERNING SHARING ARRANGEMENTS.  All arrangements contemplated by this Agreement will be subject to, and are intended to comply in all respects with, the Communications Act of 1934, as amended, the rules, regulations and policies of the Federal Communications Commission (the “FCC”), as in effect from time to time (the “FCC Rules”), and all other applicable laws.  The arrangements made pursuant to this Agreement will not be deemed to constitute “joint sales,” “program services,” “time brokerage,” “local marketing,” or similar arrangements or a partnership, joint venture, or agency relationship between the Parties or the Stations, and no such arrangement will be deemed to give either Party any right to control the policies, operations, management or any other matter relating to the Station operated by the other Party.  Consistent with the FCC Rules, Mission shall maintain full control, supervision and direction of the Mission Stations, including their management, programming, finances, editorial policies, personnel, facilities and compliance with the FCC Rules and Nexstar shall control, supervise and direct any employees it utilizes to carry out its obligations under this Agreement.

4.CERTAIN SPECIFIC SHARING ARRANGEMENTS.  In furtherance of the general agreements set forth in Sections 1 through 3 above, Nexstar and Mission have agreed as follows with respect to the sharing of certain services:

(a)Execution of Promotional Policies.  Subject to direction and control by Mission management personnel, Nexstar personnel will implement and execute the promotional policy for Mission’s Stations.  Such implementation and execution will include such tasks as graphic design, production and media placement and buying.

(b)Continuity and Traffic Support.  Subject to direction and control by management personnel of Mission, Nexstar personnel will carry out continuity, traffic and such other tasks with respect to Mission’s Stations.

(c)Master Control.  Master control operators and related employees of Nexstar may carry out master control functions for Mission’s Stations subject to the direction and control of Mission’s management personnel.

(d)Payable Support.  Nexstar personnel will not engage in the payment of accounts payable of Mission arising under contracts for the license of programming run or to be run on Mission’s Stations or the payment of Mission’s payroll with respect to Mission’s Stations.  Subject to direction and control by management personnel of Mission, Nexstar may provide payables support (but shall not make any payments) for Mission’s Stations’ other obligations incurred in the normal course of business.  

(e)Financial Services.  Subject to direction and control by management personnel of Mission, Nexstar personnel may assist Mission’s Stations with the preparation of monthly accounting statements and quarterly Securities and Exchange Commission filings, and other financial reporting activities as necessary in the ordinary course of the business.

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(f)Transmission Facilities Maintenance.  Nexstar personnel will maintain and repair (as needed) the transmission facilities of Nexstar’s Stations.  Subject to direction and control by Mission management personnel, Nexstar personnel will also maintain and repair (as needed) the transmission facilities of Mission’s Stations.

(g)Newscast Production.

(i)Production and Delivery.  Utilizing Nexstar’s Stations’ management personnel and facilities, Nexstar may provide live-feed, fully-staffed and produced newscasts for broadcast on Mission’s Stations at such times, if any, as agreed upon by Mission and Nexstar; provided that such newscasts will not comprise more than 15% (by duration) of the programming broadcast on any of Mission’s Stations during any broadcast week.  Nexstar will be responsible for delivering such newscasts to Mission’s Stations’ transmission facilities.  Mission shall make available to Nexstar (A) such space in the Mission’s Stations’ studios and facilities as may be reasonably necessary to produce such newscasts, (B) such non-management-level news personnel as may be necessary to produce such newscasts, and (C) such technical facilities of Mission’s Stations as may be necessary to produce such newscasts and to deliver such newscasts to Mission’s Stations’ transmission facilities.  Nexstar will use reasonable efforts to provide such newscasts that are of a quality appropriate to Mission’s Stations’ market.  Such newscasts will be produced exclusively for Mission for broadcast on Mission’s Stations, but may include non-exclusive videotape, graphics, news stories, field reports and other material.  Mission personnel will determine the title and format of such newscasts, and such newscasts will have an “on-air appearance” as if they had been originated by Mission through Mission’s Stations.

(ii)Commercial, Advertising and Promotional Spots.  Mission will determine the amount of commercial advertising time and promotional time to be provided during such newscasts.  

(iii)Editorial Control and Responsibility.  Nexstar will use reasonable efforts to maintain a system of editorial review to ensure the accuracy, prior to broadcast, of all investigative reports and other stories prepared by Nexstar personnel and included in the newscasts which Nexstar provides to Mission.  Nexstar will indemnify, defend and hold harmless Mission from any and all demands, claims, actions or causes of action, losses, damages and liabilities, costs and expenses, including reasonable attorneys’ fees, incurred by Mission as a result of the violation or breach of any third parties’ rights or of the FCC’s Rules, as a result of the provision of any news content provided by Nexstar or its employees in such newscasts.  Mission will indemnify, defend and hold harmless Nexstar from any and all demands, claims, actions or causes of action, losses, damages and liabilities, costs and expenses, including reasonable attorneys’ fees, incurred by Nexstar as a result of the violation or breach of any third parties’ rights, or of the FCC’s Rules, as a result of the provision of any content within such newscasts by Mission or its employees, or any variation by Mission or its employees of any content provided by Nexstar or its employees in such newscasts.  Each Party will maintain the following types of insurance coverage for no less than the indicated amounts and will deliver to the other Party upon request a certificate of insurance showing the following:  (A) comprehensive general liability insurance in an amount of $1,000,000; (B) workers’ compensation and/or disability insurance; and (C) libel/defamation/First Amendment liability 

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insurance, with a deductible of no more than $200,000, as to which coverage each Party will name the other party as an additional insured.

(iv)Operating Conditions Agreement.  Nexstar and Mission will collaborate to create a newscast operating conditions agreement or procedural memo which will provide the basis for daily operations, contingencies, Mission’s Stations’ access to breaking stories, procedures for editorial compliance with FCC Rules (including quarterly programs/issues requirements), regularly scheduled operations, editorial and ratings reviews and guidelines for access by Mission personnel and Mission’s Stations’ customers to Nexstar’s facilities.

(h)Contract Negotiations.  To the extent permissible under the FCC’s Rule, Nexstar personnel may review and assist Mission personnel in the negotiate of certain contracts related to, or necessary for, the operation of the Stations.  

(i)Spectrum Repacking.   Certain of Mission’s Stations are required by the FCC to begin operations on new RF channels pursuant to “repacking” as a result of the Spectrum Auction.  Nexstar shall provide such technical assistance and other services as necessary to assist Mission in repacking the Mission Stations in conformance with the FCC’s Rules.

(j)Facilities/Studio Use.  Nexstar and Mission are parties to those certain Facilities Leases dated May 1, 2015 (“Facilities Lease”) pursuant to which Mission leases (i) office space in Nexstar’s facilities for the Mission Stations, and (ii) use of certain equipment necessary for the operation of Mission’s Stations which is owned by Nexstar.

5.SERVICES FEE.  In consideration for the services to be provided to Mission’s Stations by Nexstar as set forth herein, Mission will pay to Nexstar the fee (the “Services Fee”) as set forth in this Section 5.

(i)Services Fee.  As of July 1, 2017, Mission shall pay to Nexstar a Service Fee for each Mission Station as set forth in Exhibit B attached hereto.  The Service Fee will increase by ten percent (10%) effective July 1 for each year that this Agreement remains in effect (e.g., on July 1, 2018, July 1, 2019, etc.) to account for increases in salaries, costs of replacing equipment owned by Nexstar used by Mission’s Stations under this Agreement and other similar increases and expenses. 

(ii)Payment Terms.  The Services Fee will be payable monthly, in arrears, and will be prorated on a daily basis for the last month in the event this Agreement terminates on any date other than on the last day of a calendar month.

6.FORCE MAJEURE.  If a force majeure event such as a strike, labor dispute, fire, flood or other act of God, failure or delay of technical equipment, war, public disaster, or other reason beyond the cause or control of Nexstar or Mission prevents such Party or its personnel from performing tasks which it is required to perform under this Agreement during any period of time, then such failure will not be a breach of this Agreement and such Party will be excused from such performance during that time.  

7.UNENFORCEABILITY.  If any provision of this Agreement or the application thereof to any person or circumstances shall be invalid or unenforceable to any extent, the 

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remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law, except that if such invalidity or unenforceability should change the basic economic positions of the Parties, they shall negotiate in good faith such changes in other terms as shall be practicable in order to restore them to their prior positions.  In the event that the FCC alters or modifies its rules or policies in a fashion which would raise substantial and material questions as to the validity of any provision of this Agreement, the Parties shall negotiate in good faith to revise any such provision of this Agreement in an effort to comply with all applicable FCC Rules, while attempting to preserve the intent of the Parties as embodied in the provisions of this Agreement.  The Parties agree that, upon the request of either of them, they will join in requesting the view of the staff of the FCC, to the extent necessary, with respect to the revision of any provision of this Agreement in accordance with the foregoing.  If the Parties are unable to negotiate a mutually acceptable modified Agreement, then either party may terminate this Agreement upon written notice to the other.  Upon such termination, Mission shall pay to Nexstar all accrued and unpaid Service Fees and each Party shall be relieved of any further obligations, one to the other.

8.TERM OF SHARING ARRANGEMENTS.  The term of this Agreement shall commence on the date of execution of this Agreement.  The initial term of this Agreement is eight (8) years.  Unless otherwise terminated by either Party, the term of this Agreement shall be extended automatically for an additional eight (8) year term.  Either Party may terminate this Agreement at the end of each eight-year term by providing six months’ prior written notice to the other Party.  

9.EVENT OF DEFAULT. It shall constitute an “Event of Default” under this Agreement if a Party materially defaults in the observance or performance of any covenant, condition or agreement contained herein and such default shall not have been cured within thirty (30) days after the non-defaulting Party has provided the other Party with written notice specifying the actions necessary to cure within such period.  This period may be extended (in writing only and only by the non-defaulting Party) for a reasonable period of time if the defaulting Party is acting diligently and in good faith to cure and such delay is not materially adverse to the non-defaulting Party.

10.TERMINATION.  

(a)Mutual Agreement.  The Parties may terminate this Agreement by mutual written agreement.

(b)Termination Upon Order of Governmental Authority.  A “Governmental Termination Event” will occur if any court or federal, state or local government authority (including the FCC) orders or takes any action which becomes effective and which requires the termination of this Agreement; provided that such order or action will no longer constitute a Governmental Termination Event if such action or order is subsequently stayed or ceases to be effective.  If any court or federal, state or local government authority announces or takes any other action or proposed action which could result in a Governmental Termination Event, then either Party may seek administrative or judicial relief therefrom (in which event the other of Party will cooperate with such effort in any reasonable manner requested) and consult with such 

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agency and its staff concerning such matters and, in the event that this Agreement is not terminated, use their reasonable best efforts and negotiate in good faith a modification to this Agreement which would obviate any such questions as to validity while preserving, to the extent possible, the intent of the parties under this Agreement.  If a Governmental Termination Event occurs, then the Term will continue until the date upon which the Agreement is required to terminate as mandated by the agency or authority which brought about such Governmental Termination Event.

(c)Termination upon Default.  Either Party may terminate this Agreement upon the occurrence of an uncured Event of Default by the other party by giving the other Party written notice of such termination.

(d)Upon Sale.  The sharing arrangements contemplated by this Agreement will terminate (i) upon the consummation of the purchase and sale of assets of any Mission Station by Nexstar (to the extent permitted by the FCC’s Rules) or (ii) at Nexstar’s option, if the assets of any Mission Station are sold to a party other than Nexstar.  In the event of the sale of the assets of less than all of Mission’s Stations, this Agreement will remain in effect with respect to any Mission Station for which such sale has not occurred.

(e)Obligations.  No termination of this Agreement will affect Mission’s duty to pay any Services Fees accrued, or to reimburse any cost or expense incurred, prior to the effective date of any termination or partial termination.

11.AMENDMENT AND WAIVER.  No amendment, supplement, modification or waiver of any provision of this Agreement will be effective unless the same will be in writing and signed by the Party against whom enforcement of any such amendment, supplement, modification or waiver is sought, and such amendment, supplement, modification or waiver will be effective only in the specific instance and for the purpose for which given.

12.NOTICES.  All notices, demands and other communications given or delivered under this Agreement will be in writing and will be deemed to have been given when personally delivered or delivered by express courier service.  Notices, demands and communications to Nexstar or Mission will, unless another address is specified in writing, be sent to the address indicated below:

To Mission:Mission Broadcasting, Inc.
30400 Detroit Road, Suite 304Westlake, OH 44145
Attention: Dennis Thatcher

With a copy (which shall not constitute notice) to:

Wiley Rein LLP

1776 K Street, NW 

Washington, D.C. 20006 

Attention:  Greg Masters

 

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To Nexstar:

	
 
	

	
Nexstar Broadcasting, Inc.
545 E. John Carpenter Freeway
Suite 700
Irving, TX  75062
Attention: Perry Sook, CEO

With a copy (which shall not constitute notice) to:

Nexstar Broadcasting, Inc.
545 E. John Carpenter Freeway
Suite 700
Irving, TX  75062
Attention: General Counsel

13.ASSIGNMENT; BINDING AGREEMENT.  Neither party may assign its rights and obligations, either in whole or in part, without the prior written consent of the other; however, such consent shall not be unreasonably withheld.  The covenants, conditions and provisions hereof are and shall be for the exclusive benefit of the parties hereto and their permitted successors and assigns, and nothing herein, express or implied, is intended or shall be construed to confer upon or to give any person or entity other than the parties hereto and their permitted successors and assigns any right, remedy or claim, legal or equitable, under or by reason of this Agreement.  This Agreement shall be binding upon and inure to the benefit of the parties and their respective permitted successors and assigns.

14.SEVERABILITY.  Whenever possible each provision of this Agreement will be interpreted so as to be effective and valid under applicable law.  If any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating or otherwise affecting the remainder or such provision or the remaining provisions of this Agreement.

15.NO STRICT CONSTRUCTION. The language used in this Agreement will be deemed to be the language chosen by the Parties to express their mutual intent.  In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties, and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.

16.CAPTIONS.  The captions used in this Agreement are for convenience of reference only, do not constitute a part of this Agreement and will not be deemed to limit, characterize or in any way affect any provision of this Agreement, and all provisions of this Agreement will be enforced and construed as if no caption had been used in this Agreement.

17.AUTHORITY; ENTIRE AGREEMENT.  Both Mission and Nexstar represent that they are legally qualified and able to enter into this Agreement.  This Agreement, the Facilities Leases and the Agreements for the Sale of Commercial Time embody the entire agreement between the parties with respect to the subject matter hereof and thereof, and supersede any prior understandings, agreements or representations by or between the parties, 

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written or oral, which may have related to the subject matter hereof in any way, and there are no other agreements, representations, or understandings, oral or written, between them with respect thereto.

18.COUNTERPARTS.  This agreement may be executed in one or more counterparts, each of which will be deemed an original but all of which taken together will constitute one and the same instrument.

19.GOVERNING LAW.  All questions concerning the construction, validity and interpretation of this Agreement will be governed by and construed in accordance with the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision.  In furtherance of the foregoing, the internal law of the State of New York will control the interpretation and construction of this Agreement (and all schedules and exhibits hereto), even if under that jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply.

20.PARTIES IN INTEREST.  Nothing in this Agreement, express or implied, is intended to confer on any person or entity other than the Parties and their respective permitted successors and assigns any rights or remedies under or by virtue of this Agreement.

21.WAIVER OF JURY TRIAL.  AS A SPECIFICALLY BARGAINED INDUCEMENT FOR EACH OF THE PARTIES TO ENTER INTO THIS AGREEMENT (EACH PARTY HAVING HAD OPPORTUNITY TO CONSULT COUNSEL), EACH PARTY EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING RELATING TO OR ARISING IN ANY WAY FROM THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN.

22.OTHER DEFINITIONAL PROVISIONS.  The terms “hereof,” “herein” and “hereunder” and terms of similar import will refer to this Agreement as a whole and not to any particular provision of this Agreement.  Section references contained in this Agreement are references to Sections in this Agreement, unless otherwise specified.  Each defined term used in this Agreement has a comparable meaning when used in its plural or singular form.  Each gender-specific term used in this Agreement has a comparable meaning whether used in a masculine, feminine or gender-neutral form.  Whenever the term “including” is used in this Agreement (whether or not that term is followed by the phrase “but not limited to” or “without limitation” or words of similar effect) in connection with a listing of items within a particular classification, that listing will be interpreted to be illustrative only and will not be interpreted as a limitation on, or an exclusive listing of, the items within that classification.

******

Signature Page Follows

 

 

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SIGNATURE PAGE TO
SHARED SERVICES AGREEMENT

IN WITNESS WHEREOF, the Parties have executed this Shared Services Agreement as of the date first written above.

 

		
	
MISSION BROADCASTING, INC.

	
 
	
 

	
 
	
 

	
By:
	
/s/ Dennis Thatcher

	
Name:
	
Dennis Thatcher

	
Title
	
President

 

 

 

 

		
	
NEXSTAR BROADCASTING, INC.

	
 
	
 

	
 
	
 

	
By:
	
/s/ Thomas Carter

	
Name:
	
Thomas Carter

	
Title
	
EVP & Chief Financial Officer

 

 

 

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EXHIBIT A – MISSION STATIONS

WVNY, Burlington, Vermont

WUTR, Utica, New York

WYOU, Scranton, Pennsylvania

WTVW, Evansville, Indiana

WAWV-TV, Terre Haute, Indiana

WTVO, Rockford, Illinois

KOLR, Springfield, Missouri

KODE-TV, Joplin, Missouri

KLRT-TV, Little Rock, Arkansas

KASN, Little Rock, Arkansas

KTVE, El Dorado, Arkansas

KAMC, Lubbock, Texas

KJTL, Wichita Falls, Texas

KJBO-LP, Wichita Falls, Texas

KCIT, Amarillo, Texas

KCPN-LP, Amarillo, Texas

KRBC-TV, Abilene, Texas

KSAN-TV, San Angelo, Texas

 

 

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EXHIBIT B – SERVICES FEES

			
	
Station
	
Monthly Service Fee
	
Total Annual Service Fee

	
WVNY
	
$258,333
	
$3,100,000

	
WUTR
	
$83,333
	
$1,000,000

	
WYOU
	
$770,833
	
$9,250,000

	
WTVW
	
$175,000
	
$2,100,000

	
WAWV-TV
	
$66,667
	
$800,000

	
WTVO
	
$291,667
	
$3,500,000

	
KOLR
	
$641,677
	
$7,700,000

	
KODE-TV
	
$279,167
	
$3,350,000

	
KLRT-TV/KASN
	
$525,000
	
$6,300,000

	
KTVE
	
$325,000
	
$3,900,000

	
KAMC
	
$275,000
	
$3,300,000

	
KJTL/KJBO-LP
	
$150,000
	
$1,800,000

	
KCIT/KCPN-LP
	
$200,000
	
$2,400,000

	
KRBC-TV
	
$204,167
	
$2,450,000

	
KSAN-TV
	
$170,833
	
$2,050,000

 

 

- 11 -Exhibit 10.3

 

AGREEMENT

 

This Agreement is made and entered into October 4, 2017 (“Agreement”), superseding the agreement entered into on August 16, 2016 by and between Dover Downs, Inc., a Delaware corporation (“Dover Downs”),located at 1131 N. DuPont Highway, Dover , DE 19901, and Delaware Standardbred Owners Association, Inc., a Delaware corporation (“DSOA”), located at 830 Walker Road, Dover, DE 19904, 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 October 4, 2017 and continuing through August 31, 2020 (“Initial Term”).

 

During the Initial Term, Dover Downs will schedule the following days of racing:

 

	
Race Season
    	
 
    	
Begins
    	
 
    	
Ends
    	
 
    	
Number of Race Days
    
	
2017 - 2018
    	
 
    	
October 30, 2017
    	
 
    	
March 29, 2018
    	
 
    	
83
    
	
2018 - 2019
    	
 
    	
November 5, 2018
    	
 
    	
April 4, 2019
    	
 
    	
81
    
	
2019 - 2020
    	
 
    	
November 4, 2019
    	
 
    	
April 2, 2020
    	
 
    	
81
    

 

The parties agree that after August 31, 2020 this Agreement shall automatically renew for successive one (1) year periods (“Renewal Term”) unless either party notifies the other in writing by June 1 of the Initial Term or any Renewal Term of its intention to not renew this Agreement, in which event the Agreement shall terminate at the end of the then current Initial or Renewal Term, as applicable.

 

 

During any Renewal Terms, Dover Downs will race not less than the scheduled days of the previous year’s live racing meet subject to the availability of horses (“Prior Year Schedule”).  That Prior Year Schedule shall remain in effect during any Renewal Terms unless either party notifies the other in writing by June 1 of each Renewal Term to change the number of days.  If such notice is given and the parties are unable to mutually agree within sixty (60) days on a new race schedule for that Renewal Term, then Dover Downs will race the Prior Year Schedule.

 

Any days of racing lost to weather, acts of God, technical problems, or human error that exceed three (3) 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.

 

The terms of this Agreement shall terminate prior to the end of the Initial Term or any Renewal Term if one of the following events occurs 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 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 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.

 

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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.

 

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 to reach an

 

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

 

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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 fifteen (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 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 

 

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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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