Document:

cphc_Ex10_1

		
			Exhibit 10.1
		

		
			FIFTH AMENDMENT TO
		

		
			COOPERATIVE MARKETING AGREEMENT
		

		
			This Fifth Amendment to Cooperative Marketing Agreement (“Amendment”) is entered into this 1st day of June, 2020 by and between Canterbury Park Holding Corporation (“CPHC”), a Minnesota corporation, and Shakopee Mdewakanton Sioux Community (“SMSC”), a federally recognized Indian tribe.  CPHC and SMSC are sometimes referred to herein collectively as the “Parties” or individually as a “Party.”
		

		
			RECITALS
		

		
			WHEREAS, the Parties entered into the Cooperative Marketing Agreement dated as of June 4, 2012, as amended by (i) the First Amendment to Cooperative Marketing Agreement dated as of January 16, 2015, (ii) the Second Amendment to Cooperative Marketing Agreement dated as of January 2016, (iii) the Third Amendment to Cooperative Marketing Agreement dated as of February 1, 2017; and the Fourth Amendment to Cooperative Marketing Agreement dated as of March 8, 2018 (as so amended, the “Agreement”); and
		

		
			WHEREAS, as a result of the COVID-19 pandemic and other events, the Parties desire to further amend the Agreement by this Fifth Amendment to Cooperative Marketing Agreement (the “Fifth Amendment”);
		

		
			NOW, THEREFORE, in consideration of the above premises, the representations and covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows:
		

		
			ARTICLE I
		

		
			Effectiveness
		

		
			Section 1.1.          Conditions to Effectiveness. This Fifth Amendment will be effective (the “New Effective Date”) on, and will be of no force or effect prior to, the first business day following the last to occur of: (i) the approval of this Fifth Amendment by the Minnesota Racing Commission and (ii) execution of a Consent and Waiver by the Minnesota Horsemen’s Benevolent and Protective Association pursuant to Horse Association Agreement dated June 4, 2012 between SMSC, CPHC and the Horse Associations party thereto (the “Horse Association Agreement”), in a form satisfactory to SMSC and CPHC.   Prior to the New Effective Date, the Agreement will continue on its terms in full force and effect.
		

		
			
		

		
			

		 

		

		
			ARTICLE II
		

		
			Amendments
		

		
			Section 2.1.           Section 2.1 of the Agreement is hereby amended and restated to read as follows:
		

		
			Section 2.1          Purse Enhancements/Marketing Payments.  SMSC will pay each Annual Purse Enhancement and the Annual Marketing Payment due after December 31, 2019 in accordance with the terms of this Agreement.  SMSC will not be obligated to make any Annual Purse Enhancement or Annual Marketing Payment if a default by CPHC has occurred and is continuing under this Agreement.  The Annual Purse Enhancement and Annual Marketing Payment to be paid in each year during the term of this Agreement are set forth on Schedule 1.  The following additional provisions shall apply to payment of the Annual Purse Enhancement and Annual Marketing Payment:
		

		
			(a)   CPHC has established a bank account at Bremer Bank (the “SMSC Purse Enhancement Account”).  CPHC warrants that funds deposited from time to time in the SMSC Purse Enhancement Account will at all times be held for the benefit of the horsepersons racing at the Racetrack and will only be used as provided in this Agreement.  SMSC will pay the portion of each Annual Purse Enhancement due under this Agreement by wire transfer to the SMSC Purse Enhancement Account on the Payment Date applicable to each such Payment Amount, as these Payment Amounts and Payment Dates are set forth on Schedule 1 as amended from time to time pursuant to the terms of the Agreement.
		

		
			(b)   Subject to the terms of this Agreement, SMSC will wire the portion of each Annual Marketing Payment payable to CPHC under this Agreement on the Payment Date applicable to such Payment Amount, as such Payment Amounts and Payment Dates are set forth on Schedule 1 as most recently amended.
		

		
			(c)   CPHC agrees that Annual Purse Enhancements are to enhance purses at the Racetrack and that such amounts will not be used to offset any purse amounts that CPHC is otherwise required to pay pursuant to Minnesota law or agreement with the Minnesota Horse Associations.
		

		
			(d)   For purposes of the Horse Association Agreement, “Annual Payment Date” means: (A) for the year 2020, the Payment Date for the first Payment Amount due for 2020 and (B) for any year during the term of this Agreement beginning with 2021, the date that is the last of (i) January 15 of such year, (ii) 15 business days following the receipt by SMSC of the Draft Preliminary Annual Racing Schedule (defined below), (iii) the date SMSC receives the Preliminary Annual Racing Schedule from CPHC and (iv) 30 business days following the receipt by SMSC of the Preliminary Marketing Plan (defined in Section 6.3 below) for such year.
		

		
			
		

		
			

		 

		

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			(e)   For any year after 2020, “Payment Amount” means, for the payment of any portion of Annual Purse Enhancement or Annual Marketing Payment, the amount set forth under the column heading “Payment Amount” and next to such payment on Schedule 1 to this Agreement as most recently amended.  For any year after 2020, “Payment Date” means for the payment of any portion of Annual Purse Enhancement or Annual Marketing Payment, the date set forth under the column heading “Payment Date” and next to such payment on Schedule 1 to this Agreement.  Notwithstanding the foregoing, each Payment Date scheduled for April 2021 and 2022 shall instead be the date that is the last of (i) April 30 of such year, (ii) 10 business days following the receipt by SMSC of the Draft Preliminary Annual Racing Schedule (defined below), (iii) the date SMSC receives the Preliminary Annual Racing Schedule from CPHC and (iv) 15 business days following the receipt by SMSC of the Preliminary Marketing Plan (defined in Section 6.3 below) for such year.
		

		
			(f)    For the year 2020, “Payment Amount” means an amount equal $108,077 per day of live horseracing at the Racetrack multiplied by the number of live racing days (which aggregate Payment Amount is the “Annual Purse Enhancement” for the year 2020); provided, however, that the aggregate Payment Amounts in 2020 shall not exceed $5,620,000 (which is the maximum Annual Purse Enhancement for the year 2020).  For the year 2020, “Payment Date” means June, July and August 2020, and the aggregate Payment Amount for each Payment Date shall be based on the number of days of live horseracing days scheduled in that month (and in the case of August later months in 2020) that are not prohibited by federal, state or local law, ordinance, order or otherwise.  For purposes of determining the Payment Amount for each month, CPHC shall provide to SMSC documentation satisfactory to SMSC of scheduled live race days for each month and later months.
		

		
			(g)   The parties agree that the maximum Annual Purse Enhancement for the year 2020 was calculated by multiplying 52 days of live horseracing times $108,077 per day of live horseracing, without including the $100,000 annual Horse Association Payments separately payable under the Horse Association Agreement for the year 2020, which Horse Association Payments for the year 2020 will be paid no later than the first Payment Date above.
		

		
			(h)   For 2020, CPHC will deliver to SMSC a draft preliminary schedule of all horse races for the entire year by June 1, 2020 (the “2020 Draft Preliminary Annual Racing Schedule”).  During the 7 business day period following delivery of the 2020 Draft Preliminary Annual Racing Schedule, CPHC will consult with SMSC regarding possible changes to such schedule and make changes to such schedule based on SMSC input to the extent CPHC reasonably determines is appropriate (such 2020 Draft Preliminary Annual Racing Schedule as so modified is herein referred to as the “2020 Preliminary
		

		
			
		

		
			

		 

		

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			Annual Racing Schedule”).  The 2020 Preliminary Annual Racing Schedule shall contain the purse size for each proposed race, including the portion of the purse budgeted for each race that will be funded by the Annual Purse Enhancement for 2020 (the “2020 Per Race Purse Enhancement”), and other information for each proposed race.  CPHC shall pay each 2020 Per Race Purse Enhancement as set forth in the 2020 Preliminary Annual Racing Schedule subject to the following: (i) CPHC may increase or decrease any 2020 Per Race Purse Enhancement by not more than 25% and (ii) CPHC may reallocate of any 2020 Per Race Purse Enhancement for a particular race to another race when such 2020 Per Race Purse Enhancement cannot be paid due to cancellation of the applicable horse race. CPHC will also deliver to SMSC a copy of all preliminary and final condition books for races as they are available.
		

		
			(i)    If CPHC does not hold a live racing day on any scheduled live racing date, then CPHC will promptly return to SMSC the portion of the Payment Amount for that day (i.e. $108,077)  unless CPHC promptly schedules, and subsequently conducts, a new substitute racing day in the year 2020, in which case SMSC will not owe any additional Payment Amount for such new substitute racing day.
		

		
			(j)    Beginning with 2021 and for each year thereafter, CPHC will deliver to SMSC a draft preliminary schedule of all horse races for the entire year by January 1 of such year (the “Draft Preliminary Annual Racing Schedule”).  During the 15 business day period following delivery of the Draft Preliminary Annual Racing Schedule, CPHC will consult with SMSC regarding possible changes to such schedule and make changes to such schedule based on SMSC input to the extent CPHC reasonably determines appropriate (such Draft Preliminary Annual Racing Schedule as so modified is herein referred to as the “Preliminary Annual Racing Schedule”).  The Preliminary Annual Racing Schedule shall contain the purse size for each proposed race, including the portion of the purse budgeted for each race that will be funded by the Annual Purse Enhancement (the “Per Race Purse Enhancement”), and other information for each proposed race.  CPHC shall pay each Per Race Purse Enhancement as set forth in the Preliminary Annual Racing Schedule subject to the following: (i) CPHC may increase or decrease any Per Race Purse Enhancement not more than 25% and (ii) CPHC may reallocate of any Per Race Purse Enhancement for a particular race to another race when such Per Race Purse Enhancement cannot be paid due to cancellation of the applicable horse race.  CPHC will also deliver to SMSC a copy of all preliminary and final condition books for races as they are available.
		

		
			(k)   CPHC will supply an annual audit of payments from the SMSC Purse Enhancement Account prepared by an independent accounting firm to confirm such funds were only applied to enhance purse amounts as contemplated by this Agreement.
		

		
			
		

		
			

		 

		

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			Section 2.2.          Schedule 1.  Schedule 1 of the Agreement is hereby amended and replaced with Schedule 1 to this Fifth Amendment.
		

		
			Section 2.3.          2020 Marketing Plan.  Notwithstanding anything to the contrary in this Agreement, no Annual Marketing Payment will be made by SMSC for 2020. Instead CPHC and SMSC agree that a total of $1,248,343 of Annual Marketing Payments from prior years remained unspent as of January 1, 2020 and that these funds will be used by CPHC for the 2020 Final Marketing Plan and will be deemed to be the 2020 Annual Marketing Payment pursuant to Section 6.3 of the Agreement.  CPHC and SMSC agree that CPHC will submit a revised Preliminary Marketing Plan for 2020 to SMSC on or before June 1 2020.  CPHC and SMSC further agree that beginning with the 2020 Annual Marketing Payment, CPHC will use the Marketing Payment for cooperative marketing purposes to promote SMSC (including Mystic Lake) and CPHC, but CPHC may also use portions of the Annual Marketing Payment for each of 2020, 2021 and 2022 for any other expense agreed upon by SMSC that is designed to promote, improve or assist in the operation of horse racing at the Racetrack.
		

		
			 
		

		
			ARTICLE III
		

		
			Miscellaneous
		

		
			Section 3.1.          Amendment Limited.  On and after the date of this Fifth Amendment each reference in the Agreement to “this Agreement,” “hereunder,” “hereof,” or words of like import referring to the Agreement will mean and be a reference to the Agreement as amended by all prior amendments and this Fifth Amendment. The Agreement, as amended by this Fifth Amendment, is and shall continue to be in full force and effect in accordance with its respective terms, and, except as expressly set forth in the prior amendments and this Fifth Amendment, no other amendment or modification to the Agreement is agreed to or implied.
		

		
			Section 3.2.          Governing Terms.  This Fifth Amendment shall be governed by Article VII of the Agreement as applicable, which are hereby incorporated into this Fifth Amendment.
		

		
			Section 3.3.          Majority Horseperson Organization.  CPHC represents to SMSC that the Minnesota Horsemen's Benevolent and Protective Association (the “MHBPA”) is the horseperson’s organization representing the majority of horsepersons at the Racetrack.
		

		
			
		

		
			

		 

		

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			IN WITNESS WHEREOF, each Party has executed this Fifth Amendment to Cooperative Marketing Agreement effective as of the date first written above.
		

			
					
						/

					
					
						 

				
	
					
						Canterbury Park Holding Corporation

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						/s/ Randall D. Sampson

					
					
						 

				
	
					
						By:  Randall D. Sampson

					
					
						 

				
	
					
						Its:  Chief Executive Officer

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						Shakopee Mdewakanton Sioux Community

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						/s/ Keith B. Anderson

					
					
						 

				
	
					
						By:  Keith B. Anderson

					
					
						 

				
	
					
						Its:  Chairman

					
					
						 

				

		
			 
		

		
			
		

		
			

		 

		

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						Schedule
Number

					
					
						Amendment

					
						Section

					
						Reference

					
					
						Description of Purpose

				
	
					
						1

					
					
						2.1

					
					
						Annual Purse Enhancement and Annual Marketing Payment amounts

				

		
			 
		

		
			
		

		
			

		 

		

			7

		

		

		
			Schedule 1
		

			
					
						Year

					
					
						    

					
					
						Annual Purse
Enhancement

					
					
						    

					
					
						Payment Date

					
					
						    

					
					
						Payment Amount

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						2020

					
					
						 

					
					
						Annual Purse Enhancement,
as defined for 2020 in
Section 2.1(f) of the Agreement

					
					
						 

					
					
						Payment Date, as defined for
2020 in Section 2.1(f) of the
Agreement

					
					
						 

					
					
						Payment Amount, as defined for
2020 in Section 2.1(f) of the
Agreement (which does not
include the $100,000 Horse
Association Payments).

				
	
					
						2021

					
					
						 

					
					
						$7,280,000

					
					
						 

					
					
						March 2021
May 2021
June 2021
July 2021
August 2021

					
					
						 

					
					
						$         2,576,000
$         1,676,000
$            676,000
$            676,000
$         1,676,000

				
	
					
						2022

					
					
						 

					
					
						$7,280,000

					
					
						 

					
					
						March 2022
May 2022
June 2022
July 2022
August 2022

					
					
						 

					
					
						$         2,576,000
$         1,676,000
$            676,000
$            676,000
$         1,676,000

				

		
			 
		

		
			
		

		
			

		 

		

			8

		

		

		
			 
		

			
					
						Year

					
					
						    

					
					
						Annual Marketing
Payment

					
					
						    

					
					
						Payment Date

					
					
						    

					
					
						Payment Amount

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						2020

					
					
						 

					
					
						$0

					
					
						 

					
					
						NONE

					
					
						 

					
					
						$0

				
	
					
						2021

					
					
						 

					
					
						$1,620,000

					
					
						 

					
					
						March 2021
May 2021
June 2021
July 2021
August 2021

					
					
						 

					
					
						$           324,000
$           324,000
$           324,000
$           324,000
$           324,000

				
	
					
						2022

					
					
						 

					
					
						$1,620,000

					
					
						 

					
					
						March 2022
May 2022
June 2022
July 2022
August 2022

					
					
						 

					
					
						$           324,000
$           324,000
$           324,000
$           324,000
$           324,000

				

		
			 
		

		 

		

			9cphc_Ex10_2

		
			Exhibit 10.2
		

		
			FIRST AMENDMENT TO
		

		
			SECURITY AGREEMENT
		

		
			This First Amendment to Security Agreement (this “Amendment”) is made as of June 1, 2020 by and between the Shakopee Mdewakanton Sioux Community (the “Pledgor”), a federally recognized Indian tribe, and Canterbury Park Holding Corporation, a Minnesota corporation (the “Secured Party”). The Pledgor and the Secured Party are sometimes referred to herein collectively as the “Parties” or individually as a “Party.”
		

		
			RECITALS:
		

		
			WHEREAS, Pledgor and Secured Party are parties to a Cooperative Marketing Agreement dated as of the June 4, 2012 (as amended, modified, supplemented or replaced from time to time, the “CMA”).
		

		
			WHEREAS, in connection with execution of the CMA, the Pledgor and Secured Party are parties to the Security Agreement dated as of June 4, 2012 (the “Security Agreement”).
		

		
			WHEREAS, as May 1, 2020, the Collateral Market Value under the Security Agreement was approximately $21.1 million;
		

		
			WHEREAS, the Pledgor's financial obligation under the CMA include the following:
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						Year

					
					
						Annual Purse
Enhancement

					
					
						Annual Marketing
Payment

				
	
					
						2020

					
					
						$5,620,000*

					
					
						None

				
	
					
						2021

					
					
						$7,280,000

					
					
						$1,620,000

				
	
					
						2022

					
					
						$7,280,000

					
					
						$1,620,000

				

		
			 
		

		
			*    This amount is subject to 52 days of live racing
		

		
			The Parties desire to amend the Security Agreement by this Amendment to allow Pledgor to use some of the Collateral to pay its 2020 Purse Annual Purse Enhancement and to lower the Minimum Value required.
		

		
			NOW, THEREFORE, in consideration of the above premises, the representations and covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows:
		

		
			
		

		
			

		 

		

		
			1.            Amendment.
		

		
			Section 1 of the Security Agreement is hereby amended to replace the defined term “Minimum Value” with the following definition:
		

		
			“Minimum Value” means $15,000,000, less the aggregate market value of any Collateral applied by the Secured Party to the payment of the Obligations, determined as of the date of any such application pursuant to an Account Statement or any other reliable and recognized source for such market value.
		

		
			2.            Reduction of Collateral in Account.
		

		
			Secured Party will promptly give Instructions to cause financial assets credited to the Account to be withdrawn by the Pledgor in the amount by which the Collateral Market Value exceeds the Minimum Value.
		

		
			Pledgor and Secured Party agree that Pledgor may withdraw an amount equal to $1.1 million without restriction. Pledgor agrees that any amounts withdrawn by Pledgor in 2020 in excess of $1.1 million will be used to pay the 2020 Annual Purse Enhancement directly to SMSC Purse Enhancement Account at Bremer Bank under the terms of the CMA, or if the entire 2020 Annual Purse Enhancement has been paid such amounts may be withdrawn without restriction.
		

		
			3.            Amendment Limited.
		

		
			On and after the date of this Amendment each reference in the Agreement to “this Agreement,” “hereunder,”  “hereof,” or words of like import referring to the Agreement will mean and be a reference to the Agreement as amended by this Amendment. The Agreement, as amended by this Amendment, is and shall continue to be in full force and effect in accordance with its respective terms, and, except as expressly set forth in this Amendment, no other amendment or modification to the Agreement is agreed to or implied.
		

		
			4.            Governing Terms.
		

		
			This Amendment shall be governed by Sections 16 through 22 of the Agreement as applicable, which are hereby incorporated into this Amendment.
		

		
			[Signature page follows.]
		

		
			 
		

		
			
		

		
			

		 

		

		
			IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date and year first above written.
		

		
			 
		

			
					
						SHAKOPEE MDEWAKANTON

					
					
						    

					
					
						CANTERBURY PARK HOLDING

				
	
					
						SIOUX COMMUNITY, as the Pledgor

					
					
						 

					
					
						CORPORATION, as the Secured Party

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						By

					
					
						/s/ Keith Anderson

					
					
						 

					
					
						By

					
					
						/s/ Randy J. Dehmer

				
	
					
						 

					
					
						Its

					
					
						Chairman

					
					
						 

					
					
						 

					
					
						Its

					
					
						Chief Executive Officer

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