Exhibit 10.4

 

THIRD AMENDMENT TO CREDIT AGREEMENT

 

THIRD AMENDMENT TO CREDIT AGREEMENT ( this “Amendment”), dated as of January 27,
2003, among DOVER MOTORSPORTS, INC. (the “Borrower”), the several banks and
other financial institutions parties to the Credit Agreement (as hereinafter
defined) (individually, a “Bank”; collectively, the “Banks”) and PNC BANK,
DELAWARE, as administrative agent for the Banks (in such capacity, the “Agent”).

 

WHEREAS, the Borrower, the Banks and the Agent are parties to a Credit Agreement
dated as of February 20, 2002, as amended by a First Amendment to Credit
Agreement dated as of March 31, 2002 and as amended by a Second Amendment to
Credit Agreement dated as of July 30, 2002 (as so amended, supplemented or
otherwise modified, the “Credit Agreement”);

 

WHEREAS, the Borrower, the Banks, and the Agent have agreed to amend the Credit
Agreement by (i) reducing the amount of the Commitments, (ii) modifying the
Applicable Margin for Base Rate Loans and Eurodollar Loans, (iii) modifying the
Commitment Fee Rate, (iv) resetting the Leverage Ratio and (v) resetting the
Fixed Charge Coverage Ratio, all on the terms and subject to the conditions set
forth herein.

 

WHEREAS, in consideration for the Banks agreeing to the amendments herein, the
Borrower has agreed to cause Dover International Speedway, Inc. to provide a
mortgage lien on certain real property owned by it as security for the
Borrower’s and Dover International Speedway, Inc.’s obligations under the Loan
Documents.

 

NOW, THEREFORE, in consideration of the foregoing and for other consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

 

1. Defined Terms. Unless otherwise defined herein, terms defined in the Credit
Agreement are used herein as therein defined.

 

2. Amendments to Credit Agreement. The Credit Agreement is hereby amended as
follows effective as of the date hereof:

 

(a) The Total Commitment is hereby reduced from $105,000,000 to $85,000,000 and
each Bank’s Commitment, other than the Commitment for Wilmington Savings Fund
Society, FSB or any assignee thereof, is hereby reduced to the amount set forth
on the revised Schedule I attached hereto, which shall be substituted for the
Schedule I now attached to the Credit Agreement. Effective on and as of
September 30, 2003, the Total Commitment shall be further reduced from
$85,000,000 to $80,000,000 and each Bank’s Commitment, other than the Commitment
for Wilmington Savings Fund Society, FSB or any assignee thereof, shall be
correspondingly reduced in proportion to its Commitment Percentage (without
giving effect to

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the Commitment Percentage of Wilmington Savings Fund Society, FSB) or any
assignee thereof) on such date, all of which shall be confirmed by the Agent by
its preparation and distribution of a revised Schedule I to be substituted for
Schedule I attached hereto. At or before the date of each such reduction, the
Borrower shall repay outstanding Loans to the extent necessary so that the Total
Exposure at such date does not exceed the Total Commitments as so reduced.

 

(b) The definitions of “Applicable Margin” and “Commitment Fee Rate” in Section
1.1 are hereby amended and restated in full to read as follows:

 

“‘Applicable Margin’: for any Base Rate Loan or LIBOR Loan on any date, the
percentage per annum set forth below, as applicable, opposite the Leverage Ratio
shown on the last Compliance Certificate delivered by the Borrower to the Agent
pursuant to subsection 5.2(a) prior to such date:

 

“Level

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Leverage Ratio

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Base Rate Loan

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Eurodollar Loan

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I

 

Less than or equal to 2.50 to 1.0

 

0%

  

2.00%

II

 

Greater than 2.50 to 1.0 but less than or equal to 3.00 to 1.0

 

0.25%

  

2.50%

III

 

Greater than 3.00 to 1.0 but less than or equal to 3.50 to 1.0

 

0.50%

  

2.75%

IV

 

Greater than 3.50 to 1.0 but less than or equal to 4.00 to 1.0

 

0.75%

  

3.00%

V

 

Greater than 4.00 to 1

 

1.00%

  

3.25%

 

; provided, however, that (a) adjustments, if any, to the Applicable Margin
resulting from a change in the Leverage Ratio shall be effective five Business
Days after the Agent has received a Compliance Certificate, (b) in the event
that no Compliance Certificate has been delivered for a fiscal quarter prior to
the last date on which it can be delivered without violation of subsection
5.2(a), the Applicable Margin from such date until such Compliance Certificate
is actually delivered shall be that applicable under Level V, (c) in the event
that the actual Leverage Ratio for any fiscal quarter is subsequently determined
to be greater than that set forth in the Compliance Certificate for such fiscal
quarter, the Applicable Margin shall be recalculated for the applicable period
based upon such actual Leverage Ratio and (d) anything in this definition to the
contrary notwithstanding, until receipt by the Agent of the Compliance
Certificate for the fiscal quarter ending December 31, 2002, the Applicable
Margin shall be that applicable under Level V. Any additional interest on the
Loans resulting from the operation of clause (c) above shall be payable by the
Borrower to the Banks within five (5) days after receipt of a written demand
therefor from the Agent.”

 

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“‘Commitment Fee Rate’: on any date, the percentage per annum set forth below,
as applicable, opposite the Leverage Ratio shown on the last Compliance
Certificate delivered by the Borrower to the Agent pursuant to subsection 5.2(a)
prior to such date:

 

“Level

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Leverage Ratio

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Commitment Fee Rate

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I

 

Less than or equal to 2.50 to 1.0

  

0.25%

II

 

Greater than 2.50 to 1.0 but less than or equal to 3.00 to 1.0

  

0.375%

III

 

Greater than 3.00 to 1.0 but less than or equal to 3.50 to 1.0

  

0.375%

IV

 

Greater than 3.50 to 1.0 but less than or equal to 4.00 to 1.0

  

0.50%

V

 

Greater than 4.00 to 1

  

0.50%

 

; provided, however, that, (a) adjustments, if any, to the Commitment Fee Rate
resulting from a change in the Leverage Ratio shall be effective five Business
Days after the Agent has received a Compliance Certificate, (b) in the event
that no Compliance Certificate has been delivered for a fiscal quarter prior to
the last date on which it can be delivered without violation of subsection
5.2(a), the Commitment Fee Rate from such date until such Compliance Certificate
is actually delivered shall be that applicable under Level V, (c) in the event
that the actual Leverage Ratio for any fiscal quarter is subsequently determined
to be greater than that set forth in the Compliance Certificate for such fiscal
quarter, the Commitment Fee Rate shall be recalculated for the applicable period
based upon such actual Leverage Ratio and (d) anything in this definition to the
contrary notwithstanding, until receipt by the Agent of the Compliance
Certificate for the fiscal quarter ending December 31, 2002, the Commitment Fee
Rate shall be that applicable under Level V. Any additional Commitment Fee that
is due to the Banks resulting from the operation of clause (c) above shall be
payable by the Borrower within five (5) days after receipt of a written demand
therefor from the Agent.”

 

(c) The following new definition shall be added to Section 1.1 in the
appropriate alphabetical order:

 

“Mortgages”: as defined in Section 5.11.”

 

(d) The definition of “Loan Documents” in Section 1.1 is hereby amended and
restated in full to read as follows:

 

“‘Loan Documents’: this Agreement, the Applications, the Notes, the Guaranty
Agreement and the Mortgages.”

 

(e) The following new subsection shall be added to the end of the definition of
“Permitted Liens”:

 

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“(k) Liens granted in favor of the Agent for the benefit of the Banks.”

 

(f) The following new Section shall be added to at the end of Section 5:

 

(g) “5.11 Mortgages. Cause Dover International Speedway, Inc. (“Speedway”) to
execute and deliver to the Agent on or before February 10, 2003 one or more
mortgages (as amended, supplemented or otherwise modified from time to time, the
“Mortgages”) on the real property owned by Speedway located in Delaware granting
to the Agent, for the benefit of the Banks, a first mortgage lien on such real
property; provided, however, in the event that the Leverage Ratio of the
Borrower is less than 3.00 to 1.00 for any two consecutive fiscal quarters as
evidenced by the Borrower’s delivery of both (i) the Compliance Certificates and
(ii) the Borrower’s publicly filed 10-Q or 10-K, as applicable, for such fiscal
quarters, the Agent shall, upon the written request and at the sole expense of
the Borrower, promptly release the Mortgages. Simultaneously with the delivery
of the Mortgages, the Borrower shall deliver or cause to be delivered to the
Agent (x) an executed legal opinion of Klaus M. Belohoubek, Esquire, General
Counsel to the Borrower and the Guarantors, such opinion to be addressed to the
Banks and the Agent and cover such matters incident to the transactions
contemplated by the Third Amendment to this Agreement and the Mortgages as the
Agent may reasonably require, (y) copies, certified by the Secretary or an
Assistant Secretary of Speedway, of resolutions of the Board of Directors of
Speedway authorizing the execution, delivery and performance of the Mortgages
and the other documents and transactions contemplated thereby, and (z) copies,
certified by one of the officers of Speedway, the certificate of incorporation,
By-laws and fictitious name filing, if any, of Speedway as in effect, or a
certificate stating that there have been no changes to any such documents since
the most recent date true and correct copies thereof were delivered to the
Agent. Without limiting the other rights of the Agent and the Banks under the
Loan Documents, upon the occurrence of an Event of Default, the Agent is hereby
authorized to obtain, at the sole cost of the Borrower, (i) an appraisal, from
an appraiser and in form and substance satisfactory to the Required Banks, on
the real property that are subject to the Mortgages and (ii) title insurance on
the real property subject to the Mortgages insuring the Agent’s first mortgage
lien on such real property, as mortgagee under the Mortgages, from an insurer
and in a reasonable amount acceptable to the Required Banks.”

 

(h) Section 6.1(a) entitled “Leverage Ratio” is hereby amended and restated in
full to read as follows:

 

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“(a) Leverage Ratio. Permit, as of the end of any fiscal quarter ending during
the periods specified below, the Leverage Ratio to exceed that set forth
opposite such periods:

 

“Period

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Ratio

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December 31, 2002 through March 30, 2003

  

4.25 to 1

March 31, 2003 through June 29, 2003

  

4.50 to 1

June 30, 2003 through September 29, 2003

  

4.00 to 1

September 30, 2003 through December 30, 2003

  

3.25 to 1

December 31, 2003 through March 30, 2004

  

3.25 to 1

March 31, 2004 and thereafter

  

3.00 to 1

 

(i) Section 6.1(b) entitled “Fixed Charge Coverage Ratio” is hereby amended and
restated in full to read as follows:

 

“(b) Fixed Charge Coverage Ratio. Permit, as of the end of any fiscal quarter
ending during the periods specified below, the Fixed Charge Coverage Ratio to
exceed that set forth opposite such periods:

 

“Period

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Ratio

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December 31, 2002 through March 30, 2003

  

1.25 to 1

March 31, 2003 through June 29, 2003

  

1.10 to 1

June 30, 2003 through September 29, 2003

  

1.25 to 1

September 30, 2003 and thereafter

  

1.50 to 1

 

3. Section 7.1(e) is hereby amended and restated in full to read as follows:

 

“The Borrower or its Subsidiaries shall default in the observance or performance
of any other agreement contained in this Agreement (other than as provided in
paragraphs (a) through (d) of this Section 7.1) or any other Loan Document, and
such default shall continue unremedied for a period of 30 days; or”

 

4. The second sentence of Section 9.1 is hereby amended by inserting at the end
thereto the following:

 

“or (f) release the Mortgages without the written consent of all of the Banks
unless the Mortgages are released pursuant to the terms of Section 5.11.”

 

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5. Representations and Warranties. The Borrower hereby represents and warrants
to the Banks and the Agent that:

 

(a) There exists no Default or Event of Default under the Credit Agreement as
amended hereby;

 

(b) The representations and warranties made in the Credit Agreement are true and
correct in all material respects on and as of the date hereof as if made on and
as of the date hereof;

 

(c) The execution and delivery of this Amendment by and on behalf of the
Borrower, has been duly authorized by all requisite action on behalf of the
Borrower and this Amendment constitutes the legal, valid and binding obligation
of the Borrower, enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law); and

 

(d) The execution and delivery of the Mortgages by and on behalf of Dover
International Speedway, Inc., has been duly authorized by all requisite action
on behalf of Dover International Speedway, Inc. and, when delivered, the
Mortgages will constitute the legal, valid and binding obligations of Dover
International Speedway, Inc., enforceable against it in accordance with their
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).

 

6. Conditions Precedent. The effectiveness of the amendments set forth herein is
subject to the fulfillment, to the satisfaction of the Agent and its counsel, of
the following conditions precedent:

 

(a) The Borrower shall have delivered to the Agent the following, all of which
shall be in form and substance satisfactory to the Agent and shall be duly
completed and executed:

 

(i) This Amendment;

 

(ii) Evidence of insurance as required by the Mortgages

 

(iii) Copies, certified by the Secretary or an Assistant Secretary of the
Borrower, of resolutions of the Board of Directors of the Borrower in effect on
the date hereof authorizing the execution, delivery and performance of this
Amendment and the other documents and transactions contemplated hereby;

 

(iv) Copies, certified by one of the officers of the Borrower, the certificate
of incorporation, By-laws and fictitious name filing, if any, of the Borrower as
in effect, or a certificate stating that there have been no changes to any such
documents since the most recent date, true and correct copies thereof were
delivered to the Agent; and

 

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(v) Such additional documents, certificates, opinions and information as the
Agent may require pursuant to the terms hereof or otherwise reasonably request.

 

(b) The representations and warranties set forth in the Credit Agreement shall
be true and correct in all material respects on and as of the date hereof.

 

(c) The Guarantors shall duly execute and deliver the Confirmation and
Acknowledgment attached hereto as Exhibit A.

 

(d) The Borrower shall pay to the Agent for the benefit of each Bank executing
and delivering this amendment an amendment and modification fee of 20 basis
points (0.20%) on the amount of such Bank’s Commitment as of the date hereof and
after giving effect to the reduction in the Total Commitment to $85,000,000.

 

7. Ratification; References; No Waiver. Except as the provisions thereof have
been expressly amended or waived by this Amendment, the Credit Agreement shall
continue to be, and shall remain, unaltered and in full force and effect in
accordance with its terms. All references in the Credit Agreement and the other
Loan Documents to the Credit Agreement shall be to the Credit Agreement as
amended by this Amendment. This Amendment does not and shall not be deemed to
constitute a waiver by the Agent or the Banks of any Default or Event of Default
or of any of the Agent’s or the Banks’ other rights or remedies.

 

8. Release and Indemnity. Recognizing and in consideration of the Banks’ and the
Agent’s agreement to the waivers and amendments set forth herein, the Borrower
hereby waives and releases the Banks and the Agent and their respective
officers, attorneys, agents, and employees from any liability, suit, damage,
claim, loss or expense of any kind or nature whatsoever and howsoever arising
that such Borrower ever had or now has against any of them arising out of or
relating to any Bank’s or the Agent’s acts or omissions with respect to this
Amendment, the Credit Agreement, the other Loan Documents or any other matters
described or referred to herein or therein. The Borrower further hereby agrees
to indemnify and hold the Agent and the Banks and their respective officers,
attorneys, agents and employees harmless from any loss, damage, judgment,
liability or expense (including counsel fees) suffered by or rendered against
the Banks or the Agent or any of them on account of anything arising out of this
Amendment, the Credit Agreement, the other Loan Documents or any other document
delivered pursuant hereto or thereto up to and including the date hereof;
provided that, no Borrower shall have any obligation hereunder to any Bank or
the Agent with respect to indemnified liabilities arising from the gross
negligence or willful misconduct of such Bank or the Agent.

 

9. Miscellaneous.

 

(a) Expenses. The Borrower agrees to pay all of the Agent’s reasonable
out-of-pocket expenses incurred in connection with the preparation, negotiation
and execution of this Amendment and the other documents executed in connection
herewith (including any filing or other fees in connection with the Mortgages)
including, without limitation, the reasonable fees and expenses of Ballard Spahr
Andrews & Ingersoll, LLP.

 

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(b) Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Delaware.

 

(c) Successor and Assigns. The terms and provisions of this Amendment shall be
binding upon and shall inure to the benefit of the Borrower, the Agent and the
Banks and their respective successors and assigns.

 

(d) Counterparts. This Amendment may be executed in one or more counterparts,
each of which shall be deemed to be an original, and all of which shall
constitute one and the same instrument.

 

(e) Headings. The headings of any paragraph of this Amendment are for
convenience only and shall not be used to interpret any provision hereof.

 

(f) Modifications. No modification hereof or any agreement referred to herein
shall be binding or enforceable unless in writing and signed on behalf of the
party against whom enforcement is sought.

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.

 

DOVER MOTORSPORTS, INC.

By:

 

/S/    DENIS MCGLYNN

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Name: Denis McGlynn

Title: President

PNC BANK, DELAWARE, as Agent and as a Bank

By:

 

/S/    THEODORE PRUSHINSKI

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Name: Theodore Prushinski

Title: Vice President

WILMINGTON TRUST COMPANY, as a Bank

By:

 

/S/    MICHAEL B. GAST

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Name: Michael B. Gast

Title: Vice President

 

8

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ALLFIRST BANK, as a Bank

By:

 

/S/    WILLIAM KEEHN

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Name: William Keehn

Title: Assistant Vice President

WILMINGTON SAVINGS FUND SOCIETY, FSB, as a Bank

By:

 

/S/    M. SCOTT BAYLIS

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Name: M. Scott Baylis

Title: Vice President

WACHOVIA BANK, NATIONAL ASSOCIATION (formerly known as First Union National
Bank), as a Bank

By:

 

/S/    GRAINNE M. PERGOLINI

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Name: Grainne M. Pergolini

Title:

NATIONAL CITY BANK, as a Bank

By:

 

/S/    TARA M. HANDFORTH

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Name: Tara M. Handforth

Title: Vice President

 

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SCHEDULE I

 

BANK AND COMMITMENT INFORMATION

 

Bank and Address

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Commitment

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PNC Bank, Delaware

222 Delaware Avenue

18th Floor

Wilmington, DE 19801

Attn: Theodore Prushinski

  

$

27,380,952.38

Wachovia Bank, National Association

301 S. College Street

Charlotte, NC 28288

Attn: Grainne M. Pergolini

  

$

20,238,095.24

Allfirst Bank

25 S. Charles St.

M/C 101-744

Baltimore, MD 21201

Attn: William Keehn

  

$

8,095,238.10

Wilmington Savings Fund Society, FSB

838 Market Street

Wilmington, De 19801

Attn: M. Scott Baylis

  

$

5,000,000.00

Wilmington Trust Company

121 South State Street

Dover, DE 19901

Attn: Michael B. Gast

  

$

12,142,857.14

National City Bank

1 South Broad St.

Philadelphia, PA 19107

Attn: Tara M. Handforth

  

$

12,142,857.14

    

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$

85,000,000

 

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