Exhibit 10.1

 

MODIFICATION
AND REAFFIRMATION AGREEMENT

 

THIS MODIFICATION AND REAFFIRMATION AGREEMENT (this “Agreement”) is dated as of
the 14th day of September, 2015, by and among DOVER DOWNS GAMING AND
ENTERTAINMENT, INC., a Delaware corporation (“Borrower”), DOVER DOWNS, INC., a
Delaware corporation (“Dover Downs”), and DOVER DOWNS GAMING AND MANAGEMENT
CORP., a Delaware corporation (jointly and severally with Dover Downs, the
“Guarantors”), and CITIZENS BANK, NATIONAL ASSOCIATION (formerly known as RBS
Citizens, National Association), as agent (“Agent”), lead arranger, cash
management bank and lender (“Citizens”), PNC BANK, NATIONAL ASSOCIATION, as
lender (“PNC”), and WILMINGTON SAVINGS FUND SOCIETY, FSB, as lender (“WSFS” and
collectively with Citizens and PNC, the “Lenders”).

 

Background

 

A.            Borrower, Agent and Lenders are parties to a Credit Agreement
dated as of June 17, 2011 (as amended, the “Credit Agreement”), which provides
for a revolving line of credit to the Borrower in the original principal amount
of Ninety Million Dollars ($90,000,000).  Unless otherwise defined herein,
initially capitalized terms have the meanings given them in the Credit
Agreement.

 

B.            At Borrower’s request and as an accommodation to it, Lenders have
agreed to amend the Credit Agreement as provided in this Agreement.

 

NOW, THEREFORE, in consideration of the Credit Agreement and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound and under seal,
agree as follows:

 

Section 1.  Amendment to Credit Agreement.  Upon satisfaction of the Conditions
Precedent (as defined herein), the Credit Agreement shall be amended as follows:

 

A.            The defined term “Daily LIBOR” in Section 1.1 of the Credit
Agreement is hereby modified by inserting “; provided, however, that if LIBOR is
less than zero (0), LIBOR shall be deemed to be zero (0)” before the period.

 

B.            The defined term “LIBOR” in Section 1.1 of the Credit Agreement is
hereby modified by inserting “; provided, however, that if LIBOR is less than
zero (0), LIBOR shall be deemed to be zero (0)” before the period.

 

C.            The first sentence after the Leverage Ratio chart in the defined
term “Applicable Margin” in Section 1.1 of the Credit Agreement is hereby
deleted and replaced with the following new sentence:

 

Any adjustments to the Applicable Margin resulting from a change in the Leverage
Ratio shall be effective as from the first Business Day of the month after the
month in which the Agent received the Compliance Certificate indicating such
change in the Leverage

 

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Ratio (or, in the event that no Compliance Certificate has been delivered prior
to the date on which such Compliance Certificate was required to be delivered
pursuant to Section 6.2(c) (Compliance Certificate), the Applicable Margin from
such date until the date on which such Compliance Certificate is actually
delivered shall be that applicable under Category 1).

 

D.            The defined term “Maturity Date” in Section 1.1 of the Credit
Agreement is hereby deleted and replaced with the following new definition:

 

“Maturity Date” means September 30, 2016.

 

E.            Section 2.5(d) of the Credit Agreement is hereby deleted and
replaced with the following new Section 2.5(d):

 

(d)           Scheduled Reduction of Commitments.  The Borrower shall reduce the
total Commitments (and, if necessary, prepay Loans in accordance with
Section 2.7 (Optional Prepayments) so that the total Revolving Exposures do not
exceed the total Commitments) on each date set forth below to the aggregate
amount set forth opposite such date:

 

Date

 

Total Commitments

 

09/14/15

 

$

45,000,000

 

03/31/16

 

$

40,000,000

 

 

F.             Section 5.2 of the Credit Agreement is hereby deleted and
replaced with the following new Section 5.2:

 

5.2          Leverage Ratio

 

The Borrower will not permit the Leverage Ratio as at the last day of any period
set forth below to exceed the ratio set forth opposite such period:

 

Period

 

Ratio

 

09/30/15

 

3.75:1.0

 

12/31/15

 

3.5:1.0

 

03/31/16

 

3.5:1.0

 

06/30/16

 

3.5:1.0

 

 

G.            Section 5.3 of the Credit Agreement is hereby deleted and replaced
with the following new Section 5.3:

 

5.3          Consolidated Tangible Net Worth

 

The Borrower will not permit Consolidated Tangible Net Worth on any day to be
less than (a) $92,925,500, plus (b) for the fiscal quarter ending September 30,
2015 and each fiscal quarter thereafter, an amount equal to forty-five percent
(45%) of the consolidated net income (if positive) of the Borrower and its
Subsidiaries, calculated on a cumulative basis.

 

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H.            Section 5.4 of the Credit Agreement is hereby deleted and replaced
with the following new Section 5.4:

 

5.4.         Minimum Consolidated EBITDA

 

The Borrower will not permit Consolidated EBITDA for the four Fiscal Quarters
ending on the dates set forth below to be less than the dollar amount set forth
opposite such dates:

 

Date

 

Consolidated EBITDA

 

09/30/15

 

$

9,000,000

 

12/31/15

 

$

9,500,000

 

03/31/16

 

$

9,500,000

 

06/30/16

 

$

9,500,000

 

 

Section 2.  Conditions Precedent.  This Agreement shall become effective upon
the satisfaction by Borrower, as determined by Agent, of the following
conditions (collectively, the “Conditions Precedent”).

 

A.            Proper execution by the parties of this Agreement and delivery of
this Agreement to Agent;

 

B.            Payment to the Agent of the amount required to reduce the
outstanding principal balance of the Loan to $45,000,000.

 

C.            Payment to the Agent for the benefit of the Lender Parties of a
fee in the amount of $67,500 in consideration of this Agreement; and

 

D.            Payment to the Agent for its fees and expenses relating to this
Agreement.

 

Section 3.  Affirmations.  Borrower and Guarantors hereby affirm the execution
and delivery of each of the Loan Documents, and agree that all of the
obligations and liabilities of Borrower and Guarantors under the Loan Documents
continue in full force and effect.  Borrower and Guarantors hereby also affirm
that all of the collateral received by Agent in connection with the Credit
Agreement is intended to and does in fact secure each of the obligations of
Borrower described in the Credit Agreement.

 

Section 4.  Agreements, Acknowledgments and Waivers.   Borrower and Guarantors
acknowledge that the obligations set forth in each of the Loan Documents are
valid, binding, and enforceable against them and are not subject to any defense,
counterclaim, recoupment or offset.  In addition, Borrower and Guarantors
acknowledge that (i) the execution of this Agreement, (ii) the acceptance by
Agent or Lenders of any payments hereunder, or (iii) any previous or subsequent
delay by Agent or Lenders in exercising any or all of its rights or remedies
under the Loan Documents, either separately or in combination, shall not
constitute a waiver by Agent or Lenders of any of the rights of Agent or Lenders
under the Loan Documents and shall not preclude Agent or Lenders from exercising
its rights thereunder or at law.  Nothing

 

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herein shall be deemed a waiver of any of Agent’s or Lenders’ rights or remedies
with respect to (i) any existing violation of any affirmative or negative
pledge, covenant or warranty, (ii) any Event of Default, or (iii) any Default.

 

Section 5.  Miscellaneous.  The parties to this Agreement further agree as
follows:

 

A.            Power and Authority.  The parties represent and warrant that each
has the full power and authority to enter into and perform this Agreement, all
of which has been duly authorized by all necessary corporate action and that
this Agreement is valid, binding, and enforceable in accordance with its terms.

 

B.            References to Credit Agreement.  Any and all references to the
Credit Agreement in any of the other Loan Documents shall be deemed to refer to
the Credit Agreement as amended by this Agreement.

 

C.            Counterparts.  This Agreement may be executed by the parties
hereto in any number of counterparts, each of which when so executed and
delivered shall be an original and all of which together shall constitute one
Agreement.

 

D.            Rules of Construction.  As used herein, unless the context clearly
indicates a contrary intent or unless otherwise specifically provided herein,
the singular shall include the plural and the plural the singular, and the
masculine, feminine or neuter gender shall include the other genders.

 

E.            Choice of Laws.  This Agreement shall be construed and interpreted
in accordance with the internal laws of the State of Delaware, without regard
for principles of conflicts of laws.

 

F.             Acknowledgments.  Each party to this Agreement acknowledges that
it has executed this Agreement voluntarily, with a full knowledge and a complete
understanding of the terms and effect of this Agreement and that it has been
fully advised by competent counsel as to the nature and effect of the applicable
terms and provisions hereof.

 

G.            Representations and Warranties.  Borrower represents and warrants
that the representations and warranties set forth in the Loan Documents remain
true and accurate in all material respects as of the date of this Agreement
(provided that references to December 31, 2010 in Sections 4.4(c) and
4.4(d) shall refer to June 30, 2015).

 

H.            Remaining Force and Effect.  Except as specifically amended
hereby, the Credit Agreement and other Loan Documents remain in full force and
effect in accordance with their terms.

 

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IN WITNESS WHEREOF, the undersigned have set their hands and seals or caused
these presents to be executed by their proper corporate officers or authorized
managers and sealed with their seal the day and year first above written.

 

 

DOVER DOWNS GAMING AND

 

ENTERTAINMENT, INC.,

 

a Delaware corporation

 

 

 

 

 

By:

/s/ Timothy R. Horne

(SEAL)

 

 

Name: Timothy R. Horne

 

 

 

Title: Senior Vice President

 

 

 

 

 

 

 

 

 

 

DOVER DOWNS, INC.,

 

a Delaware corporation

 

 

 

 

 

 

 

 

 

By:

/s/ Timothy R. Horne

(SEAL)

 

 

Name: Timothy R. Horne

 

 

 

Title: Senior Vice President

 

 

 

 

 

 

 

 

 

 

DOVER DOWNS GAMING AND

 

MANAGEMENT CORP.,

 

a Delaware corporation

 

 

 

 

 

 

 

 

 

 

By:

/s/ Timothy R. Horne

(SEAL)

 

 

Name: Timothy R. Horne

 

 

 

Title: Senior Vice President

 

 

 

 

 

 

 

 

 

 

CITIZENS BANK, NATIONAL

 

 

ASSOCIATION

 

 

 

 

 

 

 

 

 

 

By:

/s/ Edward S. Winslow  

(SEAL)

 

 

Edward S. Winslow

 

 

 

Senior Vice President

 

 

{signatures continue on following page)

 

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PNC BANK, NATIONAL ASSOCIATION

 

 

 

 

 

 

 

 

 

By:

/s/ C. Douglas Sawyer

(SEAL)

 

 

Name: C. Douglas Sawyer

 

 

 

Title: Senior Vice President

 

 

 

 

 

 

 

 

 

 

WILMINGTON SAVINGS FUND

 

 

SOCIETY, FSB

 

 

 

 

 

 

 

 

 

 

By:

/s/ James A. Walls

(SEAL)

 

 

Name: James A. Walls

 

 

 

Title: Vice President – Business Banking

 

 

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