Item 1.01 Entry Into Material Definitive Agreements.
On May 28, 2014, Dover Motorsports, Inc. and our wholly-owned subsidiary,
Nashville Speedway, USA, Inc., entered into a definitive agreement to sell to
NeXovation, Inc. our Nashville Superspeedway facility along with some related
equipment and assets. The agreement provides for a $1.5 million deposit to be
held in escrow and an aggregate purchase price of $27 million in cash plus the
assumption by NeXovation of our obligations under certain Variable Rate Tax
Exempt Infrastructure Revenue Bonds issued by the Sports Authority of the County
of Wilson, Tennessee. The Bonds, which have a remaining principal balance of
$18,800,000, are secured by a letter of credit provided by us which will be
replaced by a letter of credit provided by NeXovation. Debt service on the Bonds
is payable from property and sales taxes generated by the facility.
Our balance sheet includes a $1,765,000 contingent obligation for the estimated
portion of the debt service that may not be covered by property and sales taxes
at the Nashville facility if it were to remain closed. Upon closing of the
transaction, we will reverse the contingent obligation which will result in a
$1,765,000 increase in our pre-tax earnings.
We estimate that net proceeds from the sale will be approximately $21-$22
million after income taxes and settlement adjustments.
Closing is expected to take place in the third quarter and is subject to
customary closing conditions.
Item 9.01 Financial Statements and Exhibits
10.1 Purchase and Sale Agreement dated May 28, 2014
between Dover Motorsports,
, Nashville Speedway, USA, Inc.
and NeXovation, Inc.
99.1 Press Release dated May 29, 2014
, issued by Dover Motorsports, Inc.