Exhibit 10.9
Prepared by.
Record and Return to:
997 Lenox
Drive, Building #3
Lawrenceville,
New Jersey 08648
Parcel Id Nos.:
Al, A1B, A1F, A1F1, A1F2 AND A1F3
MORTGAGE AND
SECURITY AGREEMENT
THIS MORTGAGE AND SECURITY AGREEMENT
("Mortgage") is made on September 19 , 2007, between DIRT
MOTOR SPORTS, INC. d/b/a WORLD RACING GROUP, INC., with an address
of 7575 West Winds Boulevard, Suite D, Concord, North Carolina
28027 (the "Mortgagor") and NORTH SOUND LEGACY INTERNATIONAL, LTD,
NORTH SOUND LEGACY INSTITUTIONAL FUND LLC, VICIS CAPITAL MASTER
FUND, L.P., C.E. UNTERBERG, TOWBDSf CAPITAL PARTNERS I, L.P., BASSO
FUND LTDy BASSO MULTI-STRATEGY HOLDING FUND LTD., ROCKMORE
INVESTMENT MASTER FUND LTD., TRELLUS PARTNERS, LP, TRELLUS PARTNERS
II, LP, TRELLUS OFFSHORE FUND LIMITED, TRELLUS SMALL CAP
OPPORTUNITY FUND, LP, TRELLUS SMALL CAP OPPORTUNITY OFFSHORE FUND
LIMITED, and IROQUOIS MASTER FUND LTD, with an address of c/o
Burnham Hill Partners, 590 Madison Avenue, 5
th Floor, New York, NY 10022 (collectively, the
"Mortgagee").
WHEREAS, Mortgagor has borrowed certain funds
from the Mortgagee pursuant to the Note Purchase Agreement dated as
of the date hereof (the "Note Purchase Agreement"; capitalized
terms used herein and not defined herein have the meanings set
forth in the Note Purchase Agreement) as evidenced by the Notes in
the aggregate principal sum of FIFTEEN MILLION DOLLARS
($15,000,000) (collectively, the "Loan") upon such terms and
conditions as therein provided;
WHEREAS, Mortgagor and Mortgagee agree and
acknowledge that the total value of the Mortgaged Property (as
hereinafter defined) is equal to THREE MILLION DOLLARS ($3,000,000)
and that the amount secured by this Mortgage is hereby limited to
said amount.
The Mortgagor has agreed to enter into this
mortgage (the "Mortgage") to grant to Mortgagee a mortgage lien on
and security interest in and to the Mortgaged Property (as
hereinafter defined) as security for the payment and performance of
all Obligations (as hereinafter defined) of the Mortgagor to the
Mortgagee hereunder and under the Note Purchase Agreement, the
Notes and the other Transaction Documents (collectively, the "Loan
Documents"), and intending to be legally bound, Mortgagor does
hereby grant, sell, bargain, mortgage, assign, transfer, pledge and
convey to the Mortgagee, and does hereby grant a security interest
(the "Security Interest") to ..the Mortgagee in Mortgagor's right,
title, and interest in and to the following described p^perty,
whether now owned or hereafter acquired (collectively, the
"Mortgaged Property"):
a. all of the tract or parcel of land and
premises known described in Exhibit "A" attached hereto and made a
part of hereof;
Lernerville
Speedway:
Mailing
Address: 313 North Pike Road, Sarver, PA 15055 Total of 109.126
acres.
All those
certain pieces or parcels of land comprising the Lemerville
Speedway Property, individually known as Tax Parcels Al, A1B, A1F,
A1F1, A1F2 and A1F3 of Tax Map 1F75, situate in Winfield Township
and Buffalo Township, Butler County, Commonwealth of Pennsylvania,
the overall boundary of said parcels being more fully bounded and
described as follows:
Beginning at a
point in the centerline of North Pike Road (S.R.0356) where said
line is intersected by the southerly line of land now or formerly
of Sarver Development, L.L.C. (as recorded at instrument # 2003
09110041415); thence, away from said road and along said line of
Sarver Development, LX.C. :; Sf&9° 30' 00" E, 259.35 feet to a point;
thence, along the easterly line of said Sarver property and
properties now or formerly of Harry and Dorothy Bouch,
Helen Martin, and David A. and Lois J. Rrumpe
and an apparent 20 foot right of way, N 00° 53' 33" E, 829.13
feet to a point; thence, along the southerly line of land now or
formerly of Ervin E. arid Shirley Holbert, the southerly line of
Franklin Drive, 16 feet wide, land now or formerly of F. Charlotte
McWilliams, Bette and William McWilliams, along the southerly line
of a 20 foot right of way as called for in D.B.V. 978, Page 85 and
southerly line of other land of William R. and Bette Williams, S
89° 37' 43" E, 1983.17 feet to a point in the center of the
former Pennsylvania Railroad right of way, (now a "rails to trails"
path); thence along said former railroad right of way centerline S
39° 13' 38" E, 210.75 feet to a point of tangency; thence by
same in a southerly direction by a curve to the right having a
radius of 859.02 feet, an arc distance of 705.47 feet to a point at
or near the center of a stream; thence, away from former railroad
right of way and along or near said center of stream the following
bearings and distances:
S50° 30'
00" W, 109.83 feet; S 33° 30' 00" W, 240.90 feet; S 17°
15'00" W, 242.55 feet; S10°51' 11"E, 144.33 feet; S 22° 30'
00" W, 469.42 feet; S23°30' 00" E, 346.50 feet; S29° 00'
00" E, 179.85 feet;
To a point; thence, along the northerly line of
land now or formerly of Community Development Corporation of Butler
County, N 89° 45' 00" W, 1,056.48 feet to a point; thence,
along the easterly line of other land now and formerly of Sarver
Development, L.L.C., N 17° 58' 00" W, 300.00 feet to a point
thence, along northerly line of same N 89° 45' 00" W, 763.95
feet to the centerline of aforementioned North Pike Road (S.R.
0356); thence along said centerline the following bearings and
distances:
N 18° 30'
00" W, 403.72 feet;
N 22° 30'
00" W, 327.39 feet;
N 18° 15'
00" W, 330.00 feet;
N 18° 00'
00" W, 284.43 feet to the Point and Place of Beginning.
Containing a
total area of 4,753,521.75 square feet or 109.126 acres.
b. all
improvements, material, property rights and interests including but
not limited to:
i. all buildings and
other improvements now or hereafter located on the Mortgaged
Property (the "Improvements");
ii. all streets,
lanes, alleys, passages, ways, water courses, easements and
appurtenances whatsoever thereunto belonging in or in any way made
appurtenant hereafter, and the reversions and remainder, with
respect thereto;
iii. all present and
future fixtures attached or to be attached to the Mortgaged
Property;
iv. all building
materials, building machinery and building equipment delivered on
site to the Mortgaged Property during the course of, or in
connection with, the construction of, or reconstruction of, or
remodeling of any building and improvements from time to time
during the term of this Mortgage;
v. all awards or
payments, including interest thereon, which may be made with
respect to the Mortgaged Property, whether from the exercise of the
right of eminent domain (including any transfer made in lieu of the
exercise of said right), or for any other injury to or decrease in
the value of the Mortgaged Property, including without limitation,
all awards or payments of estimated compensation, all damages to
the Premises or Improvements resulting from any taking, all
machinery and equipment dislocation expenses, all settlement
amounts and apportionment of taxes;
vi. all insurance
policies covering the Mortgaged Property and all proceeds of any
unearned premiums on any such insurance policies includmg, without
limitation, the right to receive and apply the proceeds of any
insurance judgments, or settlements made in lieu thereof, for
damage to the Mortgaged Property;
vii. all future leases
and other agreements affecting the use and occupancy of the
Mortgaged Property now or hereafter entered into, and ;all
licenses, permits and agreements with or from all boards, public
utilities, agencies, departments, governmental or otherwise,
relating to or affecting the Mortgaged Property or the use and
occupancy thereof, whether heretofore or hereafter issued or
executed;
viii. all income, rents,
issues, profits, revenues, royalties, proceeds, credits, deposits
and options arising out of, under or relating to the use and
operation of the Mortgaged Property and all leases, chattels real,
subleases, subtenancies, occupancy agreements, licenses or
concessions affecting the Mortgaged Property, including, without
limitation, the right, power and authority given to and conferred
upon Mortgagor under any assignment of leases to collect and apply
such income, rents, issues, profits and proceeds;
ix. all general
intangibles arising from, used or held in connection with, or
relating to the Mortgaged Property or the ownership, use,
occupancy, enjoyment, operation, management, development or
improvement thereof, including, without limitation, all
governmental permits relating to construction, all subdivision maps
and applications therefor, all subdivision public reports and
applications therefor, all architectural and engineering drawings,
plans and specifications, soil tests, feasibility studies,
engineering reports, environmental, building and other permits,
certificates of occupancy, construction, management and other
contracts, franchises, licenses and all names under or by which the
Mortgaged Property or any present or future improvements on the
Mortgaged Property may at any time be operated or known, and all
rights to carry on business under any such names, or any variant
thereof, and all trademarks and goodwill in; any way relating to
the Mortgaged Property.
TOGETHER WITH all
substitutions therefore, all additions (including without
limitation all cash and dividends and other distributions and all
rights, privileges and options relating to, declared or granted in
connection with property) and all proceeds thereof and products of
each of the foregoing in any form whatsoever.
HABENDUM CLAUSE
TO HAVE AND TO HOLD all of the
Mortgaged Property unto Mortgagee and its successors and assigns,
forever, upon the terms and conditions herein set forth.
AND IT IS AGREED AND
UNDERSTOOD that until an Event of Default, (as such term is defined
herein), shall have occurred and the Required Mortgagees (as
hereinafter defined) have elected to foreclose as detailed herein,
Mortgagor may retain possession of the Mortgaged
Property.
COVENANTS. REPRESENTATIONS AND
WARRANTIES
IT IS HEREBY COVENANTED by the
parties hereto that the Mortgaged Property is to be held arid
applied subject to the further terms herein set forth; and
Mortgagor, for itself and its successors and Assigns, hereby
covenants, agrees, represents and warrants with and to Mortgagee as
follows:
1. Title to
Mortgaged Property . Mortgagor represents, warrants, covenants
and agrees Mortgagor shall at all times remain the legal and
beneficial owner of good and marketable indefeasible title in fee
simple absolute to all of the Mortgaged Property.; Mortgagor has
full power and authority to grant the Mortgaged Property as
provided in this Mortgage and will forever warrant and defend its
grant made herein against any and all claims and demands
whatsoever, except as specifically provided in this
Mortgage.
2. Definition of
Obligations . This Mortgage secures the payment and performance
of the following indebtedness, liabilities and obligations
(collectively referred to herein as the "Obligations"):
a. the Obligations of
the Mortgagor set forth in the Note Purchase Agreement, the Notes
and the other Transaction Documents; and
b. all other sums due
or to become due under the Notes and this Mortgage including all
extensions, renewals, modifications or reamortizations of the debt
evidenced by the Notes, all increases or additions to such debt,
and all other debts, obligations and liabilities of every kind and
character of Mortgagor now or hereafter existing in favor of
Mortgagee whether such debts, obligations or liabilities be direct
or indirect, primary or secondary, joint or several, fixed or
contingent, and whether originally payable to Mortgagee or to a
third party and subsequently acquired by Mortgagee.
3. Responsibility
and Preservation of Mortgaged Property; Compliance with Laws.
Mortgagor assumes all liability and responsibility in connection
#ith ail Mortgaged Property acquired by Mortgagor arid the
obligation of Mortgagor to pay all OhUg^o^shall in no way be
affected or diminished by reason of the fact that any such
Mortgaged Property may be lost, destroyed, stolen, damaged or for
any reason whatsoever unavailable to Mortgagor. Mortgagor shall
keep the Mortgaged Property protected and in good order, condition
and repair at all times and shall not: (a) commit, permit or suffer
any waste, damage, disfigurement or injury to or upon the Mortgaged
Property or arty portion thereof; or (b) demolish, destroy, or
remove any buildings, fixtures, structures or improvements
thereafter erected on or annexed or affixed to the Mortgaged
Property. Mortgagor further agrees and covenants to comply
with and perform at its own expense any and all present or future,
ordinary o|||pprdinary, foreseen or unforeseen laws, regulations,
Ordinances or requirements concerning the Mortga£e'cf
Property or any portion thereof, or the use thereof, or the streets
adjacent thereto, of the federal, state or municipal governments,
or of any departments, subdivisions, bureaus or offices thereof, or
of any governmental, public or quasi-public authorities now created
or hereafter created or of the National Board of Fire Underwriters,
any local Board of Fire Underwriters, or other body having similar
functions, or of any liability, fire or other insurance company
having policies outstanding with respect to the Mortgaged Property
or any part thereof (including, without limitation, all laws,
regulations, ordinances and requirements relating to environmental
issues and hazardous substances) (said laws, regulations,
ordinances and requirements hereafter collectively referred to as
the "Laws").
4. Taxes .
Mortgagor shall pay, before the same becomes delinquent, all taxes,
assessments and charges of every nature (collectively, "Taxes") and
by whomever assessed that may now or hereafter be levied or
assessed against, or that by reason of nonpayment may become a lien
upon, the Mortgaged Property, or any part thereof, and, if
requested by Mortgagee, Mortgagor shall, prior to the date each Tax
would become delinquent by reason of nonpayment, submit to
Mortgagee official Tax payment receipts or other evidence
acceptable to Mortgagee of the due and punctual payment thereof.
Mortgagor shall not claim on demand or be entitled to any credit on
account of the Obligations for any part of the taxes paid with
respect to the Mortgaged Property or any part thereof and no
deduction shall otherwise be made or claimed from the taxable value
of the Mortgaged Property, or any part thereof, by reason of this
Mortgage.
5. : Insurance
. In the event Mortf ^S 'shail improve the Mortgaged
Property thereby constructing buildings or other improvements
thereon, then Mortgagor shall carry adequate insurance against all
liability and hazards, including without limitation, fire and
casualty insurance for the mortgaged property as are usually
carried by entities engage in the same or a similar business
situated as Mortgagor. In the event of a casualty loss, Mortgagor
shall utilize the insurance proceeds to rebuild the premises or
apply the proceeds to the outstanding mortgaged sums due pursuant
to the .terms of this mortgage to Satisfy any outstanding
indebtedness hereunder. The aforesaid liability insurance shall be
in an amount satisfactory to Mortgagee and shall name Mortgagee as
an additional insured.
6. Tenant's
Compliance with Laws . Mortgagor shall cause all future
tenants, if any, under any leases to comply, with all Laws
affecting the Mortgaged Property.
7. Right to
Inspect and Cure . The Mortgagee shall, upon reasonable advance
written notice to Mortgagor, have the right to conduct or have
conducted by its agents or contractors, such inspections as the
Mortgagee shall deem necessary or advisable from time to
time.
8. Estoppel
Certificate . Mortgagor will certify, by a writing duly
acknowledged, to Mortgagee or to any proposed assignee of this
Mortgage, the amount of principal and interest then owing on the
Obligations and whether, to Mortgagor's best knowledge, any offsets
or defenses exist against the Obligations, within five (5) days
after a request ther^fo^s received by Mortgagor.
9. Prohibition on
Transfers . Mortgager" shall not at any time (i) sell, assign,
transfer, convey, lease with option of sale, or dispose of all or
any part of or interest in the Mortgaged Property, or (ii) suffer
or permit transfer by operation of law of the Mortgaged Property,
or any part thereof or interest therein, without the prior written
consent thereto of Mortgagee unless the then remaining balance due
under this Mortgage and Notes is satisfied. In the event that the
ownership of the Mortgaged Property or any portion thereof becomes
vested in a person other than Mortgagor, Mortgagee may, without
notice to Mortgagor, deal with such successor or successors in
interest with reference to this Mortgage, and the indebtedness
hereby secured, in the same manner as with Mortgagor, without in
any way vitiating or discharging Mortgagor's liability hereunder or
upon the indebtedness hereby secured. No sale of the Mortgaged
Property shall operate to release, discharge, modify, change or
affect the original liability of Mortgagor herein, either in whole
or in part. Any violation of the foregoing limitations shall be
deemed an Event of Default hereunder.
10. Reports and
Notices . Mortgagor will furnish Mortgagee with copies of
reports and notices pertaining to the Mortgaged Property or any
portion thereof, its value or its operations, and which are
submitted by Mortgagor to, or received by Mortgagor from, any
legally constituted authority having jurisdiction of operations
conducted on the Mortgaged Property, including, but without
limitation, any licensing agency, of which deal with any
imposition, condemnation of all or any portion of the Mortgaged
Property or default under any mortgage or security agreement
encumbering the Mortgaged Property or any portion
thereof.
11. Further
Assurances . Mortgagor wilfexecute, acknowledge and deliver, at
Mortgagor's own cost and expense, all such further acts, deeds,
conveyances, assignments, notices of assignment, transfers and
assurances as Mortgagee shall form time to time reasonably require
for the better granting, bargaining, selling, assigning and
conveying to Mortgagee of the Mortgaged Property.
12. Authorization
to Make Payments . Mortgagor hereby authorizes Mortgagee or its
designee:
a. To pay all taxes
or other governmental charges, with all interest costs and charges
accruing thereon, which may at any time be or become a lien on the
Mortgaged Property, or any portion thereof;
b. To effect any
insurance required hereunder and to pay the premiums thereon;
provided, however, that none of the above provisions shall be
construed as obligatory upon Mortgagee or as making it liable for
loss, damage or injury which may result from the non-insurance of
the Mortgaged Property, or any portion thereof, or other
failure;
c. To incur or pay
any claim, lien, encumbrance or other expe
