Exhibit
10.1
* * *
PURCHASE AGREEMENT
May 14, 2009
Speedway Motorsports,
Inc.
and
The Guarantors named
herein
$275,000,000
8
3 / 4 % Senior Notes due
2016
Banc of America Securities
LLC
Wachovia Capital Markets,
LLC
J.P. Morgan Securities
Inc.
SunTrust Robinson Humphrey,
Inc.
As Representatives of the Initial
Purchasers
May 14, 2009
B ANC OF A
MERICA S ECURITIES LLC
W ACHOVIA C APITAL M ARKETS ,
LLC
J.P. M ORGAN S ECURITIES I NC .
S UN
T RUST R OBINSON H UMPHREY ,
I NC .
c/o Banc of America Securities
LLC
One Bryant Park
New York, New York 10036
Ladies and Gentlemen:
Introductory.
Speedway
Motorsports, Inc., a Delaware corporation (the “
Company ”), proposes to issue and sell to the several
Initial Purchasers named in Schedule A (the “ Initial
Purchasers ”), acting severally and not jointly, the
respective amounts set forth in such Schedule A of an $275,000,000
aggregate principal amount of the Company’s 8
3
/
4 % Senior Notes due 2016 (the
“ Notes ”). Banc of America Securities LLC,
Wachovia Capital Markets, LLC, J.P. Morgan Securities Inc. and
SunTrust Robinson Humphrey, Inc. have agreed to act as the
representatives of the several Initial Purchasers (the “
Representatives ”) in connection with the offering and
sale of the Notes.
The Securities (as defined below)
will be issued pursuant to an indenture, to be dated as of
May 19, 2009 (the “ Indenture ”), among the
Company, the Guarantors (as defined below) and U.S. Bank National
Association, as trustee (the “ Trustee ”). Notes
will be issued only in book-entry form in the name of
Cede & Co., as nominee of The Depository Trust Company
(the “ Depositary ”) pursuant to a letter of
representations, to be dated on or before the Closing Date (as
defined in Section 2 hereof) (the “ DTC Agreement
”), among the Company, the Trustee and the
Depositary.
The holders of the Notes will be
entitled to the benefits of a registration rights agreement, to be
dated as of May 19, 2009 (the “ Registration Rights
Agreement ”), among the Company, the Guarantors and the
Initial Purchasers, pursuant to which the Company and the
Guarantors may be required to file with the Commission (as defined
below), under the circumstances set forth therein, (i) a
registration statement under the Securities Act (as defined below)
relating to another series of debt securities of the Company with
terms substantially identical to the Notes (the “ Exchange
Notes ”) to be offered in exchange for the Notes (the
“ Exchange Offer ”) and (ii)
1
a shelf registration statement pursuant to Rule
415 of the Securities Act relating to the resale by certain holders
of the Notes, and in each case, to use its reasonable best efforts
to cause such registration statements to be declared effective. All
references herein to the Exchange Notes and the Exchange Offer are
only applicable if the Company and the Guarantors are in fact
required to consummate the Exchange Offer pursuant to the terms of
the Registration Rights Agreement.
The payment of principal, premium
and Liquidated Damages (as defined in the Indenture), if any, and
interest will be fully and unconditionally guaranteed on a senior
unsecured basis, jointly and severally, by (i) all of the
operative subsidiaries of the Company (except for Oil-Chem Research
Corporation and its subsidiaries), which are listed on the
signature pages hereto, and (ii) any operative subsidiary of
the Company formed or acquired after the Closing Date or any other
subsidiary that executes an additional guarantee in accordance with
the terms of the Indenture, and their respective successors and
assigns (collectively, the “ Guarantors ”),
pursuant to their guarantees (the “ Guarantees
”). The Notes and the Guarantees attached thereto are herein
collectively referred to as the “ Securities ”;
and the Exchange Notes and the Guarantees attached thereto are
herein collectively referred to as the “ Exchange
Securities .”
Prior to or concurrently with the
closing of the offering of the Securities, the Company will enter
into an Eighth Amendment (the “ Eighth Amendment
”) to the Existing Credit Agreement (as defined below), which
will permit the issuance of the Securities. At some time after the
offering and sale of the Securities, the Company expects to enter
into a new senior secured revolving credit facility providing for
aggregate revolving credit facility availability of up to
$350,000,000, plus an accordion feature, to refinance that certain
Credit Agreement dated as of May 16, 2003, as amended, by and
among the Company, Speedway Finance, LLC and the lenders named
therein, including Bank of America, N.A., as agent for the lenders
and a lender, and Wachovia Bank, National Association as co-agent
(the “ Existing Credit Agreement ”).
The Company and the Guarantors
understand that the Initial Purchasers propose to make an offering
of the Securities on the terms and in the manner set forth herein
and in the Pricing Disclosure Package (as defined below) and agree
that the Initial Purchasers may resell, subject to the conditions
set forth herein, all or a portion of the Securities to purchasers
(the “ Subsequent Purchasers ”) on the terms set
forth in the Pricing Disclosure Package (the first time when sales
of the Securities are made is referred to as the “ Time of
Sale ”). The Securities are to be offered and sold to or
through the Initial Purchasers without being registered with the
Securities and Exchange Commission (the “ Commission
”) under the Securities Act of 1933 (as amended, the “
Securities Act, ” which term, as used herein, includes
the rules and regulations of the Commission promulgated
thereunder), in reliance upon exemptions therefrom. Pursuant to the
terms of the Securities and the Indenture, Subsequent Purchasers
who acquire Securities shall be deemed to have agreed that such
Securities may only be resold or otherwise transferred, after the
date hereof, if such Securities are registered for sale under the
Securities Act or if an exemption from the registration
requirements of the Securities Act is available (including the
exemptions afforded by Rule 144A under the Securities Act (“
Rule 144A ”) or Regulation S under the Securities Act
(“ Regulation S ”)).
The Company has prepared and
delivered to each Initial Purchaser copies of a Preliminary
Offering Memorandum, dated May 14, 2009 (the “
Preliminary Offering
2
Memorandum ”), and has prepared and delivered to each
Initial Purchaser copies of a Pricing Supplement, dated
May 14, 2009 (the “ Pricing Supplement ”),
describing the terms of the Securities, each for use by such
Initial Purchaser in connection with its solicitation of offers to
purchase the Securities. The Preliminary Offering Memorandum and
the Pricing Supplement are herein referred to as the “
Pricing Disclosure Package. ” Promptly after this
Agreement is executed and delivered, the Company will prepare and
deliver to each Initial Purchaser a final offering memorandum dated
the date hereof (the “ Final Offering Memorandum
”).
All references herein to the terms
“ Pricing Disclosure Package ” and “
Final Offering Memorandum ” shall be deemed to mean
and include all information filed under the Securities Exchange Act
of 1934 (as amended, the “ Exchange Act, ” which
term, as used herein, includes the rules and regulations of the
Commission promulgated thereunder) prior to the Time of Sale and
incorporated by reference in the Pricing Disclosure Package
(including the Preliminary Offering Memorandum) or the Final
Offering Memorandum (as the case may be), and all references herein
to the terms “ amend, ” “ amendment
” or “ supplement ” with respect to the
Final Offering Memorandum shall be deemed to mean and include all
information filed under the Exchange Act after the Time of Sale and
incorporated by reference in the Final Offering
Memorandum.
The Company and the Guarantors
hereby confirm their respective agreements with the Initial
Purchasers as follows:
Section 1. Representations
and Warranties. Each of
the Company and the Guarantors, jointly and severally, hereby
represents, warrants and covenants to each Initial Purchaser that,
as of the date hereof and as of the Closing Date (references in
this Section 1 to the “ Offering Memorandum
” are to (x) the Pricing Disclosure Package in the case
of representations and warranties made as of the date hereof and
(y) the Final Offering Memorandum in the case of
representations and warranties made as of the Closing Date, in each
case including the documents incorporated by reference
therein):
(a) No Registration
Required. Subject to
compliance by the Initial Purchasers with the representations and
warranties set forth in Section 2 hereof and with the
procedures set forth in Section 7 hereof, it is not necessary
in connection with the offer, sale and delivery of the Securities
to the Initial Purchasers and to each Subsequent Purchaser in the
manner contemplated by this Agreement and the Offering Memorandum
to register the Securities under the Securities Act or, until such
time as the Exchange Securities are issued pursuant to an effective
registration statement, to qualify the Indenture under the Trust
Indenture Act of 1939 (the “ Trust Indenture Act,
” which term, as used herein, includes the rules and
regulations of the Commission promulgated thereunder).
(b) No Integration of Offerings
or General Solicitation. None of the Company’s affiliates (as such
term is defined in Rule 501 under the Securities Act) (each, an
“ Affiliate ”), or any person acting on its or
any of their behalf (other than the Initial Purchasers, as to whom
the Company makes no representation or warranty) has, directly or
indirectly, solicited any offer to buy or offered to sell, or will,
directly or indirectly, solicit any offer to buy or offer to sell,
in the United States or to any United States citizen or resident,
any security which is or would be integrated with the sale of the
Securities in a manner that would require the Securities to
be
3
registered under the Securities Act. None of the
Company, the Guarantors or any of their Affiliates, or any person
acting on its or any of their behalf (other than the Initial
Purchasers, as to whom the Company and the Guarantors make no
representation or warranty) has engaged or will engage, in
connection with the offering of the Securities, in any form of
general solicitation or general advertising within the meaning of
Rule 502 under the Securities Act. With respect to those Securities
sold in reliance upon Regulation S, (i) none of the Company,
the Guarantors or any of their Affiliates or any person acting on
its or any of their behalf (other than the Initial Purchasers, as
to whom the Company and the Guarantors make no representation or
warranty) has engaged or will engage in any directed selling
efforts within the meaning of Regulation S and (ii) each of
the Company, the Guarantors or any of their Affiliates and any
person acting on its or their behalf (other than the Initial
Purchasers, as to whom the Company and the Guarantors make no
representation or warranty) has complied and will comply with the
offering restrictions set forth in Regulation S.
(c) Eligibility for Resale under
Rule 144A. The Securities
are eligible for resale pursuant to Rule 144A and will not be, at
the Closing Date, of the same class as securities listed on a
national securities exchange registered under Section 6 of the
Exchange Act or quoted in a U.S. automated interdealer quotation
system.
(d) The Pricing Disclosure
Package and Offering Memorandum. Neither the Pricing Disclosure Package, as of
the Time of Sale, nor the Final Offering Memorandum, as of its date
or (as amended or supplemented in accordance with
Section 3(a), as applicable) as of the Closing Date, contains
an untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided, that this representation, warranty and
agreement shall not apply to statements in, or omissions from, the
Pricing Disclosure Package, the Final Offering Memorandum or any
amendment or supplement thereto made in reliance upon, and in
conformity with, information furnished to the Company in writing by
any Initial Purchaser through Banc of America Securities LLC, or
its agents, expressly for use in the Pricing Disclosure Package,
the Final Offering Memorandum or any amendment or supplement
thereto, as the case may be. The Pricing Disclosure Package
contains, and the Final Offering Memorandum will contain, all the
information specified in, and meeting the requirements of, Rule
144A. Neither the Company nor any of the Guarantors have
distributed, and the Company and the Guarantors will not
distribute, prior to the later of the Closing Date and the
completion of the Initial Purchasers’ distribution of the
Securities, any offering material in connection with the offering
and sale of the Securities other than the Pricing Disclosure
Package and the Final Offering Memorandum.
(e) Company Additional Written
Communications. The
Company has not prepared, made, used, authorized, approved or
distributed and will not prepare, make, use, authorize, approve or
distribute any written communication that constitutes an offer to
sell or solicitation of an offer to buy the Securities (each such
communication by the Company or its agents and representatives
(other than a communication referred to in clauses (i) and
(ii) below) a “ Company Additional Written
Communication ”) other than (i) the Pricing
Disclosure Package, (ii) the Final Offering Memorandum, and
(iii) any electronic road show or other written
communications, in each case used in accordance with
Section 3(a). Each such Company Additional Written
Communication, when taken together with the Pricing Disclosure
Package, did not, and at the Closing Date will not, contain any
untrue statement of a material fact or omit
4
to state a material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, that this
representation, warranty and agreement shall not apply to
statements in or omissions from each such Company Additional
Written Communication made in reliance upon and in conformity with
information furnished to the Company in writing by any Initial
Purchaser through Banc of America Securities LLC, or its agents,
expressly for use in any Company Additional Written
Communication.
(f) Incorporated
Documents. The documents
incorporated or deemed to be incorporated by reference in the
Offering Memorandum at the time they were or hereafter are filed
with the Commission (collectively, the “ Incorporated
Documents ”), if any, complied and will comply in all
material respects with the requirements of the Exchange
Act.
(g) The Purchase
Agreement. This Agreement
has been duly authorized, executed and delivered by, and is a valid
and binding agreement of, the Company and each of the Guarantors,
enforceable in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law and
except as the enforcement hereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by
general equitable principles.
(h) The Registration Rights
Agreement and the DTC Agreement. The Registration Rights Agreement has been duly
authorized by the Company and each of the Guarantors and, on the
Closing Date, will have been duly executed and delivered by, and
will constitute a valid and binding agreement of, the Company and
each of the Guarantors, enforceable in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by
general equitable principles and except as rights to
indemnification under the Registration Rights Agreement may be
limited by applicable law. The DTC Agreement has been duly
authorized, executed and delivered by, and is a valid and binding
agreement of, the Company, enforceable in accordance with its
terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors
or by general equitable principles.
(i) Authorization of the Notes,
the Guarantees and the Exchange Notes. (i) The Notes to be purchased by the
Initial Purchasers from the Company are in the form contemplated by
the Indenture, have been duly authorized for issuance and sale
pursuant to this Agreement and the Indenture and, at the Closing
Date, will have been duly executed by the Company and, when
authenticated in the manner provided for in the Indenture and
delivered against payment of the purchase price therefor, will
constitute valid and binding obligations of the Company,
enforceable in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general
equitable principles and will be entitled to the benefits of the
Indenture. (ii) The Exchange Notes have been duly and validly
authorized for issuance by the Company, and when issued and
authenticated in accordance with the terms of the Indenture, the
Registration Rights Agreement and the Exchange Offer, will
constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms,
except as the enforcement thereof may be limited by bankruptcy,
insolvency,
5
reorganization, moratorium or similar laws
relating to or affecting enforcement of the rights and remedies of
creditors or by general principles of equity and will be entitled
to the benefits of the Indenture. (iii) The Guarantees of the
Notes and the Exchange Notes are in the respective forms
contemplated by the Indenture, have been duly authorized for
issuance and sale pursuant to this Agreement and the Indenture and,
at the Closing Date, will have been duly executed by each of the
Guarantors and, when the Notes and the Exchange Notes have been
authenticated in the manner provided for in the Indenture and
delivered against payment of the purchase price therefor, will
constitute valid and binding agreements of the Guarantors,
enforceable in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general
equitable principles and will be entitled to the benefits of the
Indenture.
(j) Authorization of the
Indenture. The Indenture
has been duly authorized by the Company and each of the Guarantors
and, at the Closing Date, will have been duly executed and
delivered by the Company and each of the Guarantors and will
constitute a valid and binding agreement of the Company and each of
the Guarantors, enforceable against the Company and each of the
Guarantors in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable
principles.
(k) Description of the
Securities, the Indenture, the Existing Credit Agreement and the
Eighth Amendment. The
Securities, the Exchange Securities, the Indenture, the Existing
Credit Agreement and the Eighth Amendment conform or will conform
in all material respects to the respective statements relating
thereto contained in the Offering Memorandum.
(l) No Material Adverse
Change. Except as
otherwise disclosed in the Offering Memorandum, subsequent to the
respective dates as of which information is given in the Offering
Memorandum exclusive of any amendment or supplement thereto:
(i) there has been no material adverse change, or any
development that could reasonably be expected to result in a
material adverse change, in the condition, financial or otherwise,
or in the earnings, business, operations or prospects, whether or
not arising from transactions in the ordinary course of business,
of the Company and its subsidiaries, considered as one entity (any
such change is called a “ Material Adverse Change
”); (ii) the Company and its subsidiaries, considered as
one entity, have not incurred any material liability or obligation,
indirect, direct or contingent, not in the ordinary course of
business nor entered into any material transaction or agreement not
in the ordinary course of business; and (iii) there has been
no dividend or distribution of any kind declared, paid or made by
the Company or, except for dividends paid to the Company or other
subsidiaries, any of its subsidiaries on any class of capital stock
or repurchase or redemption by the Company or any of its
subsidiaries of any class of capital stock.
(m) Independent
Accountants. PricewaterhouseCoopers LLP, Deloitte &
Touche LLP and Grant Thornton LLP, each of which expressed their
opinion with respect to the financial statements (which term as
used in this Agreement includes the related notes thereto) and
supporting schedules filed with the Commission and included in the
Offering Memorandum, are independent public or certified public
accountants within the meaning of Regulation S-X under the
Securities Act and the Exchange Act, and any non-audit services
provided by
6
PricewaterhouseCoopers LLP, Deloitte &
Touche LLP or Grant Thornton LLP to the Company or any of the
Guarantors have been approved by the Audit Committee of the Board
of Directors of the Company.
(n) Preparation of the Financial
Statements. The financial
statements, together with the related schedules and notes, included
in the Offering Memorandum present fairly the consolidated
financial position of the entities to which they relate as of and
at the dates indicated and the results of their operations and cash
flows for the periods specified. Such financial statements have
been prepared in conformity with generally accepted accounting
principles as applied in the United States applied on a consistent
basis throughout the periods involved, in all material respects,
except as may be expressly stated in the related notes thereto. The
financial data set forth in the Offering Memorandum under the
caption “Summary–Summary Historical Financial
Data” fairly presents the information set forth therein on a
basis consistent with that of the audited financial statements
contained in the Offering Memorandum. The statistical and
market-related data and forward-looking statements included in the
Offering Memorandum are based on or derived from sources that the
Company and its Subsidiaries believe to be reliable and accurate in
all material respects and represent their good faith estimates that
are made on the basis of data derived from such sources.
(o) Incorporation and Good
Standing of the Company and its Subsidiaries.
Each of the Company and its
subsidiaries has been duly incorporated or formed and is validly
existing as a corporation or limited liability company in good
standing under the laws of the jurisdiction of its incorporation or
formation and has corporate or limited liability company power and
authority to own, lease and operate its properties and to conduct
its business as described in the Offering Memorandum and, in the
case of the Company and the Guarantors, to enter into and perform
its obligations under each of this Agreement, the Registration
Rights Agreement, the DTC Agreement, the Securities, the Exchange
Securities, the Indenture and the Eighth Amendment. Each of the
Company and each of the Guarantors is duly qualified as a foreign
corporation or limited liability company, as applicable, to
transact business and is in good standing or equivalent status in
each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of
business, except for such jurisdictions where the failure to so
qualify or to be in good standing would not, individually or in the
aggregate, result in a Material Adverse Change. All of the issued
and outstanding capital stock or limited liability company
interests of each Guarantor has been duly authorized and validly
issued, is fully paid and nonassessable and is owned by the
Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or claim,
except for security interests, pledges, liens or encumbrances in
favor of the lenders under the Existing Credit Agreement. The
Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the
subsidiaries listed in Exhibit 21.1 to the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31,
2008.
(p) Capitalization and Other
Capital Stock Matters. At
March 31, 2009, on a consolidated basis, after giving pro
forma effect to the issuance and sale of the Securities pursuant
hereto, the Company would have an authorized and outstanding
capitalization as set forth in the Offering Memorandum under the
caption “Capitalization” (other than for subsequent
issuances of capital stock, if any, pursuant to employee benefit
plans described in the Offering Memorandum or upon exercise of
outstanding options or warrants described in the
Offering
7
Memorandum). All of the outstanding shares of
Common Stock have been duly authorized and validly issued, are
fully paid and nonassessable and have been issued in compliance
with federal and state securities laws. None of the outstanding
shares of Common Stock of the Company were issued in violation of
any preemptive rights, rights of first refusal or other similar
rights to subscribe for or purchase securities of the Company.
There are no authorized or outstanding options, warrants,
preemptive rights, rights of first refusal or other rights to
purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the Company
or any of its subsidiaries other than options to acquire shares
under the Company’s employee benefit plans. The description
of the Company’s stock option, stock bonus and other stock
plans or arrangements, and the options or other rights granted and
exercised thereunder, in the Offering Memorandum accurately and
fairly describes such plans, arrangements, options and
rights.
(q)
Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required. Neither the Company nor any of
the Guarantors is in violation of its charter (or limited liability
company agreement) or by-laws or is in default (or, with the giving
of notice or lapse of time, would be in default) (“
Default ”) under any indenture, mortgage, loan or
credit agreement, note, contract, franchise, lease or other
instrument to which the Company or any of its subsidiaries is a
party or by which it or any of them may be bound (including,
without limitation, the Company’s Existing Credit Agreement
and the Company’s 6 3 / 4 % Senior Subordinated Notes due
2013 (the “ Existing Notes ”)) or to which any
of the property or assets of the Company or any of its subsidiaries
is subject (each, an “ Existing Instrument ”),
except for such Defaults as would not, individually or in the
aggregate, result in a Material Adverse Change. The execution,
delivery and performance of this Agreement, the Registration Rights
Agreement, the DTC Agreement and the Indenture by the Company and
each Guarantor party thereto, and the issuance and delivery of the
Securities or the Exchange Securities, and consummation of the
transactions contemplated hereby and thereby and by the Offering
Memorandum (i) have been duly authorized by all necessary
corporate or limited liability company (as appropriate) action and
will not result in any violation of the provisions of the charter
(or limited liability company agreement) or by-laws of the Company
or any subsidiary, (ii) assuming the execution of the Eighth
Amendment to the Existing Credit Agreement by the parties thereto,
will not conflict with or constitute a breach of, or Default or a
Debt Repayment Triggering Event (as defined below) under, or result
in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its
subsidiaries pursuant to, or require the consent of any other party
to, any Existing Instrument, except for such conflicts, breaches,
Defaults, liens, charges or encumbrances as would not, individually
or in the aggregate, result in a Material Adverse Change and
(iii) will not result in any violation of any law,
administrative regulation or administrative or court decree
applicable to the Company or any subsidiary. No consent, approval,
authorization or other order of, or registration or filing with,
any court or other governmental or regulatory authority or agency,
is required for the Company’s or any Guarantor’s
execution, delivery and performance of this Agreement, the
Registration Rights Agreement, the DTC Agreement and the Indenture
or the issuance and delivery of the Securities or the Exchange
Securities, or consummation of the transactions contemplated hereby
and thereby and by the Offering Memorandum, except such as have
been obtained or made by the Company and are in full force and
effect under the Securities Act, applicable securities laws of the
several states of the United States or provinces of Canada and
except such as may be required by the securities laws of the
several states of the United States or
8
provinces of Canada with respect to the
Company’s obligations under the Registration Rights
Agreement. As used herein, a “ Debt Repayment Triggering
Event ” means any event or condition which gives, or with
the giving of notice or lapse of time would give, the holder of any
note, debenture or other evidence of indebtedness (or any person
acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any of its subsidiaries.
(r) No Material Actions or
Proceedings. There are no
legal or governmental actions, suits or proceedings pending or, to
the best of the Company’s or any Guarantor’s knowledge,
threatened (i) against or affecting the Company or any of its
subsidiaries or (ii) which has as the subject thereof any
property owned or leased by the Company or any of its subsidiaries,
that, if determined adversely to the Company or such subsidiary,
would result in a Material Adverse Change or adversely affect the
consummation of the transactions contemplated by this Agreement. No
material labor dispute with the employees of the Company or any of
its subsidiaries exists or, to the best of the Company’s
knowledge, is threatened or imminent.
(s) Intellectual Property
Rights. The Company and
the Guarantors own or possess sufficient trademarks, trade names,
patent rights, copyrights, licenses, approvals, trade secrets and
other similar rights (collectively, “ Intellectual
Property Rights ”) reasonably necessary to conduct their
businesses as now conducted; and the expected expiration of any of
such Intellectual Property Rights would not result in a Material
Adverse Change. Neither the Company nor any of its subsidiaries has
received any notice of infringement or conflict with asserted
Intellectual Property Rights of others, which infringement or
conflict, if the subject of an unfavorable decision, would result
in a Material Adverse Change.
(t) All Necessary Permits,
etc. The Company and each
Guarantor possess such valid and current certificates,
authorizations or permits issued by the appropriate state, federal
or foreign regulatory agencies or bodies necessary to conduct their
respective businesses, except to the extent that any failure to
possess the aforementioned would not materially and adversely
affect the operations of the respective businesses, and neither the
Company nor any subsidiary has received any notice of proceedings
relating to the revocation or modification of, or non-compliance
with, any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse
Change.
(u) Title to
Properties. The Company
and each of its subsidiaries has good and marketable title to all
the properties and assets reflected as owned in the financial
statements referred to in Section 1(m) hereof (or elsewhere in
the Offering Memorandum), in each case free and clear of any
security interests, mortgages, liens, encumbrances, equities,
claims and other defects, except such as do not materially and
adversely affect the value of such property and do not materially
interfere with the use made or proposed to be made of such property
by the Company or such subsidiary. The real property, improvements,
equipment and personal property held under lease by the Company or
any subsidiary are held under valid and enforceable leases, with
such exceptions as are not material and do not materially interfere
with the use made or proposed to be made of such real property,
improvements, equipment or personal property by the Company or such
subsidiary.
9
(v) Tax Law
Compliance. The Company
and its subsidiaries have filed all necessary federal, state and
foreign income and franchise tax returns and have paid all taxes
required to be paid by any of them and, if due and payable, any
related or similar assessment, fine or penalty levied against any
of them, except where any such failure would not materially and
adversely affect the Company. The Company has made adequate
charges, accruals and reserves in the applicable financial
statements referred to in Section 1(m) hereof in respect of
all federal, state and foreign income and franchise taxes for all
periods as to which the tax liability of the Company or any of its
subsidiaries has not been finally determined.
(w) Company Not an
“Investment Company”. The Company has been advised of the rules and
requirements under the Investment Company Act of 1940, as amended
(the “ Investment Company Act, ” which term, as
used herein, includes the rules and regulations of the Commission
promulgated thereunder). The Company is not, and after receipt of
payment for the Securities will not be, an “investment
company” within the meaning of the Investment Company Act and
will conduct its business in a manner so that it will not become
subject to the Investment Company Act.
(x) Insurance.
Each of the Company and its
subsidiaries are insured with policies in such amounts and with
such deductibles, self-insured retentions and policy limits and
covering such risks as are generally deemed adequate, appropriate
and customary for their businesses including, without limitation,
policies covering liabilities for injuries at motorsports events
and real and personal property owned or leased by the Company and
its subsidiaries against theft, damage, destruction, acts of
terrorism and vandalism and earthquakes. The Company’s
insurers each have strong financial ratings from A.M. Best,
Standard & Poor, or Moody’s. The Company believes it
has adequate, sufficient and appropriate coverage under its
policies to cover all of its known litigation such that there is no
need to establish a reserve for any such litigation under generally
accepted accounting principals, except as otherwise disclosed in
the Offering Memorandum. The Company has no reason to believe that
it or any subsidiary will not be able (i) to renew its
existing insurance coverage as and when such policies expire or
(ii) to obtain adequate and comparable coverage from
recognized insurers as may be necessary or appropriate to conduct
its business as now conducted and at a cost that would not result
in a Material Adverse Change. Neither of the Company nor any
subsidiary has been denied any insurance coverage which it has
sought or for which it has applied.
(y) No Price Stabilization or
Manipulation. None of the
Company or any of the Guarantors has taken or will take, directly
or indirectly, any action designed to or that might be reasonably
expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or
resale of the Securities.
(z) Solvency.
Each of the Company and the
Guarantors is, and immediately after the Closing Date will be,
Solvent. As used herein, the term “ Solvent ”
means, with respect to any person on a particular date, that on
such date (i) the fair market value of the assets of such
person is greater than the total amount of liabilities (including
contingent liabilities) of such person, (ii) the present fair
salable value of the assets of such person is greater than the
amount that will be required to pay the probable liabilities of
such person on its debts as they become absolute and matured,
(iii) such person is able to realize upon its assets and pay
its debts and other liabilities, including contingent obligations,
as they mature and (iv) such person does not have unreasonably
small capital.
10
(aa) Compliance with
Sarbanes-Oxley. The
Company and its subsidiaries and their respective officers and
directors are in compliance with the applicable provisions of the
Sarbanes-Oxley Act of 2002 (the “ Sarbanes-Oxley Act,
” which term, as used herein, includes the rules and
regulations of the Commission promulgated thereunder).
(bb) Company’s Accounting
System. The Company and
its subsidiaries maintain a system of internal control over
financial reporting that is in compliance with the Sarbanes-Oxley
Act and is sufficient to provide reasonable assurances that:
(i) transactions are executed in accordance with
management’s general or specific authorization;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles as applied in the United States and
to maintain accountability for assets; (iii) access to assets
is permitted only in accordance with management’s general or
specific authorization; (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences;
(v) material information relating to the Company and its
consolidated subsidiaries is promptly made known to the officers
responsible for establishing and maintaining the system of internal
control over financial reporting; and (vi) any significant
deficiencies or weaknesses in the design or operation of internal
control over financial reporting which could adversely affect the
Company’s ability to record, process, summarize and report
financial data, and any fraud whether not material that involves
management or other employees who have a significant role in
internal control over financial reporting, are adequately and
promptly disclosed to the Company’s independent auditors and
the audit committee of the Company’s Board of
Directors.
(cc) Disclosure Controls and
Procedures. The Company
has established and maintains disclosure controls and procedures
(as such term is defined in Rules 13a-15 and 15d-15 under the
Exchange Act); such disclosure controls and procedures are designed
to ensure that material information relating to the Company and its
subsidiaries is made known to the chief executive officer and chief
financial officer of the Company by others within the Company or
any of its subsidiaries, and such disclosure controls and
procedures are reasonably effective to perform the functions for
which they were established subject to the limitations of any such
control system; the Company’s auditors and the Audit
Committee of the Board of Directors of the Company have been
advised of: (i) any significant deficiencies or material
weaknesses in the design or operation of internal control over
financial reporting which could adversely affect the
Company’s ability to record, process, summarize, and report
financial data; and (ii) any fraud, whether or not material,
that involves management or other employees who have a role in the
Company’s internal control over financial reporting; and
since the date of the most recent evaluation of such disclosure
controls and procedures, there have been no significant changes in
internal control over financial reporting or in other factors that
could significantly affect internal control over financial
reporting, including any corrective actions with regard to
significant deficiencies and material weaknesses.
(dd) MD&A.
There are no transactions,
arrangements or other relationships, including but not limited to
off balance sheet transactions, which are required by the
Securities Act to be disclosed in a registration statement on Form
S-1 which are not so disclosed in the Offering
Memorandum.
11
(ee) Regulations T, U,
X. Neither the Company
nor any Guarantor nor any of their respective subsidiaries nor any
agent thereof acting on their behalf has taken, and none of them
will take, any action that might cause this Agreement or the
issuance or sale of the Securities to violate Regulation T,
Regulation U or Regulation X of the Board of Governors of the
Federal Reserve System.
(ff) Compliance with
Environmental Laws. Except as otherwise disclosed in the Offering
Memorandum or as would not, individually or in the aggregate,
result in a Material Adverse Change, (i) neither the Company
nor any of its subsidiaries is in violation of any federal, state,
local or foreign law or regulation relating to pollution or
protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation,
laws and regulations relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum and petroleum
products (collectively, “ Materials of Environmental
Concern ”), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern
(collectively, “ Environmental Laws ”), which
violation includes, without limitation, noncompliance with any
permits or other governmental authorizations required for the
operation of the business of the Company or its subsidiaries under
applicable Environmental Laws, or noncompliance with the terms and
conditions thereof, nor has the Company or any of its subsidiaries
received any written communication, whether from a governmental
authority, employee or otherwise, that alleges that the Company or
any of its subsidiaries is in violation of any Environmental Law;
(ii) there is no claim, action or cause of action filed with a
court or governmental authority, no investigation with respect to
which the Company has received written notice, and no written
notice by any person or entity alleging potential liability for
investigatory costs, cleanup costs, governmental responses costs,
natural resources damages, property damages, personal injuries,
attorneys’ fees or penalties arising out of, based on or
resulting from the presence, or release into the environment, of
any Material of Environmental Concern at any location owned, leased
or operated by the Company or any of its subsidiaries, now or in
the past (collectively, “ Environmental Claims
”), pending or, to the best of the Company’s and the
Guarantors’ knowledge, threatened against the Company or any
of its subsidiaries or any person or entity whose liability for any
Environmental Claim the Company or any of its subsidiaries has
retained or assumed either contractually or by operation of law;
(iii) to the best of the Company’s and the
Guarantors’ knowledge, there are no past or present actions,
activities, circumstances, conditions, events or incidents,
including, without limitation, the release, emission, discharge,
presence or disposal of any Material of Environmental Concern, that
would result in a violation of any Environmental Law or form the
basis of a potential Environmental Claim against the Company or any
of its subsidiaries or against any person or entity whose liability
for any Environmental Claim the Company or any of its subsidiaries
has retained or assumed either contractually or by operation of
law; and (iv) the Company has reasonably concluded that there
are no costs or liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating
activities and any potential liabilities to third parties)
associated with the effect of compliance with Environmental Laws
(after giving effect to the amount of established reserves, if
any).
12
(gg) ERISA Compliance.
The Company and its subsidiaries and
any “employee benefit plan” (as defined under the
Employee Retirement Income Security Act of 1974 (as amended,
“ ERISA, ” which term, as used herein, includes
the regulations and published interpretations thereunder)
established or maintained by the Company, its subsidiaries or their
ERISA Affiliates (as defined below) are in compliance in all
material respects with ERISA. “ ERISA Affiliate
” means, with respect to the Company or a subsidiary, any
member of any group of organizations described in Sections 414(b),
(c), (m) or (o) of the Internal Revenue Code of 1986 (as
amended, the “ Code, ” which term, as used
herein, includes the regulations and published interpretations
thereunder)) of which the Company or such subsidiary is a member.
No “reportable event” (as defined under ERISA) has
occurred or is reasonably expected to occur with respect to any
“employee benefit plan” established or maintained by
the Company, its subsidiaries or any of their ERISA Affiliates. No
“employee benefit plan” established or maintained by
the Company, its subsidiaries or any of their ERISA Affiliates, if
such “employee benefit plan” were terminated, would
have any “amount of unfunded benefit liabilities” (as
defined under ERISA). Neither the Company, its subsidiaries nor any
of their ERISA Affiliates has incurred or reasonably expects to
incur any liability under (i) Title IV of ERISA with respect
to termination of, or withdrawal from, any “employee benefit
plan” or (ii) Sections 412, 4971, 4975 or 4980B of the
Code. Each “employee benefit plan” established or
maintained by the Company, its subsidiaries or any of their ERISA
Affiliates that is intended to be qualified under Section 401
of the Code is so qualified and nothing has occurred, whether by
action or failure to act, which would cause the loss of such
qualification.
(hh) Compliance with Labor
Laws. Except as would
not, individually or in the aggregate, result in a Material Adverse
Change, (i) there is (A) no unfair labor practice
complaint pending or, to the best of the Company’s knowledge,
threatened against the Company or any of its subsidiaries before
the National Labor Relations Board, and no grievance or arbitration
proceeding arising out of or under collective bargaining agreements
pending, or to the best of the Company’s knowledge,
threatened, against the Company or any of its subsidiaries,
(B) no strike, labor dispute, slowdown or stoppage pending or,
to the best of the Company’s knowledge, threatened against
the Company or any of its subsidiaries and (C) no union
representation question existing with respect to the employees of
the Company or any of its subsidiaries and, to the best of the
Company’s knowledge, no union organizing activities taking
place and (ii) there has been no violation of any federal,
state or local law relating to discrimination in hiring, promotion
or pay of employees or of any applicable wage or hour
laws.
(ii) Related Party
Transactions. No
relationship, direct or indirect, exists between or among any of
the Company or any affiliate of the Company, on the one hand, and
any director, officer, member, stockholder, customer or supplier of
the Company or any affiliate of the Company, on the other hand,
which is required by the Securities Act to be disclosed in a
registration statement on Form S-1 which is not so disclosed in the
Offering Memorandum. Except as disclosed in the Offering
Memorandum, there are no outstanding loans, advances (except
advances for business expenses in the ordinary course of business)
or guarantees of indebtedness by the Company or any affiliate of
the Company to or for the benefit of any of the officers or
directors of the Company or any affiliate of the Company or any of
their respective family members.
13
(jj) No Unlawful Contributions or
Other Payments. Neither
the Company nor any of its subsidiaries nor, to the best of the
Company’s knowledge, any employee or agent of the Company or
any subsidiary, has made any contribution or other payment to any
official of, or candidate for, any federal, state or foreign office
in violation of any law or of the character necessary to be
disclosed in the Offering Memorandum in order to make the
statements therein not misleading.
(kk) No Conflict with Money
Laundering Laws. The
operations of the Company and its subsidiaries are and have been
conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all applicable jurisdictions, the rules and
regulations thereunder and any related or similar rules,
regulations or guidelines issued, administered or enforced by any
governmental agency (collectively, the “ Money Laundering
Laws ”) and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries with
respect to the Money Laundering Laws is pending or, to the best
knowledge of the Company, threatened.
(ll) No Conflict with OFAC
Laws. Neither the Company
nor any of its subsidiaries nor, to the knowledge of the Company,
any director, officer, agent, employee or affiliate of the Company
or any of its subsidiaries is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of
the U.S. Treasury Department (“ OFAC ”); and the
Company will not to its knowledge, directly or indirectly use the
proceeds of the offering, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or
other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered
by OFAC.
(mm) NASCAR Relationship and
Contracts. The disclosure
in the Offering Memorandum accurately and fairly describes in all
material respects (i) the sanctioning agreements between the
Company and the National Association of Stock Car Auto Racing, Inc.
(“ NASCAR ”); (ii) the broadcasting
agreements between the FOX, ABC/ESPN, and TNT networks, and the
SPEED Channel and NASCAR as provided by NASCAR to the Company; and
(iii) the ancillary rights package for NASCAR.com, the NASCAR
Channel, international and satellite broadcasting, NASCAR images,
SportsVision, FanScan and specialty pay-per-view telecasts as
provided by NASCAR to the Company.
(nn) Operative
Subsidiaries. The
Guarantors are all of the operative subsidiaries of the Company
(other than Oil-Chem Research Corporation and its
subsidiaries).
(oo) Eighth Amendment.
The Eighth Amendment has been duly
and validly authorized by the Company and the guarantors thereto
and, when duly executed and delivered by the Company and the
guarantors thereto, will be valid and legally binding obligation of
the Company and the guarantors thereto, enforceable in accordance
with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors
or by general equitable principles.
14
(pp) Stock Options.
With respect to the stock options
(the “ Stock Options ”) granted pursuant to the
stock-based compensation plans of the Company and its subsidiaries
(the “ Company Stock Plans ”), (i) each
Stock Option intended to qualify as an “incentive stock
option” under Section 422 of the Code so qualifies,
(ii) each grant of a Stock Option was duly authorized no later
than the date on which the grant of such Stock Option was by its
terms to be effective (the “ Grant Date ”) by
all necessary corporate action, including, as applicable, approval
by the Board of Directors of the Company (or a duly constituted and
authorized committee thereof) and any required stockholder approval
by the necessary number of votes or written consents, and the award
agreement governing such grant (if any) was duly executed and
delivered by each party thereto, (iii) each such grant was
made in accordance with the terms of the Company Stock Plans, the
Exchange Act and all other applicable laws and regulatory rules or
requirements, including the rules of any securities exchange on
which Company securities are traded, (iv) the per share
exercise price of each Stock Option was equal to the fair market
value of a share of common stock on the applicable Grant Date and
(v) each such grant was properly accounted for in accordance
with GAAP in the financial statements (including the related notes)
of the Company and disclosed in the Company’s filings with
the Commission in accordance with the Exchange Act and all other
applicable laws. The Company has not knowingly granted, and there
is no and has been no policy or practice of the Company of
granting, Stock Options prior to, or otherwise coordinate the grant
of Stock Options with, the release or other public announcement of
material information regarding the Company or its subsidiaries or
their results of operations or prospects.
(qq) Regulation S.
The Company, the Guarantors and
their respective subsidiaries and Affiliates and all persons acting
on their behalf (other than the Initial Purchasers, as to whom the
Company and the Guarantors make no representation) have complied
with and will comply with the offering restrictions requirements of
Regulation S in connection with the offering of the Securities
outside the United States and, in connection therewith, the
Offering Memorandum will contain the disclosure required by
Rule 902. Each of the Company and the Guarantors is a
“reporting issuer,” as defined in Rule 902 under the
Securities Act.
Any certificate signed by an officer
of the Company or any Guarantor and delivered to the Initial
Purchasers or to counsel for the Initial Purchasers shall be deemed
to be a representation and warranty by the Company or such
Guarantor to each Initial Purchaser as to the matters set forth
therein.
Section 2. Purchase, Sale
and Delivery of the Securities.
(a) The Securities.
Each of the Company and the
Guarantors agrees to issue and sell to the Initial Purchasers,
severally and not jointly, all of the Securities and the Initial
Purchasers agree, severally and not jointly, to purchase from the
Company and the Guarantors the aggregate principal amount of
Securities set forth opposite their names on Schedule A, at a
purchase price of 94.926% of the principal amount thereof payable
on the Closing Date, in each case, on the basis of the
representations, warranties and agreeme
