EXHIBIT 10.29
FIRST AMENDMENT TO
AGREEMENT FOR PURCHASE AND SALE OF ASSETS
This First Amendment (the "Amendment") is made as of June 28, 1996 by and
among GRAND PRIX ASSOCIATION OF LONG BEACH, INC. ("Grand Prix"), a California
corporation, having its principal office at 3000 Pacific Ave., Long Beach,
California 90806, AUTOMOTIVE SAFETY & TRANSPORTATION SYSTEMS, INC. (hereinafter
referred to as the "Buyer" or "AST"), a California corporation and a wholly
owned subsidiary of Grand Prix, having its principal place of business at 3000
Pacific Avenue, Long Beach, CA 90806, and MEMPHIS INTERNATIONAL MOTORSPORTS
PARK, INC. (hereinafter referred to as the "Seller"), a Tennessee corporation,
having its principal office at 5500 Taylor Forge Drive, Millington, Tennessee
38053.
WHEREAS, the Seller and Grand Prix entered into an Agreement For Purchase
And Sale Of Assets dated May 6, 1996 (the "Agreement") pursuant to which the
Seller agreed to transfer and sell substantially all of the Seller's assets to
Grand Prix in exchange for shares of the voting convertible preferred stock of
Grand Prix on the terms and subject to the conditions of the Agreement;
WHEREAS, the Seller and Grand Prix desire to amend the Agreement in
accordance with the terms and provisions of this Amendment.
THEREFORE, in consideration of the mutual covenants, agreements,
representations, and warranties contained in this Amendment, the parties agree
as follows:
I. ARTICLE ONE: PURCHASE AND SALE OF ASSETS
A. Article I(A) of the Agreement, entitled Sale and Transfer of Assets, is
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hereby amended by deleting all of the terms and provisions thereof and
substituting in lieu thereof the following as Article I(A):
"A. Sale and Transfer of Assets. Subject to the terms and conditions set
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forth in the Agreement, Seller agrees to sell, convey, transfer, assign, and
deliver to Buyer, and Buyer agrees to purchase from Seller, the following
described assets:
1. approximately 375 acres of land (outlined on Exhibit "A" hereto)
together with all buildings and structures thereon (the "Real
Property"), and the furniture, fixtures, and equipment located therein
(including, but not limited to, concession stands and equipment
(excluding fuel pumps and USTs which are being removed as described
herein), maintenance facility and maintenance
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equipment) which are listed on Exhibit "B" hereto, situated in Shelby
County, Tennessee, which is improved with, among other things, a 1/4
mile regulation NHRA approved drag strip with 14,238 grandstand seats,
accompanying support facilities, a 5/8 mile oval with approximately
5,500 permanent grandstand seats and 10 corporate suites, an SCCA
approved road course, and a 1/8 mile dirt oval with two sets of
bleachers accommodating approximately 1,000 seats (the "Park"),
2. Seller's contractual rights and powers under the contracts and
agreements of Seller as described on Exhibit "C" hereto, subject to
the obligations of Seller contained therein (the "Contracts");
3. the name "Memphis International Motorsports Park", and
4. the unregistered trademark/servicemark (including any
trademark/servicemark that Seller may register with the Tennessee
Secretary of State after the date hereof) consisting of a checkered
flag and wavy "M" depicted on Exhibit "D" hereto.
All of which assets are sometimes collectively referred to as the
"Assets"."
B. Article I(B) of the Agreement, entitled Consideration, Assumption of
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Certain Liabilities, is hereby amended by deleting all of the terms and
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provisions thereof and substituting in lieu thereof the following as Article
I(B):
"B. Consideration, Assumption of Certain Liabilities. In consideration
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for the Assets, Grand Prix and Buyer agree as follows:
1. On the Closing Date, Seller will receive from Grand Prix a number of
shares of Grand Prix's Series B voting preferred convertible shares, as
hereinafter described, (the "Preferred Stock"), having an aggregate stated value
of Two Million Five Hundred Thousand and no/100 Dollars ($2,500,000.00), such
value and number of shares to be based upon the offering price per share of the
shares of common stock of Grand Prix offered by Grand Prix to secure financing
for acquisition of the Assets (the "IPO"). The shares of Preferred Stock shall
be convertible at any time and from time to time on and after June 30, 1997 into
shares of Grand Prix's common stock, which will have the same rights,
preferences and privileges as the common stock being issued in the IPO, (the
"Common Stock") on a 1 share for 1 share basis subject to adjustment to reflect
any and all stock splits, stock dividends, recapitalizations, options issued
allowing for purchase of Common Stock for less than fair market value, or
similar events, so that the Preferred Stock and conversion rights into Common
Stock with
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respect thereto are not diluted in any manner whatsoever after the Closing Date
and prior to conversion into Common Stock.
The Preferred Stock will bear an aggregate annual cumulative dividend
rate equal to 4.185% of $2,500,000.00 (calculable and payable on a per share
basis on or before each anniversary of Closing or upon conversion of all
remaining Preferred Stock prior to such anniversary) until the date converted.
Dividends shall cease on the date of conversion, or December 31, 1998 or upon
payment of the unassumed indebtedness of Seller referred to below, whichever
shall be earliest.
If Seller does not convert any of the Preferred Stock into Common
Stock on or prior to December 31, 1998, then Grand Prix shall, at any time
during the month of January, 1999, call and redeem all of the Preferred Stock at
a $.01 per share redemption price and the Buyer shall assume, pay and indemnify
Seller, its shareholders and their legal representatives and heirs from and
against all unpaid loan indebtedness of Seller not assumed by Buyers at Closing
(as set forth on Exhibit "G" hereto) not to exceed the total sum of One Million
Five Hundred Thousand Dollars ($1,500,000.00). If Seller exercises its right to
convert any of the Preferred Stock, then Buyer shall have no obligation with
respect to such unpaid loan indebtedness of Seller not assumed by Buyer at
Closing. When used herein, the phrase "loan indebtedness of Seller not assumed
by Buyer" or "unassumed indebtedness of Seller" shall mean that part of the
total loan or other indebtednesses of Seller (as the same may be restructured in
accordance with this Agreement), which may fluctuate from time to time in the
ordinary course of Seller's business, which is not assumed by Buyer, and shall
not mean any loan indebtedness of Seller incurred after Closing. Any amendments,
modifications, renewals, extensions or other changes to such unassumed
indebtedness of Seller made after Closing shall be subject to approval by Buyer.
Notwithstanding any other provision of this Agreement to the contrary, Grand
Prix consents to the pledge of the Preferred Stock by Seller as collateral with
respect to such loan indebtedness of Seller not assumed by Buyer.
2. Buyer agrees to assume, pay and perform all of Seller's agreements,
duties and obligations (including, but not limited to, the assumption and
payment of $2,500,000.00 of Seller's loan indebtedness) under only those
contracts listed and as provided in Exhibit "E" (the "Assumed Liabilities"). It
is expressly understood and agreed that Buyer shall not be liable for any of the
obligations or liabilities of Seller of any kind and nature other than those
specifically assumed by Buyer under this Agreement."
C. Article I(C) of the Agreement, entitled Instruments of Conveyance, is
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hereby amended by deleting all of the terms and provisions thereof and
substituting in lieu thereof the following as Article I(C):
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"C. Instruments of Conveyance. Seller shall deliver assignments, bills of
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sale, deeds and such other instruments of conveyance as shall be effective to
vest in the Buyer, or at the Buyer's direction Memphis International Motorsports
Corporation, Inc. ("MIMC"), a Tennessee corporation and a wholly owned
subsidiary of Buyer, all right, title and interest of the Seller in and to the
Assets on the dates set forth below."
D. Article I(D) of the Agreement, entitled Further Assurances, is hereby
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amended by deleting all of the terms and provisions thereof and substituting in
lieu thereof the following as Article I(D):
"D. Further Assurances. Seller, at any time after the Closing Date, will
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execute, acknowledge, and deliver any further deeds, assignments, conveyances,
and other documents, and instruments of transfer, reasonably requested by Buyer
or at Buyer's direction MIMC, and will take any other action consistent with the
terms of this Agreement that may reasonably be requested by Buyers or at Buyer's
direction MIMC for the purpose of assigning, transferring, granting, conveying,
and confirming to Buyer or at Buyer's direction MIMC, or reducing to possession,
any or all property to be conveyed and transferred under this Agreement. If
requested by Buyer or at Buyer's direction MIMC, Seller further agrees to
prosecute or otherwise enforce in its own name for the benefit of Buyer any
claims, rights, or benefits that are transferred to Buyer or at Buyer's
direction MIMC under this Agreement and that require prosecution or enforcement
in Seller's name. Any such action or prosecution or enforcement of claims,
rights, or benefits under this paragraph shall be solely at Buyer's expense or
at Buyer's direction MIMC's expense, unless the action, prosecution or
enforcement is made necessary by a breach of this Agreement by the Seller."
II. ARTICLE TWO: CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE
Each of the conditions precedent to Seller's performance as set forth in
Article VII of the Agreement as they relate to Grand Prix shall also relate to
each of the Buyer as applicable.
III. ARTICLE THREE: THE CLOSING
All references in Article VIII of the Agreement, entitled The Closing, to
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the "Buyer" or "Grand Prix" shall relate to the Buyer as applicable. Article
VIII(C)(4) to the Agreement shall also apply to Grand Prix.
IV. ARTICLE FOUR: OBLIGATIONS OF GRAND PRIX AND BUYER AFTER CLOSING
Article X of the Agreement, entitled Obligations of Grand Prix and Buyer
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after Closing, is hereby amended by deleting all of the
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terms and provisions thereof and substituting in lieu thereof the following as
Article X:
"A. Employment of Key Personnel. Buyer agrees that one of them will
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continue to employ for a period of at least nine (9) months from and after the
Closing Date the following persons (the "Employees") at not less than the salary
they were receiving and in the position they occupied on December 31, 1995 and
each such Employee will be paid severance equal to three (3) months salary if
employment is terminated by Buyer who employs Employee at or after the
expiration of such nine (9) month period: Bill Whitten, Janet Newman, John
Graham and Pete Wickham. If Buyer terminates any Employee without cause prior
to the expiration of such nine (9) month period, then Buyer shall pay such
Employee all salary due plus salary for the balance of such nine (9) month
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period plus such severance pay equal to three (3) months salary. Buyer shall
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provide to each of the Employees at or before the Closing letters signed by
Buyer who employs Employee confirming the foregoing employment agreement of such
Buyer.
B. Grand Prix's and Buyer's Indemnity. Grand Prix and the Buyer, jointly
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and severally, shall indemnify, defend, and hold harmless Seller, its
shareholders and their legal representatives and heirs against and in respect of
any and all claims, demands, losses, costs, expenses, obligations, liabilities,
damages, recoveries and deficiencies, including interest, penalties, and
reasonable attorneys' fees, that Seller or its shareholders or legal
representatives or heirs shall incur or suffer, that arise, result from, or
relate to (1) any breach of, or failure by Grand Prix or either of the Buyer to
perform, any of Grand Prix's or Buyer representations, warranties, covenants, or
agreements in this Agreement or in any certificate, exhibit, or other instrument
furnished or to be furnished by Grand Prix or Buyer under this Agreement,
including, but not limited to, the failure to pay when due (a) any of the
Assumed Liabilities or (b) any liability required by this Agreement to be
assumed by Grand Prix or Buyer after the Closing, and (2) Grand Prix's or the
Buyer's use, possession and operation of the Assets from and after the
Acquisition Date.
Seller and such other indemnified parties shall promptly notify Grand
Prix or Buyer of the existence of any claim, demand, or other matter to which
Grand Prix's and the Buyer's indemnification and obligations would apply, and
shall give Grand Prix and Buyer a reasonable opportunity to defend the same at
their own expense and with counsel of their own selection; provided that Seller
and such other indemnified parties shall at all times also have the right to
fully participate in the defense at its own expense. If Grand Prix or Buyer,
within a reasonable time after this notice, fail to defend, Seller and such
other indemnified parties shall have the right, but not the obligation, to
undertake the defense of, and to compromise or settle (exercising reasonable
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business judgment), the claim or other matter on behalf of, for the account, and
at the risk, of Grand Prix and Buyer. If the claim is one that cannot by its
nature be defended solely by Grand Prix or Buyer (including, without limitation,
any federal or state tax proceedings), then Seller and such other indemnified
parties shall make available all information and assistance that Grand Prix and
Buyer may reasonably request."
V. ARTICLE FIVE: SELLER'S INDEMNITY REGARDING UST'S AND CLINE
LAWSUIT
In the event that the Closing takes place, Seller shall indemnify, defend,
and hold harmless Buyer (or MIMC rather than Buyer if the Assets are transferred
to MIMC pursuant to Article I(C)) against and in respect of any and all claims,
demands, losses, costs, expenses, obligations, liabilities, damages, recoveries,
and deficiencies, including interest, penalties, and reasonable attorneys' fees,
that Grand Prix and Buyer shall incur or suffer, that arise, result from, or
relate to (a) the removal of the seven (7) underground storage tanks located in
the Real Property (the "UST's") to be removed after the Closing and the costs of
remediation of any contamination of the Real Property resulting from the use by
Seller of any of such UST's on or prior to the Closing Date, except that Seller
shall not be obligated to indemnify Buyer or MIMC for any acts or omissions of
the Buyer or MIMC or their employees, agents or contractors, and (b) any
liability of Seller that may arise in the lawsuit Richard F. Cline et al. v.
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Memphis International Motorsports Park, Inc. et al., Docket No. 69328 T.D.-7,
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Circuit Court of Tennessee for the Thirtieth Judicial District at Memphis.
VI. ARTICLE SIX: SELLER'S COVENANT NOT TO COMPETE
Article IX(E) of the Agreement, entitled Covenant Not To Compete, is hereby
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amended by deleting the words "fifty (50) mile radius" at the end of the first
paragraph and substituting the words "one hundred fifty (150) mile radius" in
lieu thereof.
VII. ARTICLE SEVEN: TAX TREATMENT
The acquisition of the Assets pursuant to this Agreement is intended to
qualify as a reorganization under Section 368(a)(1)(C) and (a)(2)(C) of the
Code. All references in the Agreement to "Section 368(a)(1)(c)" shall be
amended to refer to such "Section 368(a)(1)(C) and (a)(2)(C)". Grand Prix and
Buyer covenant and, if the Assets are transferred to MIMC pursuant to Article
I(C) MIMC also covenants, that they will report the acquisition of the Assets as
a tax-free reorganization under Sections 368 (a)(1)(C) and (a)(2)(C) of the
Code.
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VIII. ARTICLE EIGHT: REPRESENTATIONS AND WARRANTIES OF
GRAND PRIX AND BUYER
A. Grand Prix and Buyer, jointly and severally, represent and warrant
that:
1. Corporate Existence. Buyer is a Corporation duly organized, existing,
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and in good standing under the laws of California.
2. Authority; No Consents Required. Buyer has the right, power, legal
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capacity and authority to enter into, and perform its obligations under, this
Agreement. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated by this Agreement by the Buyer has
been duly authorized, and no further corporate action or authorization is
necessary on the part of Buyer and this Agreement is a legal, valid and binding
obligation of the Buyer. No consent, approval, or authorization of, or
declaration, filing, or registration with, any United States federal or state
governmental or regulatory authority is required to be made or obtained by the
Buyer in connection with the execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated by this
Agreement except for the registration statement with respect to any Common Stock
issuable with respect to the Preferred Stock becoming effective pursuant to
Article XX of the Agreement.
3. No default. The execution of this Agreement by the Buyer and the
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performance of its obligations will not violate or result in a breach of or
constitute a default under the Buyer's Certificate of Incorporation or by-laws,
as amended, or any agreement or order to which the Buyers is a party or by which
it is bound.
4. Voting, Convertible Preferred Stock. The shares of Preferred Stock to
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be delivered pursuant to this Agreement will be duly authorized and will, when
so authorized by the Board of Directors of Grand Prix and issued in accordance
with the terms hereof, be validly issued and outstanding, fully paid and
nonassessable, and will possess, in addition to the dividend rights described in
Article I of the Agreement, the same voting rights and all other rights,
preferences and privileges as Grand Prix's common stock and upon conversion into
Common Stock, such Common Stock will have been duly authorized and will be
validly issued and outstanding, fully paid and nonassessable, and will possess
all of the rights, preferences and privileges as the Grand Prix's common stock
being issued in the IPO. Buyer further covenants that it shall comply with all
applicable securities laws and regulations in connection with the issuance of
the Preferred Stock.
5. Tax Reporting. Grand Prix and Buyer covenant that they will report
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the acquisition of the Assets contemplated by this
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Agreement as a tax-free reorganization under Section 368(a)(1)(C) and (a)(2)(C)
of the Internal Revenue Code of 1986 (as amended) (herein the "Code"). Buyer
shall cooperate as reasonably requested by Seller in connection with such tax
treatment.
6. Capital Stock. The authorized, issued and outstanding capital stock
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of Grand Prix as of the date hereof is as follows:
Class Authorized Outstanding
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Common Stock 20,000,000 3,590,590
Preferred Stock 10,000,000
Series A 343,750 343,750
Series B 280,000 -0-
7. Parent Subsidiary Relationship. Buyer is a wholly owned subsidiary of
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Grand Prix and is controlled by Grand Prix within the meaning of Section 368 of
the Code. MIMC is a wholly owned subsidiary of Buyer and is controlled by Buyer
within the meaning of Section 368 of the Code.
8. Full Disclosure. None of the representations and warranties made by
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Buyer in this Agreement, or made in any certificate furnished or to be furnished
by Buyer or on its behalf pursuant to this Agreement, contains or will contain
any untrue statement of a material fact, or omits to state a material fact
necessary to make the statements made, in the light of the circumstances under
which they were made, not misleading.
IX. ARTICLE NINE: REMEDIES
All references in Article XV of the Agreement, entitled Remedies, to "Grand
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Prix" shall also be interpreted to include the Buyer.
X. ARTICLE TEN: NOTICES
All notices, requests, demands and other communications to the Buyer under
this Agreement shall be given in the same manner as provided in Article XVII of
the Agreement to the Buyer at either the address/fax given for Grand Prix or at:
5500 Taylor Forge Road
Millington, Tennessee 38053
FAX: (901) 358-7274
XI. ARTICLE ELEVEN: AMENDMENT
All references to the "Agreement" in the Agreement and this Amendment shall
mean the Agreement as amended by this Amendment. All references to the "Buyer"
in the Exhibits to the Agreement shall also include AST. The terms and
provisions of this Amendment
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shall control in the event of any conflict between the terms and provisions of
the Agreement and this Amendment.
XII. ARTICLE TWELVE: ENVIRONMENTAL PHASE I REPORT AND
CLEAN-UP
The Seller agrees to be responsible for the cost of clean-up of the
environmental matters recommended for clean-up in the ASI Envrironmental Phase I
dated June ,1996 which are described and set forth on Exhibit A hereto (the
"Clean-Up"). The Seller will initiate such Clean-Up as soon as is reasonably
practical after the Closing Date and proceed to diligently complete such Clean-
Up subject to any delays resulting from contingencies beyond its reasonable
control.
XIII. ARTICLE THIRTEEN: SIGNATURES
IN WITNESS WHEREOF, the parties to this Amendment have duly executed it as
of the day and year first above written.
GRAND PRIX ASSOCIATION OF
LONG BEACH, INC. (Grand Prix)
By: /s/ Marlene A. Davis
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Print Name: Marlene A. Davis
Title: Chief Financial Officer
AUTOMOTIVE SAFETY & TRANSPORTATION
SYSTEMS, INC. (AST)
By: /s/ Marlene A. Davis
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Print Name: Marlene A. Davis
Title: Chief Financial Officer
MEMPHIS INTERNATIONAL MOTORSPORTS
PARK, INC. (Seller)
By: /s/ Ed Gatlin
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Ed Gatlin, President
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