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EXHIBIT 10.24
EXECUTION COPY
STOCK PURCHASE AGREEMENT
AGREEMENT, dated March 25, 1998, between DOVER DOWNS ENTERTAINMENT,
INC., a Delaware corporation ("Purchaser"), and PENSKE MOTORSPORTS, INC., a
Delaware corporation ("Seller").
WHEREAS, Seller desires to sell to Purchaser Three Hundred Forty
Thousand (340,000) shares (the "Shares"), no par value, of Grand Prix
Association of Long Beach, Inc. (the "Company"); and
WHEREAS, Purchaser desires to acquire the Shares pursuant to the terms
and conditions hereof;
NOW, THEREFORE, in consideration of the premises and the mutual and
dependent promises hereinafter set forth, the parties hereto agree as follows:
1. SALE OF SHARES; CLOSING
1.1. Issuance and Delivery of Shares. At the Closing referred to in
Section 1.3, Seller shall sell the Shares to Purchaser, free and clear of all
liens and encumbrances, by delivering to Purchaser a certificate or certificates
registered in the name of Seller representing the Shares (the "Certificates"),
duly endorsed for transfer to Purchaser.
1.2. Consideration. In consideration for the aforesaid sale and
delivery of Shares, Purchaser will pay (the "Purchase Price") to Seller at the
Closing by wire transfer the amount of Five Million Two Hundred Seventy Thousand
and 00/100 Dollars ($5,270,000.00), representing Fifteen and 50/100 Dollars
($15.50) per Share, representing the closing price of the common stock of
Company on NASDAQ on March 19, 1998.
1.3. Closing. The closing of the transaction provided for in this
Section 1 (the "Closing") shall take place at the offices of Purchaser, 2200
Concord Pike, Wilmington, Delaware 19803, or such other place as the parties may
agree, on or before the tenth business day following execution hereof or such
other later date as the parties may agree. Purchaser's attorney, Klaus M.
Belohoubek, Esquire, has agreed to hold the Certificates in escrow and not to
release them to Purchaser until the conditions to Closing are satisfied or
waived and the wire transfer of the Purchase Price is confirmed by Seller. As a
condition to Closing for either party, Purchaser shall, on the date of Closing,
enter into an Agreement and Plan of Merger with Company (the "Merger
Agreement"). Seller is a party to a certain right of first refusal agreement
dated August 8, 1997 between and among various shareholders of the Company (the
"ROFR
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Agreement"). As a further condition to Closing for either party, the
rights of such other shareholders under the ROFR Agreement shall have expired,
been terminated or waived in a manner reasonably acceptable to Seller.
2. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants as follows:
2.1. Organization and Good Standing. Purchaser is a corporation duly
organized and validly existing under the laws of the State of Delaware.
2.2. Authority. Purchaser has the legal right and power to enter
into this Agreement and to carry out the transactions herein contemplated.
2.3. Authorization, Execution and Delivery. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by Purchaser, and this Agreement
has been duly executed and delivered by Purchaser.
2.4. Legal, Valid and Binding Obligations. This Agreement
constitutes the legal, valid and binding obligation of Purchaser.
2.5. No Violation of Other Agreements. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by Purchaser does not violate any provisions of the
organizational documents of Purchaser and does not violate any provision of, or
constitute a default under, or constitute a default upon notice or lapse of time
or both under, or result in the acceleration of any obligation under, or cause a
termination under, any contract, agreement, guaranty, lease, lien, indenture,
loan or credit agreement, promissory note, obligation, statute, rule, regulation
or judgment to which Purchaser is a party or by which Purchaser or the property
or business of Purchaser is bound or affected or to which it is subject.
2.6. Governmental Approvals. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby by
Purchaser does not require any governmental approval other than filing Form 3
and Schedule 13-D under the Exchange Act.
2.7. Investment Representation. The Shares being acquired by Purchaser
pursuant to this Agreement are being acquired for its own account for investment
and not with a view toward the distribution thereof in violation of the
Securities Act, and any future dispositions of such Shares by Purchaser will be
made in accordance with said Securities Act and the applicable rules and
regulations promulgated thereunder.
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3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants as follows:
3.1. Organization and Good Standing. Seller is a corporation duly
organized and validly existing under the laws of the State of Delaware.
3.2. Authority. Seller has the legal right and power to enter into
this Agreement and to carry out the transactions herein contemplated.
3.3. Authorization, Execution and Delivery. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by Seller, and this Agreement has
been duly executed and delivered by Seller.
3.4. Legal, Valid and Binding Obligations. This Agreement
constitutes the legal, valid and binding obligation of Seller.
3.5. No Violation of Other Agreements. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by Seller does not violate any provisions of the
organizational documents of Seller and does not violate any provision of, or
constitute a default under, or constitute a default upon notice or lapse of time
or both under, or result in the acceleration of any obligation under, or cause a
termination under, any contract, agreement, guaranty, lease, lien, indenture,
loan or credit agreement, promissory note, obligation, statute, rule, regulation
or judgment to which Seller is a party or by which Seller or the property or
business of Seller is bound or affected or to which it is subject, excluding
only the ROFR Agreement referred to in Section 1.3 hereto.
3.6. Governmental Approvals. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby by
Seller does not require any governmental approval.
4. BROKERS
Purchaser and Seller represent to each other that all negotiations
relative to this Agreement and the transactions contemplated hereby have been
carried on by Purchaser and Seller and their respective representatives without
the intervention of any person in such manner as to give rise to any valid claim
against any of the parties hereto for a brokerage commission, finder's fee or
other like payment to any person.
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5. PUBLICITY
Except as required by law, neither of the parties hereto nor any of
their affiliates shall issue or make any public release or announcement
concerning this Agreement or the transactions contemplated hereby prior to the
announcement by Company and Purchaser of the execution and delivery of the
Merger Agreement. In addition, each party shall use its reasonable best efforts
to first consult in advance with the other party concerning the content of any
required public release or announcement relating to this Agreement.
6. INDEMNITY
Each of the Purchaser and the Seller hereby agrees to indemnify and
hold harmless the other and the other's officers, directors and agents, and
their respective successors and assigns, from against, and in respect of any and
all demands, claims, actions or causes of action, assessments, liabilities,
losses, costs, damages, penalties, charges, fines or expenses, including without
limitation attorney's fees and expenses, arising out of or relating to any
breach by such indemnifying party of any representation, warranty, covenant or
agreement made in this Agreement. The party (the "Indemnitor") indemnifying the
other (the "Indemnitee") shall give the Indemnitee prompt notice of a claim
which is the subject of indemnification and the Indemnitee shall not settle any
claim without the prior approval of the Indemnitor, which shall not be
unreasonably withheld. The Indemnitee shall have the right, at its sole cost and
expense, to designate counsel of its own choice to join in the defense of any
action. Such right to indemnification shall be in addition to any and all other
rights of the parties under this Agreement or otherwise, at law or in equity.
7. STANDSTILL
While the Agreement and Plan of Merger referenced in Section 1.3
remains in effect and while Purchaser retains ownership of at least eighty
percent (80%) of the Shares purchased from Seller pursuant to this Agreement,
for a one (1) year period from the date hereof, Seller will not directly or
indirectly, without the express permission of Purchaser's Board of Directors,
(A) purchase or offer to purchase any of the Company's equity securities (or
securities convertible into the Company's equity securities), or (B) conduct a
"proxy contest" to obtain control of the Company's Board. This provision shall
expire and terminate upon consummation of the Merger contemplated in the
Agreement and Plan of Merger referenced in Section 1.3.
8. BOARD RESIGNATION
On the date of Closing, Seller shall deliver the resignation of Gregory
W. Penske from the Board of Directors of Company.
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9. MISCELLANEOUS
9.1. Governing Law. This Agreement and its validity, construction and
performance shall be governed in all respects by the internal laws of the State
of Delaware (without reference to the conflict of laws provisions or principles
thereof).
9.2. Binding Effect; Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns; but neither this Agreement nor any of the rights, benefits or
obligations hereunder shall be assigned, by operation of law or otherwise, by
either party hereto without the prior written consent of the other party.
Nothing in this Agreement, express or implied, is intended to confer upon any
person other than the parties hereto and their respective permitted successors
and assigns, any rights, benefits or obligations hereunder.
9.3. Amendment; Waiver. This Agreement shall not be changed, modified
or amended in any respect except by the mutual written agreement of the parties
hereto. Any provision of this Agreement may be waived in writing by the party
which is entitled to the benefits thereof. No waiver of any provision of this
Agreement shall be deemed to or shall constitute a waiver of any other provision
hereof (whether or not similar), nor shall any such waiver constitute a
continuing waiver.
9. 4. Notices. Any notices, requests, demands and other communications
required or permitted to be given hereunder must be in writing and, except as
otherwise specified in writing, will be deemed to have been duly given when
personally delivered or facsimile transmitted, or three (3) days after deposit
in the United States mail, by certified mail, postage prepaid, return receipt
requested, as follows:
IF TO PURCHASER: Dover Downs Entertainment, Inc.
1131 N. DuPont Highway
Dover, DE 19901
Attn: Denis McGlynn
President and Chief Executive Officer
With a copy to: Klaus M. Belohoubek, Esquire
Assistant General Counsel
Dover Downs Entertainment, Inc.
2200 Concord Pike
Wilmington, DE 19803
IF TO SELLER: Robert H. Kurnick, Jr.
Senior Vice President and General Counsel
Penske Motorsports, Inc.
13400 West Outer Drive
Detroit, MI 48239
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Any party may change its address for the purposes of this Agreement by
giving notice of such change of address to the other parties in the manner
herein provided for giving notice.
9.5. Survival. The representations and warranties of the parties set
forth in this Agreement shall survive the Closing; provided, that all such
representations and warranties shall expire, terminate and be of no force and
effect (or provide the basis for any claim) and no party hereto shall have any
obligation to indemnify any other party with respect thereto unless written
notice of any claim with respect thereto is received prior to the first
anniversary of this Agreement.
9.6. Severability. Any term or provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction
only, be ineffective only to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof or affecting the validity
or enforceability of such provision in any other jurisdiction.
9.7. Headings. The captions, heading and titles herein are for
convenience of reference only and shall not effect the construction, meaning or
interpretation of this Agreement or any term or provision hereof.
9.8. Counterparts. This Agreement may be executed through the use of
one or more counterparts, each of which shall be deemed an original and all of
which shall be considered one and the same agreement, notwithstanding that all
parties are not signatories to the same counterpart.
9.9. Expenses. Each party to this Agreement shall bear their own fees,
costs and expenses incurred in connection with the negotiation, execution and
consummation of this Agreement and the transactions contemplated hereby.
9.10. Entire Agreement. Except for written agreements executed on or
about the date hereof in connection with the transactions contemplated hereby,
this Agreement merges and supersedes any and all prior agreements,
understandings, discussions, assurances, promises, representations or warranties
among the parties with respect to the subject matter hereof, and contains the
entire agreement among the parties with respect to the subject matter hereof.
9.11. Remedies. The Shares are unique chattels and each party to this
Agreement shall have the remedies which are available to it for the violation of
any of the terms of this Agreement, including, but not limited to, the equitable
remedy of specific performance.
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IN WITNESS WHEREOF, Purchaser and Seller have each duly executed this
Agreement as of the date first above written.
DOVER DOWNS ENTERTAINMENT, INC.
By: /s/ Denis McGlynn
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Denis McGlynn
President & Chief Executive Officer
Officer
PENSKE MOTORSPORTS, INC.
By: /s/ Robert H. Kurnick, Jr
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Robert H. Kurnick, Jr
Senior Vice President and
General Counsel
General Counsel
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