EXHIBIT 1.1
EXECUTION COPY
INTERNATIONAL SPEEDWAY CORPORATION
$150,000,000 4.20% SENIOR NOTES DUE 2009
$150,000,000 5.40% SENIOR NOTES DUE 2014
PURCHASE AGREEMENT
APRIL 19, 2004
Wachovia Capital Markets, LLC
Banc One Capital Markets, Inc.
SunTrust Capital Markets, Inc.
As Representatives of the Initial Purchasers
c/o Wachovia Capital Markets, LLC
One Wachovia Center
Charlotte, North Carolina 28288
Ladies and Gentlemen:
International Speedway Corporation, a corporation organized under the laws
of Florida (the "Company"), proposes to issue and sell to the several parties
named in Schedule I hereto (the "Initial Purchasers"), for whom Wachovia Capital
Markets, LLC, Banc One Capital Markets, Inc. are acting as representatives (the
"Representatives"), $150,000,000 principal amount of its 4.20% Senior Notes Due
2009 (the "Five Year Notes") and $150,000,000 principal amount of its 5.40%
Senior Notes due 2014 (the "Ten Year Notes" and collectively with the Five Year
Notes, the "Securities") unconditionally guaranteed by the entities listed on
Exhibit A attached hereto (the "Subsidiaries"). The Five Year Notes are to be
issued under the Five Year Notes Indenture (as defined below). The Ten Year
Notes are to be issued under the Ten Year Notes Indenture (as defined below).
The Securities have the benefit of a Registration Rights Agreement (the
"Registration Rights Agreement"), to be dated as of the Closing Date (as defined
below) between the Company, its Subsidiaries and the Initial Purchasers and in
substantially the form of Exhibit D, pursuant to which the Company and its
Subsidiaries have agreed to exchange notes with substantially identical terms as
the Securities (except that such notes will not contain restrictions on transfer
or provide for additional interest in the event of certain defaults) (the
"Exchange Securities") unconditionally guaranteed by the Subsidiaries and issued
pursuant to the Indenture, or agreed to register the Securities under the Act
subject to the terms and conditions therein specified. To the extent there are
no additional parties listed on Schedule I other than you, the term
Representatives as used herein shall mean you as the Initial Purchasers, and the
terms Representatives and Initial Purchasers shall mean either the singular or
plural as the context requires. The use of the neuter in this Agreement shall
include the feminine and masculine wherever appropriate. Certain terms used
herein are defined in Section 17 hereof.
The sale of the Securities to the Initial Purchasers will be made without
registration of the Securities under the Act in reliance upon exemptions from
the registration requirements of the Act.
In connection with the sale of the Securities, the Company has prepared a
preliminary offering memorandum, dated April 19, 2004 (as amended or
supplemented at the Execution Time, including any and all exhibits thereto and
any information incorporated by reference therein, the "Preliminary
Memorandum"), and a final offering memorandum, dated April 23, 2004 (as amended
or supplemented at the Execution Time, including any and all exhibits thereto
and any information incorporated by reference therein, the "Final Memorandum").
Each of the Preliminary Memorandum and the Final Memorandum sets forth certain
information concerning the Company and the Securities. The Company hereby
confirms that it has authorized the use of the Preliminary Memorandum and the
Final Memorandum, and any amendment or supplement thereto, in connection with
the offer and sale of the Securities by the Initial Purchasers. Unless stated to
the contrary, any references herein to the terms "amend", "amendment" or
"supplement" with respect to the Final Memorandum shall be deemed to refer to
and include any information filed under the Exchange Act subsequent to the
Execution Time which is incorporated by reference therein.
1. Representations and Warranties. The Company and the Subsidiaries jointly
and severally represent and warrant to each Initial Purchaser as set forth below
in this Section 1 (it being understood that the use of the term "Person" in this
Section 1 shall be deemed to exclude the Initial Purchasers and their respective
Affiliates, as well as any Person acting on their behalf at their direction).
(a) The Preliminary Memorandum, at the date thereof, did not contain any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. At the Execution Time, on the Closing Date (as
defined below) and on any settlement date, the Final Memorandum did not, and
will not (and any amendment or supplement thereto, at the date thereof, at the
Closing Date and on any settlement date, will not), contain any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company and its Subsidiaries
make no representation or warranty as to the information contained in or omitted
from the Preliminary Memorandum or the Final Memorandum, or any amendment or
supplement thereto, in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of the Initial Purchasers
through the Representatives specifically for inclusion therein.
(b) Neither the Company, nor any of its Affiliates, nor any Person
acting on its or their behalf has, directly or indirectly, made offers or sales
of any security, or solicited offers to buy any security, under circumstances
that would require the registration of the Securities under the Act.
(c) Neither the Company, nor any of its Affiliates, nor any Person
acting on its or their behalf has engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection with any
offer or sale of the Securities in the United States.
(d) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Act.
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(e) Neither the Company, nor any of its Affiliates, nor any Person
acting on its or their behalf has engaged in any directed selling efforts
(within the meaning of Regulation S) with respect to the Securities, and each of
them has complied with the offering restrictions requirement of Regulation S.
(f) The Company is not, and after giving effect to the offering and sale
of the Securities and the application of the proceeds thereof as described in
the Final Memorandum will not be, an "investment company" within the meaning of
the Investment Company Act, without taking account of any exemption arising out
of the number of holders of the Company's securities.
(g) The Company is subject to and in full compliance with the reporting
requirements of Section 13 or Section 15(d) of the Exchange Act and to the
Company's knowledge, the Company is in full compliance with all applicable
provisions the Sarbanes-Oxley Act of 2002 and the Company has not received any
information to the contrary.
(h) Neither the Company nor any Subsidiaries has paid or agreed to pay
to any Person any compensation for soliciting another to purchase any of the
Securities (except as contemplated by this Agreement).
(i) The Company has not taken, directly or indirectly, any action
designed to cause or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities.
(j) The information, if any, provided by the Company pursuant to Section
5(h) hereof will not, at the date thereof, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(k) Each of the Company and its Subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized with full corporate power and
authority to own or lease, as the case may be, and to operate its properties and
conduct its business as described in the Final Memorandum, and is duly qualified
to do business as a foreign corporation and is in good standing under the laws
of each jurisdiction which requires such qualification, except where the failure
to so exist or qualify would not have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties of the
Company and its Subsidiaries, taken as a whole (a "Material Adverse Effect").
(l) All the outstanding shares of capital stock of each Subsidiary have
been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Final Memorandum, all
outstanding shares of capital stock of the Subsidiaries are owned by the Company
either directly or through wholly owned Subsidiaries free and clear of any
perfected security interest or any other security interests, claims, liens or
encumbrances.
(m) the Company's authorized equity capitalization is as set forth in
the Final Memorandum.
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(n) The statements in the Final Memorandum under the headings
"Description of the Notes", "Exchange Offer; Registration Rights," "Material
United States Federal Income Tax Consequences" and under the headings "Risk
Factors" and "Business -- Legal Proceedings" describing certain legal
proceedings affecting the Company and its Subsidiaries, fairly summarize the
matters therein described.
(o) This Agreement has been duly authorized, executed and delivered by
the Company and its Subsidiaries; the Indentures have been duly authorized, and
assuming the due authorization, execution, delivery thereof by the Trustee, when
executed and delivered by the Company and its Subsidiaries, will constitute
legal, valid, binding instruments enforceable against the Company and its
Subsidiaries in accordance with their respective terms (subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally from time to time
in effect and to general principles of equity, and subject, as to the
enforcement of rights of indemnity and contribution, to applicable federal and
state securities laws and principles of public policy); the Securities have been
duly authorized, and, when executed and authenticated in accordance with the
provisions of the applicable Indenture and delivered to and paid for by the
Initial Purchasers, will have been duly executed and delivered by the Company
and will constitute the legal, valid and binding obligations of the Company
entitled to the benefits of the applicable Indenture (subject, as to the
enforcement of remedies, to applicable bankruptcy, insolvency, moratorium or
other laws affecting creditors' rights generally from time to time in effect and
to general principles of equity, and subject, as to the enforcement of rights of
indemnity and contribution, to applicable federal and state securities laws and
principles of public policy); the Exchange Securities have been duly authorized,
and when executed, delivered and authenticated in accordance with the provisions
of the applicable Indenture, will have been duly executed and delivered by the
Company and will constitute the legal, valid and binding obligations of the
Company entitled to the benefits of the applicable Indenture (subject, as to the
enforcement of remedies, to applicable bankruptcy, insolvency, moratorium or
other laws affecting creditors' rights generally from time to time in effect and
to general principles of equity, and subject, as to enforcement of rights of
indemnity and contribution, to applicable federal and state securities laws and
principles of public policy); the Registration Rights Agreement has been duly
authorized and, when executed and delivered by the Company and its Subsidiaries,
will constitute the legal, valid, binding and enforceable instrument of the
Company and its Subsidiaries (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in effect and to general
principles of equity, and subject, as to the enforcement of rights of indemnity
and contribution, to applicable federal and state securities laws and principles
of public policy); and the Credit Agreement Amendment and Waiver has been duly
authorized by the Company and its Subsidiaries.
(p) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required to be obtained or filed, as
applicable, by the Company or any Subsidiary in connection with the transactions
contemplated herein or in the Indentures, the Registration Rights Agreement, or
the Credit Agreement Amendment and Waiver except such as will be obtained under
the Act in connection with the Registration Rights Agreement and the
qualification of the Indenture under the Trust Indenture Act and such as may be
required under the blue sky laws of any jurisdiction in connection with the
purchase and distribution of
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the Securities by the Initial Purchasers in the manner contemplated herein and
in the Final Memorandum and the Registration Rights Agreement.
(q) Neither the execution and delivery of the Indentures, this
Agreement, the Registration Rights Agreement or the Credit Agreement Amendment
and Waiver, the issue and sale of the Securities or the Exchange Securities, nor
the consummation of any other of the transactions herein or therein
contemplated, nor the fulfillment of the terms hereof or thereof will conflict
with, result in a breach or violation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
Subsidiaries pursuant to (i) the charter or by-laws of the Company or any of its
Subsidiaries; (ii) assuming the due execution and delivery of the Credit
Agreement Amendment and Waiver, the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the Company or any of its
Subsidiaries is a party or bound or to which its or their property is subject,
other than conflicts, breaches, violations or liens that, individually or in the
aggregate, would not have a Material Adverse Effect; or (iii) any statute, law,
rule, regulation, judgment, order or decree applicable to the Company or any of
its Subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over the
Company or any of its Subsidiaries or any of its or their properties, other than
violations that, individually or in the aggregate, would not have a Material
Adverse Effect.
(r) The financial statements of the Company and its consolidated
subsidiaries and the related notes thereto incorporated by reference in the
Preliminary Memorandum and the Final Memorandum present fairly the financial
position of the Company and its consolidated subsidiaries as of the dates
indicated and the results of their operations and the changes in their cash
flows for the periods specified; except as specifically set forth in the Final
Memorandum, such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods covered thereby.
The financial data set forth under the captions "Summary--Summary
Financial Information," "Capitalization" and "Selected Financial Data" in the
Final Memorandum fairly present, on the basis stated in the Final Memorandum,
the information included therein.
(s) Except as set forth in or contemplated in the Final Memorandum, 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 or its or their property is pending or, to the best knowledge of
the Company, threatened that (i) could reasonably be expected to have a material
adverse effect on the ability of the Company and its Subsidiaries to perform
this Agreement, the Indenture or the Registration Rights Agreement, or
consummate any of the transactions contemplated hereby or thereby; or (ii) could
reasonably be expected to have a Material Adverse Effect, whether or not arising
from transactions in the ordinary course of business.
(t) Each of the Company and each of its Subsidiaries owns or leases all
such properties as are necessary to the conduct of its operations as presently
conducted.
(u) Neither the Company nor any Subsidiary is in violation or default of
(i) any provision of its charter or bylaws; (ii) assuming the due execution and
delivery of the Credit
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Agreement Amendment and Waiver, the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which it is a party or bound or
to which its property is subject, other than violations or defaults that,
individually or in the aggregate, would not have a Material Adverse Effect; or
(iii) any statute, law, rule, regulation, judgment, order or decree applicable
to the Company or any of its Subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any such Subsidiary or any of its properties,
as applicable, other than violations or defaults that, individually or in the
aggregate, would not have a Material Adverse Effect.
(v) Ernst & Young LLP, who has certified the financial statements of the
Company and its consolidated subsidiaries incorporated by reference in the
Preliminary Memorandum and Final Memorandum, is an independent public accountant
with respect to the Company within the meaning of the Act and the applicable
published rules and regulations thereunder.
(w) There are no stamp or other issuance or transfer taxes or duties or
other similar fees or charges required to be paid in connection with the
execution and delivery of this Agreement or the issuance or sale by the Company
of the Securities or the Exchange Securities.
(x) The Company and its Subsidiaries have filed all foreign, federal,
state and local tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure to so file would not
have a Material Adverse Effect), whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto), and has paid all
taxes required to be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is currently being contested in
good faith or as would not have a Material Adverse Effect, whether or not
arising from transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Memorandum.
(y) No labor problem or dispute with the employees of the Company or any
of its Subsidiaries exists or, to the best knowledge of the Company, is
threatened or imminent, and the Company is not aware of any existing or imminent
labor disturbance by the employees of any of its or its Subsidiaries' principal
suppliers, contractors or customers, that could have a Material Adverse Effect,
whether or not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Final Memorandum.
(z) The Company and each of its Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; all policies of insurance and fidelity or surety bonds insuring the
Company or any of its Subsidiaries or their respective businesses, assets,
employees, officers and directors are in full force and effect; the Company and
its Subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by the Company or
any of its Subsidiaries under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of
rights clause, other than claims that, individually or in the aggregate, if so
denied, would not have a Material Adverse Effect; neither the Company nor any
such Subsidiary has
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been refused any insurance coverage sought or applied for; and neither the
Company nor any such Subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse Effect,
except as set forth in or contemplated in the Final Memorandum.
(aa) No Subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such Subsidiary's capital stock, from repaying to the Company
any loans or advances to such Subsidiary from the Company or from transferring
any of such Subsidiary's property or assets to the Company or any other
subsidiary of the Company, except as described in or contemplated by the Final
Memorandum.
(bb) The Company and its Subsidiaries possess all licenses, certificates,
permits and other authorizations issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct their respective businesses,
except where the failure to possess any of the foregoing would not have a
Material Adverse Effect, and neither the Company nor any such Subsidiary has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would have a
Material Adverse Effect, except as set forth in or contemplated in the Final
Memorandum.
(cc) The Company and each of its Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(dd) The Company and its Subsidiaries (i) are in compliance with any and
all applicable foreign, federal, state and local laws and regulations relating
to the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental Laws");
(ii) have received and are in compliance with all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses; and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any disposal or
release of hazardous or toxic substances or wastes, pollutants or contaminants,
except where such non-compliance with Environmental Laws, failure to receive
required permits, licenses or other approvals, or liability would not,
individually or in the aggregate, have a Material Adverse Effect, except as set
forth in or contemplated in the Final Memorandum; and, except as set forth in
the Final Memorandum, neither the Company nor any of the Subsidiaries has been
named as a "potentially responsible party" under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
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(ee) In the ordinary course of its business, the Company periodically
reviews the effect of Environmental Laws on the business, operations and
properties of the Company and its Subsidiaries, in the course of which it
identifies and evaluates associated costs and 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); on the basis of such review, the Company has
reasonably concluded that such associated costs and liabilities would not,
singly or in the aggregate, have a Material Adverse Effect, except as set forth
in or contemplated in the Final Memorandum.
(ff) Each of the Company and its Subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of Section 302 of the
United States Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and the regulations and published interpretations thereunder with
respect to each "plan" (as defined in Section 3(3) of ERISA and such regulations
and published interpretations) in which employees of the Company and its
Subsidiaries are eligible to participate and each such plan is in compliance in
all material respects with the presently applicable provisions of ERISA and such
regulations and published interpretations; the Company and its Subsidiaries have
not incurred any unpaid liability to the Pension Benefit Guaranty Corporation
(other than for the payment of premiums in the ordinary course) or to any such
plan under Title IV of ERISA.
(gg) The Company and its Subsidiaries own or possess all patent,
trademarks, trademark registration, service marks, service mark registrations,
trade names, copyrights, licenses, inventions, trade secrets and rights
described in the Final Memorandum as being owned by them, or any of them, or
necessary for the conduct of their respective businesses, and the Company is not
aware of any claim to the contrary or any challenge by any other Person to the
rights of the Company or any of its Subsidiaries with respect to the foregoing.
(hh) The Company and its Subsidiaries have complied with all provisions
of Florida Statutes 517.075, relating to issuers doing business with Cuba.
Any certificate signed by any officer of the Company and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Securities shall be deemed a representation and warranty by the Company
and its Subsidiaries, as to matters covered thereby, to each Initial Purchaser.
2. Purchase and Sale. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Company agrees to
sell to each Initial Purchaser, and each Initial Purchaser agrees, severally and
not jointly, to purchase from the Company, (i) at a purchase price of 99.188% of
the principal amount thereof, the principal amount of Five Year Notes set forth
opposite such Initial Purchaser's name in Schedule I hereto and (ii) at a
purchase price of 99.275% of the principal amount thereof, the principal amount
of Ten Year Notes set forth opposite such Initial Purchaser's name in Schedule I
hereto.
3. Delivery and Payment. Delivery of and payment for the Securities shall be
made at 10:00 A.M., New York City time, on April 23, 2004, or at such time on
such later date as the Representatives shall designate, which date and time may
be postponed by agreement between
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the Representatives and the Company or as provided in Section 9 hereof (such
date and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made to the Representatives
for the respective accounts of the several Initial Purchasers against payment by
the several Initial Purchasers through the Representatives of the purchase price
thereof to or upon the order of the Company by wire transfer payable in same-day
funds to the account specified by the Company. Delivery of the Securities shall
be made through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
4. Offering by Initial Purchasers. Each Initial Purchaser, severally and not
jointly, represents and warrants to and agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell, any
Securities except (i) to those it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Act) and that, in
connection with each such sale, it has taken or will take reasonable steps to
ensure that the purchaser of such Securities is aware that such sale is being
made in reliance on Rule 144A; or (ii) in accordance with the restrictions set
forth in Exhibit B hereto.
(b) Neither it nor any Person acting on its behalf has made or will make
offers or sales of the Securities in the United States by means of any form of
general solicitation or general advertising (within the meaning of Regulation D)
in the United States or under circumstances that would require registration of
the Securities under the Act.
5. Agreements. The Company and its Subsidiaries agree with each Initial
Purchaser that:
(a) The Company will furnish to each Initial Purchaser and to counsel
for the Initial Purchasers, without charge, during the period referred to in
paragraph (c) below, as many copies of the Final Memorandum and any amendments
and supplements thereto as it may reasonably request.
(b) The Company will not amend or supplement the Final Memorandum, other
than by filing documents under the Exchange Act that are incorporated by
reference therein, without the prior written consent of the Representatives;
provided, however, that, prior to the completion of the distribution of the
Securities by the Initial Purchasers (as determined by the Representatives), the
Company will not file any document under the Exchange Act that is incorporated
by reference in the Final Memorandum unless, prior to such proposed filing, the
Company has furnished the Representatives with a copy of such document for their
review and the Representatives have not reasonably objected to the filing of
such document. The Company will promptly advise the Representatives when any
document filed under the Exchange Act that is incorporated by reference in the
Final Memorandum shall have been filed with the Commission.
(c) If at any time prior to the completion of the sale of the Securities
by the Initial Purchasers (as determined by the Representatives), any event
occurs as a result of which the Final Memorandum, as then amended or
supplemented, would include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or if it should
be
9
necessary to amend or supplement the Final Memorandum to comply with applicable
law, the Company promptly (i) will notify the Representatives of any such event;
(ii) subject to the requirements of paragraph (b) of this Section 5, will
prepare an amendment or supplement that will correct such statement or omission
or effect such compliance; and (iii) will supply any supplemented or amended
Final Memorandum to the several Initial Purchasers and counsel for the Initial
Purchasers without charge in such quantities as the Representatives may
reasonably request.
(d) The Company will arrange, if necessary, for the qualification of the
Securities for sale by the Initial Purchasers under the laws of such
jurisdictions as the Representatives may designate and will maintain such
qualifications in effect so long as required for the sale of the Securities;
provided that in no event shall the Company nor shall any Subsidiary be
obligated to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to service of process in
suits, other than those arising out of the offering or sale of the Securities,
in any jurisdiction where it is not now so subject. The Company will promptly
advise the Representatives of the receipt by the Company or any Subsidiary of
any notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose.
(e) The Company will not, and will not permit any of its Affiliates to,
resell any Securities that have been acquired by any of them.
(f) Neither the Company, nor any of its Affiliates, nor any Person
acting on its or their behalf at its or their direction will, directly or
indirectly, make offers or sales of any security, or solicit offers to buy any
security, under circumstances that would require the registration of the
Securities under the Act.
(g) Neither the Company, nor any of its Affiliates, nor any Person
acting on its or their behalf at its or their direction will engage in any form
of general solicitation or general advertising (within the meaning of Regulation
D) in connection with any offer or sale of the Securities in the United States.
(h) So long as any of the Securities are "restricted securities" within
the meaning of Rule 144(a)(3) under the Act, the Company will, during any period
in which it is not subject to and in compliance with Section 13 or 15(d) of the
Exchange Act or it is not exempt from such reporting requirements pursuant to
and in compliance with Rule 12g3-2(b) under the Exchange Act, provide to each
holder of such restricted securities and to each prospective purchaser (as
designated by such holder) of such restricted securities, upon the request of
such holder or prospective purchaser, any information required to be provided by
Rule 144A(d)(4) under the Act. This covenant is intended to be for the benefit
of the holders, and the prospective purchasers designated by such holders, from
time to time of such restricted securities.
(i) Neither the Company, nor any of its Affiliates, nor any Person
acting on its or their behalf at its or their discretion will engage in any
directed selling efforts (within the meaning of Regulation S) with respect to
the Securities, and each of them will comply with the offering restrictions
requirement of Regulation S.
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(j) The Company will cooperate with the Representatives and use its
reasonable best efforts to permit the Securities to be eligible for clearance
and settlement through The Depository Trust Company.
(k) The Company will not for a period of 7 days following the Execution
Time, without the prior written consent of Wachovia Capital Markets, LLC, offer,
sell or contract to sell, or otherwise dispose of (or enter into any transaction
which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic disposition due
to cash settlement or otherwise) by the Company or any Affiliate of the Company
or any Person in privity with the Company or any Affiliate of the Company),
directly or indirectly, or announce the offering of, any debt securities issued
or guaranteed by the Company or any of its Subsidiaries (other than the
Securities or the Exchange Securities).
(l) Neither the Company nor any of its Subsidiaries will take, directly
or indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or otherwise,
in stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(m) In connection with any disposition of Securities pursuant to a
transaction made in compliance with paragraph 6(a), paragraph 6(d) or paragraph
6(f) of Exhibit A, the Company will reissue certificates evidencing such
Securities without the legend referred to in paragraph 5 of Exhibit A (provided,
in the case of a transaction made in compliance with paragraph 6(f) of Exhibit
A, that the legal opinion referred to therein so permits).
(n) The Company and it Subsidiaries agree to pay the costs and expenses
relating to the following matters: (i) the preparation of the Indentures and the
Registration Rights Agreement, the issuance of the Securities and the Exchange
Securities and the fees of the Trustee; (ii) the preparation, printing or
reproduction of the Preliminary Memorandum and Final Memorandum and each
amendment or supplement to either of them; (iii) the printing (or reproduction)
and delivery (including postage, air freight charges and charges for counting
and packaging) of such copies of the Preliminary Memorandum and Final
Memorandum, and all amendments or supplements to either of them, as may, in each
case, be reasonably requested for use in connection with the offering and sale
of the Securities and the Exchange Securities; (iv) the preparation, printing,
authentication, issuance and delivery of certificates for the Securities and the
Exchange Securities, including any stamp or transfer taxes in connection with
the original issuance and sale of the Securities; (v) the printing (or
reproduction) and delivery of this Agreement, any blue sky memorandum and all
other agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Securities; (vi) any registration or
qualification of the Securities for offer and sale under the securities or blue
sky laws of the several states (including filing fees and the reasonable fees
and expenses of one counsel for the Initial Purchasers relating to such
registration and qualification); (vii) the transportation and other expenses
incurred by or on behalf of Company representatives (which shall not include the
Representatives or the Initial Purchasers) in connection with presentations to
prospective purchasers of the Securities; (viii) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local and
special counsel) for the Company; and (ix) all other costs and expenses incident
to the performance by the Company of its obligations hereunder.
11
6. Conditions to the Obligations of the Initial Purchasers. The obligations
of the Initial Purchasers to purchase the Securities shall be subject to the
accuracy of the representations and warranties on the part of the Company and
its Subsidiaries contained herein at the Execution Time, the Closing Date and
any settlement date pursuant to Section 3 hereof, to the accuracy of the
statements of the Company or its Subsidiaries made in any certificates pursuant
to the provisions hereof, to the performance by the Company and its Subsidiaries
of their obligations hereunder and to the following additional conditions:
(a) The Company shall have requested and caused Baker Botts L.L.P.,
counsel for the Company, to furnish to the Representatives its opinion, dated
the Closing Date and addressed to the Representatives, to the effect that:
(i) the Company and each of its Subsidiaries is validly existing
as a corporation in good standing under the laws of the jurisdiction in which it
is chartered or organized, with full corporate power and authority to own or
lease, as the case may be, and to operate its properties and conduct its
business as described in the Final Memorandum, and, to the knowledge of such
counsel, is duly qualified to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction which requires such
qualification, except where the failure so to qualify would not have,
individually or in the aggregate, a Material Adverse Effect;
(ii) the Company's authorized equity capitalization is as set forth
in the Final Memorandum;
(iii) the Indentures have been duly authorized, executed and
delivered by the Company and its Subsidiaries, and constitute legal, valid and
binding instruments enforceable against the Company in accordance with their
respective terms (subject, as to the enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity, and subject, as to the enforcement of rights of indemnity
or contribution, to applicable federal or state securities laws or principles of
public policy); the Securities have been duly and validly authorized by the
Company and, when executed and authenticated in accordance with the provisions
of the applicable Indenture and delivered to and paid for by the Initial
Purchasers under this Agreement, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the applicable Indenture
(subject, as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to general principles of equity, and
subject, as to the enforcement of rights of indemnity or contribution, to
applicable federal or state securities laws or principles of public policy); the
Exchange Securities have been duly and validly authorized and, when executed and
authenticated in accordance with the provisions of the applicable Indenture,
will constitute legal, valid and binding obligations of the Company entitled to
the benefits of the applicable Indenture (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally from time to time in effect and
to general principles of equity, and subject, as to the enforcement of rights of
indemnity or contribution, to applicable federal or state securities laws or
principles of public policy); the Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and it Subsidiaries and
constitutes the legal, valid,
12
binding and enforceable instrument of the Company and its Subsidiaries (subject,
as to the enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors' rights generally from
time to time in effect and to general principles of equity, and subject, as to
the enforcement of rights of indemnity or contribution, to applicable federal or
state securities laws or principles of public policy); the Credit Agreement
Amendment and Waiver has been duly authorized by the Company and its
Subsidiaries; and the statements set forth under the heading "Description of the
Notes" and "Exchange Offer; Registration Rights" in the Final Memorandum,
insofar as such statements purport to summarize certain provisions of the
Securities and the Exchange Securities, the Indentures and the Registration
Rights Agreement, provide a fair summary of such provisions;
(iv) to the knowledge of such counsel, there is no pending or
threatened 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 or its or their property that is not adequately disclosed in the
Final Memorandum, except in each case for such proceedings that, if the subject
of an unfavorable decision, ruling or finding would not singly or in the
aggregate, result in a Material Adverse Effect;
(v) the statements set forth under the heading "Material United
States Federal Income Tax Consequences," to the extent they constitute summaries
of matters of law or regulation or legal conclusions, fairly summarize the
matters described therein;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company and its Subsidiaries;
(vii) no consent, approval, authorization, filing with or order of
any court or governmental agency or body is required to be obtained or filed, as
applicable, by the Company or any Subsidiary in connection with the transactions
contemplated herein, the Indentures, the Registration Rights Agreement or the
Credit Agreement Amendment and Waiver, except such as will be obtained under the
Act in connection with the Registration Rights Agreement, the qualification of
the Indentures under the Trust Indenture Act and such as may be required under
the blue sky or securities laws of any jurisdiction in connection with the
purchase and sale of the Securities by the Initial Purchasers in the manner
contemplated in this Agreement and the Final Memorandum and the Registration
Rights Agreement and such other approvals (specified in such opinion) as have
been obtained (it being understood that such counsel need not express any
opinion regarding blue sky or state securities laws);
(viii) assuming the accuracy of the representations and warranties
and compliance with the agreements contained herein, no registration of the
Securities under the Act and no qualification of an indenture under the Trust
Indenture Act, are required for the offer and sale by the Initial Purchasers of
the Securities in the manner contemplated by this Agreement;
(ix) the Company is not and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof as
described in the Final Memorandum, will not be an "investment company" as
defined in the Investment Company Act without taking account of any exemption
arising out of the number of holders of the Company's securities; and
13
(x) neither the execution and delivery of the Indentures, this
Agreement, the Registration Rights Agreement or the Credit Agreement Amendment
and Waiver, the issue and sale of the Securities or the Exchange Securities, nor
the consummation of any other of the transactions herein or therein
contemplated, nor the fulfillment of the terms hereof or thereof will conflict
with, result in a breach or violation of, or imposition of any lien, charge or
encumbrance upon any property or asset of the Company or its Subsidiaries
pursuant to, (i) the charter or by-laws of the Company or its Subsidiaries; (ii)
assuming the due execution and delivery of the Credit Agreement Amendment and
Waiver, the terms of any indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument filed as an exhibit to the Company's Annual Report on
Form 10-K for the year ended November 30, 2003 or the Company's Quarterly Report
on Form 10-Q for the quarter ended February 29, 2004, which breach, violation or
imposition, individually or in the aggregate, would have a Material Adverse
Effect; or (iii) any statute, law, rule, regulation (assuming compliance with
applicable blue sky and state securities laws), judgment, order or decree
applicable to the Company or any of its Subsidiaries of any court, regulatory
body, administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company, any of its Subsidiaries or any of their
respective properties, which breach, violation or imposition, individually or in
the aggregate, would have a Material Adverse Effect.
In addition, such counsel shall state that no facts have come to such
counsel's attention which would lead such counsel to believe that as of the date
of the Final Memorandum and the Closing Date, the Final Memorandum contained or
contains any untrue statement of a material fact or omitted or omits to state
any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (in each case, other
than the financial statements, including the notes thereto, the auditors' report
thereon and any related summary of accounting policies and other financial
information contained therein, as to which such counsel need express no
opinion).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the States of
New York, Texas or the District of Columbia, the General Corporation Law of the
State of Delaware or the Federal laws of the United States, to the extent they
deem proper and specified in such opinion, upon the opinion of other counsel of
good standing whom they believe to be reliable and who are satisfactory to
counsel for the Initial Purchasers; provided, however, that, with respect to any
opinion relating to the due authorization of any corporate action or due
execution and delivery of any document by any Subsidiary that is not
incorporated or organized in New York, Texas, the District of Columbia or
Delaware, such counsel may assume for purposes of such opinion, that the laws of
the jurisdiction of incorporation or organization are the same as the Delaware
General Corporate Law; and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and public
officials. References to the Final Memorandum in this Section 6(a) include any
amendment or supplement thereto at the Closing Date.
(b) The Company shall have requested and caused Glenn R. Padgett,
counsel for the Company, to furnish to the Representatives his opinion, dated
the Closing Date and addressed to the Representatives, to the effect that:
14
(i) the Company and each of its Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction in which it is chartered or organized, with full
corporate power and authority to own or lease, as the case may be, and to
operate its properties and conduct its business as described in the Final
Memorandum, and, to the knowledge of such counsel, is duly qualified to do
business as a foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification, except where the failure so to
qualify would not have, individually or in the aggregate, a Material Adverse
Effect;
(ii) all the outstanding shares of capital stock of the Company and
each Subsidiary have been duly and validly authorized and issued and are fully
paid and nonassessable, and, except as otherwise set forth in the Final
Memorandum, all outstanding shares of capital stock of the Subsidiaries are
owned by the Company either directly or through wholly owned Subsidiaries, to
the knowledge of such counsel, free and clear of any security interest and, to
the knowledge of such counsel, after due inquiry, any other security interests,
claims, liens or encumbrances;
(iii) neither the execution and delivery of this Agreement, the
Indentures, the Registration Rights Agreement or the Credit Agreement Amendment
and Waiver, the issue and sale of the Securities or the Exchange Securities, nor
the consummation of any other of the transactions herein or therein
contemplated, nor the fulfillment of the terms hereof or thereof will conflict
with, result in a breach or violation of, or imposition of any lien, charge or
encumbrance upon any property or asset of the Company or its Subsidiaries
pursuant to, (i) the charter or by-laws of the Company or its Subsidiaries; (ii)
assuming the due execution and delivery of the Credit Agreement Amendment and
Waiver, the terms of any indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which, to the knowledge of such counsel, the Company
or any of its Subsidiaries is a party or bound or to which its respective
property is subject, which breach, violation or imposition, individually or in
the aggregate, would have a Material Adverse Effect; or (iii) any statute, law,
rule, regulation (assuming compliance with applicable blue sky and state
securities laws), judgment, order or decree applicable to the Company or any of
its Subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over the
Company, any of its Subsidiaries or any of their respective properties, which
breach, violation or imposition, individually or in the aggregate, would have a
Material Adverse Effect;
(iv) no consent, approval, authorization, filing with or order of
any court or governmental agency or body is required to be obtained or filed, as
applicable, by the Company or any Subsidiary in connection with the transactions
contemplated herein, the Indentures, the Registration Rights Agreement or in the
Credit Agreement Amendment and Waiver, except such as will be obtained under the
Act in connection with the Registration Rights Agreement, the qualification of
the Indentures under the Trust Indenture Act and such as may be required under
the blue sky or securities laws of any jurisdiction in connection with the
purchase and sale of the Securities by the Initial Purchasers in the manner
contemplated in this Agreement and the Final Memorandum and the Registration
Rights Agreement and such other approvals (specified in such opinion) as have
been obtained (it being understood that such counsel need not express any
opinion regarding blue sky or state securities laws);
15
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
Florida, the General Corporation Law of the State of Delaware or the Federal
laws of the United States, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel of good standing whom they believe to
be reliable and who are satisfactory to counsel for the Initial Purchasers;
provided, however, that, with respect to any opinion relating to the due
authorization of any corporate action or due execution and delivery of any
document by any Subsidiary that is not incorporated or organized in Florida or
Delaware, such counsel may assume for purposes of such opinion, that the laws of
the jurisdiction of incorporation or organization are the same as the Delaware
General Corporate Law; and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and public
officials. References to the Final Memorandum in this Section 6(a) include any
amendment or supplement thereto at the Closing Date.
(c) The Representatives shall have received from Mayer, Brown, Rowe &
Maw LLP, counsel for the Initial Purchasers, such opinion or opinions, dated the
Closing Date and addressed to the Representatives, with respect to the issuance
and sale of the Securities and the Exchange Securities, the Indenture, the
Registration Rights Agreement, the Final Memorandum (as amended or supplemented
at the Closing Date) and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to pass
upon such matters.
(d) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the President
and the principal financial or accounting officer of the Company, dated the
Closing Date, to the effect that the signers of such certificate have carefully
examined the Final Memorandum, any amendment or supplement to the Final
Memorandum and this Agreement and that:
(i) the representations and warranties of the Company and its
Subsidiaries in this Agreement are true and correct in all material respects on
and as of the Closing Date with the same effect as if made on the Closing Date,
and the Company and its Subsidiaries have complied with all the agreements and
satisfied all the conditions on their part to be performed or satisfied
hereunder at or prior to the Closing Date; and
(ii) since the date of the most recent financial statements
included in the Final Memorandum, there has been no material adverse change in
the condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as set
forth in or contemplated by the Final Memorandum.
(e) At the Execution Time and on the Closing Date, Ernst & Young LLP
shall have furnished to the Representatives, at the request of the Company,
letters, dated the respective dates of delivery thereof and addressed to the
Initial Purchasers, in form and substance reasonably satisfactory to the
Representatives containing statements and information of the type customarily
included in accountants' "comfort letters" to underwriters and initial
purchasers with respect to the financial information contained in the Offering
Memorandum; provided that the
16
letter delivered on the Closing Date may be a "bring-down" comfort letter and
shall use a "cut-off" date no more than three business days prior to the Closing
Date.
(f) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Final Memorandum (exclusive of any amendment
or supplement thereto), there shall not have been (i) (x) any change in the long
term debt or capital stock of the Company and its subsidiaries or decrease in
the consolidated net current assets or shareholders' equity of the Company and
its subsidiaries as compared with the amounts shown on the February 29, 2004
unaudited consolidated balance sheet incorporated by reference in the Final
Memorandum or (y) any decrease in consolidated net sales or in the total or per
share amounts of net income of the Company and its subsidiaries for the period
from March 1, 2004 to the specified cut-off date indicated in the accountant's
comfort letter, as compared with the corresponding period in the preceding year,
in each case as is indicated in the letter described in Section 6(e); or (ii)
any change, or any development involving a prospective change, in or affecting
the condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Memorandum (exclusive of any amendment or
supplement thereto) the effect of which, in any case referred to in clause (i)
or (ii) above, is, in the sole judgment of the Representatives, so material and
adverse as to make it impractical or inadvisable to market the Securities as
contemplated by the Final Memorandum (exclusive of any amendment or supplement
thereto).
(g) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act) or any notice given of any intended or potential
decrease in any such rating or of a possible change in any such rating that does
not indicate the direction of the possible change.
(h) The Company, the Subsidiaries and the other parties thereto shall
have executed and delivered the Indentures, the Registration Rights Agreement
and the Credit Agreement Amendment and Waiver.
(i) Prior to the Closing Date, the Company shall have furnished to the
Representatives such further information, certificates and documents as the
Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Initial Purchasers,
this Agreement and all obligations of the Initial Purchasers hereunder may be
canceled at, or at any time prior to, the Closing Date by the Representatives.
Notice of such cancellation shall be given to the Company in writing or by
telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 will be delivered
at the office of counsel for the Company in Washington, D.C., on the Closing
Date.
17
7. Reimbursement of Expenses. If the sale of the Securities provided for
herein is not consummated because any condition to the obligations of the
Initial Purchasers set forth in Section 6 hereof is not satisfied, because of
any termination pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of the Company or any Subsidiary to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Initial Purchasers, the Company will reimburse the Initial
Purchasers severally through Wachovia Capital Markets, LLC on demand for all
reasonable out-of-pocket expenses (including reasonable fees and disbursements
of counsel) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities.
8. Indemnification and Contribution.
(a) The Company and its Subsidiaries jointly and severally agree to
indemnify and hold harmless each Initial Purchaser, the directors, officers,
employees and agents of each Initial Purchaser and each Person who controls any
Initial Purchaser within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Memorandum, the Final
Memorandum (or in any supplement or amendment thereto) or any information
provided by the Company to any holder or prospective purchaser of Securities
pursuant to Section 5(h), or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company and its Subsidiaries
will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made in the Preliminary
Memorandum or the Final Memorandum, or in any amendment thereof or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Company by or on behalf of any Initial Purchasers through the
Representatives specifically for inclusion therein. This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
(b) Each Initial Purchaser severally and not jointly agrees to indemnify
and hold harmless the Company, its Subsidiaries, each of their respective
directors, each of their respective officers, and each Person who controls the
Company within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company and its Subsidiaries to each
Initial Purchaser, but only with reference to written information relating to
such Initial Purchaser furnished to the Company by or on behalf of such Initial
Purchaser through the Representatives specifically for inclusion in the
Preliminary Memorandum or the Final Memorandum (or in any amendment or
supplement thereto). This indemnity agreement will be in addition to any
liability which any Initial Purchaser may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph of the cover
page regarding the delivery of the Securities and the third, ninth, eleventh and
thirteenth paragraphs
18
under the heading "Plan of Distribution" in the Preliminary Memorandum and the
Final Memorandum constitute the only information furnished in writing by or on
behalf of the Initial Purchasers for inclusion in the Preliminary Memorandum or
the Final Memorandum (or in any amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses; and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest; (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party; (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action; or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 8 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Company and its Subsidiaries on one hand, and the
Initial Purchasers on the other hand agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company and its Subsidiaries on the one
hand, and one or more of the Initial Purchasers on the other hand, may be
subject in such proportion as is appropriate to reflect the relative benefits
received by the Company and its Subsidiaries on the one hand and by the Initial
Purchasers on the other hand from the offering of the Securities; provided,
however, that in no
19
case shall any Initial Purchaser (except as may be provided in any agreement
among the Initial Purchasers relating to the offering of the Securities) be
responsible for any amount in excess of the purchase discount or commission
applicable to the Securities purchased by such Initial Purchaser hereunder. If
the allocation provided by the immediately preceding sentence is unavailable for
any reason, the Company and its Subsidiaries on the one hand, and the Initial
Purchasers on the other hand shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and its Subsidiaries on the one hand and of the Initial
Purchasers on the other hand in connection with the statements or omissions
which resulted in such Losses, as well as any other relevant equitable
considerations. Benefits received by the Company and its Subsidiaries shall be
deemed to be equal to the total net proceeds from the offering (before deducting
expenses) received by it, and benefits received by the Initial Purchasers shall
be deemed to be equal to the total purchase discounts and commissions in each
case set forth on the cover of the Final Memorandum. Relative fault shall be
determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information provided by the Company or its
Subsidiaries on the one hand or the Initial Purchasers on the other hand, the
intent of the parties and their relative knowledge, information and opportunity
to correct or prevent such untrue statement or omission. The Company, its
Subsidiaries and the Initial Purchasers agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this paragraph (d), no
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each Person who controls an Initial Purchaser within the meaning of either the
Act or the Exchange Act and each director, officer, employee and agent of an
Initial Purchaser shall have the same rights to contribution as such Initial
Purchaser, and each Person who controls the Company or any Subsidiary within the
meaning of either the Act or the Exchange Act and each officer and director of
the Company or any Subsidiary shall have the same rights to contribution as the
Company or any Subsidiary, subject in each case to the applicable terms and
conditions of this paragraph (d).
9. Default by an Initial Purchaser. If any one or more Initial Purchasers
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Initial Purchasers)
the Securities which the defaulting Initial Purchaser or Initial Purchasers
agreed but failed to purchase; provided, however, that in the event that the
aggregate amount of Securities which the defaulting Initial Purchaser or Initial
Purchasers agreed but failed to purchase shall exceed 10% of the aggregate
amount of Securities set forth in Schedule I hereto, the remaining Initial
Purchasers shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Securities, and if such nondefaulting Initial
Purchasers do not purchase all the Securities, this Agreement will terminate
without liability to any nondefaulting Initial Purchaser or the Company and its
Subsidiaries. In the event of a default by any Initial Purchaser as set forth in
this Section 9, the Closing Date shall
20
be postponed for such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required changes in the Final
Memorandum or in any other documents or arrangements may be effected. Nothing
contained in this Agreement shall relieve any defaulting Initial Purchaser of
its liability, if any, to the Company or any nondefaulting Initial Purchaser for
damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Company's Common Stock shall have been suspended by the
Commission or the Nasdaq National Market, or trading in securities generally on
the New York Stock Exchange or the Nasdaq National Market shall have been
suspended or limited or minimum prices shall have been established on such
Exchange or the Nasdaq National Market; (ii) a banking moratorium shall have
been declared either by Federal or New York State authorities; or (iii) there
shall have occurred any attack on, outbreak or escalation of hostilities or act
of terrorism involving the United States, declaration by the United States of a
national emergency or war or other calamity or crisis the effect of which on
financial markets is such as to make it, in the sole judgment of the
Representatives, impracticable or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Final Memorandum (exclusive of
any amendment or supplement thereto).
11. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company,
its Subsidiaries or their respective officers and of the Initial Purchasers set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of the Initial
Purchasers or the Company or its Subsidiaries or any of the officers, directors
or controlling Persons referred to in Section 8 hereof, and will survive
delivery of and payment for the Securities. The provisions of Sections 7 and 8
hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and effective
only on receipt, and, (i) if sent to the Representatives, will be mailed,
delivered or telefaxed to Wachovia Capital Markets, LLC, 301 South College
Street, TW-7, NC0602, Charlotte, NC 28288-0602, Attention: Debt Syndicate, with
a copy to Mayer, Brown Rowe & Maw LLP, 190 S. LaSalle Street, Chicago, IL 60603,
telecopy: (312) 701-7711, Attention: Bruce F. Perce; or (ii) if sent to the
Company, will be mailed, delivered or telefaxed to the Company at 1801 W.
International Speedway Boulevard, Daytona Beach, Florida 32114, telecopy: (904)
947-6537, Attention: General Counsel, with a copy to Baker & Botts L.L.P., The
Warner, 1299 Pennsylvania Avenue, N.W., Washington, D.C. 20004, telecopy: (202)
585-1024, Attention: Michael Gold.
13. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling Persons referred to in Section 8 hereof, and, except
as expressly set forth in Section 5(h) hereof, no other Person will have any
right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
21
15. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall constitute an original and all of which together shall
constitute one and the same instrument.
16. Headings. The section headings used herein are for convenience only and
shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this Agreement, shall
have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
"Affiliate" shall have the meaning specified in Rule 501(b) of Regulation
D.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in The City of New York.
"Commission" shall mean the Securities and Exchange Commission.
"Credit Agreement Amendment and Waiver" shall mean the First Amendment to
Credit Agreement and Waiver to be dated the Closing Date between the Company,
the Subsidiaries and the lenders identified thereon, in substantially the form
attached hereto as Exhibit C.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Five Year Notes Indenture" shall mean the indenture governing the Five
Year Notes to be dated the Closing Date, between the Company, the Subsidiaries
and Wachovia Bank, National Association, as trustee, in form and substance
reasonably acceptable to the parties..
"Indentures" shall the Five Year Notes Indenture and the Ten Year Notes
Indenture.
"Investment Company Act" shall mean the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Person" shall mean any individual, corporation, company (including any
limited liability company), association, partnership, joint venture, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Regulation D" shall mean Regulation D under the Act.
"Regulation S" shall mean Regulation S under the Act.
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"Ten Year Notes Indenture" shall mean the indenture governing the Ten Year
Notes to be dated the Closing Date, between the Company, the Subsidiaries and
Wachovia Bank, National Association, as trustee, in form and substance
reasonably acceptable to the parties.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission promulgated thereunder.
[SIGNATURES ON FOLLOWING PAGE]
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EXECUTION COPY
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, its Subsidiaries and the several Initial Purchasers.
Very truly yours,
INTERNATIONAL SPEEDWAY
CORPORATION
By: /s/ Glenn R. Padgett
Name: Glenn R. Padgett
Title: Vice President
EXECUTION COPY
SUBSIDIARIES:
88 CORP.
AMERICROWN SERVICE CORPORATION
ASC HOLDINGS, INC.
ASC PROMOTIONS, INC.
THE CALIFORNIA SPEEDWAY CORPORATION
CHICAGO HOLDINGS, INC.
DARLINGTON RACEWAY OF SOUTH CAROLINA, LLC
DAYTONA INTERNATIONAL SPEEDWAY, LLC
EVENT EQUIPMENT LEASING, INC.
EVENT SUPPORT CORPORATION
GREAT WESTERN SPORTS, INC.
HBP, INC.
HOMESTEAD-MIAMI SPEEDWAY, LLC
INTERNATIONAL SPEEDWAY, INC.
ISC PROPERTIES, INC.
ISC PUBLICATIONS, INC.
ISC.COM, LLC
KANSAS SPEEDWAY CORPORATION
KANSAS SPEEDWAY DEVELOPMENT CORP.
LEISURE RACING, INC.
MIAMI SPEEDWAY CORP.
MICHIGAN INTERNATIONAL SPEEDWAY, INC.
MOTOR RACING NETWORK, INC.
MOTORSPORTS ACCEPTANCE CORPORATION
MOTORSPORTS INTERNATIONAL CORP.
NEW YORK INTERNATIONAL SPEEDWAY CORP.
NORTH AMERICAN TESTING COMPANY
NORTH CAROLINA SPEEDWAY, INC.
PENNSYLVANIA INTERNATIONAL RACEWAY, INC.
PHOENIX SPEEDWAY CORP.
RICHMOND INTERNATIONAL RACEWAY, INC.
ROCKY MOUNTAIN SPEEDWAY CORPORATION
SOUTHEASTERN HAY & NURSERY, INC.
TALLADEGA SUPERSPEEDWAY, LLC
WATKINS GLEN INTERNATIONAL, INC.
Each by its duly authorized officer:
By: /s/ Glenn R. Padgett
Glenn R. Padgett
Secretary
Of the Guarantors listed above
{Signatures Continue Next Page}
EXECUTION COPY
HBP, INC.
By: /s/ Doris J. Krick
Name: Doris J. Krick
Title: Vice President
INTERNATIONAL SPEEDWAY, INC.
By: /s/ Doris J. Krick
Name: Doris J. Krick
Title: Vice President
MOTORSPORTS ACCEPTANCE CORPORATION
By: /s/ Doris J. Krick
Name: Doris J. Krick
Title: Vice President
{Signatures Continue Next Page}
EXECUTION COPY
The foregoing Agreement is hereby confirmed and
accepted as of the date first above written.
WACHOVIA CAPITAL MARKETS, LLC
By: /s/ James T. Williams, Jr.
--------------------------
Name: James T. Williams, Jr.
Title: Director
BANC ONE CAPITAL MARKETS, INC.
By: /s/ Christopher S. Grumboski
-----------------------------
Name: Christopher S. Grumboski
Title: Director
SUNTRUST CAPITAL MARKETS, INC.
By: /s/ James Stathis
-----------------------------
Name: James Stathis
Title: Managing Director
EXECUTION COPY
SCHEDULE I
PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF
FIVE YEAR TEN YEAR
NOTES TO BE NOTES TO BE
INITIAL PURCHASERS PURCHASED PURCHASED
Wachovia Capital Markets, LLC.............................
Banc One Capital Markets, Inc.............................
SunTrust Capital Markets, Inc.............................
Citigroup Global Markets, Inc.............................
Morgan Keegan & Company, Inc..............................
Total.....................................................
EXECUTION COPY
EXHIBIT A
SUBSIDIARIES OF THE COMPANY
88 Corp.
Americrown Service Corporation
ASC Holdings, Inc.
ASC Promotions, Inc.
The California Speedway Corporation
Chicago Holdings, Inc.
Darlington Raceway of South Carolina, LLC
Daytona International Speedway, LLC
Event Equipment Leasing, Inc.
Event Support Corporation
Great Western Sports, Inc.
HBP, Inc.
Homestead-Miami Speedway, LLC
International Speedway, INC.
ISC Properties, Inc.
ISC Publications, Inc.
ISC.COM, LLC
Kansas Speedway Corporation
Kansas Speedway Development Corp.
Leisure Racing, Inc.
Miami Speedway Corp.
Michigan International Speedway, Inc.
Motor Racing Network, Inc.
Motorsports Acceptance Corporation
Motorsports International Corp.
New York International Speedway Corp.
North American Testing Company
North Carolina Speedway, Inc.
Pennsylvania International Raceway, Inc.
Phoenix Speedway Corp.
Richmond International Raceway, Inc.
Rocky Mountain Speedway Corporation
Southeastern Hay & Nursery, Inc.
Talladega Superspeedway, LLC
Watkins Glen International, Inc.
EXECUTION COPY
EXHIBIT B
SELLING RESTRICTIONS FOR OFFERS AND
SALES OUTSIDE THE UNITED STATES
1 (a) The Securities have not been and will not be registered under the Act
and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with Regulation S under
the Act or pursuant to an exemption from the registration requirements of the
Act. Each Initial Purchaser represents and agrees that, except as otherwise
permitted by Section 4(a)(i) or (ii) of the Agreement to which this is an
exhibit, it has offered and sold the Securities, and will offer and sell the
Securities, (i) as part of their distribution at any time; and (ii) otherwise
until 40 days after the later of the commencement of the offering and the
Closing Date, only in accordance with Rule 903 of Regulation S under the Act.
Accordingly, each Initial Purchaser represents and agrees that neither it, nor
any of its Affiliates nor any person acting on its or their behalf has engaged
or will engage in any directed selling efforts with respect to the Securities,
and that it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Initial Purchaser agrees that, at
or prior to the confirmation of sale of Securities (other than a sale of
Securities pursuant to Section 4(a)(i) or (ii) of the Agreement to which this is
an exhibit), it shall have sent to each distributor, dealer or person receiving
a selling concession, fee or other remuneration that purchases Securities from
it during the distribution compliance period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Act") and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S. persons (i) as part
of their distribution at any time or (ii) otherwise until 40 days after the
later of the commencement of the offering and [ ], 2004, except in either
case in accordance with Regulation S or Rule 144A under the Act. Terms used
above have the meanings given to them by Regulation S."
(b) Each Initial Purchaser also represents and agrees that it has not
entered and will not enter into any contractual arrangement with any distributor
with respect to the distribution of the Securities, except with its Affiliates
or with the prior written consent of the Company.
(b) Terms used in this section have the meanings given to them by
Regulation S.
2. Each Initial Purchaser, severally and not jointly, represents, warrants
and agrees that:
(a) it has not offered or sold, and prior to the date six months after
the Closing Date, will not offer or sell any securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the United Kingdom Public Offers of Securities Regulations
1995(as amended);
(b) it has only communicated or caused to be communicated and will only
communicate or cause to be communicated any invitation or inducement to engage
in investment activity (within the meaning of Section 21 of the United Kingdom
Financial Services and
Markets Act 2000 (the "FSMA")) received by it in connection with the issue or
sale of any Securities in circumstances in which Section 21(1) of the FSMA does
not apply to the Company or the Guarantors; and
(c) it has complied with and will comply with all applicable provisions
of the FSMA with respect to anything done by it in relation to the Securities
in, from or otherwise involving the United Kingdom.
EXHIBIT C
FORM OF CREDIT AGREEMENT AMENDMENT AND WAIVER
EXHIBIT D
FORM OF REGISTRATION RIGHTS AGREEMENT