EXECUTION COPY
STOCK PURCHASE AGREEMENT
AGREEMENT, dated March 25, 1998, between DOVER DOWNS ENTERTAINMENT,
INC., a Delaware corporation ("Purchaser"), and MIDWEST FACILITY INVESTMENTS,
INC., a Florida 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, 0000
Xxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000, 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, Xxxxx
X. Xxxxxxxxxx, 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") pursuant to which Company shall, subject to regulatory and
shareholder approvals, become a wholly-owned subsidiary of Purchaser. 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 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.
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 Florida.
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.
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 and its affiliates, including
without limitation, Seller's parent corporation International Speedway
Corporation, 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 H. Xxx
Xxxxx from the Board of Directors of Company.
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. It
is contemplated and agreed that Seller may not continue in existence
indefinitely after the closing of the transaction contemplated by this
Agreement. If Seller's existence is terminated after the closing of the
transaction but prior to the expiration of any continuing aspects of the
Agreement, Seller's parent corporation, International Speedway Corporation,
shall assume all rights, benefits, liabilities and obligations of Seller under
this agreement, with the express proviso that International Speedway
Corporation shall have no liability under such assumption greater than the
consideration paid to Seller for the Shares. 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.
0000 X. XxXxxx Xxxxxxx
Xxxxx, XX 00000
Attn: Xxxxx XxXxxxx
President and Chief Executive Officer
With a copy to: Xxxxx X. Xxxxxxxxxx, Esquire
Assistant General Counsel
Dover Downs Entertainment, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
IF TO SELLER: H. Xxx Xxxxx
President, Midwest Facility Investments, Inc.
Senior Vice President, International Speedway Corporation
0000 Xxxx Xxxxxxxxxxxxx Xxxxxxxx Xxxx.
Xxxxxxx Xxxxx, XX 00000
With a copy to: Xxxxx X. Xxxxxxx, Esquire
Director of Corporate Compliance
International Speedway Corporation
0000 Xxxx Xxxxxxxxxxxxx Xxxxxxxx Xxxx.
Xxxxxxx Xxxxx, XX 00000
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.
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/ Xxxxx XxXxxxx
----------------------------------------
Xxxxx XxXxxxx
President & Chief Executive Officer
MIDWEST FACILITY INVESTMENTS, INC.
By: /s/ H. Xxx Xxxxx
----------------------------------------
H. Xxx Xxxxx
President
International Speedway Corporation, as the owner of 100% of the capital
stock of Seller, does hereby guarantee the performance of Seller under
Sections 6 and 7 hereto and agrees to separately join in the undertakings
under Section 7 hereto, all subject to the limitations in Section 9.2 hereto.
INTERNATIONAL SPEEDWAY CORPORATION
By: /s/ H. Xxx Xxxxx
H. Xxx Xxxxx
Senior Vice President
