Exhibit 99.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is entered into by and between Sears
Point Raceway ("Seller") and Speedway Motorsports, Inc. ("Buyer").
WHEREAS, Seller owns and operates a speedway in Sonoma, California
known as Sears Point Raceway (the "Raceway") and Seller desires to sell and
buyer desires to purchase all of Seller's assets, based upon the terms and
conditions in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
set forth in this Agreement, the parties agree as follows:
1. SALE OF ASSETS. Seller agrees to sell to Buyer and Buyer agrees to
purchase from Seller, all of Seller's operating assets with respect to the
operation of the Raceway, which include, but are not limited to, all vehicles,
equipment, machinery, furnishings, leases, contract rights, goodwill, accounts
receivable, and all other personal property, tangible and intangible, but
excluding, however, all cash and all real property on which the Raceway is
located, all real property used for parking and access to the Raceway, and all
buildings and structures used in connection with the Raceway (the "Assets"). The
foregoing excluded assets, other than cash, are hereinafter called the "Real
Property." At the closing of the sale, Seller shall execute all documents and
take all other actions necessary to transfer all of Seller's rights, title and
interest in the Assets to Buyer. The Assets will be purchased AS-IS, without
warranty or representation, except as specifically provided in this Agreement.
The purchase price will be allocated to the Assets in accordance with Exhibit A,
and Seller and Buyer shall report the purchase price of the Assets for income
tax purposes in a manner consistent therewith.
2. PURCHASE PRICE. Buyer shall pay Seller Two Million Dollars
($2,000,000.00) which, together with the assumption of accounts payable pursuant
to Section 5 below, shall be in full payment for the Assets. Simultaneously with
the execution of this Agreement, the $2,000,000.00 purchase price shall be
placed in escrow by buyer with the First American Title Insurance Company office
in Santa Rosa, California (the "Escrow Agent"). The funds will be delivered to
Seller by the Escrow Agent at the closing of the sale of Assets upon transfer of
the title to the Assets to Buyer. If the sale does not close due to the default
of Buyer, the funds will be delivered to Seller. If the sale does not close for
any other reason, the funds shall will be returned to Buyer. The funds shall be
placed in an interest-bearing account by the Escrow Agent, and the interest
shall be paid to Buyer periodically by the Escrow Agent.
3. CLOSING OF SALE. The closing of this purchase of Assets, the
transfer of title to the Assets to Buyer and the delivery of the purchase price
to Seller, shall take place beginning at 10 o'clock a.m. on November 18, 1996.
The closing shall take place at the offices of First American
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Title Insurance Company in Santa Rosa, California; provided, however, it is
understood that as of the date of the signing of this Agreement, the parties
have a fully binding and enforceable agreement to sell and purchase the Assets
in accordance with the term of this Agreement.
4. LEASE OF REAL PROPERTY AND DEED OF TRUST.
a. At the closing, Buyer and Seller will enter into a lease of
the Real Property in substantially the form of Exhibit B hereto. The parties
agree that the rents will be allocated in accordance with the lease.
b. At the closing, Buyer will arrange a loan to Seller (by an
entity other than Buyer, but which may be an affiliate or subsidiary of Buyer)
in an amount not to exceed $14 million plus the costs of closing such loan. The
proceeds of such loan will be used to pay in full Seller's existing financing on
the Real Property and certain equipment leases at closing. Such loan will be
non-recourse except as to the Real Property, and will be assumable following the
third anniversary of the closing. Such loan will bear interest at the rate of 4%
per annum and will have a term of thirty (30) years. Amortization of the loan
will be interest only for the first three years of its term and, thereafter, in
equal monthly installments of principal and interest over the remaining 27 years
of the term. Such loan will be evidenced by a promissory note secured by a first
deed of trust on the Real Property in substantially the form of Exhibit C
hereto.
5. ASSUMPTION OF LIABILITIES.
a. Buyer will assume all executory contracts and other
liabilities and obligations of Seller pertaining to and incurred in the ordinary
course of the operation of the Raceway, and Buyer will indemnify and defend
Seller as to all such liabilities and obligations, except as to obligations
which were due and payable as of the closing; provided, however, Buyer will
assume and pay or discharge all accounts payable as of the date of the closing
up to the amount of the accounts receivable included in the Assets on that date.
The assumability and enforceability of executory contracts will be Buyers' sole
risk.
b. Buyer will become the successor employer to all current
employees of Seller and will assume and indemnify and defend Seller as to all
employer liability, except as to monetary obligations for actual current wages,
salaries, employee withholding and employer taxes due and payable prior to the
closing. Without limiting the foregoing, Seller will assign and transfer to
Buyer the existing 401K plan and all other employee benefit plans currently in
existence and Buyer will assume all obligations of Seller thereunder.
c. Buyer's indemnification and defense obligations hereunder
shall survive the closing of the sale.
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6. REPRESENTATIONS. Seller makes the following warranties and
representations. These warranties are to the best of the actual knowledge of
Seller. (For purposes of this paragraph, "actual knowledge of Seller" means the
actual knowledge of the officers, directors and management employees of Seller.)
a. Seller has (or at close of Escrow, will have) good title to
the Assets, with all rights to convey good title to the Assets to Buyer, subject
to any limitation on assignment contained in any contracts. Upon completion of
the transfer, Buyer shall have good, marketable title to the Assets, free and
clear of any liens, claims, or encumbrances, but subject to any limitation on
assignment contained in any contracts.
b. The transfer of the Assets to Buyer does not violate any
applicable laws or regulation or any obligations or agreements of Seller, or the
Seller's sole stockholder, or any related parties, including, but not limited
to, the terms or obligations under any loan agreements or other material
agreements (except as may be set forth in any limitation on assignment contained
in any contracts). All consents of governmental authorities, if any are
required, to the transfer of the Assets by Seller will have been obtained by the
closing of the Sale. Seller will cooperate in obtaining consents of third
parties to the assignment of all contracts which are included in the Assets, but
Seller does not warrant that such consents may be obtained, the assumability and
enforceability of executory contracts being at Buyers' sole risk.
c. Except as reflected in the financial statements of Seller
and as listed on Exhibit D there are no pending or threatened claims or
liabilities against the Seller or its Assets or the Real Property, including,
but not limited to, any pending or threatened claims with respect to
environmental matters. Seller shall be responsible to Buyer for any damages
resulting from a breach of this warranty.
d. The financial statements of Seller fairly represent the
financial condition and results of operations of Seller. The Assets and the Real
Property constitute all of the operating assets of Seller reasonably necessary
for Buyer to operate the Raceway substantially as operated by Seller.
e. Seller has full power and authority to enter into and to
perform this Agreement, subject to any limitations on assignment contained in
any of the contracts which are included in the Assets.
f. These representations and warranties shall be true as of
the date of this Agreement and as of the date of the closing. These
representations and warranties shall survive the closing of the sale.
7. GENERAL PROVISIONS.
a. At closing, both buyer and Seller shall furnish legal
opinions of counsel, in form reasonably satisfactory to the other party, that
each party is duly organized, is authorized to enter into this transaction, and
that the documents are binding on the parties.
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b. Between the date of this Agreement and the closing, Seller
shall not knowingly take any action (or fail to take any action), and will not
knowingly suffer to occur any event within Seller's reasonable control that will
materially change the value of the Assets or the Real Property or the business
of the Raceway.
c. Pending the Closing, Seller shall operate the Raceway in
the ordinary course of business and consistent with past practice.
d. Buyer acknowledges that it has sufficient information and
has made adequate investigation of the Assets and the Real Property to enter
into this binding contract. Nevertheless, from the date of this Agreement until
the closing, Seller will afford to Buyer, its attorneys, accountants and other
representatives, reasonable access to all of the facilities and management
personnel of Seller and to such records, documents, financial information and
data pertaining to the business, operations and assets of Seller as Buyer may
reasonably require in connection with Buyer's purchase investigation, including,
without limitation, commercially reasonable surveys, soil and environmental
inspection and testing.
e. Buyer shall have the right to assign this Agreement at any
time to a wholly-owned subsidiary of Buyer; provided, however, Buyer shall
remain responsible for payment of or providing funds for the purchase price at
the closing.
f. This Agreement constitutes the entire Agreement between the
parties and it shall not be modified except in a writing signed by both of the
parties.
g. This Agreement shall be governed by the laws of the State
of California.
h. If any legal action is commenced to enforce any of the
provisions of this agreement, the prevailing party in such action shall be
entitled to recover from the other party reasonable attorneys fees and costs in
addition to any other relief.
i. Except for a 10.Q which will be filed on November 14, 1996
and as expressly set forth below or as otherwise agreed in writing by the
parties, neither party will cause or permit this agreement or any of the terms
or provisions of this agreement or any information pertaining to this agreement
to be inspected by, viewed by, disclosed to, divulged to, or made accessible to
any person, firm or entity other than: (i) those officers and directors and key
employees of the parties who are immediately and directly involved in the
process of negotiating and evaluating the transaction; and (ii) the attorneys
and accountants of the parties who are immediately and directly involved in the
process of negotiating and evaluating the transaction, provided however, that
prior to any such disclosure to those persons mentioned in clause (ii) hereof,
the parties shall communicate to such attorney, accountant, or other person, the
terms of this confidentiality agreement and obtain their commitment to be bound
by all of the disclosure limitations contained herein. Notwithstanding the
foregoing, a public announcement shall be made (in a form agreed to by both
parties) by no later than 2:00 p.m. E.S.T. on November 18, 1996.
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SEARS POINT RACEWAY SPEEDWAY MOTORSPORTS, INC.
By: /s/ Skip Xxxx By: /s/ O. Xxxxxx Xxxxx
Title: Chairman Title: Chief Executive Officer
Date: October 24, 1996 Date: October 24, 1996
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