EXHIBIT 10.4
October 27, 1999
BY REGISTERED U.S. MAIL
The Colonel's Brainerd
International Raceway, Inc.
c/o Xxx X. Xxxx, PC
000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Dear Xx. Xxxx:
We write to amend the following portions of the Sanction Agreement dated March
9, 1999 by and between The Colonel's Brainerd International Raceway, Inc. and
National Hot Rod Association ("Agreement"). We have included an amendment to the
notice provisions of Paragraph 28 below, but we note that, pursuant to your
instructions, we are directing this letter to you alone and that you have agree
that such notice is sufficient.
PARAGRAPH 3, TERM: The First sentence of Paragraph 3 is replaced in its entirety
as shown below; the remainder of Paragraph 3 remains the same:
"3. Term: The term of this Agreement shall be from December 1, 1999 to
December 31, 2002."
PARAGRAPH 5, SANCTION FEE: Paragraph 5 is replaced in its entirety as follows:
"5. Sanction Fee:
(a) CBIR shall pay NHRA, as the Sanction Fee for the conduct of the
EVENT for each of the years of the term of this Agreement, as
follows:
2000: Five Hundred Seventeen Thousand, One Hundred Thirty Dollars
($517,130);
2001: Five Hundred Sixty-Two Thousand, Seven Hundred Sixty-Six
Dollars ($562,766);
2002: Six Hundred Twelve Thousand, Nine Hundred Sixty-Six Dollars
($612,966).
(b) All participate entry fees shall be retained by NHRA, including
any payments for participant late fees and participant insurance,
and the Sanction Fees set forth herein have been reduced to
reflect this change.
(c) During any extension or option period hereunder, the Sanction Fee
shall increase from zero to seven percent per year (0-7%) at the
sole and absolute discretion of NHRA.
(d) NHRA shall give notice to CBIR of any change in the Sanction Fee
not later than 90 (ninety) days prior to the first day of the
EVENT for that year.
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(e) The Sanction Fee in each year shall be payable as follows:
(i) $250,000 shall be paid to NHRA upon execution of this
amendment, and , for future years, $250,000 shall be paid
to NHRA by October 1 of each year that this Agreement is in
effect;
(ii) 50% of the remaining Sanction Fee shall be paid to NHRA not
later than 60 (sixty) days prior to the first day of the
EVENT;
(iii) The remainder of the Sanction Fee shall be paid to NHRA not
later than 30 (thirty) days prior to the first day of the
EVENT.
(f) NHRA makes no representation or warranty, express or implied, as
to the ultimate profitability of any EVENT, or as to any component
of such profitability, including the identity or number of racer
participants or vehicles in any EVENT, the attendance at any
EVENT, or any other factor affecting the financial achievement of
any EVENT."
NEW PARAGRAPH 5.1, PURSE: A new Paragraph 5.1 shall be added as follows:
"5.1 Purse.
(a) NHRA shall, in its sole and absolute discretion, set the purse
amounts for each EVENT conducted hereunder. NHRA shall notify CBIR
at least forty-five (45) days in advance of each EVENT of the
amounts of purse monies required for the EVENT for that year. The
amount of the purse may be increased or reduced from year to year
in the sole and absolute discretion of NHRA.
(b) At the time of the signing of this Amendment to the Agreement, the
purse for the EVENT to be conducted in 2000 has not been
determined. Notwithstanding the above, NHRA shall notify CBIR of
the purse amount for the 2000 EVENT by December 31, 1999.
(c) The purse in each year shall be payable in advance to NHRA by CBIR
as follows:
(i) Fifty percent (50%) of the purse shall be paid to NHRA not
later than 60 (sixty) days prior to the first day of the
EVENT;
(ii) The remainder of the Sanction Fee shall be paid to NHRA not
later that 30 (thirty) days prior to the first day of the
EVENT."
PARAGRAPH 9, PURSES: Paragraph 9 regarding purses is deleted in its entirety and
replaced with the following new paragraph 9 regarding ticket prices:
"9. Ticket Prices. The parties agree that CBIR shall not set its ticket
prices for any EVENT to be held hereunder at a level higher than that set forth
in NHRA's maximum ticket price guidelines for that year."
PARAGRAPH 28, NOTICE: Paragraph 28 regarding notice is deleted in its entirety
and replaced as follows:
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"28. Notice: Any notice provided for herein shall be given by Federal Express
or United States Postal Service Express Mail, for delivery on the next business
day or sooner, with proof of delivery, charges prepaid by sender, addressed as
follows:
If to CBIR:
Xxxxxx X. Xxxxxxxxxx
c/o The Colonel's Brainerd International Raceway, Inc.
0000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
With a xxx to:
Xxx X. Xxxx, PC
000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
If to NHRA:
Xxxx X. Xxxxxx
Vice President
Business & Legal Affairs
National Hot Rod Association
0000 Xxxxxxxxx Xxx
Xxxxxxxx, Xxxxxxxxxx 00000
With a xxx to:
Xxxx Xxxxxxx Xxxxx III
Xxxxxxx, Snowdon & Xxxxx
0000 X. Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
The person and the place to which notices are to be sent may be changed from
time to time by either party by written notice given to the other party. Notice
to be effective upon date sent."
PARAGRAPH 31, ASSIGNMENT: Paragraph 31 shall be deleted in its entirety and
replaced as follows:
"Neither this Agreement not any interest in this Agreement may be assigned by
CBIR without the express written consent of NHRA. Any purported assignment
without NHRA's express written consent shall be void. In the event that CBIR
shall have sold, transferred, conveyed, encumbered, hypothecated or in any other
fashion obligated any or all of its rights or obligations under this Agreement
to any other person or entity, NHRA shall have the right to terminate this
Agreement. Further, in the event that the identity of CBIR shall have changed as
a result of or there shall have been a sale or transfer of any shares of stock
or shares of ownership or any other transfer of any legal or beneficial interest
of CBIR to another person or entity, then NHRA shall have the right to terminate
this Agreement. Further the event CBIR shall have purchased, engaged in a merger
with, or engaged in a transfer of any legal or beneficial interest in another
entity or when the principals of CIBR shall have changed, then NHRA shall have
the right to terminate this Agreement in NHRA's sole and absolute discretion.
Such termination shall be effective thirty (30) days
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after notice of intent to terminate unless the event giving rise to termination
shall have ceased to exist within such time."
ATTACHMENT 2. PARAGRAPH (B): Attachment 2, Paragraph (b) is deleted in its
entirety and replaced with the following:
"b. Additional participant credentials purchased by contestants."
ATTACHMENT 2, PARAGRAPH (I): Attachment 2, Paragraph (I) is deleted in its
entirety and replaced with the following:
"i. Twenty percent (20%) of all net sales of Souvenirs, Diecast, Videos, Racer
Souvenirs and Seat Back Rentals; fifteen percent of all net sales of
discontinued merchandise; and 10% of al net sales of Film and Racer Specialty
Items. "Net Sales" are defined as gross sales net of taxes. As to the Racer Ten
Dollar Program or any other item from which NHRA derives no royalty revenue,
CBIR likewise will derive no revenue."
In all other respects the Agreement remains the same.
Please execute and return a copy of this letter to memorialize your agreement to
this amendment. Thank you very much for your cooperation.
Sincerely,
Xxxxx Xxxxxxxx
Vice President
Chief Financial Officer
Read, understood and agreed to this ____ day of ___________, 1999.
The Colonel's Brainerd
International Raceway, Inc.
By _________________________
Its __________________________
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