EXECUTION COPY
SPEEDWAY MOTORSPORTS, INC.
$125,000,000
8 1/2% SENIOR SUBORDINATED NOTES DUE 2007
PURCHASE AGREEMENT
MAY 4, 1999
Nationsbanc Xxxxxxxxxx Securities LLC
First Union Capital Markets Corp.
X.X. Xxxxxxxx & Co., L.L.C.
c/o Nationsbanc Xxxxxxxxxx Securities LLC
Nationsbank Corporate Center
000 Xxxxx Xxxxx Xxxxxx, XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Ladies and Gentlemen:
Speedway Motorsports, Inc., a Delaware corporation ( the "Company"),
proposes to issue and sell to you (the "Initial Purchasers") $125,000,000
principal amount of its 8 1/2% Senior Subordinated Notes due 2007 (the "Notes").
The Notes will be fully and unconditionally guaranteed (the "Guarantees" and
collectively with the Notes, the "Securities"), jointly and severally, on a
senior subordinated basis by each existing and future material domestic
subsidiary (other than Oil-Chem Research Corp. and its subsidiaries) of the
Company (the "Guarantors" and collectively with the Company, the "Issuers"). The
Securities are to be issued under that certain indenture dated as of May 11,
1999 (the "Indenture"), among the Issuers and U.S. Bank Trust National
Association, as trustee (the "Trustee").
The sale of the Securities to the Initial Purchasers will be made
without registration of the Securities under the Securities Act of 1933, as
amended (the "Securities Act"), in reliance upon exemptions from the
registration requirements of the Securities Act. You have advised the Issuers
that the Initial Purchasers will offer and sell the Securities purchased by them
hereunder in accordance with Section 4 hereof as soon as you deem advisable.
In connection with the sale of the Securities, the Issuers have
prepared a preliminary offering memorandum dated April 29, 1999 (the
"Preliminary Memorandum"), and a final
offering memorandum dated May 4, 1999 (the "Final Memorandum"). Each of the
Preliminary Memorandum and the Final Memorandum sets forth certain information
concerning the Issuers and the Securities. The Issuers hereby confirm that they
have 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, all
references herein to the Final Memorandum are to the Final Memorandum at the
time of execution and delivery (the "Execution Time") of this Purchase Agreement
(the "Agreement") and are not meant to include any amendment or supplement, or
any information incorporated by reference therein, subsequent to the Execution
Time.
The Initial Purchasers and their direct and indirect transferees will
be entitled to the benefits of the Registration Rights Agreement, substantially
in the form attached hereto as Exhibit B (the "Registration Rights Agreement"),
pursuant to which the Issuers will agree to use their best efforts (i) to
commence an offer to exchange the Securities for debt securities of the Company
and guarantees of the Guarantors (collectively, the "Exchange Securities")
identical in all material respects to the Notes and the Guarantees, respectively
(except that the transfer restrictions pertaining to such Notes and Guarantees
will be eliminated), that have been registered under the Securities Act, or (ii)
to cause a shelf registration statement to become effective under the Securities
Act and to remain effective for the period designated in such Registration
Rights Agreement.
1. REPRESENTATIONS AND WARRANTIES. The Issuers jointly and
severally represent and warrant to each Initial Purchaser as follows:
(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. The Final
Memorandum, at the date hereof, does not, and at the Closing Date (as
defined below) will not (and any amendment or supplement thereto, at
the date thereof and at the Closing 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 Issuers 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 Issuers by or on behalf of the Initial Purchasers relating to
the Initial Purchasers specifically for inclusion therein.
(b) Neither the Issuers, nor any of their "Affiliates" (as
defined in Rule 501(b) of Regulation D under the Securities Act
("Regulation D")), nor any person acting on their behalf has, directly
or indirectly, made offers or sales of any security, or solicited
offers to
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buy any security (as defined in the Securities Act), under
circumstances that would require the registration of the Securities
under the Securities Act. Neither the Issuers, nor any of their
Affiliates, nor any person acting on 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
(other than press releases issued by the Issuers pursuant to Rule 135c
under the Securities Act). The Securities satisfy the eligibility
requirements of Rule 144A(d)(3). The Company is subject to Section 13
of the Exchange Act. The Issuers have been advised by the National
Association of Securities Dealers, Inc., Private Offerings, Resales and
Trading through the Automated Linkages Market ("PORTAL") that the
Securities have been designated PORTAL eligible securities in
accordance with the rules and regulations of the National Association
of Securities Dealers, Inc.
(c) None of the Issuers or any of their respective
subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company
Act"), without taking account of any exemption arising out of the
number of holders of any Issuer's or its respective subsidiaries'
securities.
(d) Assuming that the representations, warranties, agreements
and covenants of the Initial Purchasers contained in Section 3 hereof
are true, correct and complete, (i) neither registration under the
Securities Act of the Securities nor qualification of the Indenture
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), is required in connection with the offer and sale of the
Securities to the Initial Purchasers in the manner contemplated by the
Final Memorandum or this Agreement, and (ii) neither registration under
the Securities Act of the Securities nor qualification of the Indenture
under the Trust Indenture Act is required in connection with the
initial resales of the Securities by the Initial Purchasers on the
terms and in the manner set forth in the Final Memorandum.
(e) Since the respective dates as of which information is
given in the Preliminary Memorandum and the Final Memorandum, except as
otherwise stated therein or in any supplement or amendment thereto or
information incorporated by reference therein, (i) there has been no
material adverse change in the condition (financial or otherwise),
earnings, affairs or business prospects of the Company and its
subsidiaries considered as a whole, whether or not arising in the
ordinary course of business, and (ii) there have been no material
transactions entered into by the Company or any Guarantor
(collectively, a "Material Adverse Change").
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(f) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware with corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Preliminary Memorandum and the Final Memorandum. The Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which it owns or leases properties or
in which the conduct of its business requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not, singly or in the aggregate, reasonably be expected
to have a material adverse effect on the condition (financial or
otherwise), earnings, affairs or business prospects of the Company and
its subsidiaries considered as a whole (a "Material Adverse Effect").
(g) Each of the Guarantors has been duly incorporated or
organized, as the case may be, and is validly existing as a corporation
or limited liability company, as the case may be, in good standing
under the laws of the jurisdiction of its incorporation or
organization, as the case may be, has corporate or limited liability
company, as the case may be, power and authority to own, lease and
operate its properties and conduct its business as described in the
Preliminary Memorandum and the Final Memorandum and is duly qualified
as a foreign corporation or limited liability company, as the case may
be, to transact business and is in good standing in each jurisdiction
in which it owns or leases properties or in which the conduct of its
business requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not, singly or
in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(h) The authorized and outstanding capital stock of the
Company at December 31, 1998 was as set forth under the caption
"Capitalization" in the Preliminary Memorandum and the Final
Memorandum. All of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid
and nonassessable. All of the issued and outstanding capital stock or
limited liability company interests, as the case may be, of each
Guarantor has been duly authorized and validly issued and is fully paid
and nonassessable, and, except as described in the Preliminary
Memorandum and the Final Memorandum, all such capital stock or limited
liability company interests, as the case may be, of each Guarantor is
owned by the Company, directly or through subsidiaries, free and clear
of any mortgage, pledge, lien, encumbrance, claim or equity. The
Guarantors are all of the material subsidiaries of the Company whose
capital stock is owned, directly or through subsidiaries, by the
Company (other than Oil-Chem Research Corp., an Illinois corporation,
and its wholly-owned subsidiaries (collectively, "Oil-Chem")).
(i) This Agreement has been duly authorized, executed and
delivered by each of the Issuers and constitutes the valid and binding
agreement of each of the Issuers.
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enforceable against each of the Issuers in accordance with its terms,
except that (i) enforcement thereof may be subject to (A) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and (B) general principles of equity
(regardless of whether enforceability is considered in a proceeding in
equity or at law) and (ii) the enforceability of any indemnification or
contribution provisions thereof may be limited under applicable
securities laws or the public policies underlying such laws.
(j) The Notes have been duly authorized by the Company, and,
when executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Initial Purchasers
in accordance with this Agreement, will constitute the valid and
binding obligations of the Company enforceable against the Company in
accordance with their terms and will be entitled to the benefits of the
Indenture, except that (i) enforcement thereof may be subject to (A)
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws now or hereafter in effect relating
to or affecting creditors' rights generally and (B) general principles
of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law) and (ii) the enforceability of any
indemnification or contribution provisions thereof may be limited under
applicable securities laws or the public policies underlying such laws.
(k) The Guarantees endorsed on the Notes have been duly
authorized by each of the Guarantors and, when the Notes are executed
and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial Purchasers in accordance
with this Agreement, the Guarantees will constitute the valid and
binding obligation of each of the Guarantors enforceable against each
of the Guarantors in accordance with their terms and will be entitled
to the benefits of the Indenture, except that (i) enforcement thereof
may be subject to (A) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally and (B)
general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law) and (ii) the
enforceability of any indemnification or contribution provisions
thereof may be limited under applicable securities laws or the public
policies underlying such laws.
(l) The Indenture has been duly authorized, executed and
delivered by each of the Issuers and (assuming the due execution and
delivery thereof by the Trustee) is a legally valid and binding
agreement of each of the Issuers, enforceable against each of the
Issuers in accordance with its terms, except that (i) enforcement
thereof may be subject to (A) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights
generally and (B) general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law) and
(ii) the enforceability of any indemnification or
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contribution provisions thereof may be limited under applicable
securities laws or the public policies underlying such laws.
(m) The Exchange Securities have been duly authorized, and,
when duly executed, authenticated, issued and delivered, will be
validly issued and outstanding, and will constitute the valid and
binding obligations of each of the Issuers, entitled to the benefits of
the Indenture and enforceable against each of the Issuers in accordance
with their terms, except that (i) enforcement thereof may be subject to
(A) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws now or hereafter in effect relating
to or affecting creditors' rights generally and (B) general principles
of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law) and (ii) the enforceability of any
indemnification or contribution provisions thereof may be limited under
applicable securities laws or the public policies underlying such laws.
(n) The Registration Rights Agreement has been duly authorized
by each of the Issuers, and, when duly executed and delivered by each
of the Issuers (assuming the due execution and delivery by each of the
Initial Purchasers), will constitute a valid and binding agreement of
each of the Issuers, enforceable against each of the Issuers in
accordance with its terms, except that (i) enforcement thereof may be
subject to (A) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally and (B)
general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law) and (ii) the
enforceability of any indemnification or contribution provisions
thereof may be limited under applicable securities laws or the public
policies underlying such laws.
(o) The execution, delivery and performance of this Agreement,
the Indenture, the Registration Rights Agreement and the Securities
(and all other agreements and instruments contemplated thereby) by each
of the Issuers (to the extent each is a party thereto), and the
consummation of the transactions contemplated hereby and thereby and
the issuance and sale of the Securities and Exchange Securities by the
Issuers will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan or credit agreement or other
agreement or instrument to which either the Company or any of the
Guarantors is a party or by which the Company or any of the Guarantors
is bound or to which any of the properties or assets of the Company or
any of the Guarantors are subject, nor will such actions result in any
violation of (A) the provisions of the charter or by-laws of the
Company or any of the Guarantors or (B) any statute to which the
Company or any of the Guarantors may be subject or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of the Guarantors or any of their
properties or assets (except to the extent any such conflict, breach,
violation or default singly or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect).
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(p) Except for such consents, approvals, authorizations,
registrations or qualifications as may be required under applicable
state securities and Blue Sky laws in connection with the purchase and
distribution of the Securities by the Initial Purchasers or as set
forth in the Registration Rights Agreement, no consent, approval,
authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution,
delivery and performance of this Agreement, the Indenture and the
Registration Rights Agreement by the Issuers, the consummation of the
transactions contemplated hereby and thereby, and the issuance and sale
of the Securities and Exchange Securities by the Issuers. The execution
and delivery of this Agreement, the Securities, the Indenture and the
Registration Rights Agreement will not involve any prohibited
transaction within the meaning of Section 406 of the Employee
Retirement Income Security Act of 1974, as amended, or Section 4975 of
the Internal Revenue Code of 1986, as amended.
(q) Neither the Company nor any of the Guarantors is in breach
or violation of any of the terms or provisions of any material
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of the Guarantors is a party
or by which the Company or any of the Guarantors is bound or to which
any of the properties or assets of the Company or any of its
subsidiaries are subject, nor is the Company or any of the Guarantors
in violation of the provisions of its respective articles of
incorporation, articles of organization, bylaws or operating agreement,
as the case may be, or any material statute or any material judgment,
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company, any of the Guarantors or any of
their properties or assets.
(r) This Agreement, the Securities, the Indenture and the
Registration Rights Agreement conform in all material respects to the
descriptions thereof contained in the Final Memorandum, and such
descriptions are accurate in all material respects.
(s) Except as set forth in the Registration Rights Agreement,
there are no contracts, agreements or understandings between the
Company or any of the Guarantors and any person granting such person
the right to require the Company or any of the Guarantors to file a
registration statement under the Securities Act with respect to any
securities owned or to be owned by such person or to require the
Company or any of the Guarantors to include such securities with any
securities being registered pursuant to any registration statement
filed by the Company or any of the Guarantors under the Securities Act.
(t) Except as set forth in the Preliminary Memorandum and the
Final Memorandum or in any supplement or amendment thereto or
information incorporated by reference therein, there is no action, suit
or proceeding before or by any court or governmental agency or body,
domestic or foreign, now pending or, to the knowledge of the Issuers,
threatened against or affecting the Company or any of the Guarantors,
which could
7
reasonably be expected to result in a Material Adverse Change or,
singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect or materially and adversely affect the offering of the
Securities.
(u) Each of the Company and the Guarantors has good and
indefeasible title in fee simple to all real property and good and
indefeasible title to all personal property owned by it and necessary
in the conduct of the business of the Company or such Guarantor in each
case free and clear of all liens, encumbrances and defects, except (i)
such as are referred to in the Final Memorandum or (ii) such as do not
materially adversely affect the value of such property to the Company
or such Guarantor, and do not interfere with the use made and proposed
to be made of such property by the Company or such Guarantor to an
extent that such interference would, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect. All leases to
which any of the Company or the Guarantors is a party are valid and
binding, no default has occurred or is continuing thereunder which
could, singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect or materially and adversely affect the offering
of the Securities, and the Issuers enjoy peaceful and undisturbed
possession under all such leases to which any of them is a party as
lessee, except with respect to such factors as would not have a
Material Adverse Effect. Each of the Company and the Guarantors
possesses all material certificates, authorizations or permits issued
by the appropriate state, federal or foreign regulatory agencies or
bodies necessary to conduct the business now operated by each of them.
Neither the Company nor any of the Guarantors has received any notice
of proceedings relating to the revocation or modification of any such
certificate, authority or permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would,
singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(v) Deloitte and Touche LLP, who have certified certain
financial statements of the Company and its subsidiaries, are
independent public accountants within the meaning of the Securities Act
and the rules and regulations thereunder. The audited and unaudited
consolidated financial statements included in the Preliminary
Memorandum and the Final Memorandum present fairly in all material
respects the financial position of the Company and its subsidiaries, on
a consolidated basis, as at the dates indicated and the results of
their operations and the changes in their consolidated financial
position for the periods specified, and such financial statements have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis during the periods involved,
except as indicated therein. The Company and each of its subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurances 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
8
with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(w) Neither the Company nor any of the Guarantors is now or,
after giving effect to the issuance of the Securities and the
application of the proceeds therefrom, will be (i) insolvent, (ii) left
with unreasonably small capital with which to engage in its anticipated
businesses or (iii) incurring debts beyond its ability to pay such
debts as they become due.
(x) Each of the Company and the Guarantors owns or otherwise
possesses, or can acquire on reasonable terms, the right to use all
material patents, trademarks, service marks, trade names and
copyrights, all applications and registrations for each of the
foregoing, and all other material proprietary rights and confidential
information necessary to the conduct of its respective businesses as
currently conducted. Except as otherwise disclosed in the Final
Memorandum, neither the Company nor any of the Guarantors has received
any notice or is otherwise aware of any infringement of or conflict
with the rights of any third party with respect to any of the foregoing
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would reasonably be expected to have a
Material Adverse Effect.
(y) Except as otherwise disclosed in the Final Memorandum,
each of the Company and the Guarantors is (i) 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) has received all permits,
licenses or other approvals required of it under applicable
Environmental Laws to conduct its respective businesses and (iii) is in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(aa) Except as described in the Final Memorandum, no labor
problem or disturbance with the employees of the Company or any of the
Guarantors exists or, to the knowledge of the Issuers, is threatened
which, singly or in the aggregate, would reasonably be expected to have
a Material Adverse Effect.
(ab) Each of the Company and the Guarantors is 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 it is engaged. Neither the Company nor any of the
Guarantors has been refused any insurance coverage sought or applied
for. Neither the Company nor any of the Guarantors has any reason to
believe that it will not be able to renew
9
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.
(ac) Neither the Company nor any of the Guarantors, nor, to
any Issuers knowledge, any director, officer, agent, employee or other
person associated with or acting on behalf of the Company or any of the
Guarantors, has used any corporate funds during the last five years for
any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity, made any unlawful payment to
any foreign or domestic government official or employee from corporate
funds, violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977 or made any bribe, payoff, influence
payment, kickback or other unlawful payment.
(ad) Neither the Company nor any of the Guarantors has taken,
and none of them will take, any action that would cause this Agreement
or the issuance or sale of the Securities and Exchange Securities to
violate Regulation T, U or X of the Board of Governors of the Federal
Reserve System or analogous foreign laws and regulations.
(ae) No Issuer is a "public utility" or a "holding company"
within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
(af) Assuming that Oil-Chem is a Guarantor for purposes of
this Section 1(af) only, the representations and warranties set forth
in Xxxxxxx 0(x), (x), (x), (x), (x), (x), (x), (x), (x), (xx), (ab),
(ac) and (ad) hereof are true and correct with respect to Oil-Chem.
(ag) The Company has not, directly or indirectly, solicited
any offer to buy or offered to sell, and will not, directly or
indirectly, solicit any offer to buy or offer to sell, in the United
States or to any United States citizen or resident, any security which
is or would be integrated with the sale of the Securities in a manner
that would require the Securities to be registered under the Securities
Act. None of the Company, its affiliates (as such term is defined in
Rule 501 under the Securities Act (each, an "Affiliate"), or any person
acting on its or any of their behalf (other than the Initial
Purchasers, as to whom the Company makes no representation or warranty)
has engaged or will engage, in connection with the offering of the
Securities, in any form of general solicitation or general advertising
within the meaning of Rule 502 under the Securities Act. With respect
to those Securities sold in reliance upon Regulation S, none of the
Company, its Affiliates or any person acting on its or their behalf
(other than the Initial Purchasers, as to whom the Company makes no
representation or warranty) has engaged or will engage in any directed
selling efforts within the meaning of Regulation S and each of the
Company and its Affiliates and any person acting on its or their behalf
(other than the Initial Purchasers, as to whom the Company makes no
representation or warranty) has complied and will comply with the
offering restrictions set forth in Regulation S.
10
(ah) The Securities are eligible for resale pursuant to Rule
144A and will not be, at the Closing Date, of the same class as
securities listed on a national securities exchange registered under
Section 6 of the Exchange Act or quoted in a U.S. automated interdealer
quotation system.
(ai) The Company, the Guarantors and their respective
affiliates and all persons acting on their behalf (other than the
Initial Purchasers, as to whom the Company and the Guarantors make no
representation) have complied with and will comply with the offering
restrictions requirements of Regulation S in connection with the
offering of the Securities outside the United States and, in connection
therewith, the Offering Memorandum will contain the disclosure required
by Rule 902.
(aj) Each of the Company and the Guarantors is a "reporting
issuer", as defined in Rule 902 under the Securities Act.
2. PURCHASE AND SALE. On the basis of the representations and
warranties contained in, and subject to the terms and conditions of, this
Agreement, the Issuers agree to sell to the Initial Purchasers, and each of the
Initial Purchasers, severally but not jointly, agrees to purchase the aggregate
principal amount of Securities set forth opposite its name as shown in Schedule
1 hereto, at a purchase price equal to 103% of such principal amount thereof.
The Issuers shall not be obligated to deliver any of the Securities to
be delivered, except upon payment for all the Securities to be purchased as
provided herein.
3. SALE AND RESALE OF THE SECURITIES BY THE INITIAL PURCHASERS. Each of
the Initial Purchasers, severally and not jointly, acknowledges that the
Securities have not been registered under the Securities Act and represents and
warrants to the Issuers that it will offer the Securities to be purchased
hereunder for resale only upon the terms and conditions set forth in this
Agreement and in the Final Memorandum. Each of the Initial Purchasers, severally
and not jointly, represents and warrants to, and agrees with, the Issuers that
such Initial Purchaser (i) will not solicit offers for, or offer or sell, the
Securities by means of any form of general solicitation or general advertising
within the meaning of Regulation D or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act and (ii) will solicit
offers for the Securities only from, and will offer, sell or deliver the
Securities, as part of its initial offering, only to the following persons: (A)
persons in the United States whom such Initial Purchaser reasonably believes to
be qualified institutional buyers ("Qualified Institutional Buyers"), as defined
in Rule 144A under the Securities Act, as such rule may be amended from time to
time ("Rule 144A"), or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to such Initial Purchaser that each such
account is a Qualified Institutional Buyer, to whom notice has been given that
such sale or delivery is being made in reliance on Rule 144A; and (B) non-U.S.
11
persons outside the United States to whom the offeror or seller reasonably
believes offers and sales of the Securities may be made in reliance upon
Regulation S under the Securities Act, upon the terms and conditions set forth
below.
Each Initial Purchaser agrees that it has not offered or sold and will
not offer or sell the Securities in the United States or to, or for the benefit
or account of, a U.S. Person (other than a distributor), in each case, as
defined in Rule 902 under the Securities Act as part of its distribution at any
time and otherwise until 40 days after the later of the commencement of the
offering of the Securities pursuant hereto and the Closing Date, other than in
accordance with Regulation S of the Securities Act or another exemption from the
registration requirements of the Securities Act. Each Initial Purchaser agrees
that, during such 40-day restricted period, it will not cause any advertisement
with respect to the Securities (including any "tombstone" advertisement) to be
published in any newspaper or periodical or posted in any public place and will
not issue any circular relating to the Securities, except such advertisements as
are permitted by and include the statements required by Regulation S.
Each Initial Purchaser agrees that, at or prior to confirmation of a
sale of Securities by it to any distributor, dealer or person receiving a
selling concession, fee or other remuneration during the 40-day restricted
period referred to in Rule 903 under the Securities Act, it will send to such
distributor, dealer or person receiving a selling concession, fee or other
remuneration 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, as amended (the "Securities Act"), and may not be
offered and sold within the United States or to, or for the account or benefit
of, U.S. persons as part of your distribution at any time or otherwise until 40
days after the later of the date the Securities were first offered to persons
other than "distributors" (as defined in Regulation S) in reliance upon
Regulation S and the Closing Date, except in either case in accordance with
Regulation S under the Securities Act (or Rule 144A or to Accredited
Institutions in transactions that are exempt from the registration requirements
of the Securities Act), and in connection with any subsequent sale by you of the
Securities covered hereby in reliance on Regulation S during the period referred
to above to any distributor, dealer or person receiving a selling concession,
fee or other remuneration, you must deliver a notice to substantially the
foregoing effect. Terms used above have the meanings assigned to them in
Regulation S."
Upon original issuance by the Company, and until such time as the same
is no longer required under the applicable requirements of the Securities Act,
the Securities (and all securities issued in exchange therefor or in
substitution thereof, other than the Exchange Securities) shall bear the
following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX
XXXXXX SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
12
ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANS FERRED, ONLY BY THE INITIAL PURCHASERS TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A UNDER THE SECURITIES ACT, OUTSIDE THE UNITED STATES TO A FOREIGN
PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
APPLICABLE) OR IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), TO THE COMPANY OR PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN ADDITION, TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
BY SUBSEQUENT INVESTORS, AS SET FORTH IN THROUGH ABOVE AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE
AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY
EVIDENCED HEREBY."
Following the sale of the Securities by the Initial Purchasers to
subsequent purchasers pursuant to the terms hereof, the Initial Purchasers shall
not be liable or responsible to the Company for any losses, damages or
liabilities suffered or incurred by the Company, including any losses, damages
or liabilities under the Securities Act, arising from or relating to any resale
or transfer of any Security.
Each Initial Purchaser severally and not jointly represents and
warrants to, and agrees with, the Company that it is a "qualified institutional
buyer" within the meaning of Rule 144A (a "Qualified Institutional Buyer") and
an "accredited investor" within the meaning of Rule 501 under the Securities Act
(an "Accredited Investor").
4. DELIVERY OF AND PAYMENT FOR THE NOTES. Delivery of and payment (via
wire transfer) for the Securities shall be made at the offices of Parker, Poe,
Xxxxx & Xxxxxxxxx L.L.P., 0000 Xxxxxxxxx Xxxxx, 000 X. Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 at 10:00 A.M., Charlotte, North Carolina time,
on May 11, 1999 or at such other date as shall be determined by agreement
between the Initial Purchasers and the Company (such date and time are sometimes
13
referred to as the "Closing Date"). On the Closing Date, the Issuers shall
deliver or cause to be delivered the Securities to the Initial Purchasers for
the account of the Initial Purchasers against payment to or upon the order of
the Company of the purchase price by wire transfer of immediately available
funds. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
the Initial Purchasers hereunder. Upon delivery, the Securities shall be in
definitive fully registered form and registered in the name of Cede & Co., as
nominee of the Depository Trust Company ("DTC"), or such other name or names and
in such denominations as the Initial Purchasers shall request in writing not
less than one business day prior to the Closing Date. For the purpose of
expediting the checking and packaging of the Securities, the Issuers shall make
the Securities available for inspection by the Initial Purchasers at the offices
of Parker, Poe, Xxxxx & Xxxxxxxxx L.L.P., 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000, not later than 2:00 P.M., Charlotte, North Carolina time, on the
business day prior to the Closing Date.
5. FURTHER AGREEMENTS OF THE ISSUERS. The Issuers jointly and severally
agree with each Initial Purchaser as follows:
(a) The Issuers will furnish to the Initial Purchasers,
without charge, as many copies of the Preliminary Memorandum and the
Final Memorandum and any supplements and amendments thereto as they may
reasonably request.
(b) Prior to making any amendment or supplement to the Final
Memorandum, the Issuers shall furnish a copy thereof to the Initial
Purchasers and counsel to the Initial Purchasers and will not effect
any such amendment or supplement to which the Initial Purchasers shall
reasonably object by notice to the Company after a reasonable period to
review.
(c) If, at any time prior to completion of the distribution of
the Securities by the Initial Purchasers, any event shall occur or
condition exist as a result of which it is necessary, in the opinion of
counsel for the Initial Purchasers or counsel for the Issuers, to amend
or supplement the Final Memorandum in order that the Final Memorandum
will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein
not misleading in light of the circumstances existing at the time it is
delivered to a purchaser, or if it is necessary to amend or supplement
the Final Memorandum to comply with applicable law, the Issuers will
promptly prepare such amendment or supplement as may be necessary to
correct such untrue statement or omission or so that the Final
Memorandum, as so amended or supplemented, will comply with applicable
law and furnish to the Initial Purchasers such number of copies of such
amendment or supplement as they may reasonably request.
(d) So long as any Securities are outstanding and are
"Restricted Securities" within the meaning of Rule 144(a)(3) under the
Securities Act and during any period in which the Issuers are not
subject to Section 13 or 15(d) of the Exchange Act, the Issuers will
furnish to holders of the Securities and prospective purchasers of
Securities designated by
14
such holders, upon request of such holders or such prospective
purchasers, the information, if any, required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act. Such information, at the
date of its provision by the Company to such holders or prospective
purchasers, will not contain any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. 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.
(e) So long as the Securities and Exchange Securities are
outstanding, the Issuers will furnish to the Initial Purchasers copies
of any annual reports, quarterly reports and current reports filed with
the SEC on Forms 10-K, 10-Q and 8-K, or such other similar forms as may
be designated by the SEC, and such other documents, reports and
information as shall be furnished by the Issuers to the Trustee or to
the holders of the Securities and Exchange Securities pursuant to the
Indenture.
(f) The Issuers will cooperate with the Initial Purchasers and
their counsel to ensure offers and sales of the Securities comply with
applicable securities or Blue Sky laws of such jurisdictions as the
Initial Purchasers reasonably designate and to continue such compliance
in effect so long as reasonably required for the distribution of the
Securities. The Issuers will promptly advise the Initial Purchasers of
the receipt by the Issuers of any notification with respect to any
noncompliance in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. The Issuers will also cooperate with
the Initial Purchasers and their counsel in the determination of the
eligibility for investment of the Securities under the laws of such
jurisdictions as the Initial Purchasers reasonably request.
Notwithstanding the foregoing, the Issuers shall not be obligated to
qualify as a foreign corporation in any jurisdiction in which it is not
so qualified or to file a general consent to service of process or to
subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise subject.
(g) The Issuers will use their best efforts (i) to permit the
Securities to be designated PORTAL securities in accordance with the
rules and regulations adopted by the National Association of Securities
Dealers, Inc. relating to trading in the PORTAL market and (ii) to
permit the Securities to be eligible for clearance and settlement
through DTC.
(h) The Issuers will not, and will cause their Affiliates not
to, sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Securities Act)
in a transaction that could be integrated with the sale of the
Securities in a manner which would require the registration of the
Securities under the Securities Act.
15
(i) Except following the effectiveness of any Registration
Statement (as defined in the Registration Rights Agreement) and except
for such offers as may be made as a result of, or subsequent to, filing
such Registration Statement or amendments thereto prior to the
effectiveness thereof, the Issuers will not, and will cause their
Affiliates not to, solicit any offer to buy or offer to sell the
Securities by means of any form of general solicitation or general
advertising (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act.
(j) The Company will apply the net proceeds from the sale of
the Securities as set forth in the Final Memorandum under the caption
"Use of Proceeds."
(k) The Issuers will take such steps as shall be necessary to
ensure that neither the Company nor any of its subsidiaries shall
become (i) an "investment company" within the meaning of the Investment
Company Act or (ii) a "holding company" or a "subsidiary company" or an
"affiliate" of a holding company within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
(l) The Issuers will not, and will cause their Affiliates not
to, take any actions which would require the registration under the
Securities Act of the Securities (other than pursuant to the
Registration Rights Agreement).
(m) Prior to the consummation of the Exchange Offer (as
defined in the Final Memorandum) or the effectiveness of an applicable
shelf registration statement if, in the reasonable judgment of the
Initial Purchasers, the Initial Purchasers or any of their Affiliates
are required to deliver an offering memorandum in connection with sales
of, or market-making activities with respect to, the Securities, (A)
the Issuers will periodically amend or supplement the Final Memorandum
so that the information contained in the Final Memorandum complies with
the requirements of Rule 144A of the Securities Act, (B) the Issuers
will amend or supplement the Final Memorandum when necessary to reflect
any material changes in the information provided therein so that the
Final Memorandum will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances existing as of the
date the Final Memorandum is so delivered, not misleading and (C) the
Issuers will provide the Initial Purchasers with copies of each such
amended or supplemented Final Memorandum as the Initial Purchasers may
reasonably request. The Issuers hereby expressly acknowledge that the
indemnification and contribution provisions of Section 8 hereof are
specifically applicable and relate to each offering memorandum,
registration statement, prospectus, amendment or supplement referred to
in this Section 5(m).
(n) The Company agrees that it will not and will cause its
Affiliates not to make any offer or sale of securities of the Company
of any class if, as a result of the doctrine of "integration" referred
to in Rule 502 under the Securities Act, such offer or sale would
render
16
invalid (for the purpose of (i) the sale of the Securities by the
Company to the Initial Purchasers, (ii) the resale of the Securities by
the Initial Purchasers to Subsequent Purchasers or (iii) the resale of
the Securities by such Subsequent Purchasers to others) the exemption
from the registration requirements of the Securities Act provided by
Section 4 thereof or by Rule 144A or by Regulation S thereunder or
otherwise.
(o) Each certificate for a Note will bear the legend contained
in "Notice to Investors" in the Offering Memorandum for the time period
and upon the other terms stated in the Offering Memorandum.
(p) The Company will use its best efforts to cause the
Securities to be eligible for the National Association of Securities
Dealers, Inc. PORTAL market (the "PORTAL market").
(q) The Issuers will use their best efforts to do all things
necessary to satisfy the closing conditions set forth in Section 7
hereof.
6. EXPENSES. The Issuers jointly and severally (without duplication
with respect to the provisions of the Registration Rights Agreement) agree to
pay (a) the costs incident to the authorization, issuance, sale and delivery of
the Securities and Exchange Securities and any issue or stamp taxes payable in
connection therewith, (b) the costs incident to the preparation and printing of
the Preliminary Memorandum, the Final Memorandum and any amendments, supplements
and exhibits thereto, (c) the costs of distributing the Preliminary Memorandum,
the final Memorandum and any amendments or supplements thereto, (d) the fees and
expenses of notice filings with respect to the Securities and Exchange
Securities under applicable securities laws of the several jurisdictions as
provided in Section 5(f) and, if necessary, of preparing a Blue Sky Memorandum
(including related fees and expenses of counsel to the Initial Purchasers), (e)
the cost of printing the Securities and the Exchange Securities, (f) the fees
and expenses of the Trustee and any agent of the Trustee and the fees and
disbursements of any counsel for the Trustee in connection with the Indenture
and the Securities and Exchange Securities, (g) any fees paid to rating agencies
in connection with the rating of the Securities and Exchange Securities, (h) the
costs and expenses of DTC and its nominee, including its book-entry system, (i)
all expenses and listing fees incurred in connection with the application for
quotation of the Securities on the PORTAL market and (j) all other costs and
expenses incident to the performance of the obligations of the Issuers under
this Agreement.
7. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. 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 Issuers
contained herein at the Execution Time and the Closing Date, to the accuracy of
the statements of the Issuers made in any certificates pursuant to the
provisions hereof, to the performance by the Issuers of their obligations
hereunder and to the following additional conditions:
17
(a) The Initial Purchasers shall not have discovered and
disclosed to the Company on or prior to the Closing Date that the Final
Memorandum or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of counsel for the Initial
Purchasers, is material or omits to state a fact which, in the opinion
of such counsel, is material and is necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(b) The Final Memorandum shall have been printed and copies
distributed to the Initial Purchasers as soon as practicable but in no
event later than on the second business day following the date of this
Agreement or at such later date and time as to which the Initial
Purchasers may agree, and no stop order suspending the qualification or
exemption from qualification of the Securities in any jurisdiction
referred to in Section 5(f) shall have been issued and no proceeding
for that purpose shall have been commenced or shall be pending or
threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date, singly or in
the aggregate, reasonably be expected to have a Material Adverse
Effect; no action, suit or proceeding shall have been commenced and be
pending against or affecting or, to the knowledge of the Company,
threatened against, the Company or any of the Guarantors before any
court or arbitrator or any governmental body, agency or official that,
singly or in the aggregate, if adversely determined, would reasonably
be expected to result in a Material Adverse Effect; and no stop order
shall have been issued by the SEC or any governmental agency of any
jurisdiction referred to in Section 5(f) preventing the use of the
Final Memorandum, or any amendment or supplement thereto, which would
reasonably be expected to have a Material Adverse Effect.
(d) Since the dates as of which information is given in the
Final Memorandum and other than as set forth in the Final Memorandum,
(i) there shall not have been any Material Adverse Change, or any
development that is reasonably likely to result in a Material Adverse
Change, or any material change in the long-term debt, or material
increase in the short-term debt, from that set forth in the Final
Memorandum, (ii) no dividend or distribution of any kind shall have
been declared, paid or made by the Company on any class of its capital
stock and (iii) the Company and its subsidiaries shall not have
incurred any liabilities or obligations, direct or contingent, that are
material, individually or in the aggregate, to the Company and its
subsidiaries, taken as a whole, and that are required to be disclosed
on a balance sheet or notes thereto in accordance with generally
accepted accounting principles and are not disclosed on the latest
balance sheet or notes thereto included in the Final Memorandum.
(e) The Initial Purchasers shall have received a certificate,
dated the Closing Date, signed on behalf of the Company by (i) Xx.
Xxxxxxx X. Xxxxxx, Vice President,
18
Treasurer and Chief Financial Officer, and (ii) Xx. Xxxxxxx X. Xxxxxx,
Assistant Secretary, confirming that (A) such officers have
participated in conferences with other officers and representatives of
the Issuers, representatives of the independent public accountants of
the Issuers and representatives of counsel to the Issuers at which the
contents of the Final Memorandum and related matters were discussed and
(B) the matters set forth in paragraphs (b), (c) and (d) of this
Section 7 are true and correct as of the Closing Date.
(f) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the
Securities and Exchange Securities, the Indenture, the Registration
Rights Agreement and the Final Memorandum and all other legal matters
relating to this Agreement, the Securities and Exchange Securities, the
Indenture, the Registration Rights Agreement and the Final Memorandum,
and the transactions contemplated hereby and thereby shall be
satisfactory in all material respects to counsel for the Initial
Purchasers, and the Issuers shall have furnished to such counsel all
documents and information that they may reasonably request to enable
them to pass upon such matters.
Parker, Poe, Xxxxx & Xxxxxxxxx L.L.P., counsel for the
Issuers, shall have furnished to the Initial Purchasers its written
opinion, addressed to each of the Initial Purchasers and dated the
Closing Date, in form and substance reasonably satisfactory to the
Initial Purchasers, to the effect stated in Exhibit A hereto.
(g) The Initial Purchasers shall have received on the Closing
Date an opinion of Xxxxxx & Xxxxxxx, counsel for the Initial
Purchasers, dated the Closing Date and addressed to the Initial
Purchasers, in form and substance reasonably satisfactory to the
Initial Purchasers.
(h) The Issuers and the Trustee shall have entered into the
Indenture, and the Initial Purchasers shall have received counterparts,
conformed as executed, thereof.
(i) The Issuers and the Initial Purchasers shall have entered
into the Registration Rights Agreement, and the Initial Purchasers
shall have received counterparts, conformed as executed, thereof.
(j) At the Execution Time and at the Closing Date, Deloitte &
Touche LLP shall have furnished to the Initial Purchasers a customary
"comfort letter," dated the Execution Time and the Closing Date,
respectively, in form and substance satisfactory to the Initial
Purchasers and counsel to the Initial Purchasers, among other things
confirming that they are independent accountants within the meaning of
the Securities Act and the Exchange Act and the applicable rules and
regulations thereunder and Rule 101 of the Code of Professional
19
Conduct of the American Institute of Certified Public Accountants and
otherwise satisfactory in form and substance to the Initial Purchasers
and their counsel.
(k) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included in the Final Memorandum losses or interferences
with their businesses, taken as a whole, from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Final Memorandum or (ii) since
such date, there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any change,
or any development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders' equity
or results of operations of the Company' or its subsidiaries, taken as
a whole, otherwise than as set forth or contemplated in the Final
Memorandum, the effect of which, in any such case described in clause
(i) or (ii), is, in the reasonable judgment of the Initial Purchasers,
so material and adverse as to make it impracticable or inadvisable to
proceed with the offering or the delivery of the Securities being
delivered on the Closing Date on the terms and in the manner
contemplated herein and in the Final Memorandum.
(l) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred any of the following: (i)
trading (A) in the Company's Common Stock, (B) in securities generally
on the New York Stock Exchange, (C) in securities generally on The
NASDAQ Stock Market's National Market or (D) in the over-the-counter
market shall have been suspended or materially limited, or minimum
prices shall have been established on such exchange by the SEC, or by
such exchange or by any other regulatory body or governmental authority
having jurisdiction; (ii) a banking moratorium shall have been declared
by federal or state authorities; (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States; or
(iv) there shall have occurred such a material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) as to make it, in the reasonable judgment of the Initial
Purchasers, impracticable or inadvisable to proceed with the offering
or delivery of the Securities being delivered on the Closing Date on
the terms and in the manner contemplated herein and in the Final
Memorandum.
(m) Xxxxxx & Xxxxxxx shall have been furnished with such
documents, in addition to those set forth above, as they may reasonably
require (i) for the purpose of enabling them to review or pass upon the
matters referred to in this Section 7 and (ii) in order to evidence the
accuracy, completeness or satisfaction in all material respects of any
of the representations, warranties or conditions herein contained.
20
(n) 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 Securities 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.
(o) Prior to the Closing Date, the Issuers shall have
furnished to the Initial Purchasers such further information,
certificates and documents as the Initial Purchasers may reasonably
request.
(p) At the Closing Date the Securities shall have been
designated for trading on the PORTAL market.
All opinions, letters, evidence and certificates mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Initial Purchasers.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Issuers, 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 (within the meaning of either the Securities Act or the
Exchange Act) any Initial Purchaser against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them
may become subject under the Securities 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 any information
provided by the Issuers to any holder or prospective purchaser of Notes
pursuant to Section 5(e), 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 agree to
reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them (except that only one
counsel's fees and expenses shall be covered) in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Issuers will not be liable in any
such case to any Initial Purchaser 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
21
and in conformity with written information relating to the Initial
Purchasers furnished to the Issuers by or on behalf of such Initial
Purchaser specifically for inclusion therein; provided further, that
with respect to any such untrue statement or omission made in the
Preliminary Memorandum, the indemnity agreement contained in this
Section 8(a) shall not inure to the benefit of an Initial Purchaser
from whom the person asserting any such losses, claims, damages,
liabilities, judgments, actions or expenses purchased Securities, or
any controlling person of such Initial Purchaser, if a copy of the
Final Memorandum or supplement or amendment thereto was sent or given
by or on behalf of such Initial Purchaser to such person at or prior to
the written confirmation of the sale of Securities to such person and
the Final Memorandum or supplement or amendment thereto would have
cured the defect giving rise to such losses, claims, damages,
liabilities, judgments, actions or expenses, unless such failure to
deliver the Final Memorandum was a result of noncompliance by the
Issuers with Section 5(c) hereof. This indemnity agreement will be in
addition to any liability which the Issuers may otherwise have. Each of
the Issuers acknowledges and agrees that the statements set forth in
the last paragraph of the cover page and under the heading "Plan of
Distribution" in the Preliminary Memorandum and the Final Memorandum
constitute the only information relating to the Initial Purchasers and
furnished in writing by or on behalf of the Initial Purchasers for
inclusion in the Preliminary Memorandum or the Final Memorandum (or any
amendment or supplement thereto).
(b) Each Initial Purchaser, severally and not jointly, agrees
to indemnify and hold harmless the Issuers, their directors, officers,
and each person who controls (within the meaning of either the
Securities Act or the Exchange Act) the Issuers, to the same extent as
the foregoing indemnity from the Issuers to each Initial Purchaser, but
only with reference to written information relating to such Initial
Purchaser furnished to the Issuers by or on behalf of such Initial
Purchaser 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. Each of the Issuers acknowledges
that the statements set forth in the last paragraph of the cover page
and 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 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 the indemnifying party from
liability under paragraph (a) or (b) above unless and except 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)
22
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 reasonably 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
(provided that the indemnifying party shall be liable for the cost of
only one such separate counsel for the indemnified parties) if (A) the
use of counsel chosen by the indemnifying party to represent the
indemnified party would, in the opinion of legal counsel to the
indemnified party, present such counsel with a conflict of interest,
(B) 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 been informed in writing by legal
counsel 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, (C) the indemnifying party shall
not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after
notice of the institution of such action or (D) 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 Issuers and the
Initial Purchasers 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 Issuers and one or more of the
Initial Purchasers may be subject in such proportion as is appropriate
to reflect the relative benefits received by the Issuers and by the
Initial Purchasers from the offering of the Securities; provided,
however, that in no 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 Issuers
23
and the Initial Purchasers shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of the Issuers and of the Initial Purchasers in
connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits
received by the Issuers shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses), and benefits
received by the Initial Purchasers shall be deemed to be equal to the
total purchase discounts and commissions received by the Initial
Purchasers from the Issuers in connection with the purchase of the
Securities hereunder. Relative fault shall be determined by reference
to whether any alleged untrue statement or omission relates to
information provided by the Issuers or the Initial Purchasers. The
Issuers 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 Securities 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 Securities 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 Issuers within the meaning of either the Securities Act or the
Exchange Act and each partner, officer and director of the Issuers
shall have the same rights to contribution as the Issuers, 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 principal amount of
Securities set forth opposite their names in Schedule 1 hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining Initial Purchasers) the Securities which the defaulting Initial
Purchaser or Initial Purchasers agrees but failed to purchase; provided,
however, that in the event that the aggregate principal amount of Securities
which the defaulting Initial Purchaser or Initial Purchasers agreed but failed
to purchase shall exceed 10% of the aggregate principal amount of Securities set
forth in Schedule 1 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 non-defaulting Initial Purchasers do not purchase
all the Securities, this Agreement will terminate without liability to any
non-defaulting Initial Purchaser or the Issuers. In the event of a default by an
Initial Purchaser as set forth in this Section 9, the Closing Date shall be
postponed for such period, not exceeding seven days, as NationsBanc Xxxxxxxxxx
Securities LLC 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
24
the Issuers or any non-defaulting Initial Purchaser for damages
occasioned by its default hereunder.
10. TERMINATION. The obligations of the Initial Purchasers hereunder
may be terminated by the Initial Purchasers by notice given to and received by
the Company prior to delivery of and payment for the Securities if, prior to
that time, any of the events described in Sections 7(m) or 7(n) shall have
occurred or if the Initial Purchasers shall decline to purchase the Securities
for any reason permitted under this Agreement.
11. REIMBURSEMENT OF INITIAL PURCHASERS' EXPENSES. If (a) the Issuers
shall fail to tender the Securities for delivery to the Initial Purchasers
otherwise than for any reason permitted under this Agreement or (b) the Initial
Purchasers shall decline to purchase the Securities for any reason permitted
under this Agreement, the Issuers shall, jointly and severally, reimburse the
Initial Purchasers for the reasonable fees and expenses of their counsel and for
such other out-of-pocket expenses as shall have been incurred by them in
connection with this Agreement and the proposed purchase of the Securities, and
upon demand the Issuers, jointly and severally, shall pay the full amount
thereof to the Initial Purchasers.
12. NOTICES. All statements, requests, notices and agreements hereunder
shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent
by mail, telex or facsimile transmission to NationsBanc Xxxxxxxxxx
Securities LLC, 000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000, Attention: Xxxxxx Xxxxxxxxx, Esq. (Fax: 000-000-0000),
with a copy (which shall not constitute notice) to Xxxxxx & Xxxxxxx,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx Xxxxxx,
Esq. (Fax: 000-000-0000);
(b) if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth
in the Final Memorandum, Attention: Marylaurel X. Xxxxx, Esq. (Fax:
000-000-0000), with a copy (which shall not constitute notice) to
Parker, Poe, Xxxxx & Xxxxxxxxx L.L.P., 0000 Xxxxxxxxx Xxxxx, 000 Xxxxx
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xxxxx X.
Xxxx, Esq. (Fax: 000-000-0000).
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof. The Issuers shall be entitled to act and rely upon any
request, consent, notice or agreement given or made on behalf of the Initial
Purchasers.
13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchasers, the Issuers
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (a) the
representations, warranties, indemnities and agreements of the Issuers contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control an Initial Purchaser within the meaning of Section
15 of the Securities Act and (b) the indemnity
25
agreement of the Initial Purchasers contained in Section 8(b) of this Agreement
shall be deemed to be for the benefit of directors of the Issuers, officers of
the Issuers and any person controlling any of the Issuers within the meaning of
Section 15 of the Securities Act. Nothing in this Agreement is intended or shall
be construed to give any person, other than the persons referred to in this
Section 13, any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision contained herein. No purchaser of any of the
Securities from any Initial Purchaser shall be deemed a successor or assign
merely by reason of such purchase.
14. SURVIVAL. The respective indemnities, representations, warranties,
covenants and agreements of the Issuers and the Initial Purchasers contained in
this Agreement or made by or of behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Securities and
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any of them or any person controlling any of them.
15. DEFINITION OF "BUSINESS DAY" For purposes of this Agreement,
"business day" means each Monday, Tuesday, Wednesday, Thursday and Friday that
is not a day on which banking institutions in The City of New York, New York or
The City of Charlotte, North Carolina are authorized or obligated by law,
executive order or regulation to close.
16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE NEW YORK, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.
17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[Signature page follows]
26
If the foregoing correctly sets forth the agreement among the Issuers and the
Initial Purchasers, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
COMPANY:
--------
SPEEDWAY MOTORSPORTS, INC.,
a Delaware corporation
By:/s/Xxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxx
Title:Vice President and Chief
Financial Officer
GUARANTORS:
-----------
ATLANTA MOTOR SPEEDWAY, INC.,
a Georgia corporation
By:/s/Xxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxx
Title:Vice President
BRISTOL MOTOR SPEEDWAY, INC.,
a Tennessee corporation
By:/s/Xxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxx
Title:Vice President
CHARLOTTE MOTOR SPEEDWAY, INC.,
a North Carolina corporation
By:/s/Xxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxx
Title:Vice President
SPR ACQUISITION CORPORATION,
a California corporation
By:/s/Xxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxx
Title:Vice President
TEXAS MOTOR SPEEDWAY, INC.,
a Texas corporation
By:/s/Xxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxx
Title:Vice President
600 RACING, INC.,
a North Carolina corporation
By:/s/Xxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxx
Title:Vice President
SPEEDWAY FUNDING CORP.,
a Delaware corporation
By:/s/Xxxx Xxxxxxxxxx
-----------------------
Name: Xxxx Xxxxxxxxxx
Title:Vice President
SONOMA FUNDING CORPORATION,
a California corporation
By:/s/Xxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxx
Title:Vice President
SPEEDWAY CONSULTING & DESIGN, INC.,
a North Carolina corporation
By:/s/Xxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxx
Title:Vice President
THE SPEEDWAY CLUB, INC.,
a North Carolina corporation
By:/s/Xxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxx
Title:Vice President
INEX CORP.,
a North Carolina corporation
By:/s/Xxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxx
Title:Vice President
LAS VEGAS MOTOR SPEEDWAY, LLC,
a Nevada limited liability company
By:/s/Xxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxx
Title:Manager
SMI SYSTEMS, LLC
a Nevada limited liability company
By:/s/Xxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxx
Title:Manager
SPEEDWAY SYSTEMS LLC
a North Carolina limited liability company
By: IMS Systems Limited Partnership, its sole
manager
By: Speedway Motorsports, Inc., its general
partner
By: /s/Xxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxx
Title:Vice President
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written:
INITIAL PURCHASERS:
-------------------
NATIONSBANC XXXXXXXXXX
SECURITIES LLC
By:/s/Xxxx X. Xxxxx
-------------------
Name: Xxxx X. Xxxxx
Title: Managing Director
FIRST UNION CAPITAL MARKETS CORP.
By:/s/Xxxxxx X. Xxxxxx
-------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Director
X.X. XXXXXXXX & CO., L.L.C.
By:/s/Xxxx Xxxx
-------------------
Name: Xxxx Xxxx
Title:
32
