-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QIIJWf+VX89riZHXa2sqAtomf8JMTEs2/nI19XAGB+hPNnv4XrvRxFIGTxZgCxjq ZxpBw2qjAu932vfXuNJDcw== 0000944209-97-001191.txt : 19970929 0000944209-97-001191.hdr.sgml : 19970929 ACCESSION NUMBER: 0000944209-97-001191 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19970808 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19970911 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: GRAND PRIX ASSOCIATION OF LONG BEACH INC CENTRAL INDEX KEY: 0001014957 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-RACING, INCLUDING TRACK OPERATION [7948] IRS NUMBER: 952945353 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-28594 FILM NUMBER: 97678998 BUSINESS ADDRESS: STREET 1: 3000 PACIFIC AVE CITY: LONG BEACH STATE: CA ZIP: 90806 BUSINESS PHONE: 5629812600 MAIL ADDRESS: STREET 1: 3000 PACIFIC AVE CITY: LONG BEACH STATE: CA ZIP: 90806 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES AND EXCHANGE ACT OF 1934 Date of Report (date of earliest event reported): AUGUST 8, 1997 GRAND PRIX ASSOCIATION OF LONG BEACH, INC. (Exact name of registrant as specified in its charter) CALIFORNIA 0-11837 95-2945353 (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) 3000 PACIFIC AVENUE, LONG BEACH, CALIFORNIA 90806 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (562) 981-2600 No Change (Former name or former address, if changed since last report.) ITEM 5. OTHER EVENTS On August 8, 1997, Grand Prix Association of Long Beach, Inc. (the "Company") entered into separate Stock Purchase Agreements (the "Stock Purchase Agreements") with each of Midwest Facility Investments, Inc., a wholly owned subsidiary of International Speedway Corporation ("MFI"), and Penske Motorsports, Inc. ("PMI"), for the purchase by each of them of 315,000 shares (the "Shares") of the Company's unregistered common stock, no par value (the "Common Stock"), for a purchase price of $12.34 per share. After the sale is completed, MFI and PMI will each own approximately 7.2% of the Company's outstanding shares of Common Stock. As part of the Stock Purchase Agreements, the Company granted MFI and PMI certain preemptive rights, agreed to cause the size of the Company's board of directors (the "Board") to be increased by two and to use its reasonable efforts to cause one nominee of MFI and one nominee of PMI to each be elected to the Board to fill the new positions. MFI and PMI agreed not to, without Board approval, (a) purchase any shares of the Company's equity securities, (b) conduct a proxy contest to obtain control of the Board or (c) enter into any non-market transaction to sell the Company's Common Stock to anyone who does not agree to be bound by the standstill provisions contained in the Stock Purchase Agreements, except they may each purchase up to 5% of the Company's outstanding Common Stock (in certain cases, such amount may be increased to an aggregate individual ownership for MFI or PMI, as applicable, of 20.5% if MFI or PMI, as applicable, acquires certain shares of Common Stock pursuant to the Right of First Refusal Agreement (as defined below)), and purchase shares of Common Stock from other shareholders who are subject to the Right of First Refusal Agreement. The standstill provisions expire (a) upon the earlier of (i) six years or (ii) the date Christopher R. Pook ceases to serve as Chief Executive Officer unless a successor approved by MFI and PMI have been appointed within 120 days, (b) if the Company enters into a merger, asset purchase, business combination or similar agreement pursuant to which the Company's shareholders would own less than 50% of the surviving corporation or (c) a tender offer or exchange offer commences for the Company's equity. The terms of the Stock Purchase Agreement call for the Company to use the proceeds from this transaction to fund capital expenditures intended to enhance the Company's ability to promote additionally sanctioned motorsports events at its Millington, Tennessee and/or Madison, Illinois facilities. Concurrently therewith, the Company entered into separate Registration Rights Agreements with MFI and PMI pursuant to which the Company agreed, for a period of three years, to grant MFI and PMI certain "piggyback" registration rights. In addition, the Company has also agreed, subject to certain exceptions, to file a registration statement covering the Shares not later than June 30, 1998 and has agreed, subject to certain exceptions, to use its reasonable best efforts to cause such registration statement to be declared effective as soon as practicable thereafter and to be maintained effective for at least two years. As part of the foregoing transaction MFI, PMI and certain shareholders of the Company (the "Certain Shareholders"), which shareholders collectively beneficially own approximately 2 38% of Company's outstanding shares of Common Stock on a fully diluted basis and after giving effect to the sale of Common Stock pursuant to the Stock Purchase Agreements, entered into a Right of First Refusal Agreement (the "Right of First Refusal Agreement"). Pursuant to the Right of First Refusal Agreement, MFI, PMI and the Certain Shareholders granted to each other a right of first refusal on the sale or transfer of their respective shares of Common Stock, subject to certain exceptions, for a period terminating on the earlier of (a) six years from the date of the Right of First Refusal Agreement or, (b) with respect to each of MFI and PMI, the date it ceases to own at least 80% of the shares of Common Stock it acquired pursuant to its respective Stock Purchase Agreement. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Not applicable. (b) Exhibits.
Exhibit Number Description of Exhibit Filing Status - -------------- ---------------------- ------------- 10.32 Stock Purchase Agreement, dated filed herewith August 8, 1997, between Midwest Facility Investments, Inc. and Grand Prix Association of Long Beach, Inc. 10.33 Registration Rights Agreement, dated filed herewith August 8, 1997, between Grand Prix Association of Long Beach, Inc. and Midwest Facility Investments, Inc. 10.34 Stock Purchase Agreement, dated filed herewith August 8, 1997, between Penske Motorsports, Inc. and Grand Prix Association of Long Beach, Inc. 10.35 Registration Rights Agreement, dated filed herewith August 8, 1997, between Grand Prix Association of Long Beach, Inc. and Penske Motorsports, Inc. 10.36 Right of First Refusal Agreement, dated filed herewith August 8, 1997, between Midwest Facility Investments, Inc, Penske Motorsports, Inc. and various shareholders 99.4 Press Release dated August 8, 1997 filed herewith
3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. GRAND PRIX ASSOCIATION OF LONG BEACH, INC. Date: September 11, 1997. By: /s/ Christopher R. Pook ----------------------- Christopher R. Pook President and Chief Executive Officer 4 EX-10.32 2 STOCK PURCHASE AGREEMENT EXHIBIT 10.32 STOCK PURCHASE AGREEMENT STOCK PURCHASE AGREEMENT (the "Agreement") dated as of August 8, 1997, by and between Midwest Facility Investments, Inc., a Florida corporation (the "Purchaser") and Grand Prix Association of Long Beach, Inc., a California corporation (the "Corporation"). RECITALS A. Subject to the terms and conditions, set forth herein, the Purchaser desires to purchase from the Corporation, 315,000 shares of Common Stock, no par value, of the Corporation (the "Shares"), representing 7.2% of the Corporation's issued and outstanding Common Stock. B. The Corporation desires to sell the Shares to Purchaser on the terms and subject to the conditions set forth herein. AGREEMENT NOW, THEREFORE, in consideration of the premises and mutual covenants set forth in this Agreement and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Purchaser and the Corporation agree as follows: ARTICLE ONE 1.1 SALE AND PURCHASE OF THE SHARES. On the basis of the representations, warranties, covenants and agreements, and subject to the terms set forth herein, the Corporation hereby issues and sells to the Purchaser, free and clear of any and all liens and encumbrances of whatever character created by the Corporation ("Liens") and the Purchaser hereby purchases, acquires and accepts delivery from the Corporation, the Shares, for an aggregate purchase price of Three Million Eight Hundred Eighty Seven Thousand One Hundred Dollars ($3,887,100) (the "Purchase Price"). 1.2 DELIVERIES. In order to give effect to the transaction contemplated by Section 1.1 hereof, (i) the Purchaser hereby delivers to the Corporation a bank cashier's check or wire transfer of immediately available funds in the amount of the Purchase Price, and (ii) the Corporation hereby delivers to the Purchaser certificates representing the Shares. ARTICLE TWO 2.1 REPRESENTATIONS AND WARRANTIES OF THE CORPORATION. In order to induce the Purchaser to enter into this Agreement and to purchase the Shares, the Corporation hereby represents and warrants to the Purchaser as follows: (a) ORGANIZATION; QUALIFICATION. The Corporation is a corporation duly incorporated, validly existing and in good standing under the laws of the State of California. The Corporation has full corporate power and authority to own and operate its properties and assets and to conduct and carry on its business as it is now being conducted and operated. The Corporation (i) is duly qualified to do business and is in good standing in each jurisdiction in which the ownership or lease of real property or the conduct of its business requires it to be so qualified and (ii) has all governmental licenses, certifications, permits, approvals and other authorizations necessary to own its properties and assets and carry on its business as it is presently being conducted, except, in each case, where the failure to so qualify or be in good standing, or to have obtained any such governmental licenses, certifications, permits, approvals and other authorizations, could not reasonably be expected to have a Material Adverse Effect (as hereinafter defined). (b) AUTHORIZATION. The Corporation has full corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and consummate the transactions contemplated hereby. This Agreement has been duly authorized by all necessary corporate action on the part of the Corporation, has been duly and validly executed and delivered by the Corporation, and (assuming due execution and delivery by the Purchaser) constitutes the legal, valid and binding obligation of the Corporation, enforceable in accordance with its terms, except as such enforcement may be limited by general equitable principles or by applicable bankruptcy, insolvency, moratorium, or similar laws and judicial decisions from time to time in effect which affect creditors' rights generally. (c) CAPITALIZATION. The authorized capital stock of the Corporation consists of (i) 20,000,000 shares of Common Stock, no par value (the "Common Stock"), of which 3,768,286 shares of Common Stock are issued and outstanding as of the date hereof; (ii) 10,000,000 shares of Preferred Stock, no par value (the "Preferred Stock"), of which none of the shares of the Preferred Stock are issued and outstanding as of the date hereof other than the "Series B Preferred Stock" (as hereinafter defined); and (iii) 250,000 shares of Series B Convertible Preferred Stock ("Series B Preferred Stock"), of which 250,000 shares of the Series B Preferred Stock are issued and outstanding as of the date hereof. The Shares have been duly authorized and upon payment of the Purchase Price in accordance with the terms hereof will be validly issued, fully paid and non-assessable, and have not been subject to or issued in violation of (i i) any preemptive or other rights of any Person to acquire securities of the Corporation, or (ii ii) subject to the accuracy of the representations and warranties of Article Three, any applicable securities laws. Except as set forth in SCHEDULE 2(C) to this Agreement, there are no outstanding (i) securities or instruments convertible into or exchangeable for any of the capital stock of the Corporation; (ii) options, warrants, subscriptions or other rights to acquire capital stock of the Corporation; or (iii) commitments, agreements or understanding of any kind to which the Corporation is a party, including employee benefit arrangements, relating to the issuance or repurchase by the Corporation of any capital stock of the Corporation, any such securities or instruments convertible into or exchangeable for capital stock of the Corporation or any such options, warrants or rights. As of the date hereof, the Corporation had reserved not more than (x) 474,718 shares of Common Stock for issuance upon exercise of outstanding stock options, and (y) 400,000 shares of Common Stock for option and other "Section 423" stock purchase grants that may be made in the future pursuant to the Corporation's 1996 stock option plan, in each case subject to adjustment pursuant to the anti-dilution provisions thereof. SCHEDULE 2(C) shall also set forth the name of the holder and vesting schedule for each outstanding convertible security, option, warrant or similar right, as well as the number of shares of Common Stock subject thereto. (d) NO VIOLATION. Except as set forth in Schedule 2(d), the execution, delivery and performance of this Agreement by the Corporation does not and will not (i) conflict with or violate any provision of the Corporation's Articles of Incorporation or By-laws, (ii) violate or breach any provision of, or constitute or result in a default (or an event which, with notice or lapse of time or both, would constitute such a default) under, or result in the imposition of any lien upon or the creation of a security interest in the assets, business or properties of the Corporation pursuant to, any note, bond, mortgage, indenture, deed, license, franchise, permit, lease, contract or other agreement to which the Corporation is a party or by which the Corporation or any of its assets is bound or subject, (iii) violate any order, writ, injunction, decree, judgment or ruling of any court or governmental authority applicable to the Corporation, (iv) violate any statute, law, rule or regulation applicable to the Corporation, or (v) require the Corporation to obtain any waiver, consent, approval or authorization of, or make any filing with, any governmental authority, except such reports as may be required to be filed by the Corporation with the Securities and Exchange Commission (the "Commission") pursuant to Regulation D promulgated under the 1933 Act (as hereinafter defined) or the Securities and Exchange Act of 1934 (the "1934 Act"). (e) SEC REPORTS. The Corporation has filed all forms, reports and documents required to be filed with the Commission prior to the date hereof, and has heretofore delivered or made available to the Purchaser, in the form filed with the Commission, its (i) Annual Report on Form 10-KSB for the fiscal year ended November 30, 1996, (ii) its Quarterly Reports on Form 10-QSB for the quarters ended February 28, 1997 and May 31, 1997, and (iii) its Proxy Statement with respect to the 1997 annual -2- meeting of its shareholders (collectively, the "SEC Reports"). The SEC Reports (i) were prepared in all material respects in compliance with the requirements of the 1934 Act, and (ii) did not at the time they were filed contain any untrue statement of a material fact or omit to state a material fact required to be stated therein in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The audited financial statements and unaudited interim financial statements of the Corporation included in such SEC Reports were prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (except (A) as otherwise indicated in such financial statements and the notes thereto or, in the case of audited statements, in the related report of the Corporation's independent accountants or (B) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements), and fairly present the consolidated financial position, results of operations and cash flows of the Corporation as of the dates thereof and for the periods indicated therein (subject, in the case of any unaudited interim financial statements, to normal year-end audit adjustments). (f) ABSENCE OF CERTAIN CHANGES. Except as set forth in Schedule 2(f), since November 30, 1996, there has not been (i) any event or change in circumstances that has had or could reasonably be expected to have a material adverse effect on the business, financial condition, results of operations, properties or prospects of the Corporation and its subsidiaries taken as a whole or on the ability of the Corporation to timely consummate the transactions contemplated hereby (a "Material Adverse Effect"), or (ii) any damage, destruction or loss that has had or could reasonably be expected to have a Material Adverse Effect. (g) STATUS, TITLE TO ASSETS. (i) GENERAL. Except as disclosed in Schedule 2(g) attached hereto or in the SEC Reports, the Corporation has good and marketable title to all the properties and assets reflected in the latest audited balance sheet included in such SEC Reports (except properties sold or otherwise disposed of since the date thereof in the ordinary course of business), free and clear of all claims, liens, charges, security interests, or encumbrances of any nature whatsoever except (i) statutory liens securing payments not yet due and (ii) such imperfections or irregularities of title, claims, liens, charges, security interests, or encumbrances as do not materially affect the use of the properties or assets subject thereto or affected thereby or otherwise materially impair business operations at such properties, or as do not materially impair the marketability thereof. (ii) LEASED PROPERTIES. Except as disclosed in the SEC Reports filed prior to the date of this Agreement, the Corporation is the valid lessee of all material leasehold estates reflected in the latest audited financial statements included in such SEC Reports or acquired after the date thereof (except for leases that have expired without default by their terms since the date thereof) and is in valid possession of the properties purported to be leased thereunder, and each such lease is in full force and effect and without default thereunder in any material respect by the lessee or, to the Corporation's knowledge, the lessor. (h) LITIGATION AND PROCEEDINGS. Except as set forth in the SEC Reports or SCHEDULE 2(H) attached hereto, no litigation, proceeding, whether civil or criminal, or governmental investigation is pending or, to the Corporation's knowledge, threatened against or relating to the Corporation or its properties or businesses which could reasonably be expected to have a Material Adverse Effect. (i) TAX RETURNS AND AUDITS. The Corporation has duly filed all federal, state, local and foreign tax returns required to be filed by it and has duly paid or made adequate provision for the payment of all Federal income and other material taxes that are due and payable pursuant to such returns or pursuant to any assessment with respect to taxes in such jurisdictions, whether or not in connection with such returns. Except as set forth in SCHEDULE 2(I), there are no pending, or to the Corporation's knowledge, threatened, claims asserted for taxes or assessments of the Corporation or relating to the Corporation's present practices in computing or reporting taxes which could reasonably be -3- expected to have a Material Adverse Effect. Adequate provision has been made in the Corporation's most recent balance sheet, included in the SEC Reports for all then accrued and unpaid taxes, whether or not yet due and payable and whether or not disputed by the Corporation. (j) ENVIRONMENTAL AND SAFETY LAWS. Except as disclosed in SCHEDULE 2(J) attached hereto, the Corporation is not the subject of any environmental enforcement proceeding, and complies in all material respects with all laws and regulations relating to pollution control and environmental protection in all jurisdictions in which the Corporation is presently doing business. In addition, the Corporation has no material liability for past violations of such laws and regulations in jurisdictions in which the Corporation presently does business or in the past has done business. (k) BROKERS, FINDERS, ETC. The Corporation has not employed any broker, finder or other intermediary in connection with the transactions contemplated by this Agreement who might be entitled to a fee or commission from the Corporation or the Purchaser in connection with the transactions contemplated by this Agreement other than L.H. Friend, Weinress, Frankson & Presson, Inc. ("L.H. Friend"). A true, correct and complete description of the Corporation's fee and other arrangements in connection with this Agreement and the transactions contemplated hereby with L.H. Friend is included in SCHEDULE 2(K) hereto. ARTICLE THREE 3.1 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. To induce the Corporation to enter into this Agreement and to issue and sell the Shares, the Purchaser hereby represents and warrants to the Corporation as follows: (a) ORGANIZATION; QUALIFICATION. The Purchaser is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Florida. The Purchaser has full corporate power and authority to own and operate its properties and assets and to conduct and carry on its business as it is now being conducted and operated. The Purchaser (i) is duly qualified to do business and is in good standing in each jurisdiction in which the ownership or lease of real property or the conduct of its business requires it to be so qualified and (ii) has all governmental licenses, certifications, permits, approvals and other authorizations necessary to own its properties and assets and carry on its business as it is presently being conducted, except, in each case, where the failure to so qualify or be in good standing, or to have obtained any such governmental licenses, certifications, permits, approvals and other authorizations, could not reasonably be expected to have a material adverse effect on the Purchaser. Purchaser is a wholly owned subsidiary of International Speedway Corporation ("ISC"). (b) AUTHORIZATION. The Purchaser has full corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and consummate the transactions contemplated hereby. This Agreement has been duly authorized by all necessary corporate action on the part of the Purchaser, has been duly and validly executed and delivered by the Purchaser, and (assuming due execution and delivery by the Corporation) constitutes the legal, valid and binding obligation of the Purchaser, enforceable in accordance with its terms, except as such enforcement may be limited by general equitable principles or by applicable bankruptcy, insolvency, moratorium, or similar laws and judicial decisions from time to time in effect which affect creditors' rights generally. (c) NO VIOLATION. The execution, delivery and performance of this Agreement by the Purchaser does not and will not (i) conflict with or violate any provision of the Purchaser's Articles of Incorporation or By-laws, (ii) violate or breach any provision of, or constitute or result in a default (or an event which, with notice or lapse of time or both, would constitute such a default) under, or result in the imposition of any lien upon or the creation of a security interest in the assets, business or properties of the Purchaser pursuant to, any material note, bond, mortgage, indenture, deed, license, franchise, permit, lease, contract or other agreement to which the Purchaser is a party or by which the Purchaser or any of its assets is bound or subject, (iii) violate any order, writ, injunction, decree, judgment or ruling of any court or governmental authority applicable to the Purchaser, (iv) violate any statute, law, rule or -4- regulation applicable to the Purchaser, or (v) require the Purchaser to obtain any waiver, consent, approval or authorization of, or make any filing with, any governmental authority, except such reports as may be required to be filed by the Purchaser with the Commission pursuant to the 1934 Act. (d) NO REGISTRATION, ETC. The Purchaser acknowledges that the Corporation's offering and sale of the Shares to the Purchaser pursuant to this Agreement (i) has not been registered under the Securities Act of 1933, as amended (the "1933 Act"), or under the securities or "blue sky" laws, rules or regulations of any State (collectively, the "Securities Laws") and (ii) is intended to be exempt from registration under the 1933 Act by virtue of Section 4(2) of the 1933 Act and the provisions of Rule 506 of Regulation D promulgated thereunder by the Commission. In furtherance thereof, the Purchaser represents and warrants to the Corporation that it is an "accredited investor", as defined in Rule 501 of Regulation D promulgated under the 1933 Act. The Purchaser acknowledges that it has been afforded, prior to the execution of this Agreement, the opportunity to ask questions of, and to receive answers from, the Corporation and its management. The Shares are being purchased by Purchaser for its own account for investment and not for resale or distribution to others within the meaning of the federal Securities Laws. The Purchaser agrees that it will not transfer the Shares unless such Shares are registered under any applicable Securities Laws, or unless an exemption is available under such Securities Laws. (e) BROKERS, FINDERS, ETC. The Purchaser has not employed any broker, finder or other intermediary in connection with the transactions contemplated by this Agreement who might be entitled to a fee or commission from the Purchaser or the Corporation upon execution of this Agreement or consummation of such transactions. ARTICLE FOUR COVENANTS OF THE CORPORATION AND THE PURCHASER 4.1 FURTHER ASSURANCES. Subject to the terms and conditions hereof, each of the Purchaser and the Corporation agree to use all reasonable efforts to take, or cause to be taken, all further actions and to do, or cause to be done, all things necessary, proper or reasonably requested by the other to give effect to the transactions contemplated by this Agreement. 4.2 PREEMPTIVE RIGHTS. If, subsequent to the date hereof and during the "Covered Period" (as hereinafter defined), the Corporation desires to issue and sell any shares of capital stock of the Corporation (other than "Excluded Stock," as hereinafter defined), the Corporation shall afford the Purchaser "preemptive rights" (exercisable within 10 days following reasonably detailed written notice from the Corporation of the proposed sale of stock) in order to permit the Purchaser to maintain its proportionate percentage ownership in the Corporation (it being agreed that the Purchaser's "proportionate" ownership shall be computed by comparing the Corporation's aggregate number of outstanding shares of common stock to the aggregate number of shares of common stock then held by Purchaser and acquired pursuant to this Agreement on the date hereof and the "Right of First Refusal Agreement" being executed by Purchaser on or about the date hereof). As used herein, the term (x) "Covered Period" shall mean the period commencing on the date hereof and ending on the earliest to occur of (i) the date four years after the date hereof, and (ii) the date Purchaser no longer owns at least 80% of the Shares acquired pursuant to this Agreement on the date hereof; and (y) "Excluded Stock" shall mean (i) securities issued upon exercise of options or warrants or conversion of convertible securities outstanding as of the date hereof as disclosed in SCHEDULE 2(C) to this Agreement, (ii) shares of Common Stock issuable pursuant to stock options or "Section 423" stock purchase rights (with per share exercise or purchase prices no less than 85% of the fair market value of the Common Stock on the date of grant) that may be granted in the future pursuant to the Company's 1996 and 1993 stock option plans (as such plans are currently in effect), (iii) securities issued to Purchaser or Penske Motorsports, Inc. ("Penske") or any of their respective affiliates, (iv) shares of Common Stock issued in "private placement" transactions that constitute bona fide financings or acquisitions, if and only if, with respect to -5- this item (iv), (A) at least 50%-in-interest of the acquirors of such stock (the "New Shareholders") enter into agreements (in form reasonably acceptable to Purchaser) substantially the same as the Right of First Refusal Agreement (with the term of such agreement not to exceed the then remaining term of the Right of First Refusal Agreement), and (B) the identity of all of such New Shareholders is approved by the Purchaser, which approval shall not be unreasonably withheld or delayed it being agreed that approval shall not be required with respect to (x) institutional investors, or (y) any other New Shareholder that would not be required to file or amend a Schedule 13D statement with respect to the Corporation by reason of its acquisition or ownership of Common Stock (a "Non-13D Filer"); PROVIDED, HOWEVER, that upon consummation of such a financing or acquisition where the Purchaser does not approve the Non-13D Filer (whether or not required), the Corporation shall be obligated to file a "shelf" resale registration statement with the Commission within 15 business days of the consummation of such financing or acquisition with respect to the potential public offering and sale of up to all of the shares of Common Stock owned by Purchaser unless a "shelf" resale registration statement is then in effect or on file with the Commission with respect to such shares of Common Stock owned by Purchaser, and (v) securities issued pursuant to stock dividends, stock splits, and similar "no sale" events that apply generally to all shares of outstanding Common Stock. 4.3 RIGHT TO NOMINATE DIRECTORS. The Corporation shall (i) take all corporate action necessary to immediately cause the size of the Corporation's Board to be increased by one and appoint one (1) individual designated by the Purchaser and reasonably acceptable to the Corporation's Board (it being agreed that any of Purchaser's officers who also serves as an executive officer or director of ISC shall be deemed reasonably acceptable to the Corporation's Board), as a member of the Board of Directors of the Corporation to fill such vacancy, and (ii) thereafter during the Covered Period use reasonable efforts, consistent with and no less than are taken with respect to all other nominees to the Board of Directors, to have such designee (or other reasonably acceptable designee of Purchaser) to be nominated and elected to its Board of Directors at each election of the Corporation's directors (it being agreed that Purchaser shall be entitled to two (2) designees for election as director if at any time during the Covered Period Purchaser acquires the Corporation's Common Stock hereafter transferred by Penske, and, as a result of such acquisition, Penske or any of its affiliates loses its rights to nominate a director designee). Each Purchaser designee elected to the Board of Directors shall be indemnified by the Corporation to the fullest extent permitted by law and, without limiting the generality of the foregoing, shall be given indemnification agreement protection, if any, by the Corporation in the same form as currently in effect for the Corporation's current directors. The Corporation agrees to provide each such Purchaser designee with the same compensation paid by the Corporation to its other outside directors and to reimburse the Purchaser's designee for out-of-pocket expenses reasonably incurred in connection with his or her attendance of Board meetings. In the event the Purchaser's designee(s) is (are) not elected as a member of the Board of Directors during the Covered Period, the Corporation shall take all corporate action necessary to entitle such designee(s) to attend and participate in all of the Corporation's Board of Directors meetings. 4.4 PUBLICITY. Except as required by law or by the rules of the Nasdaq Stock Market or the Commission, neither of the parties hereto shall issue or make any public release or announcement concerning this Agreement or the transactions contemplated hereby. In addition, each party shall use its reasonable best efforts to first consult in advance with the other party concerning the content of any required public release or arrangement relating to this Agreement. 4.5 INDEMNITY. Each of the Purchaser and the Corporation hereby agrees to indemnify and hold harmless the other and the other's officers, directors and agents, and their respective successors and assigns, from, against and in respect of any and all demands, claims, actions or causes of action, assessments, liabilities, losses, costs, damages, penalties, charges, fines or expenses, including without limitation attorney's fees and expenses, arising out of or relating to any breach by such indemnifying party of any representation, warranty, covenant or agreement made in this Agreement. Such right to indemnification shall be in addition to any and all other rights of the parties under this Agreement or otherwise, at law or in equity. -6- 4.6 ACCESS. The Corporation shall during the Covered Period: (i) afford to the Purchaser and its agents and representatives reasonable access to the properties, books, records and other information of the Corporation, provided that such access shall be granted upon reasonable notice and at reasonable times during normal business hours in such a manner as to not unreasonably interfere with normal business operations; (ii) use its reasonable efforts to cause the Corporation's personnel, without unreasonable disruption of normal business operations, to assist the Purchaser in its investigation of the Corporation pursuant to this Section 4.6; and (iii) furnish promptly to the Purchaser all information and documents concerning the business, assets, liabilities, properties and personnel of the Corporation as the Purchaser may from time to time reasonably request. In addition, from the date of this Agreement, the Corporation shall cause one or more of its officers to confer on a regular basis with officers of the Purchaser and to report on the general status of its ongoing operations. 4.7 SHARES. The Corporation shall use its reasonable best efforts to take any and all action necessary after the date hereof so that the Shares sold by the Corporation to the Purchaser are listed on the Nasdaq National Market. 4.8 USE OF PROCEEDS. Without the prior written consent of the Purchaser, the Corporation shall use the Purchase Price proceeds solely to fund capital expenditures for Board approved improvement projects that are intended to enhance the Corporation's ability to promote additional sanctioned motorsports events at the Corporation's Millington, Tennessee and/or Madison, Illinois facility(ies). 4.9 FUTURE STOCK ISSUANCE. Without the prior written consent of Purchaser, and notwithstanding Section 4.2 hereof, during the Covered Period, the Corporation shall not issue (or agree to issue) any shares of capital stock other than Excluded Stock. 4.10 STANDSTILL. Until the "Standstill Termination Date" (as hereinafter defined), Purchaser and its affiliates (which for purposes hereof shall not include Penske or any of its subsidiaries) will not, directly or indirectly, without the express permission of the Corporation's Board of Directors, (A) purchase or offer to purchase any of the Corporation's equity securities (or securities convertible into the Corporation's equity securities), (B) conduct a "proxy contest" to obtain control of the Corporation's Board, or (C) enter into any non-market transaction to sell Common Stock to any person or entity which does not agree in writing (in form reasonably acceptable to the Corporation) to be subject to and bound by the provisions of this Section 4.10; PROVIDED, HOWEVER, that nothing herein shall limit the right of the Purchaser and its affiliates to (i) purchase securities pursuant to, and exercise all other rights contemplated by, this Agreement and the "Right of First Refusal Agreement" being executed in connection herewith, (ii) purchase additional Common Stock that does not represent more than 5% of the Corporation's aggregate outstanding shares of Common Stock, (iii) except to the extent limited by the Right of First Refusal Agreement, vote shares and exercise rights as directors and/or (iv) if and only if Purchaser owns at least 10% of the outstanding shares of the Corporation's Common Stock by reason of (A) purchases pursuant to this Agreement on or about the date hereof, and (B) purchases pursuant to the Right of First Refusal Agreement, purchase additional Common Stock that, together with such purchases and purchases made pursuant to the preceding clause (ii), represents in the aggregate not more than 20.5% of the Corporation's aggregate outstanding shares of Common Stock (it being agreed that any purchases pursuant to this item (iv) shall reduce on a one-for-one basis the number of shares that Purchaser is entitled to purchase under the Right of First Refusal Agreement); PROVIDED, FURTHER, that the provisions of this Section 4.10 shall automatically terminate in full if (x) the Corporation enters into a merger, asset purchase, business combination or similar agreement pursuant to which the Corporation's shareholders would own less than fifty percent (50%) of the surviving corporation's capital stock, or (y) a tender offer or exchange offer commences for the Corporation's equity securities. For purposes hereof, "Standstill Termination Date" means the earlier of (A) the sixth anniversary of the date of this Agreement, and (B) the date that Christopher R. Pook no longer serves as Chief Executive Officer of the Corporation (unless within 120 days of the termination of Mr. Pook's service a successor is appointed who is approved by Purchaser, which approval shall not be unreasonably withheld or delayed). -7- 4.11 BREACH OF REPRESENTATION REGARDING OUTSTANDING SECURITIES. The parties specifically agree that if the Corporation's representation regarding outstanding securities set forth in Section 2.3 hereof and the related SCHEDULE 2(C) is incorrect, then (x) the Corporation shall promptly file and use its reasonable best efforts to have declared effective as soon as practicable thereafter the shelf resale registration statement contemplated by Section 2 of the "Registration Rights Agreement" being executed in connection herewith, notwithstanding the time periods set forth therein, (y) the Purchaser shall have the option to purchase (at a per share exercise price equal to the per share Purchase Price paid pursuant to this Agreement) the number of shares equal to 50% of the excess (the "Total Shortfall Number"), if any, of (A) the "Actual Fully Diluted Shares" OVER (B) the "Disclosed Fully Diluted Shares," AND (iii) if and only if the fair market value of the Total Shortfall Number of shares of Common Stock (based on the "Then Fair Market Value") exceeds $250,000, the Purchaser shall have the right, exercisable by written notice within 60 days of the "Shortfall Discovery Date," to require the Corporation to purchase all or any specified number of the shares of Common Stock then held by Purchaser, at a price equal to the greater of (i) the Then Fair Market Value, and (ii) the per share Purchase Price paid pursuant to this Agreement. For purposes of this Section 4.11: (a) "Actual Fully Diluted Shares" means the sum of (i) all shares of Common Stock to be issued Purchaser pursuant to this Agreement and all shares to be issued to Penske on or about the date hereof, plus (ii) the aggregate number of shares of Common Stock that are currently outstanding, to be issued upon conversion of outstanding convertible securities, to be issued pursuant to outstanding options, warrants or other rights, and/or to be issued pursuant to awards that can be made in the future under the Corporation's current employee benefit plans. (b) "Disclosed Fully Diluted Shares" means that number of Actual Fully Diluted Shares described in paragraph (a)(ii) above that are accurately set forth on SCHEDULE 2(C). (c) "Then Fair Market Value" means the average closing sales price for the Common Stock during the ten trading days preceding the Shortfall Discovery Date. (d) "Shortfall Discovery Date" means the first date that the Corporation or the Purchaser notifies the other of any misrepresentation in Section 2(c) hereof and provides a reasonable description thereof. Notwithstanding the above, the Total Shortfall Number shall be reduced by the number of shares of Common Stock which become subject to and bound by the terms of the Right of First Refusal Agreement within twenty (20) business days subsequent to the earlier of (x) the Shortfall Discovery Date, and (y) the date that the Chief Executive Officer or Chief Financial Officer of the Corporation had actual knowledge of the likelihood of a Total Shortfall Number. ARTICLE FIVE MISCELLANEOUS 5.1 GOVERNING LAW. This Agreement and its validity, construction and performance shall be governed in all respects by the internal laws of the State of Florida (without reference to the conflict of laws provisions or principles thereof). 5.2 BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; but neither this Agreement nor any of the rights, benefits or obligations hereunder shall be assigned, by operation of law or otherwise, by either party hereto without the prior written consent of the other party. Nothing in this Agreement, express or implied, is intended to confer upon any person other than the parties hereto and their respective permitted successors and assigns, any rights, benefits or obligations hereunder. -8- 5.3 AMENDMENT; WAIVER. This Agreement shall not be changed, modified or amended in any respect except by the mutual written agreement of the parties hereto. Any provision of this Agreement may be waived in writing by the party which is entitled to the benefits thereof. No waiver of any provision of this Agreement shall be deemed to or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall any such waiver constitute a continuing waiver. 5.4 NOTICES. Any notices, requests, demands and other communications required or permitted to be given hereunder must be in writing and, except as otherwise specified in writing, will be deemed to have been duly given when personally delivered, telexed or facsimile transmitted, or three days after deposit in the United States mail, by certified mail, postage prepaid, return receipt requested, as follows: IF TO THE CORPORATION: Grand Prix Association of Long Beach, Inc. 3000 Pacific Avenue Long Beach, CA 90806 Attention: Christopher R. Pook Telephone: (562) 490-4520 Facsimile: (562) 981-2632 WITH A COPY TO: Barry L. Dastin Kaye, Scholer, Fierman, Hays & Handler, LLP 1999 Avenue of the Stars, Suite 1600 Los Angeles, California 90067 Telephone: (310) 788-1000 Facsimile: (310) 788-1200 IF TO PURCHASER: Midwest Facility Investments, Inc. 1801 West International Speedway Boulevard Daytona Beach, Florida 32120 Attention: H. Lee Combs Telephone: (904) 947-6731 Facsimile: (904) 257-0266 WITH A COPY TO: Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A. 1221 Brickell Avenue Miami, Florida 33131 Attention: Bruce E. Macdonough Telephone: (305) 579-0500 Facsimile: (305) 579-0717 Any party may change its address for the purposes of this Agreement by giving notice of such change of address to the other parties in the manner herein provided for giving notice. 5.5 SURVIVAL. The representations and warranties of the parties set forth in this Agreement shall survive the Closing; provided, that all such representations and warranties shall expire, terminate and be of no force and effect (or provide the basis for any claim) and no party hereto shall have any obligation to indemnify any other party with respect thereto unless written notice of any claim with respect thereto is received prior to the third anniversary of this Agreement. 5.6 SEVERABILITY. Any term or provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction only, be ineffective only to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. -9- 5.7 HEADINGS. The captions, headings and titles herein are for convenience of reference only and shall not effect the construction, meaning or interpretation of this Agreement or any term or provision hereof. 5.8 COUNTERPARTS. This Agreement may be executed through the use of one or more counterparts, each of which shall be deemed an original and all of which shall be considered one and the same agreement, notwithstanding that all parties are not signatories to the same counterpart. 5.9 EXPENSES. Each party to this Agreement shall bear their own fees, costs and expenses incurred in connection with the negotiation, execution and consummation of this Agreement and the transactions contemplated hereby. 5.10 ENTIRE AGREEMENT. Except for written agreements executed on or about the date hereof in connection with the transactions contemplated hereby, this Agreement merges and supersedes any and all prior agreements, understandings, discussions, assurances, promises, representations or warranties among the parties with respect to the subject matter hereof, and contains the entire agreement among the parties with respect to the subject matter hereof. -10- IN WITNESS WHEREOF, the Corporation and the Purchaser have each duly executed this Agreement as of the date first above written. MIDWEST FACILITY INVESTMENTS, INC. BY: /s/ H. LEE COMBS -------------------------------- H. LEE COMBS GRAND PRIX ASSOCIATION OF LONG BEACH, INC. BY: /s/ CHRISTOPHER R. POOK -------------------------------- CHRISTOPHER R. POOK -11- SCHEDULE 2(c)
NAME WARRANTS CONVERTIBLE SHARES 1993 OPTIONS (1) - ---- -------- ------------------ ---------------- Christopher R. Pook 174,435 James P. Michaelian 108,702 Dwight Tanaka 20,830 (6) Michael S. Clark 12,691 (6) Rick Lalor 31,728 Gemma Bannon 9,064 (6) James Sullivan 14,939 Wayne Kees 11,952 (7) Daniel S. Gurney 11,952 (7) George Pellin 14,939 Joseph Ainge 14,939 Lou Mirabile 11,952 (2)(3) Ruth Queen 11,952 (3) John R. Queen, Jr. 11,952 (3) EDMARJON-RONBREWDAVE, LLC. A Tennessee limited liability company (successor in interest to Memphis International Motorsports Corporation) 45,000 (4) L. H Friend, Weinress, Frankson & Presson, Inc. 31,250 (5)
- ---------------- (1) Options granted 12/93 under the Corporation's 1993 Stock Option Plan vest one-fifth on 12/1/94, 12/1/95, 12/1/96, 12/1/97 and 12/1/98 respectively, except as otherwise noted. (2) Subject to right of first refusal agreement dated 8/8/97 between he and Christopher R. Pook. (3) All fully vested. (4) Holders of Series B Convertible Preferred shares have the right to convert to Common stock of the Corporation on a share for share basis, as more fully described in the Certificate of Rights, Preferences and Privileges of Series B Convertible Preferred Shares as amended, filed with the California Secretary of State. (5) Warrant to purchase 31,250 shares of common stock of the Corporation for $10.00 per share must be exercised prior to June 24, 2001. (6) Remaining 2/5 of original grant, 1/2 will vest on 12/1/97 and the balance on 12/1/98. (7) Remaining 4/5 of original grant. 1/2 is vested, 1/4 will vest on 12/1/97 and the balance on 12/1/98. Note: 1993 Stock options, Series B Covertible Preferred shares and L.H. Friend, etc. Warrant are all subject to certain anti-dilution provisions. SCHEDULE 2(d) None. SCHEDULE 2(f) CHANGE OF RACES DATES FROM MEMPHIS MOTORSPORTS PARK TO GATEWAY RACEWAY. The Corporation's recent decision to move the ARCA and USAC Silver Crown series events scheduled for September 13, and 14, 1997, from Memphis Motorsports Park to Gateway Raceway due to construction delays. WEATHER AND CONSTRUCTION DELAYS. Adverse weather conditions have caused delays and could cause future delays in construction at Gateway Raceway and/or Memphis Motorsports Park. Construction delays resulting from various other factors have or could have an Material Adverse Effect on the Corporation's ability to meet the deadlines necessary to host the major events scheduled in 1997 at Gateway Raceway and/or Memphis Motorsports Park. The Corporation's motorsports events could be adversely affected by weather patterns and seasonal weather changes. MANPOWER OVERLOAD AND GROWTH MANAGEMENT. The operation of the 1997 major events at Gateway Raceway and/or Memphis Motorsports Park placed substantial burdens on the Corporation's management resources and financial controls since the Corporation has never before promoted and/or operated more than three major events in one year. EFFECT OF SEASONALITY. The Corporation had very limited racing during the winter season and, accordingly, reported an operating loss during its first fiscal quarter. GOVERNMENT REGULATION OF SPONSORS. The Corporation derives a significant portion of its revenue each year from sponsorship and advertising by various companies, including tobacco and liquor companies. The impact of the recently settled litigation between various states' attorneys general and several large tobacco companies, as well as other tobacco litigation, could have a Material Adverse Effect. In addition, actions by certain liquor companies with respect to advertising could lead to additional regulation or otherwise may have a Material Adverse Effect. ENVIRONMENTAL MATTERS. There may be undetected environmental contamination at the Corporation's Long Beach, Gateway Raceway or Memphis Motorsports Park properties. Present but undetected environmental contamination, as well as the conduct of the Corporation's business could have resulted in damage to persons or property or contamination of the environment by pollutants, substances, contaminants or wastes. The Corporation could have liability under California, Illinois or Tennessee statutes, or Federal law, including but not limited to the Federal Water Pollution Control Act, Comprehensive Environmental Response, Compensation and Liability Act, and the Resource Conservation and Recovery Act for violations of environmental laws by the Company or by prior owners of its properties. LIABILITY FOR PERSONAL INJURIES. Motorsports activities, construction and weather conditions have resulted in injuries to third parties including participants and spectators at the Corporation's facilities. If the Corporation is held liable for personal injuries beyond the scope of its insurance coverage, such liability could result in a Material Adverse Effect. SCHEDULE 2(h) Claim by former Chief Financial Officer for wrongful termination, as of the date hereof no lawsuit filed but counsel has been retained by such former chief financial officer and threatens to seek damages including punitive and attorneys fees. SCHEDULE 2(i) None. SCHEDULE 2(j) The Corporation obtained Phase I environmental reports on all properties it owns prior to the purchase thereof and knows of no presence of undetectable environmental hazards at any of those properties. Because Phase I reports do not include testing of soil, water or air or other types of samples, it is possible that there may be undetected environmental contamination at one or more of the Corporation's properties. In addition, the conduct of the Corporation's business may result in damage to persons or property or contamination of the environment by pollutants, substances, contaminants or wastes used, generated or disposed of by the Corporation (for example, gasoline used at the motorsports facilities). The Corporation could have liability under California, Illinois or Tennessee statutes, or Federal law, including but not limitied to the Federal Water Pollution Control Act, Comprehensive Environmental Response, Compensation and Liability Act, and the Resource Conservation and Recovery Act for past violations of environmental laws by prior owners of those properties. SCHEDULE 2(k) L.H. Friend, Weinress, Frankson & Presson, Inc. compensation agreement pursuant to which the Corporation has agreed to compensate L. H. Friend etc. $50,000.00 for its services in connection with this Agreement and the transactions contemplated hereby. EX-10.33 3 REGISTRATION RIGHTS AGREEMENT EXHIBIT 10.33 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made and entered into this 8th day of August, 1997, between GRAND PRIX ASSOCIATION OF LONG BEACH, INC., a California corporation (the "Company") and Midwest Facility Investments, Inc., a Florida corporation (the "Holder"). RECITALS A. The Company is contemporaneously issuing and delivering to Holder 315,000 shares of the Company's common stock, no par value per share (the "Common Stock"). B. In connection with that certain Stock Purchase Agreement, dated as of August 8, 1997 (the "Purchase Agreement"), between the Company and the Holder, the Company has agreed to provide to Holder certain registration rights with respect to the 315,000 shares of Common Stock issued to Holder pursuant to the Purchase Agreement (such 315,000 shares of Common Stock being referred to herein as the "Restricted Shares"). AGREEMENT NOW, THEREFORE, in consideration of the premises and covenants set forth in the Purchase Agreement, the parties agree as follows: 1. INCIDENTAL (PIGGYBACK) REGISTRATION. Subject to the limitations set forth in this Agreement, if the Company at any time within three (3) years of the date hereof proposes to file on its behalf and/or on behalf of any of its security holders ("the demanding security holders") a Registration Statement under the Securities Act of 1933, as amended (the "Securities Act") on any form (other than a Registration Statement on Form S-4 or S-8 or any successor form for securities to be offered in a transaction of the type referred to in Rule 145 under the Securities Act or to employees of the Company pursuant to any employee benefit plan, respectively) for the general registration of any sale or resale of Common Stock or any other class of the Company's securities, it shall give written notice to the Holder at least 15 days before the initial filing with the Commission of such Registration Statement, which notice shall set forth the intended method of disposition of the securities proposed to be registered by the Company. The notice shall offer to include in such filing the aggregate number of shares of Restricted Shares as Holder may request. If Holder desire to have any offer and sale of Restricted Shares registered under this Section 1, it shall advise the Company in writing within 10 days after the date of receipt of such offer from the Company, setting forth the amount of such Restricted Shares for which registration is requested. The Company shall thereupon include in such filing the number of shares of Restricted Shares for which registration is so requested, subject to the following. In the event that the proposed registration by the Company is, in whole or in part, an underwritten public offering of securities of the Company, the Company shall not be required to include any of the Restricted Shares in such underwriting unless Holder agrees to accept the offering on the same terms and conditions as the shares of Common Stock, if any, otherwise being sold through underwriters under such registration. In each case all shares of Common Stock owned by the Holder which are not included in the underwritten public offering shall be withheld from the market by the Holder for a period, not to exceed ninety (90) calendar days, which the managing underwriter reasonably determines as necessary in order to effect the underwritten public offering. In the event the Company chooses a registration form which limits the size offering either in terms of the number of shares or dollar amount, the Company shall not be required to include in the offering (in addition to the number of shares to be sold by the Company) Restricted Shares which would exceed such limits. In no event shall the Company be required to provide the "piggyback" registration rights contemplated by this Section 1 in connection with the Company's filing, not later than September 30,1997, of a registration statement for the resale by Memphis International Motorsports, Inc. (or its permitted transferees) of the Common Stock issued or to be issued to it upon conversion of the Company's outstanding Series B Convertible Preferred Stock. 2. SHELF REGISTRATION Subject to the limitations set forth in this Agreement, not later than June 30, 1998 the Company will file a Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 under the Securities Act (the "Shelf Registration Statement") covering the Holder's sale, from time to time or any time (in public sales, negotiated sales, or otherwise) up to all of the Restricted Shares and thereafter shall use its reasonable best efforts to cause the Shelf Registration Statement to be declared effective as soon as practicable following such filing and to maintain such effectiveness for a period of at lease two (2) years from the effective date thereof; PROVIDED, HOWEVER, that the Company shall have the right to prohibit the sale of Common Stock pursuant to the Shelf Registration Statement, upon notice to the Holder if in the opinion of counsel for the Company, the Company would thereby be required to disclose information not otherwise then required by law to be publicly disclosed, provided that the Company shall use its best efforts to minimize the period of time in which it shall prohibit the sale of any shares of Common Stock and in no event shall the prohibition on sales extend more than ten (10) calendar days or twenty (20) days in any twelve (12) month period. Notwithstanding anything herein to the contrary, the Company shall not be obligated to maintain the effectiveness of the Shelf Registration Statement pursuant to this Section 1(b), to deliver any prospectus under the Shelf Registration Statement or to provide the "piggyback" registration rights contemplated by Section 1 hereof if the Holder owns less than 1% of the Company's outstanding shares and has owned the Restricted Shares at least a year. 3. EXPENSES. Subject to the limitations contained in this Section 3 and except as otherwise specifically provided in this Agreement, the entire costs and expenses of the registrations and qualifications pursuant to Sections 1 and 2 hereof shall be borne by the Company. Such costs and expenses shall include, without limitation, the fees and expenses of counsel for the Company and of its accountants, all other costs, fees and expenses of the Company incident to the preparation, printing and filing under the Securities Act of the registration statement and all amendments and supplements thereto (including all expenses incident to filing with the NASD), the cost of furnishing copies of each preliminary prospectus, each final prospectus and each amendment or supplement thereto to underwriters, dealers and other purchasers of the Restricted Shares and the costs and expenses (including fees and disbursements of counsel) incurred in connection with the qualification of the Restricted Shares under the blue sky laws of various jurisdictions. The Company shall not, however, pay (x) any underwriting discount or commissions to the extent related to the sale of the Restricted Shares sold in any registration and qualification, (y) the fees and expenses of counsel or any other adviser(s) to the Holder, or (z) any stock transfer taxes payable by the Holder. 4. REGISTRATION PROCEDURES. (a) In the case of each registration or qualification pursuant to Sections 1 or 2, the Company will keep Holder advised in writing as to the initiation of proceedings for such registration and qualification and as to the completion thereof, and will advise any such holder, upon request, of the progress of such proceedings. (b) Except as otherwise specifically provided in this Agreement, at the Company's expense, the Company will keep each registration and qualification under this Agreement effective (and in compliance with the Securities Act) by such action as may be necessary or appropriate until the distribution contemplated thereby is completed, including, without limitation, the filing of post-effective amendments and supplements to any registration statement or prospectus necessary to keep the registration statement current and the further qualification under any applicable blue sky or other state securities laws to permit such sale or distribution, all as requested by Holder; PROVIDED, HOWEVER, that except as expressly provided in Section 2 hereof, the Company shall have no obligation to keep any registration statement current for more than 90 days after its initial effective date. The Company will immediately notify Holder pursuant to this Agreement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. 2 (c) In connection with all underwritten offerings, the Company will use its reasonable best efforts to furnish to Holder a signed counterpart, addressed to Holder, of (i) an opinion of counsel for the Company, dated the effective date of such registration statement, and (ii) a so-called "cold comfort" letter signed by the independent public accountants who have certified the Company's financial statements included in such registration statement, and such opinion of counsel and accountants' letter shall cover substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of such accountants' letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer's counsel and in accountants' letters delivered to underwriters in connection with underwritten public offerings of securities. (d) Without limiting any other provision hereof, in connection with any registration of the Restricted Shares under this Agreement, the Company will use its reasonable best efforts to comply with the Securities Act, the Securities Exchange Act of 1934, as amended (the "Securities Exchange Act"), and all applicable rules and regulations of the Commission, and will make generally available to its securities holders, as soon as reasonably practicable, an earnings statement covering a period of at least twelve months, beginning with the first month of the first fiscal quarter after the effective date of such registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act. (e) In connection with any registration of the Restricted Shares under this Agreement, the Company will provide, if appropriate, a transfer agent and registrar for the Restricted Shares not later than the effective date of such registration statement. (f) If the Company at any time proposes to register any of its securities under the Securities Act, other than pursuant to a request made under Section 2 hereof, whether or not for sale for its own account, and such securities are to be distributed by or through one or more underwriters, then the Company will make reasonable efforts, if requested by Holder pursuant to Section 1 hereof, to arrange for such underwriters to include such Restricted Shares among the securities to be distributed by or through such underwriters. Holder shall be party to any such underwriting agreement, and (x) the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of Holder, and (y) the Holder shall make customary representations and agreements with respect to itself for the benefit of the underwriters and the Company. (g) In connection with the preparation and filing of each registration statement registering the Restricted Shares under this Agreement, the Company will give Holder and its underwriters, if any, and its counsel and accountants the opportunity to participate in the preparation of such registration statement, each prospectus included therein or filed with the Commission, and each amendment thereof or supplement thereto, and will give each of them such reasonable access to its books and records and such opportunities to discuss the business of the Company with its officers, its counsel and the independent public accountants who have certified its financial statements, as shall be necessary, in the opinion of Holder or such underwriters or their respective counsel, in order to conduct a reasonable and diligent investigation within the meaning of the Securities Act. Without limiting the foregoing, each registration statement, prospectus, amendment, supplement or any other document filed with respect to a registration under this Agreement shall be subject to review and reasonable approval by Holder and by its counsel, which shall not be unreasonably delayed. (h) The Company will use reasonable efforts to list, on or prior to the effective date of each registration statement registering the Restricted Shares under this Agreement, all shares covered by such registration statement on any securities exchange on which any of the Common Stock is then listed, if any. (i) The Company will cooperate with Holder and each underwriter or agent participating in the disposition of securities subject to any registration hereunder and their respective counsel in connection with any filings required to be made with the National Association of Securities Dealers. 3 (j) The Company will use reasonable efforts to prevent the issuance by the SEC or any other governmental agency or court of a stop order, injunction or other order suspending the effectiveness of each registration statement registering the Restricted Shares under this Agreement and, if such an order is issued, use reasonable efforts to cause such order to be listed as promptly as practicable. (k) The Company will promptly notify Holder and each underwriter of the happening of any event, during the period of distribution, as a result of which any registration statement registering the Restricted Shares under this Agreement includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing (in which case, the Company shall promptly provide Holder with revised or supplemental prospectuses and, if so requested by the Company in writing, Holder shall promptly take action to cease making any offers of the Common Stock until receipt and distribution of such revised or supplemental prospectuses). (l) To the extent required by law, the Company will use its reasonable best efforts to register or qualify the securities to be sold by Holder under such other securities or blue sky laws of such jurisdictions within the United States as Holder shall reasonably request (provided, however, the Company shall not be obligated to qualify as a foreign corporation to do business under the laws of any jurisdiction in which it is not then qualified or to file any general consent to service of process), and do such other reasonable acts and things as may be required of it to enable such holder to consummate the disposition in the jurisdiction of the securities covered by such registration statement. 5. PROVISION OF DOCUMENTS. The Company will, at the expense of the Company, furnish to Holder such number of registration statements, prospectuses, offering circulars and other documents incident to any registration or qualification referred to in Sections 1 or 2 as Holder from time to time may reasonably request. 6. INDEMNIFICATION. In the event of any registration of any Restricted Shares under the Securities Act pursuant to this Agreement, the Company shall indemnify and hold harmless Holder, any underwriter (as defined in the Securities Act) for Holder, each broker or any other person, if any, who controls any of the foregoing persons, within the meaning of the Securities Act against any losses, claims, damages or liabilities, joint or several, and expenses (including reasonable attorneys' fees and expenses and reasonable costs of investigation) to which any of the foregoing persons, or such controlling person may be subject, under the Securities Act or otherwise, insofar as any thereof arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in (A) any registration statement under which such Restricted Shares were registered under the Securities Act pursuant to Sections 1 or 2 hereof, any prospectus or preliminary prospectus contained therein, or any amendment or supplement thereto or (B) any other document incident to the registration of the Restricted Shares under the Securities Act or the qualification of the Restricted Shares under any state securities laws applicable to the Company, (ii) the omission or alleged omission to state in any item referred to in the preceding clause (i) a material fact required to be stated therein or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Securities Exchange Act or any other federal or state securities law, rule or regulation applicable to the Company and relating to action or inaction by the Company in connection with any such registration or qualification, except insofar as such losses, claims, damages, liabilities or expenses arise out of or are based upon any untrue statement or alleged untrue statement or omission or alleged omission based upon information furnished to the Company in writing by Holder or by any underwriter for Holder expressly for use therein (with respect to which information Holder or underwriter shall so indemnify and hold harmless the Company, any underwriter for the Company and each person, if any, who controls the Company or such underwriter within the meaning of the Securities Act). The Company will enter into an underwriting agreement with the underwriter or underwriters for any underwritten offering registered under the Securities Act pursuant to Sections 1 or 2 hereof and with Holder pursuant to such offering, and such underwriting agreement shall contain customary provisions with respect to indemnification and contribution which shall, at a minimum, provide the indemnification set forth above. 7. CERTAIN LIMITATIONS ON REGISTRATION RIGHTS. Notwithstanding the other provisions of this Agreement, the Company shall not be obligated to register the Restricted Shares of Holder if, in the opinion of counsel to the Company reasonably satisfactory to Holder, the sale or other disposition of 4 Holder's Restricted Shares may be effected without registering such Restricted Shares under the Securities Act. The Company's obligations under Section 1 or 2 are also expressly conditioned upon Holder furnishing to the Company in writing such information concerning Holder and their controlling persons and the terms of such Holder's proposed offering of Restricted Shares as the Company shall reasonably request for inclusion in the Registration Statement. 8. MISCELLANEOUS. (a) NOTICE GENERALLY. Any notice, demand, request, consent, approval, declaration, delivery or other communication hereunder to be made pursuant to the provisions of this Agreement shall be sufficiently given or made if in writing and either delivered in person with receipt acknowledged, delivered by reputable overnight courier, telecopied and confirmed separately in writing by a copy mailed as follows or sent by registered or certified mail, return receipt requested, postage prepaid, addressed as set forth in the Purchase Agreement. (b) GOVERNING LAW. This Agreement shall be governed by the laws of the State of Florida, without regard to the provisions thereof relating to conflict of laws. (c) BINDING EFFECT; ASSIGNMENT; THIRD PARTY BENEFICIARIES. This Agreement shall be binding upon the Parties and their respective successors and assigns and shall inure to the benefit of the Parties and their respective successors and permitted assigns. No Party shall assign any of its rights or delegate any of its duties under this Agreement (by operation of law or otherwise) without the prior written consent of the other Parties. Any assignment of rights or delegation of duties under this Agreement by a Party without the prior written consent of the other Parties, if such consent is required hereby, shall be void. No person (including, without limitation, any employee of a Party) shall be, or be deemed to be, a third party beneficiary of this Agreement. (d) ENTIRE AGREEMENT. This Agreement, together with the Purchase Agreement and the "Right of First Refusal Agreement" executed in connection therewith, is intended by the parties as a final expression of their agreement and intended to be a complete exclusive statement of the Agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement supersedes all prior agreements and understandings between the parties with respect to the subject matter hereof. (e) AMENDMENTS. No addition to, and no cancellation, renewal, extension, modification or amendment of, this Agreement shall be binding upon a Party unless such addition, cancellation, renewal, extension, modification or amendment is set forth in a written instrument which states that it adds to, amends, cancels, renews, extends or modifies this Agreement and has been approved by all of the Parties. (f) WAIVERS. No waiver of any provision of this Agreement shall be binding upon a Party unless such waiver is expressly set forth in a written instrument which is executed and delivered by such Party or on behalf of such Party by an officer of, or attorney-in-fact for, such Party. Such waiver shall be effective only to the extent specifically set forth in such written instrument. Neither the exercise (from time to time and at any time) by a Party of, nor the delay or failure (at any time or for any period of time) to exercise, any right, power or remedy shall constitute a waiver of the right to exercise, or impair, limit or restrict the exercise of, such right, power or remedy or any other right, power or remedy at any time and from time to time thereafter. No waiver of any right, power or remedy of a Party shall be deemed to be a waiver of any other right, power or remedy of such Party or shall, except to the extent so waived, impair, limit or restrict the exercise of such right, power or remedy. (g) REMEDIES. (i) The rights, powers and remedies of the Parties set forth herein for a breach of or default under this Agreement are cumulative and in addition to, and not in lieu of, any rights or remedies that any Party may otherwise have under this Agreement, at law or in equity. 5 (ii) The Parties acknowledge that the Restricted Shares are unique, and that any violation of this Agreement cannot be compensated for by damages alone. Accordingly, in addition to all of the other remedies which may be available hereunder or under applicable law, any Party shall have the right to any equitable relief which may be appropriate to remedy a breach or threatened breach by any other Party hereunder, including, without limitation, the right to enforce specifically the terms of this Agreement by obtaining injunctive relief in respect of any violation or non-performance hereof, and any Party shall have the right to seek recovery of and be awarded attorneys' fees and expenses in any proceeding with respect to this Agreement as reasonably determined by the court in which such proceeding is brought. (h) HEADINGS; COUNTERPARTS. The headings set forth in this Agreement have been inserted for convenience of reference only, shall not be considered a part of this Agreement and shall not limit, modify or affect in any way the meaning or interpretation of this Agreement. This Agreement may be signed in any number of counterparts, each of which (when executed and delivered) shall constitute an original instrument, but all of which together shall constitute one and the same instrument. It shall not be necessary when making proof of this Agreement to account for any counterparts other than a sufficient number of counterparts which, when taken together, contain signatures of all of the Parties. (i) SEVERABILITY. If any provision of this Agreement shall hereafter be held to be invalid, unenforceable or illegal, in whole or in part, in any jurisdiction under any circumstances for any reason, (i) such provision shall be reformed to the minimum extent necessary to cause such provision to be valid, enforceable and legal while preserving the intent of the Parties as expressed in, and the benefits to the Parties provided by, this Agreement or (ii) if such provision cannot be so reformed, such provision shall be severed from this Agreement and an equitable adjustment shall be made to this Agreement (including, without limitation, addition of necessary further provisions to this Agreement) so as to give effect to the intent as so expressed and the benefits so provided. Such holding shall not affect or impair the validity, enforceability or legality of such provision in any other jurisdiction or under any other circumstances. Neither such holding nor such reformation or severance shall affect or impair the legality, validity or enforceability of any other provision of this Agreement. 6 IN WITNESS WHEREOF, the Company and Holder have executed this Agreement as of the date first above written. GRAND PRIX ASSOCIATION OF LONG BEACH, INC. By: /s/ CHRISTOPHER R. POOK ---------------------------------------- Christopher R. Pook MIDWEST FACILITY INVESTMENTS, INC. By: /s/ H. LEE COMBS ---------------------------------------- H. Lee Combs 7 EX-10.34 4 STOCK PURCHASE AGREEMENT EXHIBIT 10.34 STOCK PURCHASE AGREEMENT STOCK PURCHASE AGREEMENT (the "Agreement") dated as of August 8, 1997, by and between Penske Motorsports, Inc., a Delaware corporation (the "Purchaser") and Grand Prix Association of Long Beach, Inc., a California corporation (the "Corporation"). RECITALS A. Subject to the terms and conditions, set forth herein, the Purchaser desires to purchase from the Corporation, 315,000 shares of Common Stock, no par value, of the Corporation (the "Shares"), representing 7.2% of the Corporation's issued and outstanding Common Stock. B. The Corporation desires to sell the Shares to Purchaser on the terms and subject to the conditions set forth herein. AGREEMENT NOW, THEREFORE, in consideration of the premises and mutual covenants set forth in this Agreement and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Purchaser and the Corporation agree as follows: ARTICLE ONE 1 1.1 SALE AND PURCHASE OF THE SHARES. On the basis of the representations, warranties, covenants and agreements, and subject to the terms set forth herein, the Corporation hereby issues and sells to the Purchaser, free and clear of any and all liens and encumbrances of whatever character created by the Corporation ("Liens") and the Purchaser hereby purchases, acquires and accepts delivery from the Corporation, the Shares, for an aggregate purchase price of Three Million Eight Hundred Eighty Seven Thousand One Hundred Dollars ($3,887,100) (the "Purchase Price"). 1.2 DELIVERIES. In order to give effect to the transaction contemplated by Section 1.1 hereof, (i) the Purchaser hereby delivers to the Corporation a bank cashier's check or wire transfer of immediately available funds in the amount of the Purchase Price, and (ii) the Corporation hereby delivers to the Purchaser certificates representing the Shares. ARTICLE TWO 2 2.1 REPRESENTATIONS AND WARRANTIES OF THE CORPORATION. In order to induce the Purchaser to enter into this Agreement and to purchase the Shares, the Corporation hereby represents and warrants to the Purchaser as follows: (a) ORGANIZATION; QUALIFICATION. The Corporation is a corporation duly incorporated, validly existing and in good standing under the laws of the State of California. The Corporation has full corporate power and authority to own and operate its properties and assets and to conduct and carry on its business as it is now being conducted and operated. The Corporation (i) is duly qualified to do business and is in good standing in each jurisdiction in which the ownership or lease of real property or the conduct of its business requires it to be so qualified and (ii) has all governmental licenses, certifications, permits, approvals and other authorizations necessary to own its properties and assets and carry on its business as it is presently being conducted, except, in each case, where the failure to so qualify or be in good standing, or to have obtained any such governmental licenses, certifications, permits, approvals and other authorizations, could not reasonably be expected to have a Material Adverse Effect (as hereinafter defined). (b) AUTHORIZATION. The Corporation has full corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and consummate the transactions contemplated hereby. This Agreement has been duly authorized by all necessary corporate action on the part of the Corporation, has been duly and validly executed and delivered by the Corporation, and (assuming due execution and delivery by the Purchaser) constitutes the legal, valid and binding obligation of the Corporation, enforceable in accordance with its terms, except as such enforcement may be limited by general equitable principles or by applicable bankruptcy, insolvency, moratorium, or similar laws and judicial decisions from time to time in effect which affect creditors' rights generally. (c) CAPITALIZATION. The authorized capital stock of the Corporation consists of (i) 20,000,000 shares of Common Stock, no par value (the "Common Stock"), of which 3,768,286 shares of Common Stock are issued and outstanding as of the date hereof; (ii) 10,000,000 shares of Preferred Stock, no par value (the "Preferred Stock"), of which none of the shares of the Preferred Stock are issued and outstanding as of the date hereof other than the "Series B Preferred Stock" (as hereinafter defined); and (iii) 250,000 shares of Series B Convertible Preferred Stock ("Series B Preferred Stock"), of which 250,000 shares of the Series B Preferred Stock are issued and outstanding as of the date hereof. The Shares have been duly authorized and upon payment of the Purchase Price in accordance with the terms hereof will be validly issued, fully paid and non-assessable, and have not been subject to or issued in violation of (i i) any preemptive or other rights of any Person to acquire securities of the Corporation, or (ii ii) subject to the accuracy of the representations and warranties of Article Three, any applicable securities laws. Except as set forth in SCHEDULE 2(C) to this Agreement, there are no outstanding (i) securities or instruments convertible into or exchangeable for any of the capital stock of the Corporation; (ii) options, warrants, subscriptions or other rights to acquire capital stock of the Corporation; or (iii) commitments, agreements or understanding of any kind to which the Corporation is a party, including employee benefit arrangements, relating to the issuance or repurchase by the Corporation of any capital stock of the Corporation, any such securities or instruments convertible into or exchangeable for capital stock of the Corporation or any such options, warrants or rights. As of the date hereof, the Corporation had reserved not more than (x) 474,718 shares of Common Stock for issuance upon exercise of outstanding stock options, and (y) 400,000 shares of Common Stock for option and other "Section 423" stock purchase grants that may be made in the future pursuant to the Corporation's 1996 stock option plan, in each case subject to adjustment pursuant to the anti-dilution provisions thereof. SCHEDULE 2(C) shall also set forth the name of the holder and vesting schedule for each outstanding convertible security, option, warrant or similar right, as well as the number of shares of Common Stock subject thereto. (d) NO VIOLATION. Except as set forth in Schedule 2(d), the execution, delivery and performance of this Agreement by the Corporation does not and will not (i) conflict with or violate any provision of the Corporation's Articles of Incorporation or By-laws, (ii) violate or breach any provision of, or constitute or result in a default (or an event which, with notice or lapse of time or both, would constitute such a default) under, or result in the imposition of any lien upon or the creation of a security interest in the assets, business or properties of the Corporation pursuant to, any note, bond, mortgage, indenture, deed, license, franchise, permit, lease, contract or other agreement to which the Corporation is a party or by which the Corporation or any of its assets is bound or subject, (iii) violate any order, writ, injunction, decree, judgment or ruling of any court or governmental authority applicable to the Corporation, (iv) violate any statute, law, rule or regulation applicable to the Corporation, or (v) require the Corporation to obtain any waiver, consent, approval or authorization of, or make any filing with, any governmental authority, except such reports as may be required to be filed by the Corporation with the Securities and Exchange Commission (the "Commission") pursuant to Regulation D promulgated under the 1933 Act (as hereinafter defined) or the Securities and Exchange Act of 1934 (the "1934 Act"). (e) SEC REPORTS. The Corporation has filed all forms, reports and documents required to be filed with the Commission prior to the date hereof, and has heretofore delivered or made available to the Purchaser, in the form filed with the Commission, its (i) Annual Report on Form 10-KSB for the fiscal year ended November 30, 1996, (ii) its Quarterly Reports on Form 10-QSB for the quarters ended February 28, 1997 and May 31, 1997, and (iii) its Proxy Statement with respect to the 1997 annual -2- meeting of its shareholders (collectively, the "SEC Reports"). The SEC Reports (i) were prepared in all material respects in compliance with the requirements of the 1934 Act, and (ii) did not at the time they were filed contain any untrue statement of a material fact or omit to state a material fact required to be stated therein in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The audited financial statements and unaudited interim financial statements of the Corporation included in such SEC Reports were prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (except (A) as otherwise indicated in such financial statements and the notes thereto or, in the case of audited statements, in the related report of the Corporation's independent accountants or (B) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements), and fairly present the consolidated financial position, results of operations and cash flows of the Corporation as of the dates thereof and for the periods indicated therein (subject, in the case of any unaudited interim financial statements, to normal year-end audit adjustments). (f) ABSENCE OF CERTAIN CHANGES. Except as set forth in Schedule 2(f), since November 30, 1996, there has not been (i) any event or change in circumstances that has had or could reasonably be expected to have a material adverse effect on the business, financial condition, results of operations, properties or prospects of the Corporation and its subsidiaries taken as a whole or on the ability of the Corporation to timely consummate the transactions contemplated hereby (a "Material Adverse Effect"), or (ii) any damage, destruction or loss that has had or could reasonably be expected to have a Material Adverse Effect. (g) STATUS, TITLE TO ASSETS. (i) GENERAL. Except as disclosed in Schedule 2(g) attached hereto or in the SEC Reports, the Corporation has good and marketable title to all the properties and assets reflected in the latest audited balance sheet included in such SEC Reports (except properties sold or otherwise disposed of since the date thereof in the ordinary course of business), free and clear of all claims, liens, charges, security interests, or encumbrances of any nature whatsoever except (i) statutory liens securing payments not yet due and (ii) such imperfections or irregularities of title, claims, liens, charges, security interests, or encumbrances as do not materially affect the use of the properties or assets subject thereto or affected thereby or otherwise materially impair business operations at such properties, or as do not materially impair the marketability thereof. (ii) LEASED PROPERTIES. Except as disclosed in the SEC Reports filed prior to the date of this Agreement, the Corporation is the valid lessee of all material leasehold estates reflected in the latest audited financial statements included in such SEC Reports or acquired after the date thereof (except for leases that have expired without default by their terms since the date thereof) and is in valid possession of the properties purported to be leased thereunder, and each such lease is in full force and effect and without default thereunder in any material respect by the lessee or, to the Corporation's knowledge, the lessor. (h) LITIGATION AND PROCEEDINGS. Except as set forth in the SEC Reports or SCHEDULE 2(H) attached hereto, no litigation, proceeding, whether civil or criminal, or governmental investigation is pending or, to the Corporation's knowledge, threatened against or relating to the Corporation or its properties or businesses which could reasonably be expected to have a Material Adverse Effect. (i) TAX RETURNS AND AUDITS. The Corporation has duly filed all federal, state, local and foreign tax returns required to be filed by it and has duly paid or made adequate provision for the payment of all Federal income and other material taxes that are due and payable pursuant to such returns or pursuant to any assessment with respect to taxes in such jurisdictions, whether or not in connection with such returns. Except as set forth in SCHEDULE 2(I), there are no pending, or to the Corporation's knowledge, threatened, claims asserted for taxes or assessments of the Corporation or relating to the Corporation's present practices in computing or reporting taxes which could reasonably be -3- expected to have a Material Adverse Effect. Adequate provision has been made in the Corporation's most recent balance sheet, included in the SEC Reports for all then accrued and unpaid taxes, whether or not yet due and payable and whether or not disputed by the Corporation. (j) ENVIRONMENTAL AND SAFETY LAWS. Except as disclosed in SCHEDULE 2(J) attached hereto, the Corporation is not the subject of any environmental enforcement proceeding, and complies in all material respects with all laws and regulations relating to pollution control and environmental protection in all jurisdictions in which the Corporation is presently doing business. In addition, the Corporation has no material liability for past violations of such laws and regulations in jurisdictions in which the Corporation presently does business or in the past has done business. (k) BROKERS, FINDERS, ETC. The Corporation has not employed any broker, finder or other intermediary in connection with the transactions contemplated by this Agreement who might be entitled to a fee or commission from the Corporation or the Purchaser in connection with the transactions contemplated by this Agreement other than L.H. Friend, Weinress, Frankson & Presson, Inc. ("L.H. Friend"). A true, correct and complete description of the Corporation's fee and other arrangements in connection with this Agreement and the transactions contemplated hereby with L.H. Friend is included in SCHEDULE 2(K) hereto. ARTICLE THREE 3 3.1 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. To induce the Corporation to enter into this Agreement and to issue and sell the Shares, the Purchaser hereby represents and warrants to the Corporation as follows: (a) ORGANIZATION; QUALIFICATION. The Purchaser is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware. The Purchaser has full corporate power and authority to own and operate its properties and assets and to conduct and carry on its business as it is now being conducted and operated. The Purchaser (i) is duly qualified to do business and is in good standing in each jurisdiction in which the ownership or lease of real property or the conduct of its business requires it to be so qualified and (ii) has all governmental licenses, certifications, permits, approvals and other authorizations necessary to own its properties and assets and carry on its business as it is presently being conducted, except, in each case, where the failure to so qualify or be in good standing, or to have obtained any such governmental licenses, certifications, permits, approvals and other authorizations, could not reasonably be expected to have a material adverse effect on the Purchaser. (b) AUTHORIZATION. The Purchaser has full corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and consummate the transactions contemplated hereby. This Agreement has been duly authorized by all necessary corporate action on the part of the Purchaser, has been duly and validly executed and delivered by the Purchaser, and (assuming due execution and delivery by the Corporation) constitutes the legal, valid and binding obligation of the Purchaser, enforceable in accordance with its terms, except as such enforcement may be limited by general equitable principles or by applicable bankruptcy, insolvency, moratorium, or similar laws and judicial decisions from time to time in effect which affect creditors' rights generally. (c) NO VIOLATION. The execution, delivery and performance of this Agreement by the Purchaser does not and will not (i) conflict with or violate any provision of the Purchaser's Articles of Incorporation or By-laws, (ii) violate or breach any provision of, or constitute or result in a default (or an event which, with notice or lapse of time or both, would constitute such a default) under, or result in the imposition of any lien upon or the creation of a security interest in the assets, business or properties of the Purchaser pursuant to, any material note, bond, mortgage, indenture, deed, license, franchise, permit, lease, contract or other agreement to which the Purchaser is a party or by which the Purchaser or any of its assets is bound or subject, (iii) violate any order, writ, injunction, decree, judgment or ruling of any court or governmental authority applicable to the Purchaser, (iv) violate any statute, law, rule or -4- regulation applicable to the Purchaser, or (v) require the Purchaser to obtain any waiver, consent, approval or authorization of, or make any filing with, any governmental authority, except such reports as may be required to be filed by the Purchaser with the Commission pursuant to the 1934 Act. (d) NO REGISTRATION, ETC. The Purchaser acknowledges that the Corporation's offering and sale of the Shares to the Purchaser pursuant to this Agreement (i) has not been registered under the Securities Act of 1933, as amended (the "1933 Act"), or under the securities or "blue sky" laws, rules or regulations of any State (collectively, the "Securities Laws") and (ii) is intended to be exempt from registration under the 1933 Act by virtue of Section 4(2) of the 1933 Act and the provisions of Rule 506 of Regulation D promulgated thereunder by the Commission. In furtherance thereof, the Purchaser represents and warrants to the Corporation that it is an "accredited investor", as defined in Rule 501 of Regulation D promulgated under the 1933 Act. The Purchaser acknowledges that it has been afforded, prior to the execution of this Agreement, the opportunity to ask questions of, and to receive answers from, the Corporation and its management. The Shares are being purchased by Purchaser for its own account for investment and not for resale or distribution to others within the meaning of the federal Securities Laws. The Purchaser agrees that it will not transfer the Shares unless such Shares are registered under any applicable Securities Laws, or unless an exemption is available under such Securities Laws. (e) BROKERS, FINDERS, ETC. The Purchaser has not employed any broker, finder or other intermediary in connection with the transactions contemplated by this Agreement who might be entitled to a fee or commission from the Purchaser or the Corporation upon execution of this Agreement or consummation of such transactions. ARTICLE FOUR 4 COVENANTS OF THE CORPORATION AND THE PURCHASER 4.1 FURTHER ASSURANCES. Subject to the terms and conditions hereof, each of the Purchaser and the Corporation agree to use all reasonable efforts to take, or cause to be taken, all further actions and to do, or cause to be done, all things necessary, proper or reasonably requested by the other to give effect to the transactions contemplated by this Agreement. 4.2 PREEMPTIVE RIGHTS. If, subsequent to the date hereof and during the "Covered Period" (as hereinafter defined), the Corporation desires to issue and sell any shares of capital stock of the Corporation (other than "Excluded Stock," as hereinafter defined), the Corporation shall afford the Purchaser "preemptive rights" (exercisable within 10 days following reasonably detailed written notice from the Corporation of the proposed sale of stock) in order to permit the Purchaser to maintain its proportionate percentage ownership in the Corporation (it being agreed that the Purchaser's "proportionate" ownership shall be computed by comparing the Corporation's aggregate number of outstanding shares of common stock to the aggregate number of shares of common stock then held by Purchaser and acquired pursuant to this Agreement on the date hereof and the "Right of First Refusal Agreement" being executed by Purchaser on or about the date hereof). As used herein, the term (x) "Covered Period" shall mean the period commencing on the date hereof and ending on the earliest to occur of (i) the date four years after the date hereof, and (ii) the date Purchaser no longer owns at least 80% of the Shares acquired pursuant to this Agreement on the date hereof; and (y) "Excluded Stock" shall mean (i) securities issued upon exercise of options or warrants or conversion of convertible securities outstanding as of the date hereof as disclosed in SCHEDULE 2(C) to this Agreement, (ii) shares of Common Stock issuable pursuant to stock options or "Section 423" stock purchase rights (with per share exercise or purchase prices no less than 85% of the fair market value of the Common Stock on the date of grant) that may be granted in the future pursuant to the Company's 1996 and 1993 stock option plans (as such plans are currently in effect), (iii) securities issued to Purchaser or Penske Motorsports, Inc. ("Penske") or any of their respective affiliates, (iv) shares of Common Stock issued in "private placement" transactions that constitute bona fide financings or acquisitions, if and only if, with respect to -5- this item (iv), (A) at least 50%-in-interest of the acquirors of such stock (the "New Shareholders") enter into agreements (in form reasonably acceptable to Purchaser) substantially the same as the Right of First Refusal Agreement (with the term of such agreement not to exceed the then remaining term of the Right of First Refusal Agreement), and (B) the identity of all of such New Shareholders is approved by the Purchaser, which approval shall not be unreasonably withheld or delayed it being agreed that approval shall not be required with respect to (x) institutional investors, or (y) any other New Shareholder that would not be required to file or amend a Schedule 13D statement with respect to the Corporation by reason of its acquisition or ownership of Common Stock (a "Non-13D Filer"); PROVIDED, HOWEVER, that upon consummation of such a financing or acquisition where the Purchaser does not approve the Non-13D Filer (whether or not required), the Corporation shall be obligated to file a "shelf" resale registration statement with the Commission within 15 business days of the consummation of such financing or acquisition with respect to the potential public offering and sale of up to all of the shares of Common Stock owned by Purchaser unless a "shelf" resale registration statement is then in effect or on file with the Commission with respect to such shares of Common Stock owned by Purchaser, and (v) securities issued pursuant to stock dividends, stock splits, and similar "no sale" events that apply generally to all shares of outstanding Common Stock. 4.3 RIGHT TO NOMINATE DIRECTORS. The Corporation shall (i) take all corporate action necessary to immediately cause the size of the Corporation's Board to be increased by one and appoint one (1) individual designated by the Purchaser and reasonably acceptable to the Corporation's Board (it being agreed that any of Purchaser's officers who also serves as an executive officer or director of Purchaser shall be deemed reasonably acceptable to the Corporation's Board), as a member of the Board of Directors of the Corporation to fill such vacancy, and (ii) thereafter during the Covered Period use reasonable efforts, consistent with and no less than are taken with respect to all other nominees to the Board of Directors, to have such designee (or other reasonably acceptable designee of Purchaser) to be nominated and elected to its Board of Directors at each election of the Corporation's directors (it being agreed that Purchaser shall be entitled to two (2) designees for election as director if at any time during the Covered Period Purchaser acquires the Corporation's Common Stock hereafter transferred by Penske, and, as a result of such acquisition, Penske or any of its affiliates loses its rights to nominate a director designee). Each Purchaser designee elected to the Board of Directors shall be indemnified by the Corporation to the fullest extent permitted by law and, without limiting the generality of the foregoing, shall be given indemnification agreement protection, if any, by the Corporation in the same form as currently in effect for the Corporation's current directors. The Corporation agrees to provide each such Purchaser designee with the same compensation paid by the Corporation to its other outside directors and to reimburse the Purchaser's designee for out-of-pocket expenses reasonably incurred in connection with his or her attendance of Board meetings. In the event the Purchaser's designee(s) is (are) not elected as a member of the Board of Directors during the Covered Period, the Corporation shall take all corporate action necessary to entitle such designee(s) to attend and participate in all of the Corporation's Board of Directors meetings. 4.4 PUBLICITY. Except as required by law or by the rules of the Nasdaq Stock Market or the Commission, neither of the parties hereto shall issue or make any public release or announcement concerning this Agreement or the transactions contemplated hereby. In addition, each party shall use its reasonable best efforts to first consult in advance with the other party concerning the content of any required public release or arrangement relating to this Agreement. 4.5 INDEMNITY. Each of the Purchaser and the Corporation hereby agrees to indemnify and hold harmless the other and the other's officers, directors and agents, and their respective successors and assigns, from, against and in respect of any and all demands, claims, actions or causes of action, assessments, liabilities, losses, costs, damages, penalties, charges, fines or expenses, including without limitation attorney's fees and expenses, arising out of or relating to any breach by such indemnifying party of any representation, warranty, covenant or agreement made in this Agreement. Such right to indemnification shall be in addition to any and all other rights of the parties under this Agreement or otherwise, at law or in equity. -6- 4.6 ACCESS. The Corporation shall during the Covered Period: (i) afford to the Purchaser and its agents and representatives reasonable access to the properties, books, records and other information of the Corporation, provided that such access shall be granted upon reasonable notice and at reasonable times during normal business hours in such a manner as to not unreasonably interfere with normal business operations; (ii) use its reasonable efforts to cause the Corporation's personnel, without unreasonable disruption of normal business operations, to assist the Purchaser in its investigation of the Corporation pursuant to this Section 4.6; and (iii) furnish promptly to the Purchaser all information and documents concerning the business, assets, liabilities, properties and personnel of the Corporation as the Purchaser may from time to time reasonably request. In addition, from the date of this Agreement, the Corporation shall cause one or more of its officers to confer on a regular basis with officers of the Purchaser and to report on the general status of its ongoing operations. 4.7 SHARES. The Corporation shall use its reasonable best efforts to take any and all action necessary after the date hereof so that the Shares sold by the Corporation to the Purchaser are listed on the Nasdaq National Market. 4.8 USE OF PROCEEDS. Without the prior written consent of the Purchaser, the Corporation shall use the Purchase Price proceeds solely to fund capital expenditures for Board approved improvement projects that are intended to enhance the Corporation's ability to promote additional sanctioned motorsports events at the Corporation's Millington, Tennessee and/or Madison, Illinois facility(ies). 4.9 FUTURE STOCK ISSUANCE. Without the prior written consent of Purchaser, and notwithstanding Section 4.2 hereof, during the Covered Period, the Corporation shall not issue (or agree to issue) any shares of capital stock other than Excluded Stock. 4.10 STANDSTILL. Until the "Standstill Termination Date" (as hereinafter defined), Purchaser and its affiliates (which for purposes hereof shall not include Penske or any of its subsidiaries) will not, directly or indirectly, without the express permission of the Corporation's Board of Directors, (A) purchase or offer to purchase any of the Corporation's equity securities (or securities convertible into the Corporation's equity securities), (B) conduct a "proxy contest" to obtain control of the Corporation's Board, or (C) enter into any non-market transaction to sell Common Stock to any person or entity which does not agree in writing (in form reasonably acceptable to the Corporation) to be subject to and bound by the provisions of this Section 4.10; PROVIDED, HOWEVER, that nothing herein shall limit the right of the Purchaser and its affiliates to (i) purchase securities pursuant to, and exercise all other rights contemplated by, this Agreement and the "Right of First Refusal Agreement" being executed in connection herewith, (ii) purchase additional Common Stock that does not represent more than 5% of the Corporation's aggregate outstanding shares of Common Stock, (iii) except to the extent limited by the Right of First Refusal Agreement, vote shares and exercise rights as directors and/or (iv) if and only if Purchaser owns at least 10% of the outstanding shares of the Corporation's Common Stock by reason of (A) purchases pursuant to this Agreement on or about the date hereof, and (B) purchases pursuant to the Right of First Refusal Agreement, purchase additional Common Stock that, together with such purchases and purchases made pursuant to the preceding clause (ii), represents in the aggregate not more than 20.5% of the Corporation's aggregate outstanding shares of Common Stock (it being agreed that any purchases pursuant to this item (iv) shall reduce on a one-for-one basis the number of shares that Purchaser is entitled to purchase under the Right of First Refusal Agreement); PROVIDED, FURTHER, that the provisions of this Section 4.10 shall automatically terminate in full if (x) the Corporation enters into a merger, asset purchase, business combination or similar agreement pursuant to which the Corporation's shareholders would own less than fifty percent (50%) of the surviving corporation's capital stock, or (y) a tender offer or exchange offer commences for the Corporation's equity securities. For purposes hereof, "Standstill Termination Date" means the earlier of (A) the sixth anniversary of the date of this Agreement, and (B) the date that Christopher R. Pook no longer serves as Chief Executive Officer of the Corporation (unless within 120 days of the termination of Mr. Pook's service a successor is appointed who is approved by Purchaser, which approval shall not be unreasonably withheld or delayed). -7- 4.11 BREACH OF REPRESENTATION REGARDING OUTSTANDING SECURITIES. The parties specifically agree that if the Corporation's representation regarding outstanding securities set forth in Section 2.3 hereof and the related SCHEDULE 2(C) is incorrect, then (x) the Corporation shall promptly file and use its reasonable best efforts to have declared effective as soon as practicable thereafter the shelf resale registration statement contemplated by Section 2 of the "Registration Rights Agreement" being executed in connection herewith, notwithstanding the time periods set forth therein, (y) the Purchaser shall have the option to purchase (at a per share exercise price equal to the per share Purchase Price paid pursuant to this Agreement) the number of shares equal to 50% of the excess (the "Total Shortfall Number"), if any, of (A) the "Actual Fully Diluted Shares" OVER (B) the "Disclosed Fully Diluted Shares," AND (iii) if and only if the fair market value of the Total Shortfall Number of shares of Common Stock (based on the "Then Fair Market Value") exceeds $250,000, the Purchaser shall have the right, exercisable by written notice within 60 days of the "Shortfall Discovery Date," to require the Corporation to purchase all or any specified number of the shares of Common Stock then held by Purchaser, at a price equal to the greater of (i) the Then Fair Market Value, and (ii) the per share Purchase Price paid pursuant to this Agreement. For purposes of this Section 4.11: (a) "Actual Fully Diluted Shares" means the sum of (i) all shares of Common Stock to be issued Purchaser pursuant to this Agreement and all shares to be issued to Penske on or about the date hereof, plus (ii) the aggregate number of shares of Common Stock that are currently outstanding, to be issued upon conversion of outstanding convertible securities, to be issued pursuant to outstanding options, warrants or other rights, and/or to be issued pursuant to awards that can be made in the future under the Corporation's current employee benefit plans. (b) "Disclosed Fully Diluted Shares" means that number of Actual Fully Diluted Shares described in paragraph (a)(ii) above that are accurately set forth on SCHEDULE 2(C). (c) "Then Fair Market Value" means the average closing sales price for the Common Stock during the ten trading days preceding the Shortfall Discovery Date. (d) "Shortfall Discovery Date" means the first date that the Corporation or the Purchaser notifies the other of any misrepresentation in Section 2(c) hereof and provides a reasonable description thereof. Notwithstanding the above, the Total Shortfall Number shall be reduced by the number of shares of Common Stock which become subject to and bound by the terms of the Right of First Refusal Agreement within twenty (20) business days subsequent to the earlier of (x) the Shortfall Discovery Date, and (y) the date that the Chief Executive Officer or Chief Financial Officer of the Corporation had actual knowledge of the likelihood of a Total Shortfall Number. ARTICLE FIVE 5 MISCELLANEOUS 5.1 GOVERNING LAW. This Agreement and its validity, construction and performance shall be governed in all respects by the internal laws of the State of Florida (without reference to the conflict of laws provisions or principles thereof). 5.2 BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; but neither this Agreement nor any of the rights, benefits or obligations hereunder shall be assigned, by operation of law or otherwise, by either party hereto without the prior written consent of the other party. Nothing in this Agreement, express or implied, is intended to confer upon any person other than the parties hereto and their respective permitted successors and assigns, any rights, benefits or obligations hereunder. -8- 5.3 AMENDMENT; WAIVER. This Agreement shall not be changed, modified or amended in any respect except by the mutual written agreement of the parties hereto. Any provision of this Agreement may be waived in writing by the party which is entitled to the benefits thereof. No waiver of any provision of this Agreement shall be deemed to or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall any such waiver constitute a continuing waiver. 5.4 NOTICES. Any notices, requests, demands and other communications required or permitted to be given hereunder must be in writing and, except as otherwise specified in writing, will be deemed to have been duly given when personally delivered, telexed or facsimile transmitted, or three days after deposit in the United States mail, by certified mail, postage prepaid, return receipt requested, as follows: IF TO THE CORPORATION: Grand Prix Association of Long Beach, Inc. 3000 Pacific Avenue Long Beach, CA 90806 Attention: Christopher R. Pook Telephone: (562) 490-4520 Facsimile: (562) 981-2632 WITH A COPY TO: Barry L. Dastin Kaye, Scholer, Fierman, Hays & Handler, LLP 1999 Avenue of the Stars, Suite 1600 Los Angeles, California 90067 Telephone: (310) 788-1000 Facsimile: (310) 788-1200 IF TO PURCHASER: Penske Motorsports, Inc. 3270 W. Big Beaver Road, Suite 130 Troy, Michigan 48084 Attention: Robert H. Kurnick, Jr. Telephone: (248) 614-1116 Facsimile: (248) 614-1125 WITH A COPY TO: Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A. 1221 Brickell Avenue Miami, Florida 33131 Attention: Bruce E. Macdonough Telephone: (305) 579-0500 Facsimile: (305) 579-0717 Any party may change its address for the purposes of this Agreement by giving notice of such change of address to the other parties in the manner herein provided for giving notice. 5.5 SURVIVAL. The representations and warranties of the parties set forth in this Agreement shall survive the Closing; provided, that all such representations and warranties shall expire, terminate and be of no force and effect (or provide the basis for any claim) and no party hereto shall have any obligation to indemnify any other party with respect thereto unless written notice of any claim with respect thereto is received prior to the third anniversary of this Agreement. 5.6 SEVERABILITY. Any term or provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction only, be ineffective only to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. -9- 5.7 HEADINGS. The captions, headings and titles herein are for convenience of reference only and shall not effect the construction, meaning or interpretation of this Agreement or any term or provision hereof. 5.8 COUNTERPARTS. This Agreement may be executed through the use of one or more counterparts, each of which shall be deemed an original and all of which shall be considered one and the same agreement, notwithstanding that all parties are not signatories to the same counterpart. 5.9 EXPENSES. Each party to this Agreement shall bear their own fees, costs and expenses incurred in connection with the negotiation, execution and consummation of this Agreement and the transactions contemplated hereby. 5.10 ENTIRE AGREEMENT. Except for written agreements executed on or about the date hereof in connection with the transactions contemplated hereby, this Agreement merges and supersedes any and all prior agreements, understandings, discussions, assurances, promises, representations or warranties among the parties with respect to the subject matter hereof, and contains the entire agreement among the parties with respect to the subject matter hereof. -10- IN WITNESS WHEREOF, the Corporation and the Purchaser have each duly executed this Agreement as of the date first above written. PENSKE MOTORSPORTS, INC. BY: /s/ GREGORY W. PENSKE ----------------------------------------- GREGORY W. PENSKE GRAND PRIX ASSOCIATION OF LONG BEACH, INC. BY: /s/ Christopher R. Pook ----------------------------------------- CHRISTOPHER R. POOK -11-
SCHEDULE 2(c) NAME WARRANTS CONVERTIBLE SHARES 1993 OPTIONS (1) - ---- -------- ------------------ Christopher R. Pook 174,435 James P. Michaelian 108,702 Dwight Tanaka 20,830 (6) Michael S. Clark 12,691 (6) Rick Lalor 31,728 Gemma Bannon 9,064 (6) James Sullivan 14,939 Wayne Kees 11,952 (7) Daniel S. Gurney 11,952 (7) George Pellin 14,939 Joseph Ainge 14,939 Lou Mirabile 11,952 (2)(3) Ruth Queen 11,952 (3) John R. Queen, Jr. 11,952 (3) EDMARJON-RONBREWDAVE, LLC. A Tennessee limited liability company (successor in interest to Memphis International Motorsports Corporation) 45,000 (4) L. H Friend, Weinress, Frankson & Presson, Inc. 31,250 (5)
- ---------------- (1) Options granted 12/93 under the Corporation's 1993 Stock Option Plan vest one-fifth on 12/1/94, 12/1/95, 12/1/96, 12/1/97 and 12/1/98 respectively, except as otherwise noted. (2) Subject to right of first refusal agreement dated 8/8/97 between he and Christopher R. Pook. (3) All fully vested. (4) Holders of Series B Convertible Preferred shares have the right to convert to Common stock of the Corporation on a share for share basis, as more fully described in the Certificate of Rights, Preferences and Privileges of Series B Convertible Preferred Shares as amended, filed with the California Secretary of State. (5) Warrant to purchase 31,250 shares of common stock of the Corporation for $10.00 per share must be exercised prior to June 24, 2001. (6) Remaining 2/5 of original grant, 1/2 will vest on 12/1/97 and the balance on 12/1/98. (7) Remaining 4/5 of original grant. 1/2 is vested, 1/4 will vest on 12/1/97 and the balance on 12/1/98. Note: 1993 Stock options, Series B Covertible Preferred shares and L.H. Friend, etc. Warrant are all subject to certain anti-dilution provisions. SCHEDULE 2(d) None. SCHEDULE 2(f) CHANGE OF RACES DATES FROM MEMPHIS MOTORSPORTS PARK TO GATEWAY RACEWAY. The Corporation's recent decision to move the ARCA and USAC Silver Crown series events scheduled for September 13, and 14, 1997, from Memphis Motorsports Park to Gateway Raceway due to construction delays. WEATHER AND CONSTRUCTION DELAYS. Adverse weather conditions have caused delays and could cause future delays in construction at Gateway Raceway and/or Memphis Motorsports Park. Construction delays resulting from various other factors have or could have an Material Adverse Effect on the Corporation's ability to meet the deadlines necessary to host the major events scheduled in 1997 at Gateway Raceway and/or Memphis Motorsports Park. The Corporation's motorsports events could be adversely affected by weather patterns and seasonal weather changes. MANPOWER OVERLOAD AND GROWTH MANAGEMENT. The operation of the 1997 major events at Gateway Raceway and/or Memphis Motorsports Park placed substantial burdens on the Corporation's management resources and financial controls since the Corporation has never before promoted and/or operated more than three major events in one year. EFFECT OF SEASONALITY. The Corporation had very limited racing during the winter season and, accordingly, reported an operating loss during its first fiscal quarter. GOVERNMENT REGULATION OF SPONSORS. The Corporation derives a significant portion of its revenue each year from sponsorship and advertising by various companies, including tobacco and liquor companies. The impact of the recently settled litigation between various states' attorneys general and several large tobacco companies, as well as other tobacco litigation, could have a Material Adverse Effect. In addition, actions by certain liquor companies with respect to advertising could lead to additional regulation or otherwise may have a Material Adverse Effect. ENVIRONMENTAL MATTERS. There may be undetected environmental contamination at the Corporation's Long Beach, Gateway Raceway or Memphis Motorsports Park properties. Present but undetected environmental contamination, as well as the conduct of the Corporation's business could have resulted in damage to persons or property or contamination of the environment by pollutants, substances, contaminants or wastes. The Corporation could have liability under California, Illinois or Tennessee statutes, or Federal law, including but not limited to the Federal Water Pollution Control Act, Comprehensive Environmental Response, Compensation and Liability Act, and the Resource Conservation and Recovery Act for violations of environmental laws by the Company or by prior owners of its properties. LIABILITY FOR PERSONAL INJURIES. Motorsports activities, construction and weather conditions have resulted in injuries to third parties including participants and spectators at the Corporation's facilities. If the Corporation is held liable for personal injuries beyond the scope of its insurance coverage, such liability could result in a Material Adverse Effect. SCHEDULE 2(h) Claim by former Chief Financial Officer for wrongful termination, as of the date hereof no lawsuit filed but counsel has been retained by such former chief financial officer and threatens to seek damages including punitive and attorneys fees. SCHEDULE 2(i) None. SCHEDULE 2(j) The Corporation obtained Phase I environmental reports on all properties it owns prior to the purchase thereof and knows of no presence of undetectable environmental hazards at any of those properties. Because Phase I reports do not include testing of soil, water or air or other types of samples, it is possible that there may be undetected environmental contamination at one or more of the Corporation's properties. In addition, the conduct of the Corporation's business may result in damage to persons or property or contamination of the environment by pollutants, substances, contaminants or wastes used, generated or disposed of by the Corporation (for example, gasoline used at the motorsports facilities). The Corporation could have liability under California, Illinois or Tennessee statutes, or Federal law, including but not limitied to the Federal Water Pollution Control Act, Comprehensive Environmental Response, Compensation and Liability Act, and the Resource Conservation and Recovery Act for past violations of environmental laws by prior owners of those properties. SCHEDULE 2(k) L.H. Friend, Weinress, Frankson & Presson, Inc. compensation agreement pursuant to which the Corporation has agreed to compensate L. H. Friend etc. $50,000.00 for its services in connection with this Agreement and the transactions contemplated hereby. EX-10.35 5 REGISTRATION RIGHTS AGREEMENT EXHIBIT 10.35 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made and entered into this 8th day of August, 1997, between GRAND PRIX ASSOCIATION OF LONG BEACH, INC., a California corporation (the "Company") and Penske Motorsports, Inc., a Delaware corporation (the "Holder"). RECITALS A. The Company is contemporaneously issuing and delivering to Holder 315,000 shares of the Company's common stock, no par value per share (the "Common Stock"). B. In connection with that certain Stock Purchase Agreement, dated as of August 8, 1997 (the "Purchase Agreement"), between the Company and the Holder, the Company has agreed to provide to Holder certain registration rights with respect to the 315,000 shares of Common Stock issued to Holder pursuant to the Purchase Agreement (such 315,000 shares of Common Stock being referred to herein as the "Restricted Shares"). AGREEMENT NOW, THEREFORE, in consideration of the premises and covenants set forth in the Purchase Agreement, the parties agree as follows: 1. INCIDENTAL (PIGGYBACK) REGISTRATION. Subject to the limitations set forth in this Agreement, if the Company at any time within three (3) years of the date hereof proposes to file on its behalf and/or on behalf of any of its security holders ("the demanding security holders") a Registration Statement under the Securities Act of 1933, as amended (the "Securities Act") on any form (other than a Registration Statement on Form S-4 or S-8 or any successor form for securities to be offered in a transaction of the type referred to in Rule 145 under the Securities Act or to employees of the Company pursuant to any employee benefit plan, respectively) for the general registration of any sale or resale of Common Stock or any other class of the Company's securities, it shall give written notice to the Holder at least 15 days before the initial filing with the Commission of such Registration Statement, which notice shall set forth the intended method of disposition of the securities proposed to be registered by the Company. The notice shall offer to include in such filing the aggregate number of shares of Restricted Shares as Holder may request. If Holder desire to have any offer and sale of Restricted Shares registered under this Section 1, it shall advise the Company in writing within 10 days after the date of receipt of such offer from the Company, setting forth the amount of such Restricted Shares for which registration is requested. The Company shall thereupon include in such filing the number of shares of Restricted Shares for which registration is so requested, subject to the following. In the event that the proposed registration by the Company is, in whole or in part, an underwritten public offering of securities of the Company, the Company shall not be required to include any of the Restricted Shares in such underwriting unless Holder agrees to accept the offering on the same terms and conditions as the shares of Common Stock, if any, otherwise being sold through underwriters under such registration. In each case all shares of Common Stock owned by the Holder which are not included in the underwritten public offering shall be withheld from the market by the Holder for a period, not to exceed ninety (90) calendar days, which the managing underwriter reasonably determines as necessary in order to effect the underwritten public offering. In the event the Company chooses a registration form which limits the size offering either in terms of the number of shares or dollar amount, the Company shall not be required to include in the offering (in addition to the number of shares to be sold by the Company) Restricted Shares which would exceed such limits. In no event shall the Company be required to provide the "piggyback" registration rights contemplated by this Section 1 in connection with the Company's filing, not later than September 30,1997, of a registration statement for the resale by Memphis International Motorsports, Inc. (or its permitted transferees) of the Common Stock issued or to be issued to it upon conversion of the Company's outstanding Series B Convertible Preferred Stock. 2. SHELF REGISTRATION Subject to the limitations set forth in this Agreement, not later than June 30, 1998 the Company will file a Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 under the Securities Act (the "Shelf Registration Statement") covering the Holder's sale, from time to time or any time (in public sales, negotiated sales, or otherwise) up to all of the Restricted Shares and thereafter shall use its reasonable best efforts to cause the Shelf Registration Statement to be declared effective as soon as practicable following such filing and to maintain such effectiveness for a period of at lease two (2) years from the effective date thereof; PROVIDED, HOWEVER, that the Company shall have the right to prohibit the sale of Common Stock pursuant to the Shelf Registration Statement, upon notice to the Holder if in the opinion of counsel for the Company, the Company would thereby be required to disclose information not otherwise then required by law to be publicly disclosed, provided that the Company shall use its best efforts to minimize the period of time in which it shall prohibit the sale of any shares of Common Stock and in no event shall the prohibition on sales extend more than ten (10) calendar days or twenty (20) days in any twelve (12) month period. Notwithstanding anything herein to the contrary, the Company shall not be obligated to maintain the effectiveness of the Shelf Registration Statement pursuant to this Section 1(b), to deliver any prospectus under the Shelf Registration Statement or to provide the "piggyback" registration rights contemplated by Section 1 hereof if the Holder owns less than 1% of the Company's outstanding shares and has owned the Restricted Shares at least a year. 3. EXPENSES. Subject to the limitations contained in this Section 3 and except as otherwise specifically provided in this Agreement, the entire costs and expenses of the registrations and qualifications pursuant to Sections 1 and 2 hereof shall be borne by the Company. Such costs and expenses shall include, without limitation, the fees and expenses of counsel for the Company and of its accountants, all other costs, fees and expenses of the Company incident to the preparation, printing and filing under the Securities Act of the registration statement and all amendments and supplements thereto (including all expenses incident to filing with the NASD), the cost of furnishing copies of each preliminary prospectus, each final prospectus and each amendment or supplement thereto to underwriters, dealers and other purchasers of the Restricted Shares and the costs and expenses (including fees and disbursements of counsel) incurred in connection with the qualification of the Restricted Shares under the blue sky laws of various jurisdictions. The Company shall not, however, pay (x) any underwriting discount or commissions to the extent related to the sale of the Restricted Shares sold in any registration and qualification, (y) the fees and expenses of counsel or any other adviser(s) to the Holder, or (z) any stock transfer taxes payable by the Holder. 4. REGISTRATION PROCEDURES. (a) In the case of each registration or qualification pursuant to Sections 1 or 2, the Company will keep Holder advised in writing as to the initiation of proceedings for such registration and qualification and as to the completion thereof, and will advise any such holder, upon request, of the progress of such proceedings. (b) Except as otherwise specifically provided in this Agreement, at the Company's expense, the Company will keep each registration and qualification under this Agreement effective (and in compliance with the Securities Act) by such action as may be necessary or appropriate until the distribution contemplated thereby is completed, including, without limitation, the filing of post-effective amendments and supplements to any registration statement or prospectus necessary to keep the registration statement current and the further qualification under any applicable blue sky or other state securities laws to permit such sale or distribution, all as requested by Holder; PROVIDED, HOWEVER, that except as expressly provided in Section 2 hereof, the Company shall have no obligation to keep any registration statement current for more than 90 days after its initial effective date. The Company will immediately notify Holder pursuant to this Agreement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. 2 (c) In connection with all underwritten offerings, the Company will use its reasonable best efforts to furnish to Holder a signed counterpart, addressed to Holder, of (i) an opinion of counsel for the Company, dated the effective date of such registration statement, and (ii) a so-called "cold comfort" letter signed by the independent public accountants who have certified the Company's financial statements included in such registration statement, and such opinion of counsel and accountants' letter shall cover substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of such accountants' letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer's counsel and in accountants' letters delivered to underwriters in connection with underwritten public offerings of securities. (d) Without limiting any other provision hereof, in connection with any registration of the Restricted Shares under this Agreement, the Company will use its reasonable best efforts to comply with the Securities Act, the Securities Exchange Act of 1934, as amended (the "Securities Exchange Act"), and all applicable rules and regulations of the Commission, and will make generally available to its securities holders, as soon as reasonably practicable, an earnings statement covering a period of at least twelve months, beginning with the first month of the first fiscal quarter after the effective date of such registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act. (e) In connection with any registration of the Restricted Shares under this Agreement, the Company will provide, if appropriate, a transfer agent and registrar for the Restricted Shares not later than the effective date of such registration statement. (f) If the Company at any time proposes to register any of its securities under the Securities Act, other than pursuant to a request made under Section 2 hereof, whether or not for sale for its own account, and such securities are to be distributed by or through one or more underwriters, then the Company will make reasonable efforts, if requested by Holder pursuant to Section 1 hereof, to arrange for such underwriters to include such Restricted Shares among the securities to be distributed by or through such underwriters. Holder shall be party to any such underwriting agreement, and (x) the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of Holder, and (y) the Holder shall make customary representations and agreements with respect to itself for the benefit of the underwriters and the Company. (g) In connection with the preparation and filing of each registration statement registering the Restricted Shares under this Agreement, the Company will give Holder and its underwriters, if any, and its counsel and accountants the opportunity to participate in the preparation of such registration statement, each prospectus included therein or filed with the Commission, and each amendment thereof or supplement thereto, and will give each of them such reasonable access to its books and records and such opportunities to discuss the business of the Company with its officers, its counsel and the independent public accountants who have certified its financial statements, as shall be necessary, in the opinion of Holder or such underwriters or their respective counsel, in order to conduct a reasonable and diligent investigation within the meaning of the Securities Act. Without limiting the foregoing, each registration statement, prospectus, amendment, supplement or any other document filed with respect to a registration under this Agreement shall be subject to review and reasonable approval by Holder and by its counsel, which shall not be unreasonably delayed. (h) The Company will use reasonable efforts to list, on or prior to the effective date of each registration statement registering the Restricted Shares under this Agreement, all shares covered by such registration statement on any securities exchange on which any of the Common Stock is then listed, if any. (i) The Company will cooperate with Holder and each underwriter or agent participating in the disposition of securities subject to any registration hereunder and their respective counsel in connection with any filings required to be made with the National Association of Securities Dealers. 3 (j) The Company will use reasonable efforts to prevent the issuance by the SEC or any other governmental agency or court of a stop order, injunction or other order suspending the effectiveness of each registration statement registering the Restricted Shares under this Agreement and, if such an order is issued, use reasonable efforts to cause such order to be listed as promptly as practicable. (k) The Company will promptly notify Holder and each underwriter of the happening of any event, during the period of distribution, as a result of which any registration statement registering the Restricted Shares under this Agreement includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing (in which case, the Company shall promptly provide Holder with revised or supplemental prospectuses and, if so requested by the Company in writing, Holder shall promptly take action to cease making any offers of the Common Stock until receipt and distribution of such revised or supplemental prospectuses). (l) To the extent required by law, the Company will use its reasonable best efforts to register or qualify the securities to be sold by Holder under such other securities or blue sky laws of such jurisdictions within the United States as Holder shall reasonably request (provided, however, the Company shall not be obligated to qualify as a foreign corporation to do business under the laws of any jurisdiction in which it is not then qualified or to file any general consent to service of process), and do such other reasonable acts and things as may be required of it to enable such holder to consummate the disposition in the jurisdiction of the securities covered by such registration statement. 5. PROVISION OF DOCUMENTS. The Company will, at the expense of the Company, furnish to Holder such number of registration statements, prospectuses, offering circulars and other documents incident to any registration or qualification referred to in Sections 1 or 2 as Holder from time to time may reasonably request. 6. INDEMNIFICATION. In the event of any registration of any Restricted Shares under the Securities Act pursuant to this Agreement, the Company shall indemnify and hold harmless Holder, any underwriter (as defined in the Securities Act) for Holder, each broker or any other person, if any, who controls any of the foregoing persons, within the meaning of the Securities Act against any losses, claims, damages or liabilities, joint or several, and expenses (including reasonable attorneys' fees and expenses and reasonable costs of investigation) to which any of the foregoing persons, or such controlling person may be subject, under the Securities Act or otherwise, insofar as any thereof arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in (A) any registration statement under which such Restricted Shares were registered under the Securities Act pursuant to Sections 1 or 2 hereof, any prospectus or preliminary prospectus contained therein, or any amendment or supplement thereto or (B) any other document incident to the registration of the Restricted Shares under the Securities Act or the qualification of the Restricted Shares under any state securities laws applicable to the Company, (ii) the omission or alleged omission to state in any item referred to in the preceding clause (i) a material fact required to be stated therein or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Securities Exchange Act or any other federal or state securities law, rule or regulation applicable to the Company and relating to action or inaction by the Company in connection with any such registration or qualification, except insofar as such losses, claims, damages, liabilities or expenses arise out of or are based upon any untrue statement or alleged untrue statement or omission or alleged omission based upon information furnished to the Company in writing by Holder or by any underwriter for Holder expressly for use therein (with respect to which information Holder or underwriter shall so indemnify and hold harmless the Company, any underwriter for the Company and each person, if any, who controls the Company or such underwriter within the meaning of the Securities Act). The Company will enter into an underwriting agreement with the underwriter or underwriters for any underwritten offering registered under the Securities Act pursuant to Sections 1 or 2 hereof and with Holder pursuant to such offering, and such underwriting agreement shall contain customary provisions with respect to indemnification and contribution which shall, at a minimum, provide the indemnification set forth above. 7. CERTAIN LIMITATIONS ON REGISTRATION RIGHTS. Notwithstanding the other provisions of this Agreement, the Company shall not be obligated to register the Restricted Shares of Holder if, in the opinion of counsel to the Company reasonably satisfactory to Holder, the sale or other disposition of 4 Holder's Restricted Shares may be effected without registering such Restricted Shares under the Securities Act. The Company's obligations under Section 1 or 2 are also expressly conditioned upon Holder furnishing to the Company in writing such information concerning Holder and their controlling persons and the terms of such Holder's proposed offering of Restricted Shares as the Company shall reasonably request for inclusion in the Registration Statement. 8. MISCELLANEOUS. (a) NOTICE GENERALLY. Any notice, demand, request, consent, approval, declaration, delivery or other communication hereunder to be made pursuant to the provisions of this Agreement shall be sufficiently given or made if in writing and either delivered in person with receipt acknowledged, delivered by reputable overnight courier, telecopied and confirmed separately in writing by a copy mailed as follows or sent by registered or certified mail, return receipt requested, postage prepaid, addressed as set forth in the Purchase Agreement. (b) GOVERNING LAW. This Agreement shall be governed by the laws of the State of Florida, without regard to the provisions thereof relating to conflict of laws. (c) BINDING EFFECT; ASSIGNMENT; THIRD PARTY BENEFICIARIES. This Agreement shall be binding upon the Parties and their respective successors and assigns and shall inure to the benefit of the Parties and their respective successors and permitted assigns. No Party shall assign any of its rights or delegate any of its duties under this Agreement (by operation of law or otherwise) without the prior written consent of the other Parties. Any assignment of rights or delegation of duties under this Agreement by a Party without the prior written consent of the other Parties, if such consent is required hereby, shall be void. No person (including, without limitation, any employee of a Party) shall be, or be deemed to be, a third party beneficiary of this Agreement. (d) ENTIRE AGREEMENT. This Agreement, together with the Purchase Agreement and the "Right of First Refusal Agreement" executed in connection therewith, is intended by the parties as a final expression of their agreement and intended to be a complete exclusive statement of the Agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement supersedes all prior agreements and understandings between the parties with respect to the subject matter hereof. (e) AMENDMENTS. No addition to, and no cancellation, renewal, extension, modification or amendment of, this Agreement shall be binding upon a Party unless such addition, cancellation, renewal, extension, modification or amendment is set forth in a written instrument which states that it adds to, amends, cancels, renews, extends or modifies this Agreement and has been approved by all of the Parties. (f) WAIVERS. No waiver of any provision of this Agreement shall be binding upon a Party unless such waiver is expressly set forth in a written instrument which is executed and delivered by such Party or on behalf of such Party by an officer of, or attorney-in-fact for, such Party. Such waiver shall be effective only to the extent specifically set forth in such written instrument. Neither the exercise (from time to time and at any time) by a Party of, nor the delay or failure (at any time or for any period of time) to exercise, any right, power or remedy shall constitute a waiver of the right to exercise, or impair, limit or restrict the exercise of, such right, power or remedy or any other right, power or remedy at any time and from time to time thereafter. No waiver of any right, power or remedy of a Party shall be deemed to be a waiver of any other right, power or remedy of such Party or shall, except to the extent so waived, impair, limit or restrict the exercise of such right, power or remedy. (g) REMEDIES. (i) The rights, powers and remedies of the Parties set forth herein for a breach of or default under this Agreement are cumulative and in addition to, and not in lieu of, any rights or remedies that any Party may otherwise have under this Agreement, at law or in equity. 5 (ii) The Parties acknowledge that the Restricted Shares are unique, and that any violation of this Agreement cannot be compensated for by damages alone. Accordingly, in addition to all of the other remedies which may be available hereunder or under applicable law, any Party shall have the right to any equitable relief which may be appropriate to remedy a breach or threatened breach by any other Party hereunder, including, without limitation, the right to enforce specifically the terms of this Agreement by obtaining injunctive relief in respect of any violation or non-performance hereof, and any Party shall have the right to seek recovery of and be awarded attorneys' fees and expenses in any proceeding with respect to this Agreement as reasonably determined by the court in which such proceeding is brought. (h) HEADINGS; COUNTERPARTS. The headings set forth in this Agreement have been inserted for convenience of reference only, shall not be considered a part of this Agreement and shall not limit, modify or affect in any way the meaning or interpretation of this Agreement. This Agreement may be signed in any number of counterparts, each of which (when executed and delivered) shall constitute an original instrument, but all of which together shall constitute one and the same instrument. It shall not be necessary when making proof of this Agreement to account for any counterparts other than a sufficient number of counterparts which, when taken together, contain signatures of all of the Parties. (i) SEVERABILITY. If any provision of this Agreement shall hereafter be held to be invalid, unenforceable or illegal, in whole or in part, in any jurisdiction under any circumstances for any reason, (i) such provision shall be reformed to the minimum extent necessary to cause such provision to be valid, enforceable and legal while preserving the intent of the Parties as expressed in, and the benefits to the Parties provided by, this Agreement or (ii) if such provision cannot be so reformed, such provision shall be severed from this Agreement and an equitable adjustment shall be made to this Agreement (including, without limitation, addition of necessary further provisions to this Agreement) so as to give effect to the intent as so expressed and the benefits so provided. Such holding shall not affect or impair the validity, enforceability or legality of such provision in any other jurisdiction or under any other circumstances. Neither such holding nor such reformation or severance shall affect or impair the legality, validity or enforceability of any other provision of this Agreement. 6 IN WITNESS WHEREOF, the Company and Holder have executed this Agreement as of the date first above written. GRAND PRIX ASSOCIATION OF LONG BEACH, INC. By: /S/CHRISTOPHER R. POOK ------------------------------ Christopher R. Pook MIDWEST FACILITY INVESTMENTS, INC. By: /s/ H. LEE COMBS ------------------------------- H. Lee Combs 7 EX-10.36 6 RIGHT OF FIRST REFUSAL AGREEMENT EXHIBIT 10.36 EX-3 EXHIBIT 3 RIGHT OF FIRST REFUSAL AGREEMENT THIS RIGHT OF FIRST REFUSAL AGREEMENT ("Agreement") is made and entered into as of August 8, 1997, by and among Midwest Facility Investments, Inc., a Florida corporation ("Facility"), Penske Motorsports, Inc., a Delaware corporation ("PMI") (collectively, Facility and PMI shall be referred to as the "Purchasers"), and each of the individuals listed on Schedule I hereto (individually a "Shareholder" and collectively the "Shareholders"). RECITALS A. This Agreement is entered into in connection with (i) that certain Stock Purchase Agreement, dated as of August 8, 1997 (the "Stock Purchase Agreement"), between Facility and Grand Prix Association of Long Beach, Inc., a California corporation (the "Corporation"), pursuant to which Facility is contemporaneously acquiring 315,000 shares of common stock, no par value ("Common Stock"), of the Corporation (together with any and all other shares of the Corporation's Common Stock that may be acquired by Facility in the future, the "Facility Shares") and (ii) that certain Stock Purchase Agreement, dated as of August 8, 1997, between PMI and the Corporation (the "PMI Stock Purchase Agreement") (collectively, the Facility Stock Purchase Agreement and the PMI Stock Purchase Agreement shall be referred to as the "Stock Purchase Agreements"), pursuant to which PMI is contemporaneously acquiring 315,000 shares of Common Stock of the Corporation (together with any and all other shares of the Corporation's Common Stock that may be acquired by PMI in the future, the "PMI Shares") (collectively, the Facility Shares and the PMI Shares shall be referred to as the "Purchased Shares"). B. The Shareholders own collectively 1,403,632 shares of common stock of the Corporation as of the date hereof (together with any and all other shares of the Corporation's capital stock that may be acquired by any of the Shareholders in the future, the "Shareholder Shares"). C. Following consummation of the transactions contemplated by Stock Purchase Agreements, Facility will own 7.2 percent of the issued and outstanding shares of the Corporation Common Stock, PMI will own 7.2 percent of the issued and outstanding shares of the Corporation Common Stock and the Shareholders will own collectively 37.2 percent of the issued and outstanding shares of the Corporation Common Stock. D. As a condition to the willingness of Facility, PMI and the Corporation to enter into the Stock Purchase Agreements, Facility, PMI and the Corporation have each requested that the Shareholders agree, and in order to induce Facility, PMI and the Corporation to enter into the Stock Purchase Agreements, the Shareholders, Facility and PMI have agreed to place certain restrictions upon the right of transfer of their respective interests in the Corporation. AGREEMENT NOW, THEREFORE, in consideration of the premises and mutual covenants set forth in this Agreement and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Facility, PMI and each Shareholder agree as follows: ARTICLE ONE REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS Each Shareholder hereby severally represents and warrants to the Purchasers as follows (as to such Shareholder only): (aa) AUTHORITY. Such Shareholder has the power and authority to execute this Agreement and perform such Shareholder's obligations hereunder. This Agreement has been duly executed and delivered by such Shareholder and (assuming the due execution and delivery hereof by the Purchasers) constitutes a valid and binding obligation of such Shareholder enforceable against such Shareholder in accordance with its terms, except to the extent that its enforceability may be limited by applicable bankruptcy, insolvency, reorganization or other laws affecting the enforcement of creditors' rights generally or by general equitable principles. (b) NO BREACH. The execution, delivery and performance by such Shareholder and the consummation of the transactions contemplated hereby and thereby: (i) do not and will not violate or conflict with any provision of law or regulation, or any writ, order, judgment or decree of any court or governmental or regulatory authority specifically naming such Shareholder; and (ii) do not and will not, with or without the passage of time or the giving of notice, result in the breach of, or constitute a default, cause the acceleration of performance, permit the unilateral modification or termination of, or require any consent under, or result in the creation of any lien, charge or encumbrance upon any property or assets of such Shareholder pursuant to, any material instrument or agreement to which such Shareholder is a party or by which such Shareholder may be bound or affected, except in each case where the violation, breach, default, modification, termination, absence of consent or lien could not reasonably be expected to impair such Shareholder's timely and complete performance of his obligations hereunder. (c) OWNERSHIP. The Shareholder Shares set forth opposite such Shareholder's name on SCHEDULE 1, hereto are owned by such Shareholder, free and clear of any liens, encumbrances, security interests, options or claims, including, without limitation, claims or rights under "buy-sell" or other shareholder agreements (other than this Agreement and other liens heretofore disclosed in writing to Purchasers). ARTICLE TWO RESTRICTIONS IMPOSED UPON THE TRANSFER OF STOCK BY THE SHAREHOLDERS 2.1 GENERAL PROHIBITION ON TRANSFERS. Except as is specifically permitted by the provisions of this ARTICLE TWO, the sale, assignment, pledge, gift, transfer or other disposition of any of Shareholder's "Stock" (as defined in Section 6.13 hereof), either directly or indirectly, to any person or entity, is prohibited. 2.2 PERMITTED TRANSFERS. The following transfers of Stock shall be permitted transfers which do not require the giving of a Notice of Right of First Refusal under Section 2.3 of this ARTICLE TWO. (a) TRANSFERS WITH CONSENT. Notwithstanding the provisions of Section 2.1, a transfer or disposition of any kind or character otherwise prohibited by this ARTICLE TWO may be permitted if approved by each of the Purchasers. (b) TRANSFERS TO FAMILY MEMBERS. Notwithstanding the provisions of Section 2.1, each Shareholder shall be permitted to transfer (whether by purchase, assignment, gift, bequest, devise, levy, execution or other means of transfer) all or any portion of his or her Stock to (i) his or her spouse or any family members, (ii) any custodian, guardian or other representative for a spouse or family members, and/or (iii) the trustee of any trust created for the benefit of the Shareholder, his or her spouse and/or family members (collectively the "Permitted Family Transferees") provided that each and every such Permitted Family Transferee executes a written acknowledgment that (i) all Stock held by the Permitted Family Transferee will, notwithstanding the transfer to such Permitted Family Transferee, be deemed for all purposes of this Agreement to be owned by the transferring Shareholder, and (ii) the Permitted Family Trustee is to be bound by all of the terms of this Agreement as if a signatory "Shareholder" hereto. (c) BONA FIDE PLEDGE. Notwithstanding the provisions of Section 2.1, a Shareholder shall be entitled to make a bona fide pledge of his or her stock to a financial institution or broker in 2 connection with borrowing transactions (each a "Lender"); provided, however, that, as contemplated by Section 2.4 hereof, any transfer of Stock to the Lender pursuant to such arrangement, upon foreclosure or otherwise, shall be subject to the "Right of First Refusal" provisions of Sections 2.3 and 2.4 hereof. (d) TRANSFER OF WARRANT. Notwithstanding the provisions of Section 2.1, L.H. Friend, Weinress, Frankson & Presson, Inc. (the "Firm") shall be permitted to assign its warrant to purchase 31,250 shares of the Corporation's common stock to one or more officers and directors of the Firm ("Permitted Transferees") in the percentages the Firm shall deem fit, provided, however, that (i) notwithstanding such assignment, the warrant shall be deemed for purposes of this Agreement to be owned by the Firm, and (ii) each such Permitted Transferee agrees to be bound by the terms of this Agreement as if a signatory hereto. 2.3 TRANSFERS TO THIRD PARTIES. (a) NOTICE OF RIGHT OF FIRST REFUSAL. Notwithstanding the provisions of Section 2.1, and absent the right to make a transfer of Stock pursuant to Section 2.2, each Shareholder may transfer all or a portion of his or her Stock, subject in all respects to the following "right of first refusal" provisions of this Section 2.3. If any Shareholder (the "Selling Shareholder") desires to sell Stock on the market in a "broker's transaction" or to a party unrelated to the Selling Shareholder, the Selling Shareholder shall, not less than five (5) business days prior to the date of the proposed sale, assignment, transfer or other disposition, deliver a Notice of Right of First Refusal to (x) the "Shareholders Representatives" (which shall mean Christopher R. Pook and/or Jim Michaelian, acting in such capacity, and/or their assigns, as applicable), and (y) each of the Purchasers, containing the following information: (i) the number of shares of Stock proposed to be so transferred (the "Offered Stock"); (ii) the terms and conditions of the proposed transfer, including the identity of the proposed transferee(s), if not a "market transaction" and the cash consideration to be received therefor (the "Offered Terms"); and (iii) an affirmative offer made by the Selling Shareholder to transfer the Offered Stock to the Shareholders Representatives and the Purchasers at a price (the "Offer Price") equal to the total cash price in the proposed transfer for the Offered Stock as indicated in the Notice of Right of First Refusal (I.E., the number of shares multiplied by the per share-cash price, to be received for the shares of Stock to be transferred), it being agreed that, (x) without the prior written approval of each of the Purchasers, all transfers permitted by this Section 2.3 must be solely for consideration consisting of cash, and (y) the Offer Price for all broker's transactions shall be the weighted average sales price for the Common Stock on the date of delivery of the Notice of Right of First Refusal. The date that the Notice of Right of First Refusal is delivered to the Shareholders Representatives and the Purchasers shall constitute the First Refusal Notice Date. (b) PRIMARY RIGHT OF FIRST REFUSAL BY THE SHAREHOLDERS REPRESENTATIVES. Each of the Shareholders Representatives shall have the sole and exclusive option to acquire all or any specified portion of the shares of Stock offered for transfer in accordance with the provisions of the Notice of Right of First Refusal for a period of two (2) business days from the First Refusal Notice Date (the "Shareholder Exclusive Option Period"). The Shareholders Representatives may exercise such option by giving written notice of exercise to the Selling Shareholder and the Purchasers prior to the termination of the Shareholder Exclusive Option Period. Such notice of exercise shall refer to the Notice of Right of First Refusal and shall set forth the number of shares to be acquired by the Shareholders Representatives. The Shareholders Representative may assign their purchase rights under this Section 2.3 to any of the other Shareholders or to any other then current executive officer or director of 3 the Company who agrees in writing (in form reasonably acceptable to Purchasers) to be subject to and bound by the terms of this Agreement. (c) SECONDARY RIGHT OF FIRST REFUSAL BY THE PURCHASERS. In the event the Shareholders Representatives do not collectively elect to acquire all of the Offered Stock, the Purchasers shall have an exclusive option for three (3) business days after the expiration of the Shareholder Exclusive Option Period to acquire all or any portion of the Offered Stock not acquired by the Shareholders Representatives. The Purchasers may, by agreement, allocate between themselves the right to acquire such part of the Offered Stock that will not be acquired by the Shareholders Representatives. In the absence of such an agreement, each Purchaser will be entitled to give written notice to the Selling Shareholder (the "Purchase Notice"), within such three business day period, of such Purchaser's election to acquire all or any part of such Offered Stock that is not being acquired by the Other Shareholders ("Excess Offered Stock"). If the Purchasers' offers to purchase exceed the amount of Excess Offered Stock, the option to acquire such Stock shall be allocated between the Purchasers as follows: (i) Each Purchaser shall be absolutely entitled to acquire the number of shares of Excess Offered Stock that is equal to or less than its proportionate part of such Excess Offered Stock, based upon the number of shares owned by each Purchaser; (ii) Each Purchaser electing to acquire more than its proportionate part of the Excess Offered Stock under the previous allocation step may acquire the remainder of the Excess Offered Stock which is not previously allocated to the other Purchaser (I.E., because the other Purchaser did not elect to acquire its entire ratable portion under the preceding allocation step); (d) REQUIREMENT TO PURCHASE ALL OFFERED STOCK. Notwithstanding the provisions of the Section 2.3(b), the option to purchase shares of Stock described in a Notice of Right of First Refusal that describes a proposed non-market transaction may be exercised and the Closing (as hereinafter defined) consummated only if the Shareholders Representatives and the Purchasers collectively agree to purchase all of the shares of the Offered Stock. (e) CLOSING AND TENDER REQUIREMENTS. The consummation of any transfer required pursuant to an exercise of option rights created by this ARTICLE TWO shall constitute the "Closing", and the time and date of such Closing shall constitute the "Closing Date." The Closing shall be held at the principal office of the Corporation, at 10:00 a.m. on or before the 25th day subsequent to the delivery of the final Purchase Notice, and if the Closing Date falls on a Saturday, Sunday or legal holiday, the Closing Date shall be postponed to the next succeeding regular business day following such Saturday, Sunday or legal holiday. At the Closing, the Selling Shareholder shall present to the acquiring Shareholders and/or Purchaser(s), or cause the Transfer Agent to, or the Corporation, as the case may be, all share certificates for Stock required to be sold in proper form for transfer. Such Stock shall be transferred free of all liens and encumbrances or adverse claims of any kind or character created by the Selling Shareholder. At the Closing, the acquiring Shareholders and/or Purchaser(s), upon receipt of proper tender of the Stock, shall tender full payment of the Offer Price in conformity with the Offered Terms as set forth in the Notice of Right of First Refusal. (f) PERMITTED TRANSFER FOLLOWING RIGHT OF FIRST REFUSAL. If all of the Stock identified in the Notice of Right of First Refusal is not elected to be purchased in the five business day time period specified above or, if so elected, is not purchased as required on or prior to the 25th day subsequent to the delivery of the final Purchase Notice (it being agreed that the Purchasers shall be entitled to purchase all of the remaining Offered Shares to be acquired by the Shareholders Representatives if and to the extent that Purchasers are not provided, at least three business days prior to the Closing Date, with reasonable evidence that the Shareholders Representatives have deposited in escrow the full cash purchase price the Common Stock to be acquired by them or otherwise established a reasonably 4 acceptable guarantee of payment therefor), then all of such Stock (including any Stock for which a proper tender was made) may be transferred by the Selling Shareholder at any time during the ensuing 30 days (10 days in the case of a market transaction) at any price (in the case of a market transaction) or, in the case of a non-market transaction, in strict conformity with the Offered Terms (or on terms more favorable to the Selling Shareholder) set forth in the Notice of Right of First Refusal (it being agreed that the identity of any purchaser in a non-market transaction may not be changed without submission of a new Notice of Right of First Refusal). Nothing herein shall limit the rights of any Selling Shareholder, the Shareholders Representatives or either Purchaser relating to any breach by any other party hereto. 2.4 TRANSFERS INCLUDE FORECLOSURE. For purposes of this ARTICLE TWO, a transfer of Stock by a Shareholder shall be deemed to include, but shall not be limited to, any transfer of legal or beneficial ownership by reason of foreclosure under any pledge, hypothecation or similar credit transactions (in which case the 25 day closing period contemplated by Section 2.3(e) shall be reduced to ten (10) business days). 2.5 COMPLIANCE. Absent the right to make a transfer of Stock pursuant to Section 2.2 or 2.3 hereof, any transfer described in this ARTICLE TWO of a Shareholder's Stock without complying with the giving of a Notice of Right of First Refusal shall be void, and the Corporation shall have the right to issue a Notice of Right of First Refusal upon discovery of such transfer, a copy of which shall be sent to the person making such transfer and his or her transferee. Upon the giving of the Notice of Right of First Refusal, the time periods for the exercise of the options specified in Section 2.3 shall commence running. ARTICLE THREE RESTRICTIONS IMPOSED UPON THE TRANSFER OF STOCK BY FACILITY AND PMI 3.1 GENERAL PROHIBITION ON TRANSFERS. Except as is specifically permitted by the provisions of this ARTICLE THREE, the sale, assignment, pledge, gift, transfer or other disposition of any of the Purchased Shares, either directly or indirectly, to any person or entity, is prohibited. 3.2 PERMITTED TRANSFERS. The following transfers of the Purchased Shares shall be permitted transfers which do not require the giving of a Notice of Right of First Refusal under Section 3.3 of this ARTICLE THREE. (a) TRANSFERS WITH CONSENT. Notwithstanding the provisions of Section 3.1, a transfer or disposition of any kind or character otherwise prohibited by this ARTICLE THREE may be permitted if approved by the Shareholders Representatives. (b) TRANSFERS TO AFFILIATES. Notwithstanding the provisions of Section 3.1, each of the Purchasers shall be permitted to transfer (whether by purchase, assignment, gift, bequest, devise, levy, execution or other means of transfer) all or any portion of the Purchased Shares to its affiliate (as defined within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") provided that each and every such affiliate executes a written acknowledgment that (i) all Purchased Shares held by such affiliate will, notwithstanding the transfer to such, be deemed for all purposes of this Agreement to be owned by the transferring Purchaser, and (ii) that such affiliate agrees in writing to be bound by all of the terms of this Agreement. 3.3 TRANSFERS TO THIRD PARTIES. (a) NOTICE OF RIGHT OF FIRST REFUSAL. Notwithstanding the provisions of Section 3.1, and absent the right to make a transfer of the Purchased Shares pursuant to Section 3.2, either of the Purchasers may also transfer all or a portion of the Purchased Shares, subject in all respects to the following "right of first refusal" provisions of this Section 3.3. If either of the Purchasers (the "Selling 5 Purchaser") desires to sell Purchased Shares on the market or to a party unrelated to such Purchaser in a "non-market" sale, the Selling Purchaser shall not less than five (5) business days prior to the date of the proposed sale, assignment, transfer or other disposition, deliver to the Other Purchaser and the Corporation a "Purchaser Notice of Right of First Refusal" containing the following information: (i) the number of shares of Purchased Shares proposed to be so transferred (the "Purchaser Offered Stock"); (ii) the terms and conditions of the proposed transfer, including the identity of the proposed transferee(s) and the per share price to be charged (if any) for the Purchased Shares to be transferred and the cash consideration to be received therefor (the "Purchaser Offered Terms"); and (iii) an affirmative offer made by the Selling Purchaser to transfer the Offered Stock to the Other Purchaser and, after the Exclusive Option Period (as hereinafter defined), to the Corporation at a price (the "Purchaser Offer Price") equal to the total cash price in the proposed transfer for the Purchaser Offered Stock as indicated in the Purchaser Notice of Right of First Refusal (I.E., the number of shares multiplied by the per share price, if any, to be charged for the shares of Stock to be transferred), it being agreed that, (x) without the prior written approval of the Other Purchaser all transfers permitted by this Section 3.3 must be solely for consideration consisting of cash or cash equivalents, and (y) the Purchase Offer Price for all broker's transactions shall be the weighted average sales price for the Common Stock on the date of delivery of the Purchaser Notice of Right of First Refusal. The date that the Purchaser Notice of Right of First Refusal is delivered to the Purchasers Representatives and the Corporation shall constitute the Purchaser First Refusal Notice Date. (b) PRIMARY RIGHT OF FIRST REFUSAL BY THE PURCHASERS REPRESENTATIVES. The Other Purchaser shall have the sole and exclusive option to acquire all or any portion of the Purchased Shares offered by the Selling Shareholder for transfer in accordance with the provisions of the Purchaser Notice of Right of First Refusal for a period of five (5) business days from the Purchaser First Refusal Notice Date (the "Purchaser Exclusive Option Period"). The Other Purchaser may exercise such option by giving written notice of exercise to the Selling Purchaser prior to the termination of its Exclusive Option Period. Such notice of exercise shall refer to the Purchaser Notice of Right of First Refusal and shall set forth the number of Purchased Shares to be acquired by the Other Purchaser. (c) SECONDARY RIGHT OF FIRST REFUSAL BY THE CORPORATION. The Corporation shall have an exclusive option for two (2) business days after the expiration of the Purchaser Exclusive Option Period to acquire all of the Offered Stock that will not be acquired by the Other Purchaser. The Corporation may assign its purchase rights under this Section 3.3 to any or all of the Shareholders or to any other current executive officer or director of the Company who agrees in writing (in form reasonably acceptable to Purchasers) to be subject to and bound by the terms of this Agreement). (d) REQUIREMENT TO PURCHASE ALL OFFERED STOCK. Notwithstanding the provisions of the Section 3.3(b), the option to purchase the Purchased Shares described in a Purchaser Notice of Right of First Refusal that describes a proposed non-market transaction may be exercised and the Purchaser Closing (as hereinafter defined) consummated only if the Corporation and/or the Other Purchaser collectively agree to purchase all of the shares of the Purchaser Offered Stock. (e) CLOSING AND TENDER REQUIREMENTS. The consummation of any transfer required pursuant to an exercise of option rights created by this ARTICLE THREE shall constitute the "Purchaser Closing", and the time and date of such Closing shall constitute the "Purchaser Closing Date." The Purchase Closing shall be held at the principal office of the Corporation, at 10:00 a.m. on or before the 25th day subsequent to the expiration of the Purchaser Exclusive Option Period and if the Closing Date falls on a Saturday, Sunday or legal holiday, the Purchase Closing Date shall be postponed to the next succeeding regular business day following such Saturday, Sunday or legal holiday. At the Purchaser 6 Closing, the Selling Purchaser shall present to the Corporation and/or the Other Purchaser, as the case may be, all share certificates for the Purchased Shares required to be sold in proper form for transfer. Such Purchased Shares shall be transferred free of all liens and encumbrances or adverse claims of any kind or character. At the Purchaser Closing, the Corporation and/or the Other Purchaser, as the case may be, upon receipt of proper tender of the Purchased Shares, shall tender full payment of the Purchaser Offer Price in conformity with the Purchaser Offered Terms as set forth in the Purchaser Notice of Right of First Refusal. (f) PERMITTED TRANSFER FOLLOWING RIGHT OF FIRST REFUSAL. If all of the Purchased Shares identified in the Purchaser Notice of Right of First Refusal are not purchased by the Corporation and/or the Other Purchaser prior to the 25th day subsequent to the expiration of the Purchaser Exclusive Option Period, then all of such Purchased Shares (including any shares for which a proper tender was made) may be transferred by the Selling Purchaser at any time during the ensuing 30 days (10 days in the case of a market transaction) at any price (in the case of a market transaction) or, in the case of a non-market transaction, in strict conformity with the Purchaser Offered Terms (or on terms more favorable to the Selling Purchaser) set forth in the Purchaser Notice of Right of First Refusal. ARTICLE FOUR THE GIVING OF NOTICES REQUIRED BY THIS AGREEMENT 4.1 ADDRESSES. Any notices, requests, demands and other communications required or permitted to be given hereunder must be in writing and, except as otherwise specified in writing, will be deemed to have been duly given when personally delivered, telexed or facsimile transmitted, or three days after deposit in the United States mail, by certified mail, postage prepaid, return receipt requested, as follows. The addresses of the Corporation, Facility, PMI and the Shareholders, which shall be considered to be their last known addresses unless subsequently changed in accordance with the provisions of this Agreement, are as follows: IF TO THE CORPORATION: Grand Prix Association of Long Beach, Inc. 3000 Pacific Avenue Long Beach, CA 90806 Attention: Christopher R. Pook Telephone: (562) 490-4520 Facsimile: (562) 981-2632 IF TO FACILITY: Midwest Facility Investments, Inc. 1801 West International Speedway Boulevard Daytona Beach, Florida 32120 Attention: H. Lee Combs Telephone: (904) 947-6731 Facsimile: (904) 257-0266 IF TO PMI: Penske Motorsports, Inc. 3270 W. Big Beaver Road, Suite 130 Troy, Michigan 48084 Attention: Robert H. Kurnick, Jr. Telephone: (248) 614-1116 Facsimile: (248) 614-1125 7 IF TO ANY SHAREHOLDER: at the address reflected opposite the Shareholder's name on Schedule 1 hereto IF TO EITHER SHAREHOLDER REPRESENTATIVE Christopher R. Pook or Jim Michaelian Grand Prix Association of Long Beach, Inc. 3000 Pacific Avenue Long Beach, CA 90806 Attention: Christopher R. Pook Telephone: (562) 490-4520 Facsimile: (562) 981-2632 Any party may change its address for the purposes of this Agreement by giving notice of such change of address to the other parties in the manner herein provided for giving notice. 4.2 FORM OF NOTICE. Any notice or communication hereunder must be in writing, and may be personally delivered or given by registered or certified mail, return receipt requested, and if given by registered or certified mail, shall be deemed to have been given and received forty-eight hours after deposit in the United States mail of a registered or certified letter, return receipt requested, containing such notice, properly addressed, with postage prepaid; and if given otherwise than by registered or certified mail, it shall be deemed to have been given when received by the party to whom it is addressed at the time received. 4.3 FAILURE TO NOTIFY OF CHANGED ADDRESS. It shall be the responsibility of each of the parties to this Agreement to notify all other parties of their respective addresses and any changes thereof, and any objections to the performance of any act required hereunder based upon a failure to receive a notice mailed in conformity with the provisions of this Agreement shall be meritless. ARTICLE FIVE ELECTION OF DIRECTORS During the term of this Agreement, each of the Shareholders and Purchasers agrees to vote all shares of Corporation Common Stock owned by such party to elect as directors of the Corporation (x) those designees of Facility and/or PMI that such Purchaser(s) then has (have) the right to designate as director nominees pursuant to the Stock Purchase Agreements, and (y) such other nominees for election as are proposed from time to time by the Corporation's Board of Directors or appropriate nominating committee thereof. ARTICLE SIX MISCELLANEOUS 6.1 CUSTODY. In connection with and to facilitate the terms of this Agreement, the Shareholders, Facility, PMI and the Corporation hereby appoint L.H. Friend, Weinress, Frankson & Presson, Inc. as custodian (the "Custodian") and herewith deposit with the Custodian certificates representing the Shareholder Shares currently held by the Shareholders listed on Schedule I hereto, together with certificates representing the Facility Shares and the PMI Shares. Each such certificate so deposited is in negotiable and proper deliverable form endorsed in blank with the signature of the Shareholder thereon guaranteed by a commercial bank or trust company in the United States or by a member firm of the New York Stock Exchange, or is accompanied by a duly executed stock power or powers in blank, bearing the signature of the Selling Shareholder so guaranteed. The Custodian is hereby authorized and directed to hold in custody the certificate or certificates delivered herewith. The Shareholders, Facility and PMI understand that the certificates evidencing such party's Common Stock will bear a restrictive legend prohibiting transfer thereof except in compliance with (i) applicable state and federal securities laws and may not be transferred of record except in compliance therewith, and (ii) the 8 terms of this Agreement. The Shareholders and Purchasers agree to promptly make such deliveries and to execute any additional agreement required to accomplish the deposit with the Custodian of all certificates evidencing Common Stock now owned or that may be acquired in the future. 6.2 TERMINATION. This Agreement shall terminate upon the earlier of (i) six years from the date hereof, (ii) with respect to Facility's rights hereunder, the date Facility ceases to own at least 80% of the shares of Common Stock acquired by Facility pursuant to the Facility Stock Purchase Agreement, and (iii) with respect to PMI's rights hereunder, the date PMI ceases to own at least 80% of the shares of Common Stock acquired by PMI pursuant to the PMI Stock Purchase Agreement. This Agreement shall terminate as to any specific Shareholder upon the date such Shareholder ceases to own any Stock. 6.3 MODIFICATION. This Agreement may only be amended, terminated or modified by the written consent of the Corporation and the Shareholder or Shareholders to be bound by such modification. 6.4 SUCCESSORS. This Agreement shall be binding upon the parties hereto, their heirs, administrators, successors, executors and assigns, and the parties hereto do covenant and agree that they themselves and their respective heirs, executors, successors, administrators and assigns will execute any and all instruments, releases, assignments and consents that may be reasonably required of them to more fully execute the provisions of this Agreement. 6.5 COUNTERPARTS. This Agreement may be executed in several counterparts, each of which shall serve as an original for all purposes, but all copies of which shall constitute but one and the same Agreement. 6.6 HEADINGS. All headings set forth in this Agreement are intended for convenience only and shall not control or affect the meaning, construction or effect of this Agreement or of any of the provisions thereof. 6.7 GOVERNING LAW. This Agreement shall be governed by and shall be construed and enforced in accordance with the laws of the State of Florida. 6.8 WAIVER. The waiver by any party hereto of a breach of any provision of this Agreement must be in writing and shall not operate or be construed as a waiver of any subsequent breach by any party. 6.9 ENTIRE AGREEMENT. This Agreement, together with the Stock Purchase Agreements and "Registration Rights Agreements" executed in connection therewith, constitute the entire agreement of the parties hereto with respect to the transactions contemplated hereby, and it is hereby agreed that any prior oral or written agreements concerning the sale or disposition of Stock shall be null and void. 6.10 SEVERABILITY. If any provision of this Agreement shall be held to be illegal or unenforceable, such illegality or unenforceability shall extend to that provision solely, and the remainder of this Agreement shall be enforced as if such illegal or unenforceable provision were not incorporated herein. 6.11 SPECIFIC PERFORMANCE. The right to own and vote capital stock of the Corporation is hereby declared by the parties hereto to be a unique right, the loss of which is not susceptible to monetary quantification. Consequently, the parties hereto agree that an action for specific performance of the purchase and sale obligations created by this Agreement is a proper remedy for the breach of its provisions. If any party(ies) to this Agreement institute legal proceedings in connection with this Agreement, the prevailing party(ies) shall be entitled to recover their reasonable attorneys' fees and court costs. 9 6.12 BUSINESS DAYS. References to "Business Days" or "Business Day" shall mean any day in which The Nasdaq Stock Market is open for business. Whenever the terms of this Agreement call for the performance of a specific act on a specified date, which date falls on a Saturday, Sunday or legal holiday, the date for the performance of such act shall be postponed to the next succeeding regular business day following such Saturday, Sunday or legal holiday. 6.13 STOCK REFERENCES. References to "Stock" herein shall mean (i) each Shareholder's Shares and any capital stock of the Corporation purchased or otherwise acquired, as of the date hereof or subsequent thereto, by any Shareholder, and the 31,250 Shares issuable upon exercise of the L.H. Friend, Weinress, Frankson & Presson, Inc. Warrant, dated as of June 24, 1996 (ii) any equity securities issued or issuable, as of the date hereof or subsequent thereto, directly or indirectly with respect to the Stock referred to in clause (i) above by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization, and (iii) any other shares of any class or series of capital stock of the Corporation held by a Shareholder. 6.14 FAILURE TO DELIVER STOCK. If a Purchaser or a Shareholder (or any personal representative or other representative of a Shareholder) who has become obligated to sell stock of the Corporation hereunder shall fail to deliver such stock on the terms and in accordance with this Agreement, the party(ies) having the right to purchase such stock, in addition to all other remedies they may have, may send to the such obligated party by registered mail, return receipt requested, the purchase price for such Stock on the terms provided for in this Agreement. Thereupon, the Corporation, upon written notice to such obligated Purchaser or Shareholder, shall cause the cancellation on its books or cause the Transfer Agent to cancel the certificates representing the stock to be sold; and thereupon, all of the obligated Purchaser's or Shareholder's rights in and to such Stock shall terminate. 10 IN WITNESS WHEREOF, the parties to this Agreement have hereunto set their names as of the date first above written. MIDWEST FACILITY INVESTMENTS, INC. By: /s/ H. LEE COMBS -------------------------------- H. Lee Combs PENSKE MOTORSPORTS, INC. By: /s/ GREGORY W. PENSKE -------------------------------- Gregory W. Penske GRAND PRIX ASSOCIATION OF LONG BEACH, INC. SHAREHOLDERS: /s/ CHRISTOPHER R. POOK -------------------------------- Christopher R. Pook /s/ ELLEN L. POOK -------------------------------- Ellen L. Pook /s/ JAMES P. MICHAELIAN -------------------------------- James P. Michaelian /s/ DWIGHT R. TANAKA -------------------------------- Dwight R. Tanaka /s/ SHARON TANAKA -------------------------------- Sharon Tanaka /s/ MICHAEL S. CLARK -------------------------------- Michael S. Clark /s/ RICHARD LALOR -------------------------------- Richard Lalor /s/ GEMMA A. BANNON -------------------------------- Gemma A. Bannon /s/ MARTIN BANNON -------------------------------- Martin Bannon /s/ TODD BRIDGES -------------------------------- Todd Bridges /s/ VICTORIA BRIDGES -------------------------------- Victoria Bridges /s/ ROD WOLTER -------------------------------- Rod Wolter /s/ JAMES SULLIVAN -------------------------------- James Sullivan, Trustee of the S.R.E. Industries Pension Plan & Trust and individually /s/ BETTY SULLIVAN -------------------------------- Betty Sullivan 11 /s/ BETTY SULLIVAN -------------------------------- Betty Sullivan, Trustee of the S.R.E. Industries Pension Plan & Trust /s/ WAYNE G. KEES -------------------------------- Wayne Kees, Trustee of the Wayne G. Kees Living Trust dated 10/24/89 and individually /s/ DANIEL S. GURNEY -------------------------------- Daniel S. Gurney, Trustee under the Gurney Family Trust and Individually /s/ EVI GURNEY -------------------------------- Evi Gurney /s/ EVI GURNEY -------------------------------- Evi Gurney, Trustee under the Gurney Family Trust /s/ JOHN R. QUEEN, III -------------------------------- John R. Queen, III /s/ GEORGE PELLIN -------------------------------- George Pellin 12 GRAND PRIX ASSOCIATION OF LONG BEACH, INC. SHAREHOLDERS: /s/ JOSEPH AINGE -------------------------------- Joseph Ainge, Trustee of the Ainge Family Trust dated 11/21/96 and individually /s/ CONSTANCE AINGE -------------------------------- Constance Ainge, Trustee of the Ainge Family Trust dated 11-21-96 /s/ GILBERT L. FRIES -------------------------------- Gilbert L. Fries, Trustee of the Lambert-Fries Trust dated 12-5-91 /s/ MARY LOU LAMBERT FRIES, JR. -------------------------------- Mary Lou Lambert Fries, Trustee of the Lambert-Fries Trust dated 12-5-91 MATLINS FINANCIAL CONSULTING, INC. PROFIT SHARING PLAN /s/ NEIL MATLINS -------------------------------- Neil Matlins, Trustee THE LINCOLN FUND, LP /s/ NEIL MATLINS -------------------------------- 13 THE LINCOLN FUND TAX ADVANTAGED, LP /s/ NEIL MATLINS -------------------------------- THE GORDON FUND, LP /s/ NEIL MATLINS -------------------------------- /s/ J. RODNEY BRYAN -------------------------------- J. Rodney Bryan Trustee of the Rodney Bryan Trust dated 12-15-93 /s/ MARY ANN BRYAN -------------------------------- Mary Ann Bryan Trustee of the Rodney Bryan Trust dated 12-15-93 /s/ PENNY NICCOLE -------------------------------- Penny Niccole, Trustee of the Niccole Family Trust dated 11/13/95 /s/ MICHAEL NICCOLE -------------------------------- Michael Niccole, Trustee of the Niccole Family Trust dated 11/13/95 /s/ RUTH QUEEN -------------------------------- Ruth Queen /s/ JOHN R. QUEEN -------------------------------- John R. Queen, Jr. /s/ ROBERT SETTE -------------------------------- Robert Sette /s/ GAYLE SETTE -------------------------------- Gayle Sette /s/ HERMAN MAIER -------------------------------- Herman Maier EDMARJON-RONBREWDAVE, LLC* Shareholders /s/ ED H. GATLIN -------------------------------- Ed H. Gatlin, CEO 14 *Only 45,000 shares of EDMARJON-RONBREWDAVE, LLC is subject to the Right of First Refusal Agreement. L.H. FRIEND, WEINRESS, FRANKSON, PRESSON, INC. By: /s/ GREGORY E. PRESSON -------------------------------- Gregory E. Presson President /s/ PATRICIA QUEEN -------------------------------- Patricia Queen 15 SCHEDULE I TO RIGHT OF FIRST REFUSAL AGREEMENT
NAME SHARES 1993 OPTIONS - ---- ------ ------------ Christopher R. Pook 310,207(8) 174,435 Christopher R. Pook 72,341(9) Ellen L. Pook 65,804 James P. Michaelian 176,499(12) 108,702 Dwight Tanaka and Sharon Tanaka 55,204(6) 20,830 Michael S. Clark 32,190(5) 12,691 Rick Lalor 31,728 Gemma Bannon 9,064 Gemma Bannon and Martin Bannon 23,049(7) Todd Bridges and Victoria Bridges 1,400 Rod Wolter 500 James Sullivan 7,114 14,939 Betty Sullivan 7,114 James Sullivan and Betty Sullivan Trustees under the S.R.E. Industries Pension Plan & Trust 41,799 Wayne Kees 11,952 Wayne Kees Trustee of the Wayne G. Kees Living Trust dated 10/24/89 49,014 Daniel S. Gurney 11,952 Daniel S. Gurney and Evi Gurney Trustees of the Gurney Family Trust 70,841 (1) Evi Gurney 2,987 John Queen, III 36,570(3) George Pellin 59,195(2) 14,939 Joseph Ainge 14,939 Joseph Ainge and Constance Ainge, Trustees of the Ainge Family Trust dated 11/21/96 46,027
NAME SHARES 1993 OPTIONS - ---- ------ ------------ Gilbert L. Fries and Mary Lou Lambert Fries, Trustees of The Lambert-Fries Trust dated 12-5-91 35,000(4) The Lincoln Fund, LP 66,600 The Lincoln Fund Tax Advantaged, LP 18,750 The Gordon Fund, LP 15,625 Matlins Financial Consulting, Inc. Profit Sharing Plan 6,250 Rod Sette and Gayle Sette 37,508(11) J. Rodney Bryan and Mary Ann Bryan Trustees of the Rodney Bryan Trust dated 12/15/93 23,120 Penny Niccoli and Michael Niccoli Trustees of the Niccoli Family Trust dated 11/13/95 35,570 Ruth Queen 38,557 11,952 John R. Queen, Jr. and Patricia Queen 81,910(1) 11,952 Herman Maler 14,228 EDMARJON-RONBREWDAVE, LLC A Tennessee limited liability company (successor in interest to Memphis International Motorsports Corporation) 45,000(13) L.H. Friend, Weinress, Frankson & Presson, Inc. Warrant to purchase 31,250
(1) 16,148 pledged to secure $12,485 note to GPALB. (2) 18,148 subject to $44,500.42 margin balance with Evern Securities. (3) Shares in a Mortgage Pledge Account at Merrill Lynch will be released within 10 days. (4) Subject to $105,677 margin balance account with Christopher Weil & Co. (5) Pledged to secure $24,887.50 note to GPALB. (6) Pledged to secure $42,679 note to GPALB. (7) Pledged to secure $17,820 note to GPALB. (8) Subject to $342,731 margin balance with Bear Stearns. (9) Shares and options owned by Lou Mirabile subject to right of first refusal agreement with dated 8-8-97 in favor of Christopher R. Pook (10,457 of Mr. Mirabile's shares are pledged to secure $8,085 note to GPALB). (10) intentionally ommitted. (11) 10,457 pledged to secure $8,085 note to GPALB. (12) 114,997 pledged to secure $88,907.50 note to GPALB. (13) Part of total 250,000 series B convertible preferred shares which are held by First Commercial Bank of Memphis to secure a $1,500,000 note. EX-99.4 7 PRESS RELEASE DATED 08/08/1997 EXHIBIT 99.4 GPALB RAISES $7.8 MILLION IN NEW EQUITY - --INCREASES EQUITY BY 38% THROUGH PRIVATE PLACEMENT WITH PENSKE MOTORSPORTS AND INTERNATIONAL SPEEDWAY-- LONG BEACH, California--August 8, 1997--Grand Prix Association of Long Beach, Inc. (GPLB) (Nasdaq:GPLB) today announced it has agreed to privately raise $7.8 million in new equity from the sale of common stock to Penske Motorsports, Inc. (PMI) (Nasdaq:SPWY) and International Speedway Corporation (ISC) (Nasdaq:ISCA), two leaders in the motorsports entertainment industry. GPLB will sell 315,000 shares at $12.34 per share to both PMI and ISC. This issuance will increase GPLB's total outstanding shares to 4,398,286 and will give both PMI and ISC a 7% interest in the company. Concurrent with the sale, certain security holders of GPLB, consisting primarily of its senior management and Board of Directors, will grant ISC, PMI and members of the group of certain security holders, certain mutual rights of first refusal regarding the sale of their GPLB securities. GPLB also announced that it will name Greg Penske (35), President of PMI and H. Lee Combs (44), Senior Vice President of ISC to its Board of Directors. These elections increase GPLB's board to eleven (11) members. The new funds are targeted toward further development of Grand Prix Association's permanent racing facilities, Gateway International Raceway near St. Louis and Memphis Motorsports Park, in order to attract additional major racing events. These facilities currently host NASCAR, NHRA, and CART races, and management is exploring arrangements to provide for additional stock car, open wheel, truck and motorcycle competitions. "We believe these investments are a testament to the quality of the organization we are building and International Speedway's and Penske Motorsports' confidence in our long-term potential," said Christopher R. Pook, Grand Prix Association's chairman and chief executive officer. "These investments align us with two of the premier companies in motorsports and will allow us to accelerate our plans at Gateway and Memphis in order to maximize usage of those two facilities. The experience and insight that Messrs. Penske and Combs bring to our board are welcome additions as we pursue our growth goals." Pook added: "We have enjoyed considerable success in our first year of operations both at Gateway and Memphis. However, ISC and PMI bring immediate additional knowledge and expertise to help build our per capita yield from our customers to levels commensurate with those we experience at Long Beach and which our new investors have achieved at their facilities. This will be very valuable to us." Greg Penske, President of PMI said, "Our company has an excellent long-time relationship with Chris Pook, and I believe GPLB's annual CART PPG Cup race in Long Beach sets the standard for open wheel street racing in the United States. In addition, we are impressed with GPLB's developments in the important St. Louis and Memphis markets, and we are pleased to participate in the continued growth of the motorsports entertainment industry." "This transaction further enhances ISC's strategic goal of investment in the motorsports entertainment industry on a national scale," said H. Lee Combs, ISC'S Senior Vice President for Operations. "We look forward to working with Chris Pook and his fine organization, and we believe that our long history in motorsports entertainment will enable us to offer useful input to GPLB." Grand Prix Association of Long Beach is the owner and operator of the Toyota Grand Prix of Long Beach, the annual CART PPG Cup race fun on the streets of Long Beach, California since 1975. The annual CART PPG Cup race is now the second largest open wheel car race in the world next to the Indianapolis 500 mile race. In addition, the company owns and operates Gateway International Raceway in Madison, Illinois, and Memphis Motorsports Park in Millington, Tennessee. International Speedway Corporation is a leading promoter of motorsports activities in the United States, currently promoting over 70 events annually. The company owns and/or operates five premier motorsports facilities -- Daytona International Speedway in Florida, home of the Daytona 500; Talladega Superspeedway in Alabama; Darlington Raceway in South Carolina; Watkins Glen International in upstate New York; and Phoenix International Raceway in Arizona -- as well as Tucson (Arizona) Raceway park. International Speedway also owns and operates MRN Radio, the nation's largest independent sports radio network; the DAYTONA USA motorsports attraction in Daytona Beach, Florida; and holds an approximate 11 percent stake in Penske Motorsports. Additionally, the company owns 40% interest in Homestead-Miami Speedway, LLC. Penske Motorsports, Inc. is a leading promoter and marketer of professional motorsports in the United States. PMI owns and operates the following through its wholly-owned subsidiaries: Michigan Speedway in Brooklyn, Michigan; Nazareth Speedway in Nazareth, Pennsylvania; and California Speedway near Los Angeles, California. PMI also has a majority ownership of the North Carolina Motor Speedway near Rockingham, North Carolina and holds a 40% interest in Homestead- Miami Speedway, LLC. In addition, PMI produces and markets motorsports-related merchandise and accessories such as apparel, souvenirs and collectibles; and it distributes and sells Goodyear brand racing tires in the Midwest and Southeast regions of the United States. Matters discussed in this release related to Grand Prix Association of Long Beach are forward looking statements that involve risks and uncertainties, and actual results may be materially different. Factors that could cause actual results to differ include: delays in construction; failure to obtain or renew sanctioning and sponsorship agreements for national events; severe and adverse weather conditions; dilution of manpower, seasonality; competition and other risk factors listed in the company's SEC reports, including the 10-QSB for the period ended May 31, 1997. 08/08/97 PMI CONTACT: James H. Harris, Senior Vice President & Treasurer of Penske Motorsports, 313-592-5258, or fax, 313-592-7332(SPWY) ISC CONTACT: Glenn Padgett, Director of Investor Relations & Corporate Compliance for ISC, 904-947-6446, or fax, 904-947-6884(ISCA) -----END PRIVACY-ENHANCED MESSAGE-----