Exhibit 99.1
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ASSET PURCHASE AGREEMENT
Dated as of December 15, 2003,
among
OPEN WHEEL RACING SERIES LLC,
OPEN WHEEL ACQUISITION CORPORATION
CHAMPIONSHIP AUTO RACING TEAMS, INC.
and
CART, INC.
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TABLE OF CONTENTS
Page
SECTION 1.01. Definitions............................................... 2
ARTICLE II Termination of the Merger Agreement and the Sale............. 8
SECTION 2.01. Termination of the Merger Agreement....................... 8
SECTION 2.02. The Sale.................................................. 8
SECTION 2.03. Excluded Assets........................................... 10
SECTION 2.04. Assumption of Liabilities................................. 11
SECTION 2.05. Consideration............................................. 11
SECTION 2.06. Closing................................................... 12
SECTION 2.07. Actions at Closing........................................ 13
ARTICLE III Representations and Warranties of the Sellers............... 14
SECTION 3.01. Organization, Standing and Power.......................... 14
SECTION 3.02. Authority; Execution and Delivery; Enforceability......... 15
SECTION 3.03. No Conflicts; Consents.................................... 15
SECTION 3.04. Title to Acquired Assets.................................. 16
SECTION 3.05. Contracts................................................. 16
SECTION 3.06. Intellectual Property Matters............................. 17
SECTION 3.07. Compliance with Laws...................................... 18
SECTION 3.08. Insurance Coverage........................................ 18
SECTION 3.09. The Acquired Stock........................................ 18
SECTION 3.10. Balance Sheets; Undisclosed Liabilities................... 19
ARTICLE IV Representations and Warranties of Parent and Sub............. 22
SECTION 4.01. Organization, Standing and Power.......................... 22
SECTION 4.02. Authority; Execution and Delivery; Enforceability......... 22
SECTION 4.03. No Conflicts; Consents.................................... 23
SECTION 4.04. Financing................................................. 23
ARTICLE V Covenants Relating to Conduct of Business..................... 23
SECTION 5.01. Conduct of Business by Sellers............................ 23
SECTION 5.02. Bankruptcy Court Orders................................... 26
ARTICLE VI Additional Agreements........................................ 28
SECTION 6.01. Access to Information; Confidentiality.................... 28
SECTION 6.02. Reasonable Best Efforts; Notification..................... 29
SECTION 6.03. Interim Management........................................ 30
SECTION 6.04. Fees and Expenses......................................... 30
SECTION 6.05. Public Announcements...................................... 30
SECTION 6.06. Transfer Taxes............................................ 30
SECTION 6.07. No Additional Representations............................. 31
SECTION 6.08. Employment................................................ 31
SECTION 6.09. Sale Procedures........................................... 32
SECTION 6.10. Apportionment............................................. 32
SECTION 6.11. Bankruptcy Case........................................... 33
SECTION 6.12. Possession of the Assets.................................. 33
SECTION 6.13. Collection of Receivables................................. 33
SECTION 6.14. Consent to Negotiations................................... 34
ARTICLE VII Conditions Precedent........................................ 35
SECTION 7.01. Conditions to Each party's Obligation To Effect The Sale.. 35
SECTION 7.02. Conditions to Obligations of Parent and Sub............... 35
SECTION 7.03. Conditions to Obligation of the Sellers................... 37
SECTION 7.04. Frustration of Closing Conditions......................... 37
ARTICLE VIII Termination, Amendment and Waiver.......................... 38
SECTION 8.01. Termination............................................... 38
SECTION 8.02. Effect of Termination..................................... 39
SECTION 8.03. Amendment................................................. 39
SECTION 8.04. Extension; Waiver......................................... 39
ARTICLE IX General Provisions........................................... 39
SECTION 9.01. Nonsurvival of Representations and Warranties............. 39
SECTION 9.02. Notices................................................... 40
SECTION 9.03. Interpretation; Disclosure Letters........................ 41
SECTION 9.04. Severability.............................................. 42
SECTION 9.05. Counterparts.............................................. 42
SECTION 9.06. Entire Agreement; No Third-party Beneficiaries............ 42
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SECTION 9.07. Governing Law............................................. 43
SECTION 9.08. JURISDICTION; WAIVER OF JURY TRIAL........................ 43
SECTION 9.09. Assignment................................................ 44
SECTION 9.10. Specific Performance...................................... 44
Schedule 2.02(a) Acquired Personal Property
Schedule 2.02(b) Assumed Contracts
Schedule 2.02(d) Seller Proprietary Rights
Seller Disclosure Letter
Exhibit A ▇▇▇▇ of Sale, Assignment and Assumption Agreement
Exhibit B Intellectual Property Assignment
Exhibit C Budget
Exhibit D Sale Procedure Order
Exhibit E Approval Order
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ASSET PURCHASE AGREEMENT dated as of December 15,
2003 (this "Agreement"), among OPEN WHEEL RACING SERIES
LLC, a Delaware limited liability company ("Parent"),
OPEN WHEEL ACQUISITION CORPORATION, a Delaware
corporation and a wholly owned Subsidiary of Parent
("Sub"), CHAMPIONSHIP AUTO RACING TEAMS, INC., a
Delaware corporation ("Championship") and CART, Inc., a
Michigan corporation ("CART"), (together, Championship
and CART are referred to herein as the "Sellers" and
each is referred to individually as a "Seller").
WHEREAS Parent, Sub and Championship are parties to the Agreement
and Plan of Merger dated September 10, 2003 by and among Parent, Sub and
Championship (the "Merger Agreement");
WHEREAS Parent, Sub and Championship have mutually concluded that
the conditions to Parent's and Sub's obligations to close the transactions
contemplated in the Merger Agreement can not be satisfied;
WHEREAS as soon as practicable after the date hereof CART will file
a Chapter 11 bankruptcy case (the "Chapter 11 Case") in the United States
Bankruptcy Court for the Southern District of Indiana, Indianapolis Division
(the "Bankruptcy Court") and will continue in possession of its assets and in
the management of its business pursuant to Sections 1107 and 1008 of the
Bankruptcy Code;
WHEREAS Sub desires to purchase certain assets of CART and to assume
certain contracts of CART, and CART desires to sell such assets to Sub and to
assign such contracts to Sub on the terms and conditions set forth in this
Agreement and in accordance with Sections 105, 363 and 365 of the Bankruptcy
Code and other applicable provisions of the Bankruptcy Code;
WHEREAS Sub also desires to purchase certain assets of Championship
and to assume certain contracts of Championship and Championship desires to sell
such assets to Sub and to assign such contracts to Sub on the terms and
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conditions set forth in this agreement outside of any bankruptcy process;
WHEREAS the ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
have agreed to provide sufficient funds to permit Parent and Sub to perform
their obligations under this Agreement pursuant to a side agreement dated as of
the date hereof (the "Side Agreement");
WHEREAS Players/▇▇▇▇▇▇▇▇ Racing, PK Racing and Rocketsports Motor
Racing have, pursuant to the Side Agreement, agreed to release CART at the
Closing from its obligation to pay to Players/▇▇▇▇▇▇▇▇ Racing, PK Racing and
Rocketsports Motor Racing the year-end prize money owed to them with respect to
the 2003 CART racing season; and
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
SECTION 1.01. Definitions. For purposes of this Agreement:
(a) "Acquired Assets" has the meaning set forth in Section 2.02.
(b) "Acquired Personal Property" has the meaning set forth in
Section 2.02(a).
(c) "Acquired Stock" has the meaning set forth in Section 2.02(h).
(d) "Affiliate" of any Person means another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first Person. For purposes of this
definition, "control" as applied to any Person means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities, by
contract, or otherwise.
(e) "Allocations" has the meaning set forth in Section 2.05(c).
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(f) "Alternative Transaction" shall mean a single transaction or a
series of transactions involving (a) a sale of all or any material part of the
Acquired Assets to a Person other than (i) the Parent or Sub or (ii) an
Affiliate of the Parent or Sub or (b) confirmation by the Bankruptcy Court of a
plan of reorganization under which the Sellers retain any of the Acquired
Assets.
(g) "Approval Order" has the meaning set forth in Section 5.02(b).
(h) "Assumed Contracts" has the meaning set forth in Section
2.02(b).
(i) "Assumed Liabilities" has the meaning set forth in Section 2.04.
(j) "Balance Sheets" has the meaning set forth in Section 3.10(a).
(k) "Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as
heretofore and hereinafter amended, and codified as 11 U.S.C. Section 101, et
seq.
(l) "Bankruptcy Court" has the meaning set forth in the Recitals.
(m) "▇▇▇▇ of Sale" has the meaning set forth in Section 2.07(b)(i).
(n) "Budget" has the meaning set forth in Section 5.01(a).
(o) "Business Day" means every day other than Saturdays, Sundays and
days banks in New York, New York are required or permitted to be closed.
(p) "Chapter 11 Case" has the meaning set forth in the Recitals.
(q) "CLP" has the meaning set forth in Section 2.02(h).
(r) "Closing" has the meaning set forth in Section 2.06.
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(s) "Closing Date" has the meaning set forth in Section 2.06.
(t) "Code" means the Internal Revenue Code of 1986, as amended,
together with the Treasury regulations promulgated thereunder.
(u) "Consent" has the meaning set forth in Section 3.03(b).
(v) "Cure Costs" has the meaning set forth in Section 5.02(f)
(w) "Employees" has the meaning set forth in Section 6.08.
(x) "Employment Agreements" has the meaning set forth in Section
6.08.
(y) "Encumbrances" means and includes interests, contractual rights,
security interests, mortgages, liens, licenses, pledges, guarantees, charges,
easements, reservations, restrictions, clouds, equities, rights of way, options,
rights of first refusal and all other encumbrances, whether or not relating to
the extension of credit or the borrowing of money.
(z) "Final Approval Order" means the Approval Order (as defined in
Section 5.02(b)), the operation or effect of which has not been stayed, reversed
or amended (including any revisions, modifications or amendment thereof).
(aa) "Governmental Entity" has the meaning set forth in Section
3.03(b).
(bb) "Intellectual Property Assignment" has the meaning set forth in
Section 2.07(b)(i).
(cc) "Interim Contracts" has the meaning set forth in Section
5.01(b).
(dd) "Interim Expenditures" has the meaning set forth in Section
5.01(b).
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(ee) "Merger Agreement" has the meaning set forth in the Recitals.
(ff) "Parent Material Adverse Effect" means any state of facts,
change, development, effect, condition, or occurrence that materially impairs
Parent's or Sub's ability to perform its obligations under this Agreement or to
consummate the Transactions.
(gg) "Person" means any individual, firm, corporation, partnership,
company, limited liability company, trust, joint venture, association,
Governmental Entity or other entity.
(hh) "Pro-Motion" has the meaning set forth in Section 2.02(h).
(ii) "Proposed Sale" has the meaning set forth in Section 5.02(a).
(jj) "Proprietary Rights" means all (i) U.S. and foreign patents,
patent applications, patent disclosures and improvements thereto, including
▇▇▇▇▇ patents and utility models and applications therefor, (ii) U.S. and
foreign trademarks, service marks, trade dress, logos, trade names and corporate
names and the goodwill associated therewith and registrations and applications
for registration thereof, (iii) U.S. and foreign copyrights and registrations
and applications for registration thereof, (iv) U.S. and foreign mask work
rights and registrations and applications for registration thereof, (v) rights
in trade secrets, (vi) software, (vii) domain name registrations and contents of
all websites, (viii) other proprietary rights, and (ix) licenses granting any
rights with respect to any of the foregoing.
(kk) "Purchase Price" has the meaning set forth in Section 2.05(a).
(ll) "Registered Proprietary Rights" means all United States,
international and foreign: (i) issued patents and patent applications (including
provisional applications), (ii) registered trademarks and servicemarks,
applications to register trademarks and servicemarks, intent-to-use
applications, other registrations or
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applications to trademarks or servicemarks, (iii) registered copyrights and
applications for copyright registration, (iv) any mask work registrations and
applications to register mask works, and (v) any other Proprietary Right that is
the subject of an application, certificate, filing, registration or other
document issued by, filed with, or recorded by, any state, government or other
public legal authority.
(mm) "Representative" of any Person means any officer, director or
employee of, or any investment banker, attorney or other advisor or
representative of, such Person.
(nn) "Sale Hearing" has the meaning set forth in Section 5.02(a).
(oo) "Sale Procedure Order" has the meaning set forth in Section
5.02(a).
(pp) "Sale Procedures" has the meaning set forth in Section 5.02(a).
(qq) "Seller Certificates" has the meaning set forth in Section
7.02(c).
(rr) "Seller Disclosure Letter" has the meaning set forth in the
preamble to Article III.
(ss) "Seller Group" has the meaning set forth in Section 3.12(e).
(tt) "Seller Proprietary Right" means any Proprietary Right that (i)
is owned or used by, (ii) is licensed to, or (iii) was developed or created by
or for any Seller or any other subsidiaries.
(uu) "Seller Registered Proprietary Rights" means all Registered
Proprietary Rights owned by, filed in the name of, assigned to or applied by or
for, any Seller or any of their Subsidiaries.
(vv) "Sellers' Knowledge" means, with respect to the Transactions,
the actual knowledge, after due inquiry of any of the officers or directors of a
Seller.
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(ww) "Subsidiary" of any Person means another Person, an amount of
the voting securities or other voting ownership or voting partnership interests
of which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
Person.
(xx) "Tax" or "Taxes" means any foreign, United States federal,
state or local income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits, environmental, customs
duties, capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated or other tax of any kind whatsoever, including all estimated taxes,
deficiency assessments and any interest, penalty or addition thereto.
(yy) "Tax Authority" means any domestic, foreign, federal, national,
state, county, municipal, provincial or other local government, any subdivision,
agency, commission or authority thereof, or any quasi-governmental body
exercising tax regulatory authority.
(zz) "Tax Return" means all domestic or foreign (whether national,
federal, state, provincial, local or otherwise) returns, declarations,
statements, reports, schedules, forms and information returns and any amended
Tax return relating to Taxes.
(aaa) "Transactions" means the sale of the Acquired Assets,
assumption of the Assumed Liabilities and the other transactions contemplated by
this Agreement.
(bbb) "Transfer Taxes" has the meaning set forth in Section 6.06.
(ccc) "Voting Company Debt" has the meaning set forth in Section
3.09(c).
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ARTICLE II
Termination of the Merger Agreement and the Sale
SECTION 2.01. Termination of the Merger Agreement. The Merger
Agreement is hereby terminated pursuant to Section 8.01(a) thereof.
SECTION 2.02. The Sale. Upon the terms and subject to the conditions
set forth in this Agreement, Championship and CART each agree, with respect to
the items that they are agreeing to sell, transfer, assign convey and deliver
hereunder, to sell, transfer, assign, convey and deliver to Sub, Sub agrees to
purchase, and Parent agrees to cause Sub to purchase, from the respective
Seller, on and as of the Closing Date, certain of such Seller's assets as set
forth below (the "Acquired Assets"):
(a) All machinery, equipment, inventory, goods, computer and other
office equipment, tools, motor vehicles, parts, accessories, furniture,
leasehold improvements (including fixtures that CART has the right to convey)
and all other tangible personal property, other than Excluded Assets, owned or
leased by CART as of the date of this Agreement including without limitation the
items set forth in Schedule 2.02(a) (collectively the "Acquired Personal
Property");
(b) All rights of a Seller under the contracts, commitments or other
arrangements set forth in Schedule 2.02(b) and any leases with respect to the
Acquired Personal Property (collectively, the "Assumed Contracts");
(c) All prepaid expenses or other prepayments, security or other
deposits and other security related to any Assumed Contract, including insurance
proceeds with respect to loss or damage to Acquired Assets;
(d) All interests of the Sellers in Seller Proprietary Rights
including the interests set forth in Schedule 2.02(d), together with all
associated goodwill;
(e) To the extent transferable, all rights of CART, and of
Championship to the extent Championship has
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any such rights which are necessary or useful to the business of CART, under any
franchises, memberships, approvals, permits, licenses, orders, registrations,
certificates, variances, and similar rights including without limitation the
memberships of the Sellers in the Automobile Competition Committee for the
United States, FIA, Inc. (ACCUS) and Federation Internationale de l'Automobile
(FIA);
(f) (i) All accounts receivable of the Sellers (A) accruing after
the date hereof other than those relating exclusively to the 2003 CART racing
season and (B) relating exclusively to the 2004 CART racing season or later
season and (ii) the Note dated June 10, 2003, made by Sports Car Racing
Association of Monterey Peninsula in favor of CART;
(g) All books, records, files and papers of CART, and of
Championship to the extent Championship has any books, records, files or papers,
necessary or useful to the business of CART, whether in hard copy or electronic
format, including customer lists, supplier lists, volunteer lists, sponsor
contracts, advertising and promotional materials, production records and other
records; all deeds and other instruments, maps, and profiles; all engineering
data, blueprints and other property records; and all personnel records that may
be transferred under applicable law; provided, however, that Seller may make and
retain copies of any records transferred to Sub, provided, however, that no
Seller shall be obligated to include in such records any documents which are
subject to its attorney-client privileges, the disclosure of which such Seller
reasonably deems is inappropriate; provided, further, that Sub shall make any
records transferred to it by CART reasonably available to CART or any trustee
that may be appointed in the Chapter 11 Case (or any case resulting from
conversion of the Chapter 11 Case) to the extent reasonably necessary and in a
manner designed to minimize disruption to the business operations of Sub; and
(h) All of the outstanding capital stock (the "Acquired Stock") of
CART Licensed Products, Inc., a Michigan corporation ("CLP") and Pro-Motion
Agency, Ltd., an Illinois Corporation ("Pro-Motion").
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Seller shall sell, transfer, assign, convey and deliver the Assets to Sub in
accordance with this Agreement free and clear of all Encumbrances.
SECTION 2.03. Excluded Assets. Notwithstanding any other provision
in this Agreement, the Acquired Assets will not include any of following:
(a) All rights of the Sellers under this Agreement and the
agreements and instruments executed and delivered in connection with this
Agreement;
(b) All cash, cash equivalents (including deposit accounts but
excluding deposits referred to in Section 2.02(c)) and securities in persons
owned by any Seller;
(c) The formal corporate records of any Seller, including their
certificates of incorporation, bylaws, minute books, corporate books, stock
records and other records having to do with the corporate organization of the
Sellers;
(d) Any tax attributes of the Sellers, including without limitation,
any net operating loss carryovers and any right or claim for a tax refund
attributable to the operation or assets of the Sellers, whether arising before
or after the Closing;
(e) All personnel records and other records that any Seller is
required by applicable law to retain in its possession, provided that Sub will
receive copies of such records (to the extent permitted by applicable law);
(f) All records, books, files and papers related exclusively to
assets that are not Acquired Assets;
(g) Any rights or actions for avoidance of transactions or
obligations, or recovery under Sections 541 through 550 of the Bankruptcy Code,
that may be asserted on behalf of CART as debtor in possession or a trustee in
the Chapter 11 Case against a Person other than Parent, Sub or their Affiliates;
and
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(h) Rights and claims of CART against 88 Corp. including the claims
related to the cancellation of the 2003 and 2004 Fontana, California races.
SECTION 2.04. Assumption of Liabilities. Sub agrees to assume as of
the Closing only the following liabilities (the "Assumed Liabilities"):
(a) The obligations of performance of the Sellers under the Assumed
Contracts arising on and after the Closing Date; and
(b) To the extent unpaid (by lawful and appropriate set-off or
otherwise), the obligation to pay all year-end prize money to the teams
participating in CART racing series for the 2003 season (other than teams
controlled by Affiliates of Parent).
Except for the Assumed Liabilities, Sub shall not assume and shall not be liable
for any of the debts, obligations, responsibilities, undertakings or
liabilities, whether matured or unmatured, fixed or contingent, secured or
unsecured, accrued, absolute or other of any Seller and all such liabilities
will remain the responsibility of the Sellers and shall be retained, paid
performed and discharged by the Sellers.
SECTION 2.05. Consideration.
(a) At the Closing, as consideration for the sale, conveyance,
transfer and assignment of the Acquired Assets, the Sub will deliver, and Parent
will cause to be delivered, by wire transfer of immediately available funds to
an account specified by CART an amount in cash equal to $3,000,000 minus the
amount of any unpaid (by lawful and appropriate set-off or otherwise) year-end
prize money payable to teams participating in the Sellers racing series for the
2003 series (other than teams controlled by Affiliates of Parent) the liability
for which Sub has assumed pursuant to Section 2.04(b) (the "Purchase Price").
(b) At the Closing, Sub will assume the Assumed Liabilities.
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(c) The Consideration shall be allocated among the Acquired Assets
and, in accordance with the amounts allocated to each of the Acquired Assets,
among the Sellers, as of the Closing Date in accordance with an allocation to be
mutually agreed upon in good faith by the Parties prior to the Closing (the
"Allocation"). The Allocation will be determined in a manner consistent with
Section 1060 of the Code and the Treasury Regulations thereunder. For all Tax
purposes, the Parties agree to report the transactions contemplated in this
Agreement in a manner consistent with the terms of this Agreement, including the
Allocation, except as provided below, and that none of the parties will take, or
permit any of its Affiliates or representatives to take, any position
inconsistent therewith in any Tax return, in any refund claim, in any
litigation, or otherwise except as required by a final determination within the
meaning of Section 1313(a) of the Code or any equivalent provision of any
applicable state or local Law. Each party will promptly provide the other party
with any additional information required to complete Form 8594 if the filing of
such form is required. Each party will timely notify the other party, and will
timely provide the other party with assistance, in the event of an examination,
audit or other proceeding regarding the Allocation.
SECTION 2.06. Closing. The closing (the "Closing") of the
Transactions shall take place at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ White & ▇▇▇▇▇▇▇▇▇
LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m., San
Francisco time, on the third business day following the satisfaction (or, to the
extent permitted by Law, waiver) by the applicable party or parties of the
conditions set forth in Article VII (other than those conditions that by their
terms cannot be satisfied until the time of the Closing but subject to the
satisfaction (or, to the extent permitted by Law, waiver by the applicable party
or parties) of such conditions), or at such other place, time and date as Parent
and Championship shall agree in writing; provided, however, that if all the
conditions set forth in Article VII shall not have been satisfied (or, to the
extent permitted by applicable Law, waived by the applicable party or parties)
on such business day, then the Closing shall take place on the third Business
Day after the date on which all such conditions shall have been
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satisfied (or, to the extent permitted by applicable Law, waived by the
applicable party or parties). The date on which the Closing occurs is referred
to in this Agreement as the "Closing Date".
SECTION 2.07. Actions at Closing.(a) At the Closing, the parties
shall take such actions and execute and deliver such agreements, bills of sale,
and other instruments and documents necessary to effect the Transactions subject
to the terms of this Agreement.
(b) At the Closing, the Sellers will:
(i) deliver, or cause to be delivered, to Sub, a receipt for the
Purchase Price and duly executed ▇▇▇▇ of Sale, Assignment and Assumption
Agreement (the "▇▇▇▇ of Sale"), and an intellectual property assignment
agreement (the "Intellectual Property Assignment") (together with any
trademark assignments as Sub may reasonably request) substantially in the
forms of Exhibit A and Exhibit B hereto, respectively;
(ii) deliver, or cause to be delivered, to Parent and Sub all
consents, orders and approvals of the Bankruptcy Court (including a
conformed copy of the Final Approval Order);
(iii) deliver, or cause to be delivered, to Parent and Sub the
Seller Certificates;
(iv) deliver, or cause to be delivered, to Parent and Sub certified
copies of the resolutions of the Boards of Directors of each Seller
authorizing the sale of the Acquired Assets, the execution and delivery of
this Agreement and all other documents and agreements delivered in
connection herewith by officers of each Seller and consummation of the
Transactions;
(v) deliver, or cause to be delivered, to Parent and Sub such good
standing certificates and other similar documents as Parent or Sub may
reasonably request to ensure that the actions required to be taken by the
Sellers at the Closing have been properly authorized; and
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(vi) deliver, or cause to be delivered, to Sub, certificates
representing the Acquired Stock, duly endorsed in blank, together with
such stock-powers or other transfer documents as Parent or Sub may
reasonably request.
(c) At the Closing, Sub and Parent will cause Sub to:
(i) deliver, or cause to be delivered, to the Sellers the ▇▇▇▇ of
Sale and the Intellectual Property Assignment duly executed by Sub;
(ii) pay to the Sellers the Purchase Price in accordance with
Section 2.04;
(iii) deliver, or cause to be delivered, to the Sellers such good
standing certificates and other similar documents as Sellers may
reasonably request to ensure that the actions required to be taken by
Parent or Sub at the Closing have been properly authorized.
ARTICLE III
Representations and Warranties of the Sellers
The Sellers, jointly and severally, represent and warrant to Parent
and Sub that, except as set forth in the letter dated as of the date of this
Agreement, from the Sellers to Parent and Sub (the "Seller Disclosure Letter"):
SECTION 3.01. Organization, Standing and Power. (a) Each of the
Sellers, CLP and Pro-Motion (a) is duly organized, validly existing and in good
standing (to the extent such jurisdiction recognizes the concept of good
standing) under the laws of the jurisdiction in which it is organized and (b)
has full corporate power and authority. CLP and Pro-Motion (a) are each duly
qualified to do business in each jurisdiction where the nature of their business
or the ownership or leasing of its properties make such qualification necessary
and (b) possess all governmental franchises, licenses, permits and approvals
necessary to enable them to own, lease or otherwise hold their assets and to
conduct their business as currently
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conducted, in each case, other than failures to so qualify that, individually or
in the aggregate, are not reasonably likely to have material negative effect on
the Sellers.
(b) The business of the Sellers is conducted by CART. Championship
has no material ongoing business operations other than owning the stock of CART
and Pro-Motion.
SECTION 3.02. Authority; Execution and Delivery; Enforceability.
(a) Each Seller has all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the Transactions in
accordance with the terms of this Agreement. The execution and delivery by the
Sellers of this Agreement and the consummation by the Sellers of the
Transactions (including the commencement of the Chapter 11 Case) in accordance
with the terms of this Agreement have been duly authorized by all necessary
corporate action on the part of each Seller and no other corporate proceedings
on the part of either Seller are necessary to approve this Agreement or to
consummate the Transactions. The approval of the shareholders of Championship is
not required to consummate the Transactions. Each Seller has duly executed and
delivered this Agreement, and, assuming due execution and delivery hereof by
Parent and Sub, this Agreement constitutes its legal, valid and binding
obligation, enforceable against each Seller in accordance with its terms.
(b) No state takeover statute or similar statute or regulation
applies or purports to apply to any Seller with respect to this Agreement or the
Transactions.
SECTION 3.03. No Conflicts; Consents.
(a) The execution and delivery by the Sellers of this Agreement does
not, and the consummation of the Transactions and the compliance with the terms
hereof will not, give rise to a right of termination, cancellation or
acceleration of any obligation or to loss of a benefit under, or result in the
creation of any Lien upon any of the Acquired Assets or Assumed Liabilities that
cannot be cured or corrected by entry of the Final Approval Order.
16
(b) Other than as specifically contemplated in this Agreement, no
material consent, approval, license, permit, order or authorization ("Consent")
of, or material registration, declaration or filing with, or material permit
from, any domestic or foreign (whether national, federal, state, provincial,
local or otherwise) government or any court of competent jurisdiction,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign (each, a "Governmental Entity") is required
to be obtained or made by any Seller in connection with the execution, delivery
and performance of this Agreement by any Seller or the consummation of the
Transactions by either of them.
SECTION 3.04. Title to Acquired Assets. As of the Closing and
assuming the entry of the Final Approval Order by the Bankruptcy Court, the
Sellers will have good and valid title to all of the Acquired Assets free and
clear of all Encumbrances. The Acquired Personal Property constitutes all of the
material tangible personal property used in the business of CART.
SECTION 3.05. Contracts. Section 3.05 of the Seller Disclosure
Letter lists all written or oral contracts to which CART is a party that provide
for the payment to or by any Seller of more than $50,000 or is otherwise
material to the business of the Sellers. Championship is not a party to any
written or oral contracts, other than Contracts which are Assumed Contracts,
that are necessary or useful to the business of CART. Champ and Cart, as
applicable, have delivered to Parent and Sub a correct and complete copy of each
Assumed Contract to which it is a party and each contract (and all amendments,
modifications and supplements thereto) listed in Section 3.05 of the Seller
Disclosure Schedule. Subject to (i) laws of general application relating to
bankruptcy, insolvency and the relief of debtors and (ii) rules of law governing
specific performance, injunctive relief and other equitable remedies, each of
the Assumed Contracts is valid and in full force and effect in accordance with
its terms. Neither Champ or CART, as applicable, is in material violation of or
material default under any of the Assumed Contracts to which it is a party, and
Schedule 2.02(b) identifies any and all Cure Costs related to the Assumed
Contracts. Immediately after the Closing, no party to any
17
Assumed Contract will have the right to terminate any Assumed Contract by reason
of a breach or default by either Seller thereunder.
SECTION 3.06. Intellectual Property Matters.
(a) To Seller's Knowledge, Section 3.06 of Seller Disclosure Letter
lists, as of the date of this Agreement, all Seller Registered Proprietary
Rights (including all Seller Proprietary Rights, all pending applications
seeking registration of Proprietary Rights and trademark and service marks that
any Seller or any of their Subsidiaries has used with the intent of creating or
benefiting from any common law rights relating to such marks) and lists any
proceedings or actions pending as of the date of this Agreement before any
court, tribunal or administrative body (including the PTO or equivalent
authority anywhere in the world) related to any of Seller Registered Proprietary
Rights. Section 3.06 of Seller Disclosure Letter also lists, as of the date of
this Agreement, all material Contracts (including all inbound licenses) to which
any Seller or any of their Subsidiaries is a party with respect to any
Proprietary Rights.
(b) The Sellers own exclusively all Seller Proprietary Rights listed
in Section 3.06 of the Seller Disclosure Letter. Each of Seller Proprietary
Rights owned or used by any Seller or any of their Subsidiaries immediately
prior to the date of this Agreement will be owned or available for use by Sub on
identical terms and conditions immediately subsequent to the Closing. Each
Seller has taken all actions reasonably necessary to maintain and protect each
material item of Seller Proprietary Rights.
(c) Each item of Seller Registered Proprietary Rights listed in
Section 3.06 of the Seller Disclosure Letter is valid and subsisting, and all
necessary registration, maintenance, renewal fees, annuity fees and Taxes due
through the date of this Agreement in connection with such Seller Registered
Proprietary Rights have been paid and all necessary documents and certificates
in connection with such Seller Registered Proprietary Rights have been filed
with the relevant patent, copyright, trademark or other authorities in the
United States or
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foreign jurisdictions, as the case may be, for the purposes of maintaining such
Seller Registered Proprietary Rights including all change of name documents
required to be filed to maintain chain of title.
SECTION 3.07. Compliance with Laws. The business of CLP and
Pro-Motion is being conducted in substantial compliance with all applicable
Laws.
SECTION 3.08. Insurance Coverage. Section 3.08 of the Seller
Disclosure Letter identifies all insurance policies covering the Acquired
Assets. There is no material claim by any Seller pending under any of such
policies as to which coverage has been questioned, denied or disputed by the
underwriters of such policies or bonds.
SECTION 3.09. The Acquired Stock. All shares of Acquired Stock (i)
are duly authorized and have been validly issued and are fully paid and
nonassessable, as applicable, and free of preemptive rights and (ii) are owned
by CART free and clear of all Encumbrances. There are no Contracts or
arrangements with respect to the ownership, voting or disposition of any shares
of the Acquired Stock.
(a) The Acquired Stock constitutes all of the outstanding capital
stock of CLP and Pro-Motion.
(b) All of the shares of Acquired Stock are duly authorized, validly
issued, fully paid and nonassessable and not subject to or issued in violation
of any purchase option, call option, right of first refusal, preemptive right,
subscription right or any similar right.
(c) There are no bonds, debentures, notes or other indebtedness of
CLP or Pro-Motion having the right to vote (or convertible into, or exchangeable
for, securities having the right to vote) on any matters on which holders of
shares of Acquired Stock may vote ("Voting Company Debt"). Except as set forth
above, there are no options, warrants or other rights linked to the price of or
otherwise exercisable for or convertible into capital stock of CLP or
Pro-Motion.
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(d) Neither the Company nor any Company Subsidiary is a party to any
voting agreement, and, to the Sellers' Knowledge, there are no irrevocable
proxies and no other agreements with respect to the voting of the Company
Capital Stock, other than those described in the Schedule 13D filed by Parent on
August 18, 2003.
SECTION 3.10. Balance Sheets; Undisclosed Liabilities.
(a) Section 3.10 of the Seller Disclosure Letter contains the
unaudited balance sheets of CLP and Pro-Motion as of November 30, 2003 (the
"Balance Sheets").
(b) The Balance Sheets fairly present the financial positions of CLP
and Pro-Motion as of the dates thereof (subject to normal year-end audit
adjustments).
(c) Other than as disclosed in the Balance Sheets, as of the date of
this Agreement, neither CLP nor Pro-Motion has any material liabilities or
material obligations of any nature (whether accrued, absolute, contingent or
otherwise).
SECTION 3.11. Tax Matters. (a) Each of the Sellers and their
Subsidiaries has timely filed, or has caused to be timely filed on its behalf,
all Tax Returns required to be filed by it prior to the date of this Agreement.
All such Tax Returns are true, complete and accurate in all material respects.
All Taxes shown to be due on such Tax Returns have been timely paid.
(b) Taxes incurred by the Sellers or any of their Subsidiaries but
not yet due and payable do not exceed the reserve for Taxes set forth on the
most recent financial statements contained in the Championship SEC Documents for
all Tax periods and portions thereof through the date of such financial
statements. No material Taxes will be incurred by the Sellers or any their
Subsidiaries for periods ending after the date of the most recent financial
statements contained in the Championship SEC Documents through the Closing other
than in the ordinary course of business.
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(c) No audit is currently pending with respect to any Tax Return of
either Seller or any of their Subsidiaries nor, to the Sellers' Knowledge, has
an audit, examination or other similar review been threatened by any Tax
Authority. Neither the of the Sellers nor any of their Subsidiaries has waived
any statute of limitations in respect of Taxes or agreed to any extension of
time for the assessment of any Tax. There are no outstanding rulings of, or
requests for rulings by, any Tax Authority addressed to either Seller or any of
their Subsidiaries, that are, or if issued would be, binding on the either
Seller or ant of their Subsidiaries. No written claim has been made in the past
five years by a Tax Authority in a jurisdiction where none of the Sellers or any
of their Subsidiaries do not file Tax Returns that it is or may be subject to
taxation by that jurisdiction.
(d) The federal income Tax Returns of the Sellers and each of their
Subsidiaries (whether or not consolidated in the Tax Returns for the Seller
Group) have been examined by and fully and finally settled with the United
States Internal Revenue Service, or have closed by virtue of the expiration of
the applicable statute of limitations, for all tax years ended on or before
December 31, 1999. Copies of all Tax Returns of the Sellers and their
Subsidiaries as filed, including any amendments thereof, relating to income for
periods ending after December 31, 1999 have been made available, and shall be
delivered on request, to Parent, Sub or their Representatives. All assessments
for Taxes due with respect to such completed and settled examinations or any
concluded litigation have been fully paid.
(e) Neither the Company nor any Company Subsidiary has been a member
of an affiliated group filing a consolidated federal income Tax Return other
than the group in which the Company is the common parent (the "Seller Group").
Neither Seller nor any of their Subsidiaries is a party to any Tax allocation or
sharing agreement or any other material agreement with respect to Taxes. The
Sellers and their Subsidiaries do not have any liability for the Taxes of any
person other than the Company and the Company Subsidiaries (i) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state,
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local, or foreign law), (ii) as a transferee or successor, (iii) by contract, or
(iv) otherwise.
(f) The Company and the Company Subsidiaries have withheld and paid
all material Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
stockholder or other third party.
(g) Neither Seller nor any of their Subsidiaries will be required,
as a result of a change in method of accounting for any period ending on or
before or including the Effective Time, to include any adjustment under Section
481(c) of the Code (or any similar or corresponding provision or requirement
under any other Tax law) in Taxable income for any period ending on or after the
Closing Date.
(h) Pro-Motion and CLP are not subject to any limitations under Code
Sections 382 or 383 on the use of its federal net operating loss or credit
carryforwards.
(i) Neither Pro-Motion or CLP is obligated to make any payments, and
is not a party to any agreement that under certain circumstances could obligate
it to make any payments, that will not be deductible under Code Section 162(m)
or Section 280G.
(j) Neither CLP nor Pro-Motion has been a United States real
property holding corporation within the meaning of Code Section 897(c)(2).
(k) Neither of the Sellers nor any of their Subsidiaries have a
permanent establishment in any country with which the United States of America
has a relevant Tax treaty, as defined in such relevant Tax treaty, and does not
otherwise operate or conduct business through any branch in any country other
than the United States.
(l) Neither of the Sellers nor any of their Subsidiaries have ever
been either a "distributing corporation" or a "controlled corporation" in
connection with a distribution of stock qualifying for tax-free treatment, in
whole or in part, pursuant to Section 355 of the Code.
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SECTION 3.12. Budget. The Budget is adequate to maintain the ongoing
operations of the Sellers, CLP and Pro-Motion other than the expenditures
contemplated by Section 5.01(b).
ARTICLE IV
Representations and Warranties of Parent and Sub
Parent and Sub, jointly and severally, represent and warrant to the
Sellers that:
SECTION 4.01. Organization, Standing and Power. Each of Parent and
Sub is duly organized, validly existing and in good standing (to the extent such
jurisdiction recognizes the concept of good standing) under the laws of the
jurisdiction in which it is organized and has full limited liability company or
corporate power and authority, as applicable, to conduct its business as
presently conducted, other than where the failure to be in good standing,
individually or in the aggregate, is not reasonably likely to have a Parent
Material Adverse Effect.
SECTION 4.02. Authority; Execution and Delivery; Enforceability.
Each of Parent and Sub has all requisite limited liability company or corporate
power and authority, as applicable, to execute and deliver this Agreement and to
consummate the Transactions. The execution and delivery by each of Parent and
Sub of this Agreement and the consummation by it of the Transactions have been
duly authorized by all necessary limited liability company or corporate action,
as applicable, on the part of Parent and Sub. Each of the Board of Managers of
Parent and the Board of Directors of Sub, at a meeting duly called and held,
duly and unanimously adopted resolutions approving this Agreement, the
Transactions and, in the case of the Board of Directors of Sub, declaring its
advisability. Parent, as sole stockholder of Sub, has adopted this Agreement.
Each of Parent and Sub has duly executed and delivered this Agreement, and,
assuming due execution and delivery hereof by the Sellers, this Agreement
constitutes the legal, valid and binding obligation of each of Parent and Sub,
enforceable against it in accordance with its terms.
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SECTION 4.03. No Conflicts; Consents.
(a) The execution and delivery by each of Parent and Sub of this
Agreement do not, and the consummation of the Transactions and the compliance
with the terms hereof will not, conflict with, or result in any violation of or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any material
obligation or to loss of a material benefit under, or result in the creation of
any Lien upon any of the properties or assets of Parent or any of its
subsidiaries under, any provision of (i) the certificate of incorporation,
by-laws or other comparable charter and organizational documents of Parent or
any of its subsidiaries, (ii) any Contract to which Parent or any of its
subsidiaries is a party or by which any of their respective properties or assets
is bound or (iii) any Judgment or Law, in each case, applicable to Parent or any
of its subsidiaries or their respective properties or assets.
(b) No Consent of, or registration, declaration or filing with, or
permit from any Governmental Entity is required to be obtained or made by or
with respect to Parent or any of its subsidiaries in connection with the
execution, delivery and performance of this Agreement by Parent or any of its
subsidiaries or the consummation of the Transactions.
SECTION 4.04. Financing. At the Closing, Parent and Sub will have
available all of the funds necessary to complete the Transactions.
ARTICLE V
Covenants Relating to Conduct of Business
SECTION 5.01. Conduct of Business by Sellers.
(a) Except for matters specifically contemplated by this Agreement,
from the date of this Agreement to the Closing each Seller shall, and shall
cause each of their Subsidiaries to, conduct its business in light of the
existing circumstances (including the Chapter 11 Case) in
24
such a manner as to permit the Sellers to perform their obligations under this
Agreement and to maintain the ongoing operations of the Sellers, CLP and
Pro-Motion consistent with the budget attached hereto as Exhibit C (the
"Budget"). In addition, and without limiting the generality of the foregoing,
from the date of this Agreement to the Closing, the Sellers shall not, and shall
not permit any of their subsidiaries to, do any of the following without the
prior written consent of Parent:
(i) (A) declare, set aside or pay any dividends on, or make any
other distributions in respect of, any of its capital stock or (B)
purchase, redeem or otherwise acquire any shares of capital stock of any
Seller or any Subsidiary of any Seller or any other securities thereof or
any options, warrants, calls or rights to acquire any such shares or other
securities;
(ii) acquire or agree to acquire (A) by merging or consolidating
with, or by purchasing any equity interest in or portion of the assets of,
or by any other manner, any business or any corporation, partnership,
joint venture, association or other business organization or division
thereof or (B) any assets that are material, individually or in the
aggregate, to the Sellers, taken as a whole, except purchases in the
ordinary course of business consistent with prior practice;
(iii) sell, lease (as lessor), license or otherwise dispose of or
subject to any Encumbrance any of the Acquired Assets or any properties or
assets that are material, individually or in the aggregate, to the
Sellers;
(iv) incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or
warrants or other rights to acquire any debt securities of any Seller,
guarantee any debt securities of another person, enter into any "keep
well" or other agreement to maintain any financial statement condition of
another person or enter into any arrangement having the economic effect of
any of the foregoing;
25
(v) enter into, modify or terminate (i) any Contract listed on
Section 3.05 of the Seller Disclosure Letter, and (ii) any Contract
entered into on or after the date of this Agreement, that if it had been
entered into prior to the date of this Agreement, would have had to be
listed on Section 3.05 of the Seller Disclosure Letter;
(vi) enter into, modify or terminate any sponsorship or promoter
Contract;
(vii) enter into, modify or terminate any Contract with any
Affiliate of any Seller; or
(viii) authorize any of, or commit or agree to take any of, the
foregoing actions.
(b) Discretionary Spending. In addition to the requirements set
forth in Section 5.01(a), from the date of this Agreement to the Closing, the
Sellers, CLP and Pro-Motion will conduct their businesses in a manner to assist
Parent and Sub to prepare for the 2004 CART racing season. Without limiting the
generality of the foregoing, the Sellers will identify to Parent those
expenditures ("Interim Expenditures") and contracts ("Interim Contracts") that
would be necessary or appropriate to prepare for the 2004 CART racing season.
Upon written approval of Parent in its sole discretion, the Sellers will assist
Parent or Sub in entering into such Interim Contracts or making such Interim
Expenditures for its own account. For the avoidance of doubt, the Sellers shall
not be required to make expenditures in excess of the Budget.
(c) Other Actions. Except as otherwise permitted by Section 5.02,
the Sellers, Parent and Sub shall not, and shall not permit any of their
respective Subsidiaries to, take any action that would, or that is reasonably
likely to, result in (i) any of the representations and warranties of such party
set forth in this Agreement becoming untrue, other than for such failures to be
true and correct that, individually or in the aggregate, have not resulted and
are not reasonably likely to result in the condition in Section 7.02(a) (in the
case of the Sellers) or Section 7.03(a) (in the case of Parent and Sub) not
being satisfied or (ii) any condition
26
to the Closing set forth in Article VII not being satisfied.
(d) Designated Representative of Parent and Sub. If any consent is
required of Parent or Sub pursuant to this Agreement, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, each of them alone and any Person that either of them designates in
writing are hereby designated as the authorized representative of Parent or Sub
for such purposes. Parent or Sub may change its authorized representative by
giving notice to the Sellers pursuant to the procedures set forth in Section
9.02.
SECTION 5.02. Bankruptcy Court Orders.
(a) As soon as practicable after the date hereof and in any event no
later than three Business Days after the date hereof, CART shall file a motion
that seeks, on an expedited basis, the entry of an order (the "Sale Procedure
Order") approving, among other things, the procedures in connection with (i)
CART's request to sell and assign, as applicable, the Acquired Assets to the Sub
pursuant to this Agreement and Sections 363, 365 and 1146 of the Bankruptcy
Code, free and clear of all interests or Encumbrances in or on the Acquired
Assets to the fullest extent of the Bankruptcy Court's authority to so order
(the "Proposed Sale" and the hearing to consider approval of the Proposed Sale,
the "Sale Hearing"), (ii) establishing notice and service requirements to all
creditors and parties in interest of the Proposed Sale and the Sale Hearing
(including the Internal Revenue Service and all other Tax authorities with
jurisdiction over the Seller or the Acquired Assets)and (iii) establishing
thresholds for initial overbids consistent with those set forth in Section
5.02(g), the bidding procedures and setting a date for the Sale Hearing
(collectively, the "Sale Procedures"), which shall be substantially in the form
of Exhibit D.
(b) The order approving the Proposed Sale (the "Approval Order")
will be substantially in the form annexed hereto as Exhibit E, provided that, in
each case, any material changes to such form of order must be approved by Parent
and Sub and the Sellers, and the motion relating to the Approval Order will be
in form and substance reasonably satisfactory to Parent and Sub. If (i) the
Bankruptcy
27
Court refuses to issue the Approval Order (except as otherwise provided in the
preceding sentence) or (ii) an Alternative Transaction is approved by the
Bankruptcy Court at the Sale Hearing, then in any such event, this transaction
shall automatically terminate and the Sellers and Parent and Sub shall be
relieved of any further liability or obligation hereunder.
(c) Subject to CART's obligations to comply with any order of the
Bankruptcy Court (including the Sale Procedures), CART and Sub will promptly
make any filings, take all actions and use commercially reasonable efforts to
obtain any and all other approvals and orders necessary or appropriate for
consummation of the transactions contemplated hereby.
(d) CART shall file a motion requesting the Bankruptcy Court to hold
a hearing on the sale of the Acquired Assets. CART shall use its best efforts to
expedite the timing of the hearing so that it shall be held on or before the
date 45 days after the date hereof but in no event shall the hearing be held
later than the date 60 days after the date hereof.
(e) CART shall promptly provide Parent and Sub with drafts of all
documents, motions, orders, filings or pleadings that CART proposes to file with
the Bankruptcy Court which relate to the consummation or approval of this
Agreement and will provide Parent and Sub with reasonable opportunity to review
such filings. The Seller will also promptly provide Parent and Sub with written
notice and copies of any other or further notice of appeal, motion or
application filed in connection with any appeal from or application for
reconsideration of, any of such orders and any related briefs.
(f) The Sellers shall be responsible for the payment or satisfaction
of any amounts as required pursuant to Section 365(a)(1)(A) of the Bankruptcy
Code (the "Cure Costs") necessary to cure any defaults and arrearages that exist
on the Closing Date under the Assumed Contracts.
(g) Parent and Sub acknowledge and understand that the Bankruptcy
Court customarily requires that any offer to purchase a debtor's assets be
subject to
28
counteroffers by third parties and that the Bankruptcy Court may conduct a
bidding process at or prior to the hearing on approval of the sale of the
Acquired Assets contemplated by this Agreement; provided, however, that the
Sellers shall oppose, and shall not submit any motions, plans of reorganization
or disclosure statements proposing, any counteroffer by a third party (i)
pursuant to which the payment of any consideration is contingent upon the maker
thereof meeting or exceeding any performance criteria or is payable solely out
of any profits or a percentage of revenue of the maker, or (ii) if such
counteroffer contains any non-cash consideration, the maker's capital structure
is not at least as financially sound as that of Open Wheel and Sub (including
any guarantees of their performance) and (iii) provides for a total purchase
price payable pursuant to such counteroffer which does not exceed the Purchase
Price payable by Sub hereunder by an amount in excess of $150,000.
ARTICLE VI
Additional Agreements
SECTION 6.01. Access to Information; Confidentiality. The Sellers
shall, and shall cause each of their Subsidiaries to, afford to Parent, and to
Parent's Representatives, reasonable access during normal business hours during
the period prior to the Closing to all their respective properties, books,
contracts, commitments, personnel and records and, during such period, the
Sellers shall, and shall cause each of their Subsidiaries to, furnish promptly
to Parent (a) a copy of each report, schedule, registration statement and other
document filed by it during such period pursuant to the requirements of Federal
or state securities laws and (b) all other information concerning its business,
properties and personnel as Parent may reasonably request; provided, however,
that the Sellers or any of their Subsidiaries may withhold any document or
information that is subject to the terms of a confidentiality agreement with a
third party. All information exchanged pursuant to this Section 6.01 shall be
subject to the confidentiality agreements previously entered into among the
parties.
29
SECTION 6.02. Reasonable Best Efforts; Notification. (a) Upon the
terms and subject to the conditions set forth in this Agreement, each of the
parties hereto shall use its reasonable best efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with the other parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, the
Transactions, including (i) the obtaining of all necessary actions or
nonactions, Consents and waivers from Governmental Entities and the making of
all necessary registrations and filings (including filings with Governmental
Entities, if any) and the taking of all reasonable steps as may be necessary to
obtain a Consent or waiver from, or to avoid an action or proceeding by, any
Governmental Entity, (ii) in the case of the Sellers, the obtaining of all
necessary Consents or waivers from third parties, (iii) in the case of the
Sellers, the defending of any lawsuits or other legal proceedings, whether
judicial or administrative, challenging this Agreement or the consummation of
any of the Transactions, including seeking to have any stay, order or injunction
entered by any court or other Governmental Entity vacated or reversed,(iv) the
execution and delivery of any additional instruments necessary to consummate the
Transactions and to fully carry out the purposes of this Agreement and (v) in
the case of the Sellers, use good faith efforts to transfer the memberships
referred to in Section 2.02(e). In connection with and without limiting the
foregoing, the Sellers and their respective boards of directors shall (i) take
all action necessary to ensure that no state takeover statute or similar statute
or regulation is or becomes applicable to any Transaction or this Agreement and
(ii) if any state takeover statute or similar statute or regulation becomes
applicable to any Transaction or this Agreement, take all action necessary to
ensure that the Transactions may be consummated as promptly as practicable on
the terms contemplated by this Agreement and otherwise to minimize the effect of
such statute or regulation on the Transactions. Parent and Sub will use
reasonable efforts to cooperate with the Sellers, at the Sellers' request, in
the performance of the Sellers' obligations in clauses (ii) and (iii) above.
30
SECTION 6.03. Interim Management. Immediately prior to filing of the
Chapter 11 Case, CART will terminate the employment of its Chief Executive
Officer and appoint ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, to serve as CEO until the Closing (the
"Replacement CEO"). If the Replacement CEO resigns or is otherwise unable to
serve, CART will appoint another Replacement CEO, who shall be satisfactory to
Parent in its reasonable discretion. The authority of the Replacement CEO will
be defined and limited by resolutions of the board of directors of CART so that
the Replacement CEO will not be authorized to incur obligations on behalf of
CART or make decisions with respect to the actions to be taken by CART in the
Chapter 11 Case without express authorization from the board of directors of
CART. However, the Replacement CEO will have sufficient authority to fulfill his
duties including access to and authority to direct the employees of CART to
perform their obligations hereunder, including without limitation the
obligations under Section 5.01.
SECTION 6.04. Fees and Expenses. All fees and expenses incurred in
connection with the Transactions shall be paid by the party incurring such fees
or expenses, whether or not the Transactions are consummated.
SECTION 6.05. Public Announcements. Parent and Sub, on the one hand,
and the Sellers, on the other hand, shall consult with each other before
issuing, and provide each other the opportunity to review and comment upon, any
press release or other public statements with respect to the Transactions and
shall not issue any such press release or make any such public statement prior
to such consultation, except as may be required by applicable Law or court
process.
SECTION 6.06. Transfer Taxes. The Parties recognize and acknowledge
that the sale, transfer, assignment and delivery of the Acquired Assets may be
exempt under Section 1146(c) of the Bankruptcy Code and the Approval Order from
all state and local transfer, recording, stamp or other similar transfer Taxes
that may be imposed by reason of the sale, transfer, assignment and delivery of
the Acquired Assets. Notwithstanding the foregoing, the Sellers on the one hand,
and Parent and Sub, on the other, will each bear and pay, one-half of any sales
31
Taxes, use Taxes, transfer Taxes, documentary charges, recording fees, filing
fees or similar Taxes, charges, fees or expenses that may become payable by Sub
or the Sellers in connection with the sale of the Acquired Assets to Sub, the
assumption by Sub of the Assumed Liabilities or any of the other transactions
contemplated by this Agreement (the "Transfer Taxes").
SECTION 6.07. No Additional Representations.
(a) Parent acknowledges and agrees that (i) it is entering into this
Agreement and the Transactions without any representation or warranty, express
or implied, by the Sellers or any of their Representatives except as expressly
set forth in this Agreement and (ii) the accuracy, completeness or
reasonableness of any projection or forecast delivered by or on behalf of the
Sellers to Parent, Sub or any of their Representatives shall not be considered
in determining whether any condition to Parent's or Sub's obligations with
respect to the Transactions has been satisfied.
(b) The Sellers acknowledge and agree that (i) it is entering into
this Agreement and the Transactions without any representation or warranty,
express or implied, by Parent, Sub or any of their Representatives except as
expressly set forth in this Agreement and (ii) the accuracy, completeness or
reasonableness of any projection or forecast delivered by or on behalf of
Parent, Sub or any of their Representatives to the Sellers shall not be
considered in determining whether any condition to the Sellers' obligations with
respect to the Transactions has been satisfied.
SECTION 6.08. Employment. Prior to the Closing, Sub will offer
employment agreements, (the "Employment Agreements") commencing upon the
business day immediately following the Closing Date, to ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇▇ (the "Employees"). The Employment Agreements will
provide for at-will employment and compensation at a rate substantially the same
as each Employee's current compensation and 90 days severance pay if the
employee is terminated without cause prior to the final race of the 2004 season
or, if there is no 2004 season, November 1, 2004. To the extent required under
32
Section 4980B of the Code and the Treasury Regulations promulgated thereunder,
Sub shall provide COBRA coverage to CART's M&A Qualified Beneficiaries (within
the meaning of Section 4980B of the Code and the Treasury Regulations
promulgated thereunder). CART shall provide to Sub all information that SUB
reasonably deems necessary to provide such coverage, including but not limited
to, the identification of all M&A Qualified Beneficiaries and the identification
of all qualifying events with respect to each such M&A Qualified Beneficiary (as
defined in Section 4980B(f)(3) of the Code).
SECTION 6.09. Sale Procedures. CART (a) will conduct the auction
process in accordance with the Sale Procedures and (b) will not amend, waive,
modify or supplement in any material respect the Sale Procedures except as set
forth herein or therein or as required or ordered by the Bankruptcy Court.
SECTION 6.10. Apportionment. All personal property Taxes,
assessments and similar governmental charges levied with respect to the Acquired
Assets for a taxable period which includes (but does not end on) the Closing
Date shall be apportioned between the pre-Closing Tax period and the
post-Closing Tax period as of the Closing Date on a per diem basis. Thereafter
the Sellers shall notify Parent and Sub upon receipt of any ▇▇▇▇ for personal
property Taxes or similar charges relating to the Acquired Assets, part or all
of which are attributable to any post-Closing Tax period, and shall promptly
deliver such Tax ▇▇▇▇ to the Sub who shall pay the same to the appropriate
Governmental entity; provided, that if such ▇▇▇▇ covers the pre-Closing period,
the Sellers shall also remit to Sub, prior to the due date of such Tax ▇▇▇▇,
payment for the proportionate amount of such ▇▇▇▇ that is attributable to the
pre-Closing period. If any of the Sellers, on the one hand, or the Parent or
Sub, on the other hand, shall make a payment for which such party is entitled to
have such payment made by the other party under this Section, the other party
shall make reimbursement promptly but in no event later than 15 Business Days
after the presentation of a statement setting forth the amount of reimbursement
to which the presenting party is entitled along with such supporting evidence as
is reasonably necessary to calculate the amount of the reimbursement.
33
Any payment between the parties required under this Section shall bear interest
at the rate per annum determined, from time to time, under the provisions of
Section 6621(a)(2) of the Code for each day from the date the relevant Tax is
due to be paid to the Tax authority until paid. The Sellers will provide Sub and
Buyer prior to the Closing Date a forecast of all personal property Taxes,
assessments and similar governmental charges levied with respect to the Acquired
Assets for a taxable period which includes (but does not end on) the Closing
Date.
SECTION 6.11. Bankruptcy Case. Parent and Sub will cooperate fully
with the Bankruptcy Court and with the Sellers to expedite the Chapter 11 Case
and to obtain orders as described in Section 5.02.
SECTION 6.12. Possession of the Assets. Parent and Sub will make all
necessary arrangements for Sub to take possession of the Acquired Assets (other
than intangible assets), and, at Sub's expense, to transfer the same to a
location operated by Parent or Sub, promptly, but in no event later than 60 days
following the Closing. Sub will bear the storage expenses for storing the
Acquired Assets from the date of the Closing to the date Sub takes possession of
the Acquired Assets which would not have otherwise been incurred by the Sellers
were it not for the requirement to store the Acquired Assets pursuant to this
Section 6.12.
SECTION 6.13. Collection of Receivables. The Sellers agree that they
shall forward promptly to Sub any monies, checks or instruments received by them
after the Closing Date with respect to the accounts receivable, notes receivable
or other obligations receivable purchased by Sub from the Sellers pursuant to
this Agreement. Parent and Sub agree that they shall forward promptly to CART
any monies, checks or instruments received by them after the Closing Date with
respect to accounts receivable, notes receivable or other obligations receivable
which were not purchased by Sub pursuant to this Agreement. The Sellers shall
provide to Parent and Sub and Parent and Sub shall provide to Parent such
reasonable assistance as the other may request with respect to the collection of
any such receivables, provided the requesting party pays the reasonable
out-of-pocket expenses of the others and their
34
officers, directors and employees incurred in providing such assistance. The
Sellers hereby grant to Parent and Sub a power of attorney to endorse and cash
any checks or instruments payable or endorsed to the Sellers or either of their
order which are received by Parent or Sub and which relate to accounts
receivable, notes receivable or other obligations receivable purchased by Sub
from the Sellers.
SECTION 6.14. Consent to Negotiations. The Sellers acknowledge that
Parent and Sub desire to initiate and maintain discussions and negotiations with
certain third parties with which the Sellers have existing Contracts or other
relationships for the purpose of preparing for the Closing and planning the 2004
CART racing season. From the date hereof until the earlier of (a) the Closing or
(b) the termination of this Agreement, the Sellers consent to Parent and Sub
initiating or continuing any such discussions and negotiations.
SECTION 6.15. Indemnification for Tax Matters. (a) Notwithstanding
any other provision of this Agreement, the representations and warranties made
in Section 3.11 and the covenants and agreements contained in this Section 6.15
shall survive the Closing until the expiration of all applicable statutes of
limitations with respect to the representations and warranties made in Section
12.
(b) Championship and CART shall, jointly and severally, indemnity
and hold harmless Parent and Sub and/or their Affiliates, Subsidiaries
(including, after the Closing Date, Pro-Motion and CLP), directors, officers,
employees, agents, members and assignees from and against any claims, demands,
causes of action, proceedings, losses, liabilities, damages, interest,
penalties, expenses, judgments and costs (including reasonable attorney's fees
and disbursements, court costs, amounts paid in settlement) based upon, arising
or otherwise in respect of any breach of the representations and warranties made
in Section 3.12 hereof.
SECTION 6.16. Schedule 13E-3. Other than arising out of the Merger
Agreement, the Sellers have not taken, and agree not to take, any action that
could require the Parent, Sub or any of their Affiliates to file a
35
Transaction Statement on Schedule 13E-3 pursuant to the Securities and Exchange
Act of 1934, as amended.
SECTION 6.17. License of Names. The parties acknowledge that the
trademark "Championship Auto Racing Teams" is being acquired by Sub pursuant to
this Agreement. At the Closing, Sub and Championship will enter into a royalty
free non-exclusive trademark license agreement, on terms reasonably acceptable
to both Sub and Championship, to permit Championship to use the name
"Championship Auto Racing Teams" as its corporate name; provided, however, that
Championship will not be entitled to use the name "Championship Auto Racing
Teams" for any purpose other than its corporate name.
SECTION 6.18. Intercompany Receivables. At the Closing, the Sellers
will release Pro-Motion and CLP from any intercompany receivables owed to either
Seller or any of their Subsidiaries.
ARTICLE VII
Conditions Precedent
SECTION 7.01. Conditions to Each Party's Obligation To Effect The
Sale. The respective obligation of each party hereto to effect the Transactions
is subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(a) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or Law preventing the consummation of the Transactions,
or preventing Sub from owning the Acquired Assets shall be in effect; provided,
however, that prior to asserting this condition the applicable party shall have
used its reasonable efforts to prevent the entry of any such injunction or other
order and to appeal as promptly as possible any such injunction or other order
that may be entered.
SECTION 7.02. Conditions to Obligations of Parent and Sub. The
obligations of Parent and Sub to
36
effect the Transaction are further subject to the satisfaction or waiver on or
prior to the Closing Date of the following conditions:
(a) The representations and warranties of each Seller in this
Agreement shall be true and correct in all material respects, as of the date of
this Agreement and as of the Closing Date, except to the extent that such
representations and warranties expressly relate to an earlier date (in which
case on and as of such earlier date).
(b) Each of the Sellers shall each have performed in all material
respects any material obligation and complied in all material respects with any
material agreement or covenant of any Seller to be performed or complied with by
it under this Agreement prior to or at the time of the Closing.
(c) Each of the Sellers shall have furnished a certificate, signed
by their respective Chief Executive Officers, certifying compliance with the
conditions set forth in Sections 7.02(a) and 7.02(b) (together, the "Seller
Certificates")
(d) CART shall have filed a motion to approve the Sale Procedures
Order no later than 5 Business Days from the date of this Agreement.
(e) The Bankruptcy Court shall have conducted a hearing to establish
the sale procedures for the Sale Hearing and entered the Sale Procedures order
consistent with Section 5.02.
(f) The Bankruptcy Court shall have conducted a hearing on the sale
of the Acquired Assets.
(g) The Bankruptcy Court shall have entered the Final Approval Order
in form and substance in accordance with the provisions of this Agreement to Sub
and no stay of such Final Approval Order shall be in effect. The Final Approval
Order shall include a determination that this Agreement has been made and
negotiated in good faith, and that Sub is entitled to the protections of Section
363(m) of the Bankruptcy Code as a result. To the extent any
37
consent is needed for the assumption of the Assumed Contracts, the Sellers shall
have obtained all such consents.
(h) Any Cure Costs related to the Assumed Contracts shall have been
paid by the Sellers.
SECTION 7.03. Conditions to Obligation of the Sellers. The
obligations of the Sellers to effect the Transactions is further subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Representations and Warranties. The representations and
warranties of Parent and Sub in this Agreement shall be true and correct in all
material respects, in each case as of the date of this Agreement and as of the
Closing Date, except to the extent such representations and warranties expressly
relate to an earlier date (in which case on and as of such earlier date).
(b) Performance of Obligations of Parent and Sub. Parent and Sub
shall have performed in all material respects any material obligation of Parent
or Sub, as the case may be, and complied in all material respects with any
material agreement or covenant of Parent or Sub, as the case may be, to be
performed or complied with by it under this Agreement prior to or at the time of
the Closing.
(c) A Final Approval Order shall have been entered by the Bankruptcy
Court and the Sellers shall have received from the Bankruptcy Court all
applicable orders, approvals, and consents to transfer the Acquired Assets, and
to consummate the Transactions.
SECTION 7.04. Frustration of Closing Conditions. None of the
Sellers, on the one hand, or Parent or Sub, on the other hand, may rely on the
failure of any condition set forth in Article VII to be satisfied if such
failure was caused primarily by the failure of the Sellers, on the one hand, or
Parent or Sub, on the other hand, to use reasonable best efforts to consummate
the Transactions, as required by and subject to Section 6.02.
38
ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01. Termination. This Agreement may be terminated at any
time prior to the Closing:
(a) by mutual written consent of each of the parties;
(b) by any of Parent, Sub, Championship or CART, if the Closing has
not occurred by the date 60 days after the date of this Agreement;
(c) by Parent or Sub, if any Seller breaches or fails to perform in
any material respect any of its representations, warranties or covenants
contained in this Agreement, which breach or failure to perform (A) would give
rise to the failure of a condition set forth in Section 7.02, and (B) cannot be
or has not been cured within 15 days after the giving of written notice to the
Sellers of such breach;
(d) by Championship or CART, if Parent or Sub breaches or fails to
perform in any material respect any of its representations, warranties or
covenants contained in this Agreement, which breach or failure to perform (A)
would give rise to the failure of a condition set forth in Section 7.03, and (B)
cannot be or has not been cured within 15 days after the giving of written
notice to Parent of such breach;
(e) by any of Parent, Sub, Championship or CART, if there shall be
any Law of any Governmental Entity that makes consummation of the transactions
contemplated hereby illegal or otherwise prohibited or if any judgment,
injunction, order or decree of any competent authority prohibiting such
transactions is entered and such judgment, injunction, order or decree shall
have become final and non-appealable;
(f) by any of Parent, Sub, Championship or CART if the Sale
Procedure Order is not issued by the Bankruptcy Court on substantially similar
terms as contained in Section 5.1(a) or in the event that a stay pending appeal
39
or a writ of mandate of the Approval Order is granted on behalf of any party; or
(g) by any Parent, Sub, Championship or CART if an Alternative
Transaction is approved by the Bankruptcy Court.
SECTION 8.02. Effect of Termination. In the event of termination of
this Agreement as provided in Section 8.01, this Agreement shall forthwith
become void and have no effect, without any liability or obligation on the part
of Parent, Sub or any Seller, other than Section 6.04, this Section 8.02 and
Article IX, which provisions shall survive such termination, and except to the
extent that such termination results from the willful and material breach by a
party of any representation, warranty or covenant set forth in this Agreement.
SECTION 8.03. Amendment. This Agreement may be amended by the
parties hereto. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
SECTION 8.04. Extension; Waiver. At any time prior to the Closing,
the parties hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, or (b) waive any inaccuracies in
the representations and warranties contained in this Agreement or in any
document delivered pursuant to this Agreement or (c) subject to the proviso of
Section 8.03, waive compliance with any of the agreements or conditions
contained in this Agreement. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. Any failure or delay by any party hereto to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of such rights.
ARTICLE IX
General Provisions
SECTION 9.01. Nonsurvival of Representations and Warranties. Other
than as provided in Sections 6.15 and
40
6.16, none of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Closing. This
Section 9.01 shall not limit any covenant or agreement of the parties hereto
which by its terms contemplates performance after the Closing.
SECTION 9.02. Notices. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and shall be
deemed given upon receipt by the parties hereto at the following addresses (or
at such other address for a party as shall be specified by like notice):
(a) if to Parent or Sub, to
Open Wheel Racing Series LLC
c/o 21st Century Racing Holdings LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Open Wheel Racing Series LLC
c/▇ ▇▇▇▇▇▇ Capital, L.L.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Open Wheel Racing Series LLC
c/o Big Bang Racing LLC
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ White & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
41
▇▇▇▇▇▇▇▇ Racing, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Sellers, to
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Carlisle Peet, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇, Esq.
SECTION 9.03. Interpretation; Disclosure Letters. (a) When a
reference is made in this Agreement to a Section, Exhibit or Schedule, such
reference shall be to a Section of, or an Exhibit or Schedule to, this Agreement
unless otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation". The words "hereof", "herein",
"hereby" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. The words "date hereof" shall refer to the date of this
Agreement. The term "or" is not exclusive. The word "extent" in the phrase "to
the extent" shall mean the degree to which a subject or other thing extends, and
such
42
phrase shall not mean simply "if". The definitions contained in this Agreement
are applicable to the singular as well as the plural forms of such terms. Any
agreement or instrument defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement or instrument as from
time to time amended, modified or supplemented. References to a Person are also
to its permitted successors and assigns.
(a) Any matter disclosed in any section of Seller Disclosure Letter
shall be deemed disclosed for all purposes and all sections of Seller Disclosure
Letter if the reference to such matter in Seller Disclosure Letter makes
apparent the relationship between the matter disclosed and the other
representation that the disclosure qualifies.
SECTION 9.04. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced as a result of any
applicable Law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the extent possible.
SECTION 9.05. Counterparts. This Agreement may be executed in one or
more counterparts (including via telecopy or facsimile), all of which shall be
considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties hereto and delivered
to the other parties. Each party hereto need not sign the same counterpart.
SECTION 9.06. Entire Agreement; No Third-party Beneficiaries. This
Agreement, taken together with Seller Disclosure Letter (a) constitute the
entire agreement, and supersede all prior agreements and understandings, both
43
written and oral, among the parties hereto with respect to the Transactions and
(b) are not intended to confer upon any Person other than the parties hereto any
rights or remedies.
SECTION 9.07. Governing Law. THIS AGREEMENT IS TO BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH U.S. FEDERAL BANKRUPTCY LAW, TO THE EXTENT
APPLICABLE, AND WHERE STATE LAW IS IMPLICATED, THE LAWS OF THE STATE OF
DELAWARE, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
SECTION 9.08. JURISDICTION; WAIVER OF JURY TRIAL.
(a) THE BANKRUPTCY COURT WILL HAVE JURISDICTION OVER ANY AND ALL
DISPUTES BETWEEN OR AMONG THE PARTIES, WHETHER IN LAW OR EQUITY, ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY AGREEMENT CONTEMPLATED HEREBY; PROVIDED,
THAT IF THE BANKRUPTCY COURT IS UNWILLING OR UNABLE TO HEAR ANY SUCH DISPUTE,
THE COURTS OF THE STATE OF INDIANA AND THE FEDERAL COURTS OF THE UNITED STATES
OF AMERICA LOCATED IN THE STATE OF INDIANA WILL HAVE SOLE JURISDICTION OVER ANY
AND ALL DISPUTES BETWEEN OR AMONG THE PARTIES, WHETHER IN LAW OR EQUITY, ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY AGREEMENT CONTEMPLATED HEREBY. EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY CONSENTS AND SUBMITS TO THE
JURISDICTION OF SUCH COURTS AND WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
(b) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
SUIT, ACTION OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION. EACH PARTY HERETO, (i)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF
ANY SUIT, ACTION OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND (ii)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION 9.08(b).
44
SECTION 9.09. Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties hereto
without the prior written consent of the other parties. Any purported assignment
without such consent shall be void. Subject to the preceding sentences, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties hereto and their respective successors and assigns. Notwithstanding
the foregoing, Sub may assign its rights and obligations under this Agreement to
Parent.
SECTION 9.10. Specific Performance. The Transactions are unique
transactions and any failure on the part of any party to complete the
Transactions on the terms of this Agreement will not be fully compensable in
damages and the breach or threatened breach of the provisions of this Agreement
would cause the non-breaching party irreparable harm. Accordingly, in addition
to and not in limitation of any other remedies available to the non-breaching
party for a breach or threatened breach of this Agreement, such party will be
entitled to specific performance of this Agreement upon any breach by the other
party, and to an injunction restraining any such party from such breach or
threatened breach.
45
IN WITNESS WHEREOF, Parent, Sub, and each Seller have duly executed
this Agreement, all as of the date first written above.
OPEN WHEEL RACING SERIES LLC,
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Manager
OPEN WHEEL ACQUISITION CORPORATION,
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
CHAMPIONSHIP AUTO RACING TEAMS, INC.,
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: VP/CFO
CART, INC.,
By /s/ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇, III
---------------------------------
Name: ▇. ▇▇▇▇▇▇▇▇ Peet, III
Title: VP/CLO
46
Schedule 2.02(a)
Acquired Personal Property
(See attached)
47
Schedule 2.02(b)
Assumed Contracts
48
Schedule 2.02(d)
Seller Proprietary Rights
See the following attached annexes:
Annex 2.02(d)(1) Trademark Applications and Registrations of CART, Inc. and
related companies
Annex 2.02(d)(2) Common Law Trademarks of CART, Inc.
Annex 2.02(d)(3) Copyright Registrations and Domain Names of CART, Inc.
