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EXHIBIT 10.8
ARS Agreement
Draft #6 E.C.
December 21, 1995
AGREEMENT
THIS AGREEMENT made this 22nd day of December, 1995, by and between
Championship Auto Racing Teams, Inc., a Michigan corporation, of ▇▇▇ ▇. ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, herein referred to as "CART", and
American Racing Series, Inc., a Michigan corporation, of ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, herein referred to as "ARS".
W I T N E S S E T H:
1. OFFICIAL SUPPORT SERIES. CART hereby designates ARS as the exclusive
organizer of a series of open wheel automobile races to comprise and be
conducted as the Official Support Series of CART, herein referred to as the Indy
Lights Series. The Indy Lights Series shall be sanctioned exclusively by CART in
accordance with the IndyCar Rule Book and the current Indy Lights Rules
Supplement and shall be recognized as its Official Support Series, and as the
primary source from which to license drivers for participating in the IndyCar
Series, giving due credence to all other qualifications and requirements
considered by CART in passing on driver license applications.
2. TERM. The term of this Agreement shall commence with the 1996 racing
season and continue through the 1998 racing season, except as otherwise provided
in this Agreement. Provided ARS is in compliance with all the terms and
conditions of this Agreement, ARS shall have the option to extend this Agreement
on the same terms for an additional term of three (3) years, i.e., for the years
1999, 2000 and 2001, by notification to CART of such intent no later than
January 1, 1998.
3. SCHEDULE OF EVENTS. The Indy Lights Series races shall be scheduled
by CART and shall include not less than twelve (12) IndyCar events, unless a
lower number is requested by ARS. If ARS wishes to run more than twelve (12)
events or any event not held in conjunction with a CART
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December 21, 1995
event, then the parties will discuss and agree in good faith respecting the
additional arrangements or where applicable adjustments to this Agreement
necessary for such event(s), including but not limited to race promoter
agreements, officiating staff, television production arrangements, and safety
and medical team coverage. CART shall place the Indy Lights Series events on the
IndyCar event schedule at no promoter cost to ARS. No financial renumeration,
concession or adjustment to this Agreement will be made should ARS elect for any
reason to run at less than twelve (12) IndyCar events. ARS intends to present a
starting field of at least twenty (20) cars, and shall use its best efforts to
assure no less than fifteen (15) cars at each event.
4. SCHEDULE OF ACTIVITIES. Each Indy Lights Series race shall be
scheduled for seventy-five (75) miles in duration (subject to Rule 6.25 in the
Indy Lights Rules Supplement to the 1995 IndyCar Rule Book), and shall be
scheduled to start not more than two and one-half (2 1/2) hours prior to the
start of the IndyCar race when held in conjunction with CART events, unless
mutually agreed to the contrary. Furthermore, Indy Lights Series competitors
will receive a minimum of one (1) hour of track time on each of the Friday and
Saturday of the IndyCar event for practice and qualifying and an additional
fifteen (15) minutes for final practice on Saturday or warm-up on Sunday. If
possible, the Indy Lights Series on track activities shall be scheduled adjacent
to the IndyCar on track activities. Specifics of the schedule of activities are
as follows (subject to prevailing "two-thirds rule" as recognized by event
promoters for support event activities):
A. Road Course Events:
- Minimum of two (2) one-half hour on track sessions on
Friday (Friday practice/qualifying format to be
consistent with IndyCar procedures);
- Minimum of two (2) one-half hour on track sessions on
Saturday (Saturday practice/qualifying format to be
consistent with IndyCar procedures).
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ARS Agreement
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December 21, 1995
B. Oval Course Events:
- Minimum of two (2) one-half hour practice sessions on
Friday;
- Minimum of one-half hour practice and one (1) hour
qualifying sessions on Saturday.
5. RACE NAME ENTITLEMENT. Partly in recognition of the obligation being
imposed upon the event promoter to include the Indy Lights Series at no cost,
the parties recognize that the event promoter shall have the right to sell the
Indy Lights Series race title, provided, however, that the name shall include
reference to "Indy Lights", as well as the identity of a series sponsor or
sponsors as ARS may designate. In addition, CART shall exercise its approval
rights as to such on-site entitlement in a similar manner as with the on-site
entitlement of the Indy Car race, including a reasonable effort to avoid any
entitlement that may conflict with an existing ARS sponsor.
6. DISTRIBUTION OF REVENUES.
A. Entry fees paid by Indy Lights Series competitors and all associated
licensing and registration fees shall be paid to CART. The following costs
directly related to the Indy Lights Series shall be paid from such gross
receipts:
1. Direct insurance costs for liability, driver life,
participant accident, catastrophic medical;
2. Officials' fees and expenses for those officials
whose function is allocated primarily to the Indy
Lights Series;
3. Television production charges of $15,000.00 per race.
The parties agree that the resulting "net receipts" will be divided equally
between CART and ARS. In addition, each party shall contribute fifty percent
(50%) of their respective allocation toward the Indy
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Lights Series prize fund for the following season, as illustrated in Exhibit "A"
attached hereto.
B. The distribution of revenues provisions set forth in paragraph 6A
shall also apply to the money CART received in conjunction with the 1995 Indy
Lights Series, except that the only costs to be deducted by CART from the gross
receipts will be for insurance and for the Series Chief ▇▇▇▇▇▇▇.
7. TELEVISION.
A. ARS hereby appoints CART as its exclusive agent for negotiating the
sale of the television rights to the Indy Lights Series. CART shall use its best
efforts in obtaining as much television exposure as possible, and the parties
acknowledge that the amount of revenues obtained shall be regarded as secondary
to maximizing the coverage of the races. Net revenues from the sale of
television rights will be divided equally between the parties.
B. The parties hereto acknowledge that when Indy Lights Series races
are not held in conjunction with a CART event, television production cannot be
provided within the scope of the normal production arrangements. CART and ARS
will cooperate to ensure that the race promoter takes responsibility for the
supply of a live feed at the promoter's expense.
8. RACE ADMINISTRATION. Except as otherwise mutually agreed, CART shall
be responsible for each of the following race-related items:
A. CART shall administer the credentialling, licensing and registration
of Indy Lights Series participants, at no cost to ARS.
B. The parties shall provide by mutual agreement for on site race
personnel and support, including the provision by CART of the following specific
officials and/or functions to be assigned by CART for Indy Lights Series
activities, at no cost to ARS, except as provided in paragraph 8I below:
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- Series Chief ▇▇▇▇▇▇▇, Indy Lights;
- Technical Coordinator;
- Six (6) permanent Technical Workers;
- Starter;
- Timing and Scoring Coordinator;
- Pace Car Coordinator;
- Complete timing and scoring service with applicable
equipment and EDS Service;
- Three (3) Stewards (including Chief ▇▇▇▇▇▇▇).
No increase in the number of officials will occur without the prior
written approval of ARS.
C. Subject to paragraph 3 above, Indy Lights Series participants shall
receive full coverage by the CART safety and medical team at all Indy Lights
Series races and CART sanctioned Indy Lights tests.
D. CART shall provide a minimum of two (2) scoring monitors in pit lane
during all phases of Indy
Lights Series competitions.
E. CART shall include the Indy Lights Rules Supplement in its official
IndyCar Rule Book.
F CART shall conduct and oversee all phases of Indy Lights Series race
competitions, consistent with past practices.
G. CART shall use its best efforts to locate the Indy Lights Series
paddock as close to the IndyCar area as possible, subject to existing
established practices where applicable.
▇. ▇▇▇▇▇▇▇ Parking Passes:
1. Each entered Indy Lights Series team owner will
receive no less than one (1) Team Owner Parking Pass
(area to be designated by the event promoter) to
allow the team to access the Indy Lights Series
paddock area for event activities;
2. Each entered driver will receive one (1) Driver
Parking Pass to allow
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access to the Indy Lights Series paddock area;
3. ARS will receive a maximum of ten (10) credentials
and a reasonable number of parking passes for the use
of its full time staff.
I. ARS shall be responsible for the supply and associated cost of all
equipment specifically required for the sole purpose of carrying out technical
inspections on Indy Lights race cars.
9. INSURANCE. CART agrees to name ARS, its directors, officials,
officers, agents, sponsors, and employees as an additional insured in any and
all event insurance policies including, but not limited to, participant
accident, participant to participant liability, spectator liability and the
like.
10. ANNOUNCEMENT OF RACE RESULTS. CART shall use its best efforts to
have the results of the Indy Lights Series races announced during the television
broadcast of the Indy Car races.
11. TEST DAYS. CART shall arrange for sanctioned "open test" days for
the Indy Lights Series teams, to be held in conjunction with IndyCar sanctioned
tests, with the incremental increase in costs to be divided consistent with past
practices.
12. SPONSOR CONFLICTS. ARS agrees not to contract with any sponsor for
the Indy Lights Series that may conflict with any CART contract or agreement,
without the prior written approval of CART.
13. SALE OF ARS.
A. CART may submit an offer to purchase ARS at any time during the term
of this Agreement. ARS may accept, reject, or propose a counter offer to any
such offer, in its sole discretion.
B. If ARS receives a bona fide offer from any third party to acquire
the business of ARS, through the purchase of its stock or assets, merger,
consolidation, or any other fundamental corporate
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reorganization, or any other method, CART shall have an exclusive right of first
refusal to acquire same, provided that the business and operational structure of
CART has not substantially changed from that existing when this Agreement is
signed. ARS shall submit to CART in writing the specific terms of such offer and
CART shall have ten (10) business days after receiving the bona fide offer
within which to accept the same, provided, however, that such time shall be
extended for a reasonable period if necessary (not to exceed thirty (30) days)
for the CART CEO to submit the offer to the CART Board if necessary to obtain
approval, and to communicate any pertinent feedback to ARS. If CART does not
accept such proposal within such time, ARS shall be free to contract with such
third party but not on terms different than those offered to CART without again
giving CART an additional ten (10) business day right of first refusal
concerning some.
14. ASSIGNABILITY. Neither party may assign its rights and/or
obligations under this Agreement.
15. INDEMNITY. ARS agrees to indemnify and hold harmless CART, its
directors, officials and officers, agents and employees from any and all
liabilities and all costs and expenses, including attorney fees incurred in the
defense thereof, asserted or imposed on CART, its directors, official
representatives, employees and officers, arising out of or as a result of the
Indy Lights Series.
16. CONFIDENTIALITY..
A. All media releases, public announcements, including competition
related announcements and public disclosures by either party or its employees or
agents relating to this Agreement, including but not limited to promotional or
marketing material, but not including any announcement intended solely for
internal distribution by either party or any disclosure required by legal,
accounting, or regulatory requirements beyond the reasonable control of the
disclosing party, or
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any announcements which solely make incidental references to the Indy Lights
Series as the Official Support Series of CART shall be coordinated with and
approved by the other party prior to the release thereof.
B. CART and ARS agree to safeguard the confidentiality of any
information obtained in the performance of this Agreement regarding the
products, accessories, designs and developments of the other party. It is agreed
that each party remains the owner of its information and documents and that such
information and documents can be used by the other party only for the purpose of
performing under the terms of this Agreement. The disclosure of any such
information or documents to any third party requires prior written approval of
the owner of such information and requires the prior agreement of such third
party to safeguard the confidentiality. Notwithstanding the foregoing,
disclosure may be made if necessary to enforce a party's rights under this
Agreement, or if required by a governmental agency, in which case any and all
documents, information, or materials disclosed shall be marked "confidential"
and such party shall seek confidential treatment of such information.
17. AUTHORITY TO CONTRACT. Each party warrants and represents that it
has the full right and authority to enter into and perform this Agreement and to
grant all rights granted herein, (subject in all cases to any applicable legal
limitations or restrictions), and that the execution and delivery of this
Agreement has been duly authorized by all necessary corporate action.
18. ENTIRE AGREEMENT: WAIVERS AND AMENDMENTS. This Agreement sets forth
the entire agreement between the parties and supersedes all prior agreements and
understandings between the parties, their officers, directors, or employees
relating to the subject matter hereof. None of the terms of this Agreement may
be waived or modified except as expressly agreed to, in writing, by both
parties.
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19. NOTICES. Except as otherwise provided, any notice or other
communication required or permitted to be given under this Agreement will be
sufficient if it is in writing and delivered personally, telegraphed, telecopied
or telexed, or mailed (by certified, registered or first class mail or by
recognized overnight courier), postage prepaid, and will be deemed given when so
delivered personally, telegraphed, telecopied or telexed, or if mailed by
certified, registered, first class mail or by recognized overnight courier, one
day after the date of mailing, as follows (or to any other address provided by a
party in accordance with this Section):
If to CART: Championship Auto Racing Teams, Inc.
▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Mr. ▇▇▇▇▇▇ ▇▇▇▇▇ and
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
If to ARS: American Racing Series, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Mr. U.E. (▇▇▇) ▇▇▇▇▇▇▇
Mr. ▇▇▇▇▇ ▇▇▇▇▇▇
20. GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of Michigan.
21. HEADINGS. The headings in this Agreement are for reference purposes
only and will not in any way affect the meaning or interpretation of this
Agreement.
22. SEVERABILITY. If any provision of this Agreement is determined to
be illegal or invalid, such illegality or invalidity will have no effect on the
other provisions of this Agreement, which will remain valid, operative and
enforceable.
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23. RELATIONSHIP OF THE PARTIES. Nothing in this Agreement will be
deemed to create a partnership or joint venture among any one or more of the
parties.
24. CANCELLATION. Either party may unilaterally cancel this Agreement
upon the occurrence of any of the following on behalf of the non-canceling
party, provided, however, the canceling party must give notice in writing by
certified mail to the non-canceling party, specifying the ground or grounds for
termination and permitting said party thirty (30) days in which to cure the
purported ground or grounds of termination:
A. Either party becomes insolvent or enters federal bankruptcy or
reorganization proceedings; or
B. A receiver, trustee, guardian or ▇▇▇▇▇▇▇▇ is appointed to manage the
affairs of either party; or
C. Either party should, for reasons totally beyond its cause or
control, be completely and permanently prevented from reasonably complying with
its duties hereunder; or
D. Either party fails to perform any of the material terms and
conditions herein; or
E. Any of the material representations made by either party to the
other which led to this Agreement proves to be false.
IN WITNESS WHEREOF, this Agreement is executed by the parties hereto as
of the date first above written.
AMERICAN RACING SERIES, INC. CHAMPIONSHIP AUTO RACING TEAMS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------- ---------------------------------
Its: President Its: President and CEO
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December 21, 1995
EXHIBIT A
Income = A
Insurance costs = B
Officials costs = C
TV Production costs = D
Net Distribution Formula: A-(B+C+D) = Net Distribution
Net Distribution
(25%) 50%-------50% 50%------- 50% (25%)
to IndyCar to ARS
(25%) 50% 50%(25%)
to Prize Fund
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