exhibit4_4.htm


    Exhibit 4.4

     

    
       

      SERIES C
CONVERTIBLE PREFERRED STOCK EXCHANGE AGREEMENT

       

      This
Exchange Agreement (this "Agreement")
is dated as of May 15, 2006, by and among Dirt Motor Sports, Inc., a Delaware
corporation (the "Company"'),
and the holders of shares of the Company's Series C Convertible Preferred Stock
whose signatures appear on the signature page attached hereto (the "Holders").

       

      Recitals:

       

      WHEREAS,
certain Holders currently hold an aggregate of 2,500 shares of Series C
Convertible Preferred Stock of the Company, par value $.01 per share and stated
value $2,500 per share, convertible into shares of the Company's common stock
('"Common
Stock") at a conversion price of $2.50 per share (the "Series C
Preferred Shares"), issued pursuant to that Series C Convertible
Preferred Stock Purchase Agreement dated as of February 25, 2005 by and among
the Company and the Holders (the "Series C
Purchase Agreement"); and

       

      WHEREAS,
subject to the terms and conditions set forth herein, the Company desires to
cancel and retire the Series C Preferred Shares and forfeit any and all rights
under the Series C Purchase Agreement and the Certificate of Designation of the
Relative Rights and Preferences of the Series C Convertible Preferred Stock
filed with the Colorado Secretary of State on February 18, 2005 and the Holders
are willing to exchange the Series C Preferred Shares for an aggregate of 2,500
shares of Series D Convertible Preferred Stock of the Company, par value $.01
per share and stated value $3,000 per share, convertible into shares of Common
Stock at a conversion price of $3.00 per share (the "Series D
Preferred Shares").

       

      NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby agreed and acknowledged, the parties hereby agree as
follows:

       

      AGREEMENT:

       

      1.      Securities
Exchange.

       

      (a) In
consideration of and in express reliance upon the representations, warranties,
covenants, terms and conditions of this Agreement, each Holder agrees to deliver
to the Company the Series C Preferred Shares in exchange for the Series D
Preferred Shares and the Company agrees to issue and deliver the Series D
Preferred Shares to the Holders in exchange for the Series C Preferred
Shares.

       

      (b) The
closing under this Agreement (the "Closing")
shall take place at the offices of Kramer Levin Naftalis & Frankel LLP, 1177
Avenue of the Americas, New York, NY 10036 upon the satisfaction of each of the
conditions set forth in Sections 4 and 5 hereof (the "Closing
Date").

       

      
        
          
          

        

        
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      (c) At the
Closing, the Company shall issue to the Holders an aggregate of 2,500 Series D
Preferred Shares as set forth on Exhibit
A hereto and the Holders shall deliver to the Company for cancellation
the Series C Preferred Shares. The Series D Preferred Shares are sometimes
referred to herein as the "Securities".

       

      2. Representations,
Warranties and Covenants of the Holders. Each of the Holders hereby makes
the following representations and warranties to the Company, and covenants for
the benefit of the Company, with respect solely to itself and not with respect
to any other Holder:

       

      (a) If a
Holder is an entity, such Holder is a corporation, limited liability company or
partnership duly incorporated or organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization.

       

      (b) This
Agreement has been duly authorized, validly executed and delivered by each
Holder and is a valid and binding agreement and obligation of each Holder
enforceable against such Holder in accordance with its terms, subject to
limitations on enforcement by general principles of equity and by bankruptcy or
other laws affecting the enforcement of creditors' rights generally, and each
Holder has full power and authority to execute and deliver the Agreement and the
other agreements and documents contemplated hereby and to perform its
obligations hereunder and thereunder.

       

      (c) Each
Holder understands that the Securities are being offered and sold to it in
reliance on specific provisions of Federal and state securities laws and that
the Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of each Holder set
forth herein for purposes of qualifying for exemptions from registration under
the Securities Act of 1933, as amended (the "Securities
Act") and applicable state securities laws.

       

      (d) Each
Holder is an "accredited investor" as defined under Rule 501 of Regulation D
promulgated under the Securities Act.

       

      (e) Each
Holder is and will be acquiring the Securities for such Holder's own account,
and not with a view to any resale or distribution in whole or in part, in
violation of the Securities Act or any applicable securities
laws.

       

      (f) The offer
and sale of the Securities is intended to be exempt from registration under the
Securities Act, by virtue of Section 3(a)(9) and/or 4(2) thereof. Each Holder
understands that the Securities purchased hereunder have not been registered
under the Securities Act and that none of the Securities can be sold or
transferred unless they are first registered under the Securities Act and such
state and other securities laws as may be applicable or the Company receives an
opinion of counsel reasonably acceptable to the Company that an exemption from
registration under the Securities Act is available (and then the Securities may
be sold or transferred only in compliance with such exemption and all applicable
state and other securities laws).

       

      3. Representations,
Warranties and Covenants of the Company. The Company represents and
warrants to each Holder, and covenants for the benefit of each Holder, as
follows:

       

      
        
          
          

        

        
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      (a) The
Company has been duly incorporated and is validly existing and in good standing
under the laws of the state of Delaware, with full corporate power and authority
to own, lease and operate its properties and to conduct its business as
currently conducted, and is duly
registered and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the failure
to register or qualify would not have a Material Adverse Effect. For purposes of
this Agreement, "Material
Adverse Effect" shall mean any material adverse effect on the business,
operations, properties, prospects, or financial condition of the Company and its
subsidiaries and/or any condition, circumstance, or situation that would
prohibit or otherwise materially interfere with the ability of the Company to
perform any of its obligations under this Agreement in any material
respect.

       

      (b) The
Securities have been duly authorized by all necessary corporate action and, when
paid for or issued in accordance with the terms hereof, the Securities shall be
validly issued and outstanding, fully paid and nonassessable, free and clear of
all liens, encumbrances and rights of refusal of any kind.

       

      (c) This
Agreement has been duly authorized, validly executed and delivered on behalf of
the Company and is a valid and binding agreement and obligation of the Company
enforceable against the Company in accordance with its terms, subject to
limitations on enforcement by general principles of equity and by bankruptcy or
other laws affecting the enforcement of creditors' rights generally, and the
Company has full power and authority to execute and deliver the Agreement and
the other agreements and documents contemplated hereby and to perform its
obligations hereunder and thereunder.

       

      (d) The
execution and delivery of the Agreement and the consummation of the transactions
contemplated by this Agreement by the Company, will not (i) conflict with or
result in a breach of or a default under any of the terms or provisions of, (A)
the Company's certificate of incorporation or by-laws, or (B) of any material
provision of any indenture, mortgage, deed of trust or other material agreement
or instrument to which the Company is a party or by which it or any of its
material properties or assets is bound, (ii) result in a violation of any
provision of any law, statute, rule, regulation, or any existing applicable
decree, judgment or order by any court, Federal or state regulatory body,
administrative agency, or other governmental body having jurisdiction over the
Company, or any of its material properties or assets or (iii) result in the
creation or imposition of any material lien, charge or encumbrance upon any
material property or assets of the Company or any of its subsidiaries pursuant
to the terms of any agreement or instrument to which any of them is a party or
by which any of them may be bound or to which any of their property or any of
them is subject except in the case of clauses (i)(B), (ii) or ("0
f°r
my sucn
conflicts, breaches, or defaults or any liens, charges, or encumbrances which
would not have a Material Adverse Effect.

       

      (e) The
delivery and issuance of the Securities in accordance with the terms of and in
reliance on the accuracy of each Holder's representations and warranties set
forth in this Agreement will be exempt from the registration requirements of the
Securities Act.

       

      (f) No
consent, approval or authorization of or designation, declaration or filing with
any governmental authority on the part of the Company is required in connection
with the valid execution and delivery of this Agreement or the offer, sale or
issuance of the Securities or the consummation of any other transaction
contemplated by this Agreement.

       

      
        
          
          

        

        
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      (g) The
Company has complied and will comply with all applicable federal and state
securities laws in connection with the offer, issuance and delivery of the
Securities hereunder. Neither the Company nor anyone acting on its behalf,
directly or indirectly, has or will sell, offer to sell or solicit offers to buy
any of the Securities, or similar securities to, or solicit offers with respect
thereto from, or enter into any preliminary conversations or negotiations
relating thereto with, any person, or has taken or will take any action so as to
bring the issuance and sale of any of the Securities under the registration
provisions of the Securities Act and applicable state securities laws. Neither
the Company nor any of its affiliates, nor any person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D under the Securities Act) in connection with
the offer or sale of any of the Securities.

       

      (h) The
Company represents that it has not paid, and shall not pay, any commissions or
other remuneration, directly or indirectly, to the Holder or to any third party
for the solicitation of the exchange of the Series C Preferred Shares pursuant
to this Agreement.

       

      (i)           The
Company covenants and agrees that promptly following the Closing

       

      Date, all
outstanding Series C Preferred Shares will be cancelled and retired by the
Company.

       

      4. Conditions
Precedent to the Obligation of the Company to Issue the Securities. The
obligation hereunder of the Company to issue and deliver the Securities to each
Holder is subject to the satisfaction or waiver, at or before the Closing Date,
of each of the conditions set forth below. These conditions are for the
Company's sole benefit and may be waived by the Company at any time in its sole
discretion.

       

      (a) Each
Holder shall have executed and delivered this Agreement.

       

      (b) Each
Holder shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by such Holder at or prior to the Closing
Date.

       

      (c) The
representations and warranties of each Holder shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made at that time, except for representations and warranties that are expressly
made as of a particular date, which shall be true and correct in all material
respects as of such date.

       

      5. Conditions
Precedent to the Obligation of the Holders to Accept the Securities. The
obligation hereunder of each Holder to accept the Securities is subject to the
satisfaction or waiver, at or before the Closing Date, of each of the conditions
set forth below. These conditions are for each Holder's sole benefit and may be
waived by each Holder at any time in its sole discretion.

      
        
          
          

        

        
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              (a) The
Company shall have executed and delivered this Agreement.

       

              (b) The
Company shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by the Agreement to be
performed, satisfied or complied with by the Company at or prior to the Closing
Date.

       

                  (c) Each of
the representations and warranties of the Company shall be true and correct in
all material respects as of the date when made and as of the Closing Date as
though made at that time, except for representations and warranties that speak
as of a particular date, which shall be true and correct in all material
respects as of such date.

       

      (d) No
statute, regulation, executive order, decree, ruling or injunction shall have
been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction which prohibits the consummation of any of
the transactions contemplated by this Agreement at or prior to the Closing
Date.

       

      (e) As of the
Closing Date, no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, shall be pending against or
affecting the Company, or any of its properties, which questions the validity of
the Agreement or the transactions contemplated thereby or any action taken or to
be taken pursuant thereto. As of the Closing Date, no action, suit, claim or
proceeding before or by any court or governmental agency or body, domestic or
foreign, shall be pending against or affecting the Company, or any of its
properties, which, if adversely determined, is reasonably likely to result in a
Material Adverse Effect.

       

      6. Rights,
Benefits and Obligations of Series D Convertible Preferred Stock Purchase
Agreement and Registration Rights Agreement. The Company and the Holders
hereby agree that the Company and the Holders shall have all of the rights and
benefits, and be subject to all of the obligations, under (i) the Series D
Convertible Preferred Stock Purchase Agreement dated as of May 15, 2006 among
the Company and the purchasers named therein and (ii) the Registration Rights
Agreement dated as of May 15, 2006 among the Company and the purchasers named
therein, in each case, with respect to the Securities issued pursuant to this
Agreement.

       

      7. Governing
Law; Consent to Jurisdiction. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York without giving
effect conflicts of law principles that would result in the application of the
substantive laws of another jurisdiction. Each of the parties consents to the
exclusive jurisdiction of the Federal courts whose districts encompass any part
of the County of New York located in the City of New York in connection with any
dispute arising under this Agreement and hereby waives, to the maximum extent
permitted by law, any objection, including any objection based on forum non
conveniens, to the bringing of any such proceeding in such jurisdictions.
Each party waives its right to a trial by jury. Each party to this Agreement
irrevocably consents to the service of process in any such proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
such party at its address set forth herein. Nothing herein shall affect the
right of any party to serve process in any other manner permitted by
law.

       

      8. Notices.
All notices and other communications provided for or permitted hereunder shall
be made in writing by hand delivery, express overnight courier, registered first
class mail, or telecopier (provided that any notice sent by telecopier shall be
confirmed by other means pursuant to this Section 11), initially to the address
set forth below, and thereafter at such other address, notice of which is given
in accordance with the provisions of this Section.

       

      
        
           

        

        
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      (a) 
if to the
Company:

       

       

      Dirt
Motor Sports, Inc. 2500 McGee Drive, Suite 147 Norman, Oklahoma 73072 Attention:
Chief Executive Officer Tel. No.: (405) 360-5047 Fax No.:
(405)360-5354

       

      with a
copy to:

       

      Jackson
Walker L.L.P. 2435 N. Central Expressway Suite 600

      Richardson,
Texas, 75080 Attention: Richard F. Dahlson Tel No.: (972) 744-2996 Fax No.:
(972) 744-2990

       

      (b)     if
to the Holders:

       

      At the
address of such Holder set forth on Exhibit A
to this Agreement.

       

      All such
notices and communications shall be deemed to have been duly given: when
delivered by hand, if personally delivered; when receipt is acknowledged, if
telecopied; or when actually received or refused if sent by other
means.

       

      9. Entire
Agreement. This Agreement constitutes the entire understanding and
agreement of the parties with respect to the subject matter hereof and
supersedes all prior and/or contemporaneous oral or written proposals or
agreements relating thereto all of which are merged herein. This Agreement may
not be amended or any provision hereof waived in whole or in part, except by a
written amendment signed by both of the parties.

       

      Counterparts.
This Agreement may be executed by facsimile signature and in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

       

      [THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

       

      
        
           


        

        
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      IN
WITNESS WHEREOF, this Agreement was duly executed on the date first written
above.

       

      DIRT MOTOR
SPORTS, INC.

    

     

    By:  /s/ Brian
Carter

    Name:  Brian
Carter

    Title:  EVP &
CFO

     

    HOLDER:  North
Sound Legacy Institutional Fund LLC

      By:  North
Sound Capital LLC; Manager

     

    By:  /s/ Andrew B.
David

    Name:  Andrew B.
David

    Title:  General
Counsel

     

    
      HOLDER:  North
Sound Legacy International LLC

        By:  North
Sound Capital LLC; Investment Advisor

       

      By:  /s/ Andrew B.
David

      Name:  Andrew B.
David

      Title:  General
Counsel

       

    

    



    
      
        
           


        

        
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    EXHIBIT A
to the

     

    SERIES C
CONVERTIBLE PREFERRED STOCK EXCHANGE AGREEMENT FOR

    DIRT
MOTOR SPORTS, INC.

     

    
    

     

    
      	
               

              Names
      and Addresses of Purchasers

            	Number
      of Series C Preferred Shares Exchanged	  

               

              Number
      of Series P Shares Received

            
	 	 	 
	
              North
      Sound Legacy Fund LLC

              c/o North
      Sound Capital LLC 53 Forest Avenue, Suite 202 Old Greenwich, CT 06870
      Attention: Andrew David Fax No.: (203) 967-5701

            	 42.50	 42.50
	 	 	 
	North Sound Legacy
      International Ltd, 

              c/o
      North Sound Capital LLC

              53
      Forest Avenue, Suite 202

              Old
      Greenwich, CT 06870 

                Attention:
      Andrew David

                Fax
      No.: (203) 967-5701

              

            	 1,423.75	 1,423.75
	 	 	 
	North
      Sound Legacy Institutional Fund
      LLC 

              c/o
      North Sound Capital LLC 

              53
      Forest Avenue, Suite 202 

              Old
      Greenwich, CT 06870 

              Attention:
      Andrew David 

              Fax
      No.: (203)967-5701

            	 658.75
    	 658.75
	 	 	 
	Royal
      Bank of Canada  

              c/o
      RBC Capital Markets Corp.

              165
      Broadway, 2nd
      Floor

              One
      Liberty Plaza

               

              New
      York, NY 10006-1404

              Attention:
      Michael Frommer

              Fax
      No.: (212) 858-7439

            	 375.00	 
    375.00
	 	 	 


    

     

     

    
      
        
        

      

      
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    SERIES
C
CONVERTIBLE PREFERRED STOCK EXCHANGE AGREEMENT

     

    Phis
Exchange Agreement (this "Agreement"
is
dated as of May 11 , 2006, by and among Dirt Motor Sports, Inc., a
Delaware corporation (the "Company"),
and the holders of shares of the Company's Series C Convertible Preferred Stock
and Serves C Convertible Preferred Stock whose signatures appear on the
signature page attached hereto (the "Holders").

     

    Recital
9:

     

    WHEREAS,
certain Holders currettly hold an aggregate of 375
shares of Series
C
Convertible Preferred Stock of the Company, par value $.01 per share and
stated value $ 2,500 per share, convertible into shares of the
Company's common stock ("Common

    StQcjcp)
at a conversion price of $2.50
per share (the "Series C
Preferred Shares"), issued pursuant to that Series C Convertible I
referred Stock Purchase Agreement dated as of February
25th, 2005 among ti ic Company and the Holders (the "Series C
Purchase Agreement"); and

     

    WHEREAS,
subject to the terms and
conditions set forth herein, the Company desires to cancel and retire the
Series C Preferred Shires and forfeit any and all rights under the Series C
Purchase Agreement and the Certificate of Designation of the Relative Rights and
Preferences of the Series C Convertible Preferred Stool: filed with the Colorado
Secretary of State on

    February
28, 2005, and the Holders are willing to exchange the Series C Preferred
Shares for an
aggregate of 375 shares of Series D Convertible Preferred Stock of
the
Conpany, par value $.01 per share and : stated value $3,000 per share,
convertible into shares of Common Stock at a conversion price of $ J .00 per
share (the "Series D
Preferred Shares").

     

    NOW,
THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby agreed and acknowledged, the parties hereby
agree as follows;

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

    AGREEMENT;

     

    I.      Securities
Exchange.

     

    (a) In
consideration of .Hid in express reliance upon the representations, warranties,
covenants, terms and conditions of this Agreement, each Holder agrees to deliver
to the Company the Series C Preferred Shares in exchange for the Series D
Preferred Shares and the Company agrees to issue and deliver the Series D
Preferred Shares to the Holders in exchange for the Series C Preferred
Shares.

     

    (b) The
closing under tbi; Agreement (the "Closing")
shall take place at the offices of Kramer Levin Naftalis & Frankel LLP, 1177
Avenue of the Americas, New York, NY 10036 upon the satisfaction of each of the
..;onditions set forth in Sections 4 and 5 hereof ("the "Closhm
Paten. v

     

    (c)    At
the Closing, the Company shall issue to the Holders an aggregate of. Scries
D
Inferred Shares as set forth on Exhibit
A hereto and the Holders shall
deliver to the Company for cancellation the Series C Preferred Shares. The
SeriesD Preferred Shares arc sometimes referred to lerein as the
"Securities",

     

    2. Representations.
Warrant! sa
and
Covenants of the Holders. Each of
the Holders; hereby makes the following representations and
warranties to the Company, and covenants for the benefit of the
Company, with
respect solely to itself and not with respect to any other Holder:

     

    (a) If
a
Holder is an entity, such Holder is a corporation, limited liability
company or
partnership duly incorporated or organized, validly existing and in good
standing under the laws of the jurisdiction of its incoi poration or
organization,

     

    (b) This
Agreement has been duly authorized, validly executed and delivered by each
Holder and is a valid and binding iigreement and obligation of each Holder
enforceable against such Holder in accordance with its terms, subject to
limitations on enforcement by general principles of equity and by bankruptcy or
other laws affecting the enforcement of creditors* rights generally, and each
Holdei has full power and authority to execute and deliver the Agieement and the
other agreements mi
documents contemplated hereby and to perform its obligations hereunder
and thereunder.

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    (c) Each
HoldeT
understa nds that the Securities are being offered and sold to it in
reliance on specific provisions of Federal and state securities laws and that
the Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of ea:n Holder
set forth
herein for purposes of qualifying for exemptions from registration under
the Securities Act of 1933, as amended
(the "Securities
Acj") and applicable state securities laws.

     

    (d) Each
Holder is an "accredited investor" as defined under Rule 501 of Regulation D
promulgated under the Securil ies Act

     

    (e) Each
Holder is and will be acquiring the Securities for such Holder's own account and
not with a view to any resale or distribution in whole or in part, in violation
of the Securities Act or any applicable securities Is ws.

     

    (f) The
offer
and sale of the Securities is intended to be exempt from registration
under the Securities Act, by virtue of Section 3(a)(9) and/or 4(2) thereof.
Each Holder understands that the Securities purchased hereunder have not
been registered under the Securities Act and that none of the Securities can be
sold or transferred unless they are first registered under the Securities Act
and such state and other securities laws as may be applicable or the Company
receives an opinion of counsel reasonably acceptable to the Company that an exempts
on from registration under the Secui Mies Act is available (and then the
Securities may be sold or
transferred only in compliance with such exemption and all applicable
state and other securities laws),

     

    Representations.
Warranto sand
Covenants of
the Company. The
Company represents and warrants to each Holder, and covenants for the benefit of
each Holder, as follows:

     

    (a) The
Company has been duly incorporated and is validly existing and in good standing
under the laws of ttte state of Delaware, with full corporate power and
authority to own, lease and operate its properties and to conduct its business
as currently conducted, and is duly registered and qualified to conduct its
business and is in good standing in each jurisdiction or place where the nature
of its properties oi the conduct of its business requires such registration or
quaJfication, except where the failure to
register or qualify would not have a Material Adveree Effect. For
purposes of this Agieement, "Material
Adverse Effect?' shall mean any material adverse effect on the business,
op<rations, properties, prospects, or financial condition of the Company and
its subsidiaries and/or any condition, circumstance, or situation that would
prohibit or otherwise materially interfere with the ability of the Company to
perform any of its obligations under this Agreement in any ma-trial
respect.

     

    (b) The
Securities have been duly authorized by all necessary corporate action and, when
paid for or issued in accordance with the terms hereof the Securities shall be
validly issued and outstanding, fully paid and nonassessable, free and clear of
all liens, encumbrances and rights of refusal of any kind.

     

    (c) This
Agreement has been duly authorized, validly executed and delivered on behalf of
the Company and is a valid and binding agreement and obligation of the Company
enforceable against the Company in accordance with its terms, subject to
limitations on enforcement by general principles of equ ,ty and by bankruptcy or
other laws affecting the enforcement of creditors' rights generally, and the
Company has full power and authority to execute and deliver the Agreement and
the other agreements and documents contemplated hereby and to perform its
obligations hereun der and thereunder.

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    (d) The
execution and delivery of the Agreement and the consummation of the transactions
contemplated by this Agra silent by the Company, will not (i) conflict with or
result in a breach of or a default under any of the terms or provisions of, (A)
the Company's certifiwite of incorporation or by-laws, or (B) of any material
provision of any indenture, mortgage, deed of trust or other material agreement
or instrument to which the
Company is a party or by which it or any of its material pr >perties or
assets is bound, (ii) result in a violation of any provision of any law,
statute, rule, regul ation, or any existing applicable decree, judgment or order
by any
court, Federal or state rsgulatory body, administrative agency, or other
governmental body having jurisdiction over the Company, or any of its material
properties or assets cr (iii) result in the creation or impc sition of any
material lien, charge or encumbrance upon any material property or assets of the
Company or any of its subsidiaries pursuant to the terms of any agreement or
instrument to wl ich any of them is a party or by which any of them may be bound
or to which any of their prof lerty or any of them is subject except in the case
of clauses (i)(B), (ii) or (iii) for any such conllicts, breaches, or defeults
or any liens, charges, or encumbrances which would not have a Mateial Adverse
Effect.

     

    (e) The
delivery and issua nee of the Securities in accordance with the terms of and in
reliance on the accuracy of each HoMer's representations and warranties set
forth in this Agreement will be exempt from the registrafcon requirements of the
Securities Act.

     

    (f) No
consent, approval or authorization of or designation, declaration or filing with
any governmental authority on thf part of the Company is required in connection
with the vali
d execution end delivery of this Agr sement or the offer, sale or issuance of
the Securities or the consummation of any other transactic a
contemplated by this Agreement

     

    (g) The
Company has complied and will comply with all. applicable federal and state
securities laws in connection win the offer, issuance and delivery of the
Securities hereunder. Neither the Company nor anyene acting on its behalf,
directly or indirectly, has or will sell, offer to sell or solicit offers to buy
any of the Securities, or similar securities to, or solicit offers with respect
thereto from, or enter into any prelraunary conversations or negotiations
relating thereto with, any person, or has taken or will take any action so as to
bring the issuance and sale of any of the Securities under the registration
provisions of the Securities Act and applicable state securities laws. Neither
the Company nor any of its affiliates, nor any person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulati m
D under the Securities Act) in connection with the offer or sale of any
of the Securities.

     

    (h) The
Company represents that it has not paid, and shall not pay, any comraiiisions or
other remuneration, directly or indirectly, to the Holder or to any third party
for the solicitation of the exchange of the Serie; C Preferred Shares pursuant
to this Agreement

     

    (i)                   The
Company coven: ints and agrees that promptly following the Closing Date,
i'.l outstanding Series C Preferred Sha rus will be cancelled and retired by the
Company.

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    4*
Conditions
Precedent to tlte Obligation of the
Company to Issue the
Securities. The obligation hereunder of the (Company to issue and deliver
the Securities to each Holder is subject to the satisfaction or waiver, at or
before the Closing Date, of each of the conditions set forth below. These
cxxnditkns are for the Company fs
soie benefit and may be waived by the Company at any time in its sc Ic
discretion.

     

    (a) Each
Holder shall ha\ e executed and delivered this Agreement.

     

    (b) Each
Holder shall have performed, satisfied and complied in all material respects*,
with all covenants, agreements nnd conditions required by this Agreement to he
perfomj.ed, satisfied or complied with by sue h Holder at or prior to the
Closing Date.

     

    (c) The
representations .md warranties of each Holder shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made a-: that time, except for representations and warranties that are expressly
made as of a particular date, which shall be true and corrc;iJ in all material
respects as of such date.

     

    &      Conditions
Precedent to  tie Obligation of
the Holders to Accept the Se^nritfies.
The obligation hereunder of each Holder to accept the Securities is subject to
the satisfaction or waiver, at or before the Closing Date, of each of the
conditions set forth below. These conditions ere for each Holder's sole benefit
and may be waived by each Holder at any time in its sole
discretion,

     

    (a)    The
Company shall ha ve executed and delivered this Agreement.

     

    (b) The
Company shall 1 ave performed, satisfied and complied in all material respects
with all covenants, agreements end conditions required by the Agreement to be
performed, satisfied or complied With by tin: Company at or prior to the Closing
Date.

     

    (c) Each of
the representations and warranties of the Company shall be true and correct in
all material respects as of the date when made and as of the Closing Date as
though made at that time, except for representations and warranties that speak
as of a particular date, which shall be true and correct in all n mterial
respects as of such date.

     

    (d) No
statute, regulation executive order, decree, ruling or mjunction shall have
bi;en enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction which prohibits the consummation of any of
the transactions contemplated by this Agreement at or prior to the Closing
Date.

     

    (e) As of the
Closing Eate, no action, suit or proceeding before or by any court or
governmental agency or body, don estic or foreign, shall be pending against or
affecting the Company, or any of its properties, which questions the validity of
the Agreement or the transactions contemplated thereby or any a< tion taken
or to be taken pursuant thereto. As of the Closing Date, no action, suit, claim
or proce eding before or by any court or governmental agency or body, domestic
or foreign, shall be pending against or affecting the Company, or any of its
properties, which, if adversely determined, is reasonably likely to result in a
Material Adverse Effect.

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    6. Rights.
Benefits and Obligations of Series P Convertible Preferred Stock Parch use
Agreement and Registration lights
Agreement. The Company and the Holders hereby agree that the Company and
the Holders shall have all of the rights and benefits, and be subject to all of
the obligations, under the Series D Convertible Preferred Stock Purchase
Agreement dated as of May__, 2006 among the Company and the purchasers named
therein. The Holders hereby deem the Registration Rights Agreement Waiver and
Extension entered into between the Company and the Holders on Jjne 22,2005 to be
extended through the date herein. The Holders shall have all the rights and
benefits of the Registration Rights Agreement dated
as

     

    of
May                                    ,
2006 among the Company aid the purchasers named therein, in each case,
with

    respect
to the Securities issued pursuant to tl lis Agreement

     

    Governing
Law;
Consent tc
Jnrisdlction. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York without giving effect
conflicts of law principles that would result in the application of the
substantive laws of another jurisdicion. Each of the parties consents to the
exclusive jurisdiction of the Federal courts whose districts encompass any part
of the C ?unty of New York located in the City of New York in connection with
any dispute arising under this Agreement and hereby waives, to the maximum
extent permitted by law, any objection, including any objection based on forum non
conveniens, to the fringing of any such proceeding in su< sh
jurisdictions. Each party waives its right to a trial hy jury. Each party to
this Agreement irrevocably consents to the service of process in any such
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to such parry at its address set forth herein. Nothing herein
shall affect the right of any party to serve process in any other manner
permitted by law.

     

    S. Notices,
AH notices and other communications provided for or permitted hereunder shall be
made in writing by haul delivery, express overnight courier, registered first
class mail, or telecopier (provided that any notice sent by telecopier shall be
confirmed by other means pursuant to this Section 11), Initially to the address
set forth below, and thereafter at such other address, notice of which is given
in accordance with the provisions of this Section.

     

    (a) if to the
Company:

     

    Dirt
Motor Sports, Inc. 2500 McGee Drivt, Suite 147 Norman, Oklahom 173072
Attention: Chief Executive Officer Tel. No.: (405) 36C-5047 Fax No.: (405)3611-5354

     

    with a
copy to;

     

    Jackson
Walker L.L .P. 2435
N. Central E> pressway Suite 600

    Richardson,
Texas, 75080 Attention: Richard P. Dahlson Tel No.: (972) 744- 2996 Fax No.:
(972) 744-2990

     

    (b) if to the
Holders:

     

    At the
address of such Holder set forth on Exhibit A
to this Agreement.

     

    All such
notices and commumcatiais shall be deemed to have been duly given: when
delivered by hand, if personally delivered; -v/hen receipt is acknowledged, if
telecopied; or when actually received or refused if sent by other f
neans.

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

     

    Entire
Agreement. This
Agreement constitutes the entire understanding and agreement of the parties with
respect to the subject matter hereof and supersedes all prior and/or
contemporaneous oral or written proposal i or agreements relating thereto all of
which are merged herein. This Agreement may not bn amended or any provision
hereof waived in whole or in part, except by a written amendment sijjied by both
of the parties.

     

    110,
Counterparts. This Agreement may be executed by facsimile signature and in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     

    [THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

     

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, this Agreement was duly executed on the date first written
above.

     

    DIRT
MOTOR SPORTS;

     

    By:  /s/ Brian Carter

    Name:  Brian Carter

    Title:  EVP & CFO

     

    Royal
Bank of Canada

    By
its agent

    RBC
Capital Markets Corporation

     

    By:  /s/ Steve Milke

    Name:  Steve Milke

    Title:  Managing Director

     

    By: /s/ Josef Muskatel

    Name:  Josef Muskatel

    Title:  Director and Senior
Counsel

     

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

     

    
      EXHIBIT A

       

      
      

       

      
        	Series C Shares
      Held 	Face Value Per C
      Share 	 Total Face
      Value: Series C	Series D Shares
      Held 	Face Value Per D
      Share 	Total Face
      Value:  Series D 
	 	 	 	 	 	 
	375 	$2,500 	$937,500	375 	$3,000 	$1,125,000 


      

       

    

     

    Notices
to be
delivered to: 

    Royal
Bank of Canada 

    One
Liberty Plaza, 2nd
Floor 

    New
York, NY 10006 

    Attention:
Josef Muskatei 

    Tel
No.: (212)858-7492 

    Fax
No.; (212)428-3062