Document:

exhibit10_8.htm

    Exhibit
10.8

    
 

    
      SUBSIDIARY
GUARANTY

       

      

      SUBSIDIARY
GUARANTY (this “Guaranty”) dated
September 28, 2007 made by the Persons listed on the signature pages hereof
under the caption “Subsidiary Guarantors” (each a “Subsidiary
Guarantor”), in favor of the Lenders whose names are set forth on Exhibit A hereto (the
“Lenders”).

       

      WHEREAS,
Dirt Motor Sports, Inc. d/b/a World Racing Group, Inc., a Delaware corporation
(the “Company”)
and the Lenders are parties to a Note Purchase Agreement dated the date hereof
(the “Note Purchase
Agreement”; the terms defined therein and not otherwise defined herein
being used herein as therein defined);

       

      WHEREAS,
each Subsidiary Guarantor will derive substantial direct and indirect benefit
from the transactions contemplated by the Note Purchase Agreement;
and

       

      WHEREAS,
it is a condition precedent to the Lenders making the loan evidenced by the
Notes to the Company that each Subsidiary Guarantor shall have executed and
delivered this Subsidiary Guaranty.

       

      NOW,
THEREFORE, in consideration of the premises and in order to induce the Lenders
to make the loans under the Note Purchase Agreement, each Subsidiary Guarantor,
jointly and severally with each other Subsidiary Guarantor, hereby agrees as
follows:

       

       

      1. No
Impairment.  The Lenders may at any time and from time to time,
either before or after the maturity thereof, without notice to or further
consent of the undersigned, extend the time of payment of, exchange or surrender
any collateral for, renew or extend any of the obligations under the Transaction
Documents (the “Obligations”) or
increase or decrease the interest rate thereon, or any other agreement with the
Company or with any other party to or person liable on any of the Obligations,
or interested therein, for the extension, renewal, payment, compromise,
discharge or release thereof, in whole or in part, or for any modification of
the terms thereof or of any agreement between the Lenders and the Company or any
such other party or person, or make any election of rights the Lenders may deem
desirable under the United States Bankruptcy Code, as amended, or any other
federal or state bankruptcy, reorganization, moratorium or insolvency law
relating to or affecting the enforcement of creditors’ rights generally (any of
the foregoing, an “Insolvency Law”)
without in any way impairing or affecting this Guaranty.  This
Guaranty shall be effective regardless of the subsequent incorporation, merger
or consolidation of the Company, or any change in the composition, nature,
personnel or location of the Company and shall extend to any successor entity to
the Company, including a debtor in possession or the like under any Insolvency
Law.

      
        
           

        

        
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      2. Guaranty
Absolute.  Each of the undersigned jointly and severally
guarantees that the Obligations will be paid strictly in accordance with the
terms of the Note Purchase Agreement, the Notes or the other Transaction
Documents, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of the Company
with respect thereto.  The Subsidiary Guarantors hereby knowingly
accept the full range of risk encompassed within a contract of “continuing
guaranty” which risk includes the possibility that the Company will contract
additional obligations and liabilities for which the Subsidiary Guarantors may
be liable hereunder after the Company’s financial condition or ability to pay
its lawful debts when they fall due has deteriorated, whether or not the Company
has properly authorized incurring such additional obligations and
liabilities.  The undersigned acknowledge that (i) no oral
representations, including any representations to extend credit or provide other
financial accommodations to the Company, have been made by the Lenders to induce
the undersigned to enter into this Guaranty and (ii) any extension of credit to
the Company shall be governed solely by the provisions of the Transaction
Documents.  The liability of each of the undersigned under this
Guaranty shall be absolute and unconditional, in accordance with its terms, and
shall remain in full force and effect without regard to, and shall not be
released, suspended, discharged, terminated or otherwise affected by, any
circumstance or occurrence whatsoever, including, without limitation: (a) any
waiver, indulgence, renewal, extension, amendment or modification of or
addition, consent or supplement to or deletion from or any other action or
inaction under or in respect of the Note Purchase Agreement, the Notes or the
other Transaction Documents or any assignment or transfer of any thereof, (b)
any lack of validity or enforceability of the Note Purchase Agreement, the Notes
or the other Transaction Documents or any assignment or transfer of any thereof,
(c) any furnishing of any additional security to the Lenders or its assignees or
any acceptance thereof or any release of any security by the Lenders or its
assignees, (d) any limitation on any party’s liability or obligation under the
Note Purchase Agreement, the Notes or the other Transaction Documents or any
assignment or transfer of any thereof or any invalidity or unenforceability, in
whole or in part, of any such document, instrument or agreement or any term
thereof, (e) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to the
Company, or any action taken with respect to this Guaranty by any trustee or
receiver, or by any court, in any such proceeding, whether or not the
undersigned shall have notice or knowledge of any of the foregoing, (f) any
exchange, release or nonperfection of any collateral, or any release, or
amendment or waiver of or consent to departure from any guaranty or security,
for all or any of the Obligations or (g) any other circumstance which might
otherwise constitute a defense available to, or a discharge of, the
undersigned.  Any amounts due from the undersigned to the Lenders
shall bear interest until such amounts are paid in full at the highest rate then
applicable to the Obligations.  Obligations include post-petition
interest whether or not allowed or allowable.

       

      3. Waivers.

       

      (a) This
Guaranty is a guaranty of payment and not of collection.  The Lenders
shall be under no obligation to institute suit, exercise rights or remedies or
take any other action against the Company or any other person or entity liable
with respect to any of the Obligations or resort to any collateral security held
by it to secure any of the Obligations as a condition precedent to the
undersigned being obligated to perform as agreed herein and each of the
Subsidiary Guarantors hereby waives any and all rights which it may have by
statute or otherwise which would require the Lenders to do any of the
foregoing.  Each of the Subsidiary Guarantors further consents and
agrees that the Lenders shall be under no obligation to marshal any assets in
favor of the Subsidiary Guarantor, or against or in payment of any or all of the
Obligations.  The undersigned hereby waives all suretyship defenses
and any rights to interpose any defense, counterclaim or offset of any nature
and description which the undersigned may have or which may exist between and
among the Lenders, the Company and/or the undersigned with respect to the
undersigned’s obligations under this Guaranty, or which the Company may assert
on the underlying debt, including but not limited to failure of consideration,
breach of warranty, fraud, payment (other than cash payment in full of the
Obligations), statute of frauds, bankruptcy, infancy, statute of limitations,
accord and satisfaction, and usury.

       

      
        
           

        

        
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      (b) Each of
the undersigned further waives (i) notice of the acceptance of this Guaranty, of
the extensions of credit, and of all notices and demands of any kind to which
the undersigned may be entitled, including, without limitation, notice of
adverse change in the Company’s financial condition or of any other fact which
might materially increase the risk of the undersigned and (ii) presentment to or
demand of payment from anyone whomsoever liable upon any of the Obligations,
protest, notices of presentment, non-payment or protest and notice of any sale
of collateral security or any default of any sort.

       

      (c) Notwithstanding
any payment or payments made by the undersigned hereunder, or any setoff or
application of funds of the undersigned by the Lenders, the undersigned shall
not be entitled to be subrogated to any of the rights of the Lenders against the
Company or against any collateral or guarantee or right of offset held by the
Lenders for the payment of the Obligations, nor shall the undersigned seek or be
entitled to seek any contribution or reimbursement from the Company in respect
of payments made by the undersigned hereunder, until all amounts owing to the
Lenders by the Company on account of the Obligations are indefeasibly paid in
full.  If, notwithstanding the foregoing, any amount shall be paid to
the undersigned on account of such subrogation rights at any time when all of
the Obligations shall not have been paid in full, such amount shall be held by
the undersigned in trust for the Lenders, segregated from other funds of the
undersigned, and shall forthwith upon, and in any event within two (2) business
days of, receipt by the undersigned, be turned over to the Lenders in the exact
form received by the undersigned (duly endorsed by the undersigned to the
Lenders, if required), to be applied against the Obligations pro rata among the
Lenders, whether matured or unmatured, in such order as the Lenders may
determine, subject to the provisions of the Transaction
Documents.  Any and all present and future obligations and liabilities
of the Company to any of the undersigned are hereby waived and postponed in
favor of, and subordinated to the full payment and performance of, all
Obligations of the Company to the Lenders.

       

      4. Representations and
Warranties.  Each of the undersigned hereby jointly and
severally represents and warrants (all of which representations and warranties
shall survive until all Obligations are indefeasibly satisfied in full and the
Transaction Documents have been irrevocably terminated), that:

       

      (a) Corporate
Status.  It is a corporation, partnership or limited liability
company, as the case may be, duly formed, validly existing and in good standing
under the laws of its jurisdiction of formation indicated on the signature page
hereof and has full power, authority and legal right to own its property and
assets and to transact the business in which it is engaged.

       

      (b) Authority and
Execution.  It has full power, authority and legal right to
execute and deliver, and to perform its obligations under, this Guaranty and has
taken all necessary corporate, partnership or limited liability company, as the
case may be, action to authorize the execution, delivery and performance of this
Guaranty.

       

      (c) Legal, Valid and Binding
Character.  This Guaranty constitutes its legal, valid and
binding obligation enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting the
enforcement of creditor’s rights and general principles of equity that restrict
the availability of equitable or legal remedies.

      
        
           

        

        
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      (d) Violations.  The
execution, delivery and performance of this Guaranty will not violate any
requirement of law applicable to it or any contract, agreement or instrument to
which it is a party or by which it or any of its property is bound or result in
the creation or imposition of any mortgage, lien or other encumbrance other than
in favor of the Lenders on any of its property or assets pursuant to the
provisions of any of the foregoing, which, in any of the foregoing cases, could
reasonably be expected to have, either individually or in the aggregate, a
material adverse effect on the business, operations, properties, prospects, or
financial condition of any Subsidiary Guarantor and/or any condition,
circumstance, or situation that would prohibit or otherwise materially interfere
with the ability of the Subsidiary Guarantor to perform any of its obligations
under this Guaranty in any material respect (a “Material Adverse
Effect”).

       

      (e) Consents or
Approvals.  No consent of any other person or entity
(including, without limitation, any creditor of the undersigned) and no consent,
license, permit, approval or authorization of, exemption by, notice or report
to, or registration, filing or declaration with, any governmental authority is
required in connection with the execution, delivery, performance, validity or
enforceability of this Guaranty by it, except to the extent that the failure to
obtain any of the foregoing could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.

       

      (f) Litigation.  No
litigation, arbitration, investigation or administrative proceeding of or before
any court, arbitrator or governmental authority, bureau or agency is currently
pending or, to the best of its knowledge, threatened (i) with respect to this
Guaranty or any of the transactions contemplated by this Guaranty or (ii)
against or affecting it, or any of its property or assets, which, in each of the
foregoing cases, if adversely determined, would reasonably be expected to have a
Material Adverse Effect.

       

      (g) Financial
Benefit.  It has derived or expects to derive a financial or
other advantage from each and every loan, advance or extension of credit made
under the Transaction Documents or other Obligation incurred by the Company to
the Lenders.

       

      (h) Solvency.  As
of the date of this Guaranty, (a) the fair saleable value of its assets exceeds
its liabilities and (b) it is meeting its current liabilities as they
mature.

       

      5. Remedies upon an Event of
Default.

       

      (a) If any
Event of Default shall occur and be continuing under any agreement made by the
Company or any of the undersigned to the Lenders, any and all Obligations shall
for purposes hereof, at the Lenders’ option, be deemed due and payable without
notice notwithstanding that any such Obligation is not then due and payable by
the Company.

       

      (b) Each of
the undersigned will promptly notify each Lender of any default by such
undersigned in its respective performance or observance of any term or condition
of any agreement to which the undersigned is a party if the effect of such
default is to cause, or permit the holder of any obligation under such agreement
to cause, such obligation to become due prior to its stated maturity and, if
such an event occurs, the Lenders shall have the right to accelerate such
undersigned’s obligations hereunder.

      
        
           

        

        
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      6. Payments from the Subsidiary
Guarantor.  The Lenders, in their sole and absolute discretion,
with or without notice to the undersigned, may apply on account of the
Obligations any payment from the undersigned or any other guarantors, or amounts
realized from any security for the Obligations, or may deposit any and all such
amounts realized in a non-interest bearing cash collateral deposit account to be
maintained as security for the Obligations.

       

      7. Costs.  The
undersigned shall pay on demand, all costs, fees and expenses (including
expenses for legal services of every kind) relating or incidental to the
enforcement or protection of the rights of the Lenders hereunder or under any of
the Obligations.

       

      8. No
Termination.  This is a continuing irrevocable guaranty and
shall remain in full force and effect and be binding upon the undersigned, and
each of the undersigned’s successors and assigns, until all of the Obligations
have been indefeasibly paid in full.  If any of the present or future
Obligations are guarantied by persons, partnerships, corporations or other
entities in addition to the undersigned, the death, release or discharge in
whole or in part or the bankruptcy, merger, consolidation, incorporation,
liquidation or dissolution of one or more of them shall not discharge or affect
the liabilities of any undersigned under this Guaranty.

       

      9. Recapture.  Anything
in this Guaranty to the contrary notwithstanding, if the Lenders receives any
payment or payments on account of the liabilities guaranteed hereby, which
payment or payments or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver, or any other party under any Insolvency Law, common law or
equitable doctrine, then to the extent of any sum not finally retained by the
Lenders, the undersigned’s obligations to the Lenders shall be reinstated and
this Guaranty shall remain in full force and effect (or be reinstated) until
payment shall have been made to the Lenders, which payment shall be due on
demand.

       

      10. Books and
Records.  The books and records of the Lenders showing the
account between the Lenders and the Company shall be admissible in evidence in
any action or proceeding, shall be presumptively correct for purposes of
establishing the items therein set forth and shall constitute prima facie proof
thereof.

       

      11. No
Waiver.  No failure on the part of the Lenders to exercise, and
no delay in exercising, any right, remedy or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the Lenders of any
right, remedy or power hereunder preclude any other or future exercise of any
other legal right, remedy or power.  Each and every right, remedy and
power hereby granted to the Lenders or allowed it by law or other agreement
shall be cumulative and not exclusive of any other, and may be exercised by the
Lenders at any time and from time to time.

       

      12. Waiver of Jury Trial.
EACH OF THE UNDERSIGNED HERETO WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT,
TORT, OR OTHERWISE BETWEEN THE LENDERS, AND/OR ANY OF THE UNDERSIGNED ARISING
OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THIS GUARANTY, THE NOTE PURCHASE AGREEMENT, THE
NOTES OR THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR
THERETO.

      
        
           

        

        
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      13. Governing Law;
Jurisdiction.  This Guaranty cannot be changed or terminated
orally, and shall be governed by and construed and enforced in accordance with
the laws of the State of New York applicable to contracts made and performed in
such state, without regard to principles of conflicts of laws which would result
in the application of the substantive law of another
jurisdiction.  Each of the undersigned hereby consents and agrees that
the state or federal courts located in the County of New York, State of New York
shall have exclusive jurisdiction to hear and determine any claims or disputes
between any of the undersigned, on the one hand, and the Lenders, on the other
hand, pertaining to this Guaranty or any of the Transaction Documents or to any
matter arising out of or related to this Guaranty or any of the Transaction
Documents; provided, that each
of the undersigned acknowledges that any appeals from those courts may have to
be heard by a court located outside of the County of New York, State of New
York; and further provided, that
nothing in this Guaranty shall be deemed or operate to preclude the Lenders from
bringing suit or taking other legal action in any other jurisdiction to collect
the obligations, to realize on the collateral or any other security for the
obligations, or to enforce a judgment or other court order in favor of the
Lenders.  Each of the undersigned expressly submits and consents in
advance to such jurisdiction in any action or suit commenced in any such court,
and each undersigned hereby waives any objection which it may have based upon
lack of personal jurisdiction, improper venue or forum non
conveniens.  Each of the undersigned hereby waives personal
service of the summons, complaint and other process issued in any such action or
suit and agrees that service of such summons, complaint and other process may be
made by registered or certified mail addressed to such undersigned in accordance
with Section 17 and that service so made shall be deemed completed upon the
earlier of such undersigned’s actual receipt thereof or three (3) days after
deposit in the U.S. mail, proper postage prepaid.

       

      14. Understanding With Respect
to Waivers and Consents.  Each Subsidiary Guarantor warrants
and agrees that each of the waivers and consents set forth in this Guaranty is
made voluntarily and unconditionally after consultation with outside legal
counsel and with full knowledge of its significance and consequences, with the
understanding that events giving rise to any defense or right waived may
diminish, destroy or otherwise adversely affect rights which such Subsidiary
Guarantor otherwise may have against the Company, the Lenders or any other
person or entity or against any collateral.  If, notwithstanding the
intent of the parties that the terms of this Guaranty shall control in any and
all circumstances, any such waivers or consents are determined to be
unenforceable under applicable law, such waivers and consents shall be effective
to the maximum extent permitted by law.

       

      15. Severability.  To
the extent permitted by applicable law, any provision of this Guaranty which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

       

      16. Amendments,
Waivers.  No amendment or waiver of any provision of this
Guaranty nor consent to any departure by the undersigned therefrom shall in any
event be effective unless the same shall be in writing executed by each of the
undersigned directly affected by such amendment and/or waiver and the
Lenders.

       

      17. Notice. All notices
and other communications required or permitted hereunder shall be in writing and
shall be hand delivered or sent via facsimile, overnight courier service or
mailed by certified or registered mail, postage prepaid, return receipt
requested, addressed or sent to the addresses listed on the signature page
hereto or at such other addresses as the parties shall have furnished to each
other in writing.  Notices sent via hand delivery shall be effective
when received, notices sent facsimile shall be effective upon written
confirmation of transmission (if also sent by another form of notice permitted
hereunder within 24 hours of sending the facsimile), notices sent by overnight
courier shall be effective upon receipt, and notices mailed by certified or
registered mail, postage prepaid return receipt requested, shall be effective
five business days after deposit with the U.S. Postal Service.

      
        
           

        

        
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      18. Successors.  This
Guaranty shall (a) be binding upon each Subsidiary Guarantor, its
successors and assigns and (b) inure to the benefit of and be enforceable
by the Lenders and their successors, transferees and assigns.  Without
limiting the generality of the foregoing clause (b), subject to Section
10(h) of the Note
Purchase Agreement, the Lenders may assign or otherwise transfer all or any
portion of its rights and obligations under the Note Purchase Agreement or other
Transaction Documents to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof of a Lender, in each case
as and to the extent provided in Section 10(h) of the Note Purchase
Agreement.  No Subsidiary Guarantor shall have the right to assign its
obligations hereunder or any interest herein without the prior written consent
of the Lender.

       

      19. Joinder.  It
is understood and agreed that any person or entity that desires to become a
Subsidiary Guarantor hereunder, or is required to execute a counterpart of this
Guaranty after the date hereof pursuant to the requirements of the Transaction
Documents, shall become a Subsidiary Guarantor hereunder by (x) executing a
joinder agreement in form and substance satisfactory to the Lenders,
(y) delivering supplements to such exhibits and annexes to such Transaction
Documents as the Lenders shall reasonably request and/or as may be required by
such joinder agreement and (z) taking all actions as specified in this Guaranty
as would have been taken by such Subsidiary Guarantor had it been an original
party to this Guaranty, in each case with all documents required above to be
delivered to the Lenders and with all documents and actions required above to be
taken to the reasonable satisfaction of the Lenders.

       

      20. Release.  Nothing
except indefeasible payment in full of the Obligations shall release any of the
undersigned from liability under this Guaranty.

       

      21. Remedies Not
Exclusive.  The remedies conferred upon the Lenders in this
Guaranty are intended to be in addition to, and not in limitation of any other
remedy or remedies available to the Lenders under applicable law or
otherwise.

       

      22. Limitation of Obligations
under this Guaranty.  Each Subsidiary Guarantor and the Lenders
(by its acceptance of the benefits of this Guaranty) hereby confirms that it is
its intention that this Guaranty not constitute a fraudulent transfer or
conveyance for purposes of the Bankruptcy Code, the Uniform Fraudulent
Conveyance Act of any similar Federal or state law.  To effectuate the
foregoing intention, each Subsidiary Guarantor and the Lenders (by its
acceptance of the benefits of this Guaranty) hereby irrevocably agrees that the
Obligations guaranteed by such Subsidiary Guarantor shall be limited to such
amount as will, after giving effect to such maximum amount and all other
(contingent or otherwise) liabilities of such Subsidiary Guarantor that are
relevant under such laws and after giving effect to any rights to contribution
pursuant to any agreement providing for an equitable contribution among such
Subsidiary Guarantor (including this Guaranty), result in the Obligations of
such Subsidiary Guarantor under this Guaranty in respect of such maximum amount
not constituting a fraudulent transfer or conveyance.

       

       

      23. Reference to Section 11(c)
of the Note Purchase Agreement.  Notwithstanding anything
herein to the contrary, the rights of any Lender or any other Person to enforce
this Guaranty, or take action under this Guaranty or otherwise in respect of the
Obligations against any Subsidiary Guarantor, is subject to the restrictions set
forth in Section 11(c) of the Note Purchase Agreement.

       

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      IN
WITNESS WHEREOF, this Guaranty has been executed by the undersigned as of the
date and year here above written.

       

       

      SUBSIDIARY
GUARANTORS:

       

      Dirt
Motorsports, Inc.

       

      By: /s/
Brian Carter

      Name:
Brian Carter

      Title:  Executive
Vice President

       

      Address:  7575
West Winds, Suite D, Concord, NC 28027

       

      Telephone:  704-795-7223

      Facsimile:  704-795-7229

      State of
Formation:  New York

       

      Volusia
Operations, LLC

       

      By: /s/
Brian Carter

      Name:
Brian Carter

      Title:  Executive
Vice President

       

      Address:  7575
West Winds, Suite D, Concord, NC 28027

       

      Telephone:  704-795-7223

      Facsimile:  704-795-7229

      State of
Formation:  Florida

       

      Carter
& Miracle Concessions, LLC

       

      By: /s/
Brian Carter

      Name:
Brian Carter

      Title:  Executive
Vice President

       

      Address:  7575
West Winds, Suite D, Concord, NC 28027

       

      Telephone:  704-795-7223

      Facsimile:  704-795-7229

      State of
Formation:  Florida

      
        
           

        

        
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      Boundless
Racing, Inc.

       

      By: /s/
Brian Carter

      Name:
Brian Carter

      Title:  Executive
Vice President

       

      Address:  7575
West Winds, Suite D, Concord, NC 28027

       

      Telephone:  704-795-7223

      Facsimile:  704-795-7229

      State of
Formation:

      
        
           

        

        
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      EXHIBIT
A

       

      LENDERS

       

      

      North
Sound Legacy International, Ltd.

      North
Sound Legacy Institutional Fund LLC

      Vicis
Capital Master Fund, L.P.

      C.E.
Unterberg, Towbin Capital Partners I, L.P.

      Basso
Fund Ltd.

      Basso
Multi-Strategy Holding Fund Ltd.

      Rock More
Investment Master Fund Ltd.

      Trellus
Partners, LP

      Trellus
Partners II, LP

      Trellus
Offshore Fund Limited

      Trellus
Small Cap Opportunity Fund, LP

      Trellus
Small Cap Opporttmity Offshore Fund Limited

      Iroquois
Master Fund Ltd.exhibit10_9.htm

    Exhibit 10.9

     

    Prepared by. Record and
Return to:

    

     

    Andrew
Kaplan, Esquire

    Fox
Rothschild, LLP

    997 Lenox
Drive, Building #3 

    Lawrenceville,
New Jersey 08648

     

    Parcel Id
Nos.: Al, A1B, A1F, A1F1, A1F2 AND A1F3

     

     

    MORTGAGE AND SECURITY
AGREEMENT

     

     

    THIS
MORTGAGE AND SECURITY AGREEMENT ("Mortgage") is made on September 19,
2007, between DIRT MOTOR SPORTS, INC. d/b/a WORLD RACING GROUP, INC.,
with an address of 7575 West Winds Boulevard, Suite D, Concord, North Carolina
28027 (the "Mortgagor") and NORTH SOUND LEGACY INTERNATIONAL, LTD, NORTH SOUND
LEGACY INSTITUTIONAL FUND LLC, VICIS CAPITAL MASTER FUND, L.P., C.E. UNTERBERG,
TOWBDSf CAPITAL PARTNERS I, L.P., BASSO FUND LTDy BASSO MULTI-STRATEGY HOLDING
FUND LTD., ROCKMORE INVESTMENT MASTER FUND LTD., TRELLUS PARTNERS, LP, TRELLUS
PARTNERS II, LP, TRELLUS OFFSHORE FUND LIMITED, TRELLUS SMALL CAP OPPORTUNITY
FUND, LP, TRELLUS SMALL CAP OPPORTUNITY OFFSHORE FUND LIMITED, and IROQUOIS
MASTER FUND LTD, with an address of c/o Burnham Hill Partners, 590 Madison
Avenue, 5th Floor,
New York, NY 10022 (collectively, the "Mortgagee").

     

    WHEREAS,
Mortgagor has borrowed certain funds from the Mortgagee pursuant to the Note
Purchase Agreement dated as of the date hereof (the "Note Purchase Agreement";
capitalized terms used herein and not defined herein have the meanings set forth
in the Note Purchase Agreement) as evidenced by the Notes in the aggregate
principal sum of FIFTEEN MILLION DOLLARS ($15,000,000) (collectively, the
"Loan") upon such terms and conditions as therein provided;

     

    WHEREAS,
Mortgagor and Mortgagee agree and acknowledge that the total value of the
Mortgaged Property (as hereinafter defined) is equal to THREE MILLION DOLLARS
($3,000,000) and that the amount secured by this Mortgage is hereby limited to
said amount.

     

    The
Mortgagor has agreed to enter into this mortgage (the "Mortgage") to grant to
Mortgagee a mortgage lien on and security interest in and to the Mortgaged
Property (as hereinafter defined) as security for the payment and performance of
all Obligations (as hereinafter defined) of the Mortgagor to the Mortgagee
hereunder and under the Note Purchase Agreement, the Notes and the other
Transaction Documents (collectively, the "Loan Documents"), and intending to be
legally bound, Mortgagor does hereby grant, sell, bargain, mortgage, assign,
transfer, pledge and convey to the Mortgagee, and does hereby grant a security
interest (the "Security Interest") to ..the Mortgagee in Mortgagor's right,
title, and interest in and to the following described p^perty, whether now owned
or hereafter acquired (collectively, the "Mortgaged Property"):

     

    a. all of
the tract or parcel of land and premises known described in Exhibit "A" attached
hereto and made a part of hereof;

    
      
         

      

      
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    Lernerville
Speedway:

    Mailing
Address: 313 North Pike Road, Sarver, PA 15055 Total of 109.126
acres.

     

    All those
certain pieces or parcels of land comprising the Lemerville Speedway Property,
individually known as Tax Parcels Al, A1B, A1F, A1F1, A1F2 and A1F3 of Tax Map
1F75, situate in Winfield Township and Buffalo Township, Butler County,
Commonwealth of Pennsylvania, the overall boundary of said parcels being more
fully bounded and described as follows:

     

    Beginning
at a point in the centerline of North Pike Road (S.R.0356) where said line is
intersected by the southerly line of land now or formerly of Sarver Development,
L.L.C. (as recorded at instrument # 2003 09110041415); thence, away from said
road and along said line of Sarver Development, LX.C.:;Sf&9°
30' 00" E, 259.35 feet to a point; thence, along the easterly line of said
Sarver property and properties now or formerly of Harry and Dorothy
Bouch,
Helen Martin,
and David A. and Lois J. Rrumpe and an apparent 20
foot right of way, N 00° 53' 33" E, 829.13 feet to a point; thence, along the
southerly line of land now or formerly of Ervin E. arid Shirley Holbert, the
southerly line of Franklin Drive, 16 feet wide, land now or formerly of F.
Charlotte McWilliams, Bette and William McWilliams, along the southerly line of
a 20 foot right of way as called for in D.B.V. 978, Page 85 and southerly line
of other land of William R. and Bette Williams, S 89° 37' 43" E, 1983.17 feet to
a point in the center of the former Pennsylvania Railroad right of way, (now a
"rails to trails" path); thence along said former railroad right of way
centerline S 39° 13' 38" E, 210.75 feet to a point of tangency; thence by same
in a southerly direction by a curve to the right having a radius of 859.02 feet,
an arc distance of 705.47 feet to a point at or near the center of a stream;
thence, away from former railroad right of way and along or near said center of
stream the following bearings and distances:

     

    S50° 30'
00" W, 109.83 feet; S 33° 30' 00" W, 240.90 feet; S 17° 15'00" W, 242.55 feet;
S10°51' 11"E, 144.33 feet; S 22° 30' 00" W, 469.42 feet; S23°30' 00" E, 346.50
feet; S29° 00' 00" E, 179.85 feet;

     

    To a
point; thence, along the northerly line of land now or formerly of Community
Development Corporation of Butler County, N 89° 45' 00" W, 1,056.48 feet to a
point; thence, along the easterly line of other land now and formerly of Sarver
Development, L.L.C., N 17° 58' 00" W, 300.00 feet to a point thence, along
northerly line of same N 89° 45' 00" W, 763.95 feet to the centerline of
aforementioned North Pike Road (S.R. 0356); thence along said centerline the
following bearings and distances:

    

    
      N 18° 30'
00" W, 403.72 feet; 

      N 22° 30'
00" W, 327.39 feet; 

      N 18° 15'
00" W, 330.00 feet;

    

    N 18° 00'
00" W, 284.43 feet to the Point and Place of Beginning. 

     

    Containing
a total area of 4,753,521.75 square feet or 109.126 acres.

    

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    b.      all
improvements, material, property rights and interests including but not limited
to:

     

    i. all
buildings and other improvements now or hereafter located on the Mortgaged
Property (the "Improvements");

     

    ii. all
streets, lanes, alleys, passages, ways, water courses, easements and
appurtenances whatsoever thereunto belonging in or in any way made appurtenant
hereafter, and the reversions and remainder, with respect thereto;

     

    iii. all
present and future fixtures attached or to be attached to the Mortgaged
Property;

     

    iv. all
building materials, building machinery and building equipment delivered on site
to the Mortgaged Property during the course of, or in connection with, the
construction of, or reconstruction of, or remodeling of any building and
improvements from time to time during the term of this Mortgage;

     

    v. all
awards or payments, including interest thereon, which may be made with respect
to the Mortgaged Property, whether from the exercise of the right of eminent
domain (including any transfer made in lieu of the exercise of said right), or
for any other injury to or decrease in the value of the Mortgaged Property,
including without limitation, all awards or payments of estimated compensation,
all damages to the Premises or Improvements resulting from any taking, all
machinery and equipment dislocation expenses, all settlement amounts and
apportionment of taxes;

     

    vi. all
insurance policies covering the Mortgaged Property and all proceeds of any
unearned premiums on any such insurance policies includmg, without limitation,
the right to receive and apply the proceeds of any insurance judgments, or
settlements made in lieu thereof, for damage to the Mortgaged
Property;

     

    vii. all
future leases and other agreements affecting the use and occupancy of the
Mortgaged Property now or hereafter entered into, and ;all licenses, permits and
agreements with or from all boards, public utilities, agencies, departments,
governmental or otherwise, relating to or affecting the Mortgaged Property or
the use and occupancy thereof, whether heretofore or hereafter issued or
executed;

     

    viii. all
income, rents, issues, profits, revenues, royalties, proceeds, credits, deposits
and options arising out of, under or relating to the use and operation of the
Mortgaged Property and all leases, chattels real, subleases, subtenancies,
occupancy agreements, licenses or concessions affecting the Mortgaged Property,
including, without limitation, the right, power and authority given to and
conferred upon Mortgagor under any assignment of leases to collect and apply
such income, rents, issues, profits and proceeds;

     

    ix. all
general intangibles arising from, used or held in connection with, or relating
to the Mortgaged Property or the ownership, use, occupancy, enjoyment,
operation, management, development or improvement thereof, including, without
limitation, all governmental permits relating to construction, all subdivision
maps and applications therefor, all subdivision public reports and applications
therefor, all architectural and engineering drawings, plans and specifications,
soil tests, feasibility studies, engineering reports, environmental, building
and other permits, certificates of occupancy, construction, management and other
contracts, franchises, licenses and all names under or by which
the Mortgaged Property or any present or future improvements on the Mortgaged
Property may at any time be operated or known, and all rights to carry on
business under any such names, or any variant thereof, and all trademarks and
goodwill in; any way relating to the Mortgaged Property.

    

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

            

        TOGETHER WITH
all substitutions therefore, all additions (including without limitation all
cash and dividends and other distributions and all rights, privileges and
options relating to, declared or granted in connection with property) and all
proceeds thereof and products of each of the foregoing in any form
whatsoever.

     

    HABENDUM
CLAUSE

     

        TO HAVE AND
TO HOLD all of the Mortgaged Property unto Mortgagee and its successors and
assigns, forever, upon the terms and conditions herein set forth.

    

     

        AND IT IS
AGREED AND UNDERSTOOD that until an Event of Default, (as such term is defined
herein), shall have occurred and the Required Mortgagees (as hereinafter
defined) have elected to foreclose as detailed herein, Mortgagor may retain
possession of the Mortgaged Property.

    

    COVENANTS. REPRESENTATIONS
AND WARRANTIES

    IT IS
HEREBY COVENANTED by the parties hereto that the Mortgaged Property is to be
held arid applied subject to the further terms herein set forth; and Mortgagor,
for itself and its successors and Assigns, hereby covenants, agrees, represents
and warrants with and to Mortgagee as follows:

     

    1. Title to Mortgaged
Property. Mortgagor represents, warrants, covenants and agrees Mortgagor
shall at all times remain the legal and beneficial owner of good and marketable
indefeasible title in fee simple absolute to all of the Mortgaged Property.;
Mortgagor has full power and authority to grant the Mortgaged Property as
provided in this Mortgage and will forever warrant and defend its grant made
herein against any and all claims and demands whatsoever, except as specifically
provided in this Mortgage.

     

    2. Definition of
Obligations. This Mortgage secures the payment and performance of the
following indebtedness, liabilities and obligations (collectively referred to
herein as the "Obligations"):

     

    a. the
Obligations of the Mortgagor set forth in the Note Purchase Agreement, the Notes
and the other Transaction Documents; and

     

    b. all other
sums due or to become due under the Notes and this Mortgage including all
extensions, renewals, modifications or reamortizations of the debt evidenced by
the Notes, all increases or additions to such debt, and all other debts,
obligations and liabilities of every kind and character of Mortgagor now or
hereafter existing in favor of Mortgagee whether such debts, obligations or
liabilities be direct or indirect, primary or secondary, joint or several, fixed
or contingent, and whether originally payable to Mortgagee or to a third party
and subsequently acquired by Mortgagee.

     

    3. Responsibility and
Preservation of Mortgaged Property; Compliance with Laws. Mortgagor
assumes all liability and responsibility in connection #ith ail Mortgaged
Property acquired by Mortgagor arid the obligation of Mortgagor to pay all
OhUg^o^shall in no way be affected or diminished by reason of the fact that any
such Mortgaged Property may be lost, destroyed, stolen, damaged or for any
reason whatsoever unavailable to Mortgagor. Mortgagor shall keep the Mortgaged
Property protected and in good order, condition and repair at all times and
shall not: (a) commit, permit or suffer any waste, damage, disfigurement or
injury to or upon the Mortgaged Property or arty portion thereof; or (b)
demolish, destroy, or remove any buildings, fixtures, structures or improvements
thereafter erected on or annexed or affixed to the Mortgaged Property. Mortgagor
further agrees and
covenants to comply with and perform at its own expense any and all present or
future, ordinary o|||pprdinary, foreseen or unforeseen laws, regulations,
Ordinances or requirements concerning the Mortga£e'cf Property or any portion
thereof, or the use thereof, or the streets adjacent thereto, of the federal,
state or municipal governments, or of any departments, subdivisions, bureaus or
offices thereof, or of any governmental, public or quasi-public authorities now
created or hereafter created or of the National Board of Fire Underwriters, any
local Board of Fire Underwriters, or other body having similar functions, or of
any liability, fire or other insurance company having policies outstanding with
respect to the Mortgaged Property or any part thereof (including, without
limitation, all laws, regulations, ordinances and requirements relating to
environmental issues and hazardous substances) (said laws, regulations,
ordinances and requirements hereafter collectively referred to as the
"Laws").

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

    4. Taxes. Mortgagor
shall pay, before the same becomes delinquent, all taxes, assessments and
charges of every nature (collectively, "Taxes") and by whomever assessed that
may now or hereafter be levied or assessed against, or that by reason of
nonpayment may become a lien upon, the Mortgaged Property, or any part thereof,
and, if requested by Mortgagee, Mortgagor shall, prior to the date each Tax
would become delinquent by reason of nonpayment, submit to Mortgagee official
Tax payment receipts or other evidence acceptable to Mortgagee of the due and
punctual payment thereof. Mortgagor shall not claim on demand or be entitled to
any credit on account of the Obligations for any part of the taxes paid with
respect to the Mortgaged Property or any part thereof and no deduction shall
otherwise be made or claimed from the taxable value of the Mortgaged Property,
or any part thereof, by reason of this Mortgage.

     

    5. : Insurance. In the
event Mortf^S'shail
improve the Mortgaged Property thereby constructing buildings or other
improvements thereon, then Mortgagor shall carry adequate insurance against all
liability and hazards, including without limitation, fire and casualty insurance
for the mortgaged property as are usually carried by entities engage in the same
or a similar business situated as Mortgagor. In the event of a casualty loss,
Mortgagor shall utilize the insurance proceeds to rebuild the premises or apply
the proceeds to the outstanding mortgaged sums due pursuant to the .terms of
this mortgage to Satisfy any outstanding indebtedness hereunder. The aforesaid
liability insurance shall be in an amount satisfactory to Mortgagee and shall
name Mortgagee as an additional insured.

     

    6. Tenant's Compliance with
Laws. Mortgagor shall cause all future tenants, if any, under any leases
to comply, with all Laws affecting the Mortgaged Property.

     

    7. Right to Inspect and
Cure. The Mortgagee shall, upon reasonable advance written notice to
Mortgagor, have the right to conduct or have conducted by its agents or
contractors, such inspections as the Mortgagee shall deem necessary or advisable
from time to time.

     

    8. Estoppel Certificate.
Mortgagor will certify, by a writing duly acknowledged, to Mortgagee or to any
proposed assignee of this Mortgage, the amount of principal and interest then
owing on the Obligations and whether, to Mortgagor's best knowledge, any offsets
or defenses exist against the Obligations, within five (5) days after a request
ther^fo^s received by Mortgagor.

     

    9. Prohibition on
Transfers. Mortgager" shall not at any time (i) sell, assign, transfer,
convey, lease with option of sale, or dispose of all or any part of or interest
in the Mortgaged Property, or (ii) suffer or permit transfer by operation of law
of the Mortgaged Property, or any part thereof or interest therein, without the
prior written consent thereto of Mortgagee unless the then remaining balance due
under this Mortgage and Notes is satisfied. In the event that the ownership of
the Mortgaged Property or any portion thereof becomes vested in a person other
than Mortgagor, Mortgagee may, without notice to Mortgagor, deal with such
successor or successors in interest with reference to this Mortgage, and the
indebtedness hereby secured, in the same manner as with Mortgagor, without in
any way vitiating or discharging Mortgagor's liability hereunder or upon the
indebtedness hereby secured. No sale of the Mortgaged Property shall operate to
release, discharge, modify, change or affect the original liability of Mortgagor
herein, either in whole or in part. Any violation of the foregoing limitations
shall be deemed an Event of Default hereunder.

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    10. Reports and Notices.
Mortgagor will furnish Mortgagee with copies of reports and notices pertaining
to the Mortgaged Property or any portion thereof, its value or its operations,
and which are submitted by Mortgagor to, or received by Mortgagor from, any
legally constituted authority having jurisdiction of operations conducted on the
Mortgaged Property, including, but without limitation, any licensing agency, of
which deal with any imposition, condemnation of all or any portion of the
Mortgaged Property or default under any mortgage or security agreement
encumbering the Mortgaged Property or any portion thereof. 

     

    11. Further Assurances.
Mortgagor wilfexecute, acknowledge and deliver, at Mortgagor's own cost and
expense, all such further acts, deeds, conveyances, assignments, notices of
assignment, transfers and assurances as Mortgagee shall form time to time
reasonably require for the better granting, bargaining, selling, assigning and
conveying to Mortgagee of the Mortgaged Property.

     

          
12. Authorization to Make
Payments. Mortgagor hereby authorizes Mortgagee or its
designee:

     

    a. To pay
all taxes or other governmental charges, with all interest costs and charges
accruing thereon, which may at any time be or become a lien on the Mortgaged
Property, or any portion thereof;

     

    b. To effect
any insurance required hereunder and to pay the premiums thereon; provided,
however, that none of the above provisions shall be construed as obligatory upon
Mortgagee or as making it liable for loss, damage or injury which may result
from the non-insurance of the Mortgaged Property, or any portion thereof, or
other failure;

     

    c. To incur
or pay any claim, lien, encumbrance or other expense in protecting its rights
hereunder and the security hereby granted;

     

    d. To do
such things as may, in the judgment of Mortgagee, be necessary or advisable in
order to perform and observe any present agreement affecting or restricting the
use of, or pertaining to, the Mortgaged Property, or any portion thereof,
including, without limitation, the making of such repairs and the taking of such
steps as Mortgagee deems reasonably necessary to prevent or cure waste and the
payment of any reasonable sums and the mcurring of reasonable expenses,
including attorneys' fees; and

     

    e. To
appear or participate in any action or proceeding purporting to affect the
security hereof, it being understood that Mortgagee shall have no obligation,
expressed or implied, to advance any funds, incur any expense or liability, or
take any action authorized by this provision or any other provision of this
Mortgage.

     

    13. Definition of Event of
Default. The occurrence of any one or more of the following events shall
constitute an Event of Default hereunder:

     

          
   a. The
failure of Mortgagor to make any payments required under the Notes or this
Mortgage;
or

     

    b. Mortgagor
shall fail to perform or observe any other term, covenant, warranty, obligation,
provision, representation, or agreement contained in this Mortgage or any other
Obligation;

     

    c. Any
representation, statement, or warranty made in this Mortgage shall prove to have
been false or incorrect in any material respect when made;

     

    
      
         

      

      
        -6-

        
          

        

      

      
         
          d. Mortgagor
shall transfer all or a part of the Mortgaged Property in violation of this
Mortgage;

    

     

    e. The
holder of any lien shall commence foreclosure proceedings against the Mortgaged
Property or any part thereof;

     

    f. Mortgagor
shall be insolvent, or shall file a voluntary petition in bankruptcy or a
Voluntary petition seeking to effect a plan or other arrangement with
creditors;

     

    g. Mortgagor
shall be adjudicated bankrupt, or shall make an assignment for the benefit of
creditors, or shall apply for or consent to the appointment of any receiver or
trustee for itself, or for the Mortgaged Property or any part thereof, or for
all or any substantial portion of its other property, or a suit shall be
instituted against Mortgagor seeking to establish bankruptcy, insolvency,
arrangement, debt adjustment, receivership, sequestration, liquidation or
attachment of the Mortgagor, or of the Mortgaged Property or any part thereof,
or of all or any substantial portion of its other property which is not
dismissed within sixty (60) days thereafter;

     

    h. The
Mortgaged Property' or'any part thereof is taken or damaged by eminent domain,
alteration on the grade of any street, or other injury to or decrease in the
value of the Mortgaged Property, by reason of any public of quasi-public
improvement or condemnation proceeding or any other similar manner
("Condemnation"), regarding such condemnation or proposed
condemnation;

     

    i.           The
Mortgaged Property is materially damaged by any fire or casualty not
covered
by insurance sufficient to provide for the material restoration
thereof;

     

    j.       The
occurrence of an "Event of Default" under any Loan Document.

     

            14. Rights and Remedies on
Default.

     

    a. Acceleration. Upon
the occurrence and during the continuance of any Event of Default, in addition
to any other rights, powers or remedies conferred herein or by operation of law,
the Required Mortgagees, in their sole judgment and discretion, may declare the
then unpaid principal balance secured by this Mortgage (the "Principal Balance"'),
the accrued interest thereon and any other accrued but unpaid portion of the
Obligations to be, and they shall thereupon forthwith become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by Mortgagor. "Required Mortgagees"
means any individual Mortgagee or group of Mortgagees where the sum of the
principal amount of the Notes then outstanding held by such Mortgagee or
Mortgagees aggregates at least sixty percent (60%) of the total principal amount
of all of the Notes then outstanding.

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

    b. Foreclosure and Sale.
If an Event of Default shall occur and be continuing, Mortgagee shall have the
right and option to take possession of the Mortgaged Property and/or proceed
with foreclosure and to sell, to the extent and in the: manner
permitted by applicable law, all or any portion of the Mortgaged Property at one
or moresiles, as an entirety or in parcels, at such place or places, in such
manner and upon such notice as Si|yf;be required by applicable law, or, in the
absence of any such requirement, as Mortgagee may deem appropriate, and to make
conveyance to the purchaser or purchasers. Nothing contained in this Section 14(b) shall
be construed so as to limit in any way Mortgagee's rights to sell the Mortgaged
Property, or any portion thereof, by private sale if, and to the extent that,
such private sale is permitted under the laws of the applicable jurisdiction or
by public or private sale after entry of a judgment by any court of competent
jurisdiction so ordering. Mortgagor hereby irrevocably appoints Mortgagee to be
the attorney-in-fact of Mortgagor (coupled with an interest) and in the name and
on behalf of Mortgagor to execute and deliver any deeds, transfers, conveyances,
assignments, assurances and notices which Mortgagor ought to execute and
deliver, and to do and perform any other acts or things which Mortgagor ought to
do and perform under the covenants herein contained and, generally, to use the
name of Mortgagor in the exercise of any of the powers hereby conferred on
Mortgagee. At any such sale: (a) whether made under the power herein contained
of any other legal enactment, or by virtue of any judicial proceedings or any
other legal right, remedy or recourse, it shall not be necessary for Mortgagee
to have physically present, or to have constructive possession of, the Mortgaged
Property (Mortgagor hereby covenanting and agreeing to deliver to Mortgagee any
portion of the Mortgaged Property not actually or constructively possessed by
Mortgagee immediately upon demand by Mortgagee) and the title to and right of
possession of any such property shall pass to the purchaser thereof as
completely as if the same had been actually present and delivered to purchaser
at such sale; (b) each instrument of conveyance executed by Mortgagee shall
contain a general warranty of title, binding upon .Mortgagor and its successors
and assigns; (c) each and every recital contained in any instrument of con^l^e
made by Mortgagee shall conclusively establish the truth and accuracy of the
matters recited therein; including, without limitation, nonpayment and/or
nonperformance of the Obligations and advertisement and conduct of such sale in
the manner provided herein and otherwise required by applicable law; (d) any and
all prerequisites to the validity thereof shall be conclusively presumed to have
been performed; (e) the receipt of Mortgagee, or of such other Person or officer
making the sale, shall be a sufficient discharge to the purchaser for its
purchase money and neither such purchaser nor its assigns or personal
representatives shall thereafter be obligated to see to the application of such
purchase money, or be in any way answerable for any loss, misapplication or
non-application thereof; (f)to the fullest extent permitted by applicable law,
Mortgagor shall be completely and irrevocably divested of all of its right,
title, interest, estate, claim and demand whatsoever, either at law or in equity
(including any statutory or common law right of redemption, which is hereby
waived to the fullest extent permitted by applicable law), in and to the
property sold in any such event, and such sale shall be a perpetual bar, both at
law and in equity, against Mortgagor and any and all other Persons claiming by,
through or under Mortgagor; and (g) to the extent and under such circumstances
as are permitted by applicable law, Mortgagee may be a purchaser at any such
sale, and shall have the right, after paying or accounting for all costs of said
sale or sales, to credit the amount of the then unpaid Obligations to the amount
of its bid (in the order of priority set forth in Section 15 hereof) in
lieu of cash payment. Each remedy provided in this instrument is distinct from
and cumulative with all other rights and remedies provided hereunder or afforded
by applicable law or equity, and may be exercised concurrently, independently or
successively, in any order whatsoever.

     

    c. Judicial Foreclosure.
If any Event of Default shall occur and be continuing, Mortgagee shall have the
right and power to proceed by a suit or suits in equity or at law, whether for
the specific performance of arty covenant or agreement herein contained or in
aid of the execution of any power herein granted, or for any foreclosure
hereunderjor.for the sale of the Mortgaged Property under the judgment or decree
of any court or courts 6£-co^npetent jurisdiction, or for the enforcement of any
Other appropriate legal or equitable remedy. 

     

    d. Mortgagee's Agents.
If any Event of Default shall occur and be continuing, Mortgagee may appoint or
delegate any one or more persons as agent to perform any act or acts necessary
or incident to arty sale held by Mortgagee, including the posting of notices and
the conduct of sale, but in the name and on behalf of Mortgagee.

     

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

    e. Receiver. If any
Event of Default shall occur and be continuing, Mortgagee may apply for and
obtain as a matter of right and without notice to Mortgagor, which notice is
hereby expressly waived by Mortgagor, the appointment of a receiver to collect
the rents of the Mortgaged Property and to preserve the security hereof, either
before or after any foreclosure sale or the sale of the Mortgaged Property under
the order of a court or courts of competent jurisdiction or under executory or
other legal process, without regard to the value of the Mortgaged Property as
security for the amount then due to Mortgagee, or the solvency of any entity or
entities, person or persons primarily or secondarily liable for the payment of
such amounts; the rents of the Mortgaged Property, in any such event, having
heretofore been assigned to Mortgagee pursuant to this Mortgage as additional
security for the payment of the Obligations secured hereby. Any money advanced
by Mortgagee in connection with any such receivership shall be a demand
obligation (which obligation Mortgagor hereby expressly promises to pay) owing
by Mortgagor to Mortgagee and shall be subject to the provisions of Section 15 hereof.

     

    f. Uniform Commercial Code'
Remedies. Mortgagee shall have all of the rights, remedies and recourses
with respect to the personalty and the fixtures afforded to it by the applicable
UCC, including, without limitation, the right to take possession of the
personalty and the fixtures or any part thereof, and to take such other measures
as Mortgagee may deem necessary for the care, protection and preservation of the
personalty and the fixtures, in addition to, and not in limitation of, the other
rights, remedies and recourses afforded by this Mortgage or any other Loan
Document.

     

    g. Mortgagees Right to
Cure. Mortgagee shall provide Mortgagor with ten (10) days to cure a
monetary Event of Default. Mortgagee shall provide Mortgagor with a thirty (30)
day time period to cure a non-monetary Event of Default, which period shall
begin the date Mortgagor knows or should have known of the existence of such
Event of Default, provided, however, that if the cure of the non-monetary Event
of Default requires more than thirty (30) days, Mortgagee shall extend the cure
period to forty-five (45) days so long as Mortgagor has commenced the cure
within the thirty (30) day period, and is diligently pursuing the
same.

     

    h. Required Consent of
Mortgagee Prior to Election of Remedies. Should an Event of Default
continue beyond any and all applicable notice, grace and cure periods as
detailed above, Mortgagor shall not proceed with any remedies detailed in this
section or otherwise available at law or in equity without first obtaining
written consent from the R|quhM Mortgagees. Upon receipt of written consent for
the Required Mortgagees, Mortgagee may pursue'.ah^and all rights detailed herein
or otherwise available at law or in equity.

     

    15. Application of
Proceeds. After me occurrence and during the continuance of an Event of
Default, the proceeds of any sale of and any other amounts generated by the
holding, leasing, operating or other use of the Mortgaged Property shall be
applied by Mortgagee (or the receiver, if one is appointed), to the extent that
funds are so available therefrom, in accordance with the provisions of the Note
Purchase Agreement or, if not so provided, then in the following order of
priority, except to the extent otherwise required by applicable
law:

     

    (a) first, to
the payment of the reasonable and necessary costs and expenses of taking
possession of the Mortgaged Property and of holding, using, leasing, repairing,
improving the same, including reasonable (i) receivers' fees, (ii) court costs,
(iii) attorneys' and accountants' fees, (iv) costs of advertisement and title
search fees, and (V) the
payment of any and all Impositions, liens, security interests or other rights,
titles or interests equal or superior to the lien and security interest of this
Mortgage (except those to which the Mortgaged Property has been sold subject to
and without in any way implying Mortgagee's prior consent to the creation
thereof);

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

    (b) second,
to the payment of all amounts other than the Principal Balance and accrued but
unpaid interest which may be due to Mortgagee hereunder, under the Note Purchase
Agreement, the Notes or the other Loan Documer)t^,:t§gltbter with interest
thereon as provided herein;

     

    (c) third, to
the payment of the Obligations in such order and manner as Mortgagee determines
in its sole discretion; and

    (d) fourth,
to Mortgagor or as otherwise required by any governmental requirement. Mortgagor
shall be liable for any deficiency remaining.

     

    16. Remedies Cumulative.
The parties agree and acknowledge that the Mortgagee shall not be permitted to
exercise any remedies under this Mortgage until such time as it obtains consent
from the Required Mortgagees as detailed above. No remedy herein conferred upon
Mortgagee is intended to be exclusive of any other remedy, but every such remedy
shall be cumulative and shall be in addition to every other remedy herein
conferred or now or hereafter existing at law or in equity or by
statute.

     

    17. Delay Not a Waiver.
No delay or omission of Mortgagee in exercising any right or remedy arising upon
the happening of any Event of Default shall impair any right or remedy or shall
be construed to be a Waiver of any such Event of Default or an acquiescence
therein; and every right and remedy given by this Mortgage to Mortgagee may be
exercised upon consent from the Required Mortgagees as detailed above from time
to time and as often as may be deemed expedient by Required
Mortgagees.

     

    18. Headings. The Section
and Clause headings herein are for convenience only and are not to be deemed a
part of the agreement between the parties.

     

    19. Counterparts. This
Mortgage may be executed in any number of counterparts, each of which shall be
deemed to be an original and all of which taken together shall constitute but
one and the same instrument.

     

    20. Severability. If any
term or provision of this Mortgage or the application thereof to any person or
circumstances shall, to any extent, be invalid or unenforceable, the remainder
of this Mortgage, of the application of such term or provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby^aiid;each term
and provision of the Mortgage shall be Valid and be enforced to the fullest
extent permitted by law.

     

    21. Successors and
Assigns. The word "Mortgagee" as used hefein shall be construed as
descriptive of Mortgagee named herein, its successors and assigns. The word
"Mortgagor" as used herein shall be construed as descriptive of Mortgagor named
herein and of any subsequent owner or owners of the Mortgaged Property or any
part thereof. All of the covenants and agreements of Mortgagor herein contained
shall be binding upon and assumed by the successors and assigns of
Mortgagor.

     

    22. Release. Upon full
payment of the Obligations and all other amounts secured by this Mortgage, which
full payment is acknowledged by Mortgagee to be satisfaction in full of the Loan
secured by this Mortgage, this Mortgage shall be null and void; otherwise it
shall remain in full force and effect. In the event that this Mortgage shall,
pursuant to the terms of this Section become null and void, Mortgagee shall,
within a reasonable time after receipt of the written request of Mortgagor
therefore, at Mortgagor's sole expense, execute and deliver to Mortgagor a
satisfaction of this Mortgage in recordable form and the appropriate termination
statements as provided for and by the Uniform Commercial Code.

     

    23. Security Agreement.
This Mortgage shall constitute a security agreement to the extent that any of
the Property constitute fixtures or other personal property, and Mortgagee shall
have all the rights of a secured party under the Uniform Commercial Code as
amended from time to time.

     

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

    24. Governing Law. This
Mortgage is construed and enforced by and under the laws of the state in which
the Mortgage Property.

     

    25. Notices. All notices,
requests, demands, directions and other communications which may or are required
to be given, served or sent by either Mortgagee or Mortgagor to the other shall
be given, served or sent by nationally recognized overnight courier or certified
mail, return receipt requested, to the address as set forth in the first
paragraph of this document unless a party notifies the other of a different
address.

     

    26. Payment Of Costs And
Expenses. Mortgagor shall immediately reimburse the Mortgagee for all
costs and expenses which the Mortgagee may incur by reason of, or arising out
of, or in connection with: (a) any Event of Default; (b) any action or
proceeding in which the Mortgagee may appear in or commence to protect,
preserve, exercise or enforce their rights, remedies or security interests under
this Mortgage, or under any document or instrument evidencing the Obligations
secured by this Mortgage, or which otherwise relates to the Mortgaged Property,
including all appeals therefrom; (c) the performance of any act authorized or
permitted hereunder; and (d) the exercise of any other rights or
remedies under this Mortgage, or under any document or instrument evidencing the
Obligations secured by this Mortgage, or otherwise relating to the protection of
the Mortgagee's rights and interest hereunder or under any document or
instrument evidencing the Obligations secured hereby, whether or not a suit or
proceeding is instituted. Such costs and expenses shall include, without
limitation, the fees, charges and expenses of attorneys, expert witnesses, costs
and expenses of searching records, examining title and determining rights in,
title to, or the; Value of, the Mortgaged or the boundaries thereof, including
title company charges,
title insurance premiums, publication costs, and other charges
incident thereto, all
whether or not a suit or proceeding is instituted, provided that such
reimbursable costs and expenses shall not include any costs and expenses
incurred by the Mortgagees as a result of its gross negligence or willful
misconduct. Mortgagor agrees to and shall pay, immediately and without demand,
all sums so expended by the Mortgagee, together with interest from the date of
expenditure, at the highest interest rate then payable under the documents and
instruments evidencing the Obligations, all of which sums plus interest shall
constitute additional indebtedness secured by this Mortgage.

     

    27. Amendment. Any term,
covenant, agreement or condition of this Mortgage may be amended, or compliance
therewith may be waived (either generally or in a particular instance and either
retroactively or prospectively) by one or more substantially concurrent written
instruments signed by Mortgagor and the Required Mortgagees.

     

    28. ACKNOWLEDGEMENT OF RECEIPT
OF COPY. MORTGAGOR HEREBY DECLARES AND ACKNOWLEDGES THAT IT HAS RECEIVED,
WITHOUT CHARGE, A TRUE COPY OF THIS MORTGAGE.

     

    29. Construction. This
Mortgage shall be interpreted and construed with the terms of the Note executed
of even date herewith.

     

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

     

    
    

     

    
      	WITNESS:	MORTGAGOR: 
	 	 
	 	DIRT MOTOR
      SPORTS, INC. 
	 	 
	By:  /s/ Tom Deery 	By:  /s/ Brian Carter
	Name:  Tom
      Deery 	Name:  Brian
      Carter 
	 	Title: 
      Executive Vice President 
	 	 
	 	 
	 	MORTGAGEE: 
	 	
               

              IROQUOIS MASTER FUND LTD

               

              By:  /s/ Mitchell R.
      Kulick

              Name:  Mitchell R.
      Kulick

              Title:  General
      Counsel

               

                    
                TRELLUS SMALL CAP OPPORTUNITY OFFSHORE
      FUND LTD

                 

                By:  /s/ Adam Usdan

                Name:  Adam Usdan

                Title: 
      President

              

               

              

                TRELLUS PARTNERS LP

                 

                By:  /s/ Adam Usdan

                Name:  Adam Usdan

                Title:  President

                 

                      
                  TRELLUS
      PARTNERS II LP

                   

                  By:  /s/ Adam Usdan

                  Name:  Adam Usdan

                  Title: 
      President

                

              

                

                TRELLUS OFFSHORE FUND LTD

                 

                By:  /s/ Adam Usdan

                Name:  Adam Usdan

                Title:  President

                 

                TRELLUS SMALL CAP
      OPPORTUNITY FUND LP

                
                   

                  By:  /s/ Adam Usdan

                  Name:  Adam Usdan

                  Title: 
      President

                

              

            

    

     

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

    
      	 	      
                    
                ROCKMORE INVESTMENT MASTER
      FUND LTD

                
                   

                  By:  /s/ Bruce
      Bernstein

                  Name:  Bruce
Bernstein

                  Title: 
      President

                

              

               

              VICIS CAPITAL MASTER FUND
      L.P.

                By:  Vicis Capital
      LLC

              
                 

                By:  /s/ Keith W.
      Hughes

                Name:  Keith W.
Hughes

                Title:  Chief Financial
      Officer

                 

                BASSO MULTI-STRATEGY HOLDING
      FUND LTD.

                 

                      
                  By:  /s/ Howard I.
      Fischer

                  Name:  Howard I.
      Fischer

                  Title:  Authorized
      Signatory

                

                 

                
                  BASSO FUND LTD.

                   

                        
                    By:  /s/ Howard I.
      Fischer

                    Name:  Howard I.
      Fischer

                    Title:  Authorized
      Signatory

                  

                

                 

                
                  NORTH SOUND LEGACY INSTITUTIONAL
      FUND LLC

                    By: 
      North Sound Capital LLC; Manager  

                   

                        
                    By:  /s/ Thomas E.
      McAuley

                    Name:  Thomas E.
      McAuley

                    Title:  Chief Investment
      Officer

                     

                    
                      
                        NORTH SOUND LEGACY INTERNATIONAL
      LTD.

                          By:  North Sound
      Capital LLC; Investment Advisor

                         

                              
                          By:  /s/ Thomas E.
      McAuley

                          Name:  Thomas E.
      McAuley

                          Title:  Chief Investment
      Officer

                           

                          
                            
                              C.E. UNTERBERG, TOWBIN CAPITAL
      PARTNERS I, L.P.

                               

                                    
                                By:  /s/ Andrew
      Arno

                                Name:  Andrew Arno

                                Title:  A Managing Member of the
      GP

                              

                            

                          

                        

                      

                    

                  

                

              
 

    

     

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

    STATE OF Oklahoma

    COUNTY OF Cleveland

     

    On this 19th day of September, 2007, before me the
undersigned, personally appeared Brian Carter, Executive Vice President of Dirt
Motor Sports, Inc., who I am satisfied is the person who signed the foregoing
instrument, and he did acknowledge that he signed, sealed and delivered the same
as his voluntary act and deed.

     

    /s/  Jennifer Newlin

    Name:  Jennifer Newlin

     

    
      
        STATE OF New York

        COUNTY OF New York

         

        On this 1st day of November, 2007, before me the
undersigned, personally appeared Mitchell R. Kudick, who I am satisfied
is the person who signed the foregoing instrument, and he did acknowledge that
he signed, sealed and delivered the same as his voluntary act and deed.

         

        /s/  Clarissa Russo

        Name:  Clarissa Russo

         

      

      STATE OF New York

    

    COUNTY OF New York

     

    On this 29th day of October, 2007, before me the
undersigned, personally appeared Adam
Usdan, who I am satisfied is the person who signed the foregoing
instrument, and he did acknowledge that he signed, sealed and delivered the same
as his voluntary act and deed.

     

    /s/  Denise Ortiz

    Name:  Denise Ortiz

     

    STATE OF New York

    COUNTY OF Nassau

     

    On this 24th day of September , 2007, before me the
undersigned, personally appeared Keith
W. Hughes, who I am satisfied is the person who signed the foregoing
instrument, and he did acknowledge that he signed, sealed and delivered the same
as his voluntary act and deed.

     

    /s/  Dhansinghani Prakash

    Name:  Dhansinghani Prakash

     

    
      
         

        
          
             

          

          
            -14-

            
              

            

          

          
             

          

        

        STATE OF
Connecticut

      

      COUNTY OF Fairfield

       

      On this 20th day of September , 2007, before me the
undersigned, personally appeared Howard
I. Fischer, who I am satisfied is the person who signed the foregoing
instrument, and he did acknowledge that he signed, sealed and delivered the same
as his voluntary act and deed.

       

      /s/  Renee Robillard

      Name:  Renee Robillard

    

     

    
       

      
        
          STATE
OF Connecticut

        

        COUNTY OF Fairfield

         

        On this 24th day of September , 2007, before me the
undersigned, personally appeared Thomas
E. McAuley, who I am satisfied is the person who signed the foregoing
instrument, and he did acknowledge that he signed, sealed and delivered the same
as his voluntary act and deed.

         

        /s/  Elizabeth Siegel

        Name:  Elizabeth Siegel

      

    

     

    
      STATE
OF New York

      COUNTY OF New York

       

      On this 24th day of September , 2007, before me the
undersigned, personally appeared Andrew
Arno, who I am satisfied is the person who signed the foregoing
instrument, and he did acknowledge that he signed, sealed and delivered the same
as his voluntary act and deed.

       

      /s/  David Barrett

      Name:  David Barrett

    

     

     

    
      
         

      

      
        -15-

        
          

        

      

      
         

      

    

    CERTIFICATE OF RESIDENCE

     

    I certify that the address of the Mortgagee named in this Mortgage is:

     

     

    641 Lexington Ave, NY, NY 10022

    
      By:  /s/ Mitchell R. Kulick

      Name: 
Mitchell R. Kulick

      Title: 
General Counsel

       

      350 Madison Ave, 9th, New York, NY 10017

      By:  /s/ Adam Usdan

      Name:  Adam Usdan

      Title:  President

       

      
        c/o Rockmore Capital, LLC, 150 E 58th St, NY,
NY, 10155

        By:  /s/ Bruce Bernstein

        Name:  Bruce Bernstein

        Title:  President

         

        
          126 E 86th St, Tower 56 Suite 700, New York,
NY

          By:  /s/ John Succo

          Name:  John Succo

          Title:  Member

          
             

            c/o Basso Capital Management, 1266 E Main St,
Stamford, CT 06902

            By:  /s/ Howard I. Fischer

            Name:  Howard I. Fischer

            Title:  Authorized Signatory

          

          
             

            c/o North Sound Capital LLC, 20 Horseneck Lane,
Greenwich, CT 06380

            By:  /s/ Andrew B. David

            Name:  Andrew B. David

            Title:  General
Counsel

          

        

      

       

      350 Madison Ave, New York, NY 10017

      By:  /s/ Andrew Arno

      Name:  Andrew Arno

      Title:  A Managing Member of the
GP

    

    
      
        -16-

        
          

        

      

       

    

    
      Lemerville
Speedway:

      Mailing
Address: 313 North Pike Road, Sarver, PA 15055 Total of 109.126
acres.

       

      All those
certain pieces or parcels of land comprising the Lemerville Speedway Property,
individually known as Tax Parcels Al, A1B, A1F, A1F1, A1F2 and A1F3 of Tax Map
1F75, situate in Winfield Township and Buffalo Township, Butler County,
Commonwealth of Pennsylvania, the overall boundary of said parcels being more
fully bounded and described as follows:

       

      Beginning
at a point in the centerline of North Pike Road (S.R..0356) where said line is
intersected
by the southerly line of land now or formerly of Sarver Development, L.L.C.
(as
recorded at instrument # 2003 09110041615); thence, away from said road and
along said line
of Sarver Development, L.L.C. S 89° 30' 00" E, 259.35 feet to a point; thence,
along the
easterly line of said Sarver property and properties now or formerly of Harry
and
Dorothy Bouch, Helen Martin, and David A. and Lois J. Krumpe and an apparent 20
foot
right of way, N 00° 53' 33" E, 829.13 feet to a point; thence, along the
southerly line of land
now or formerly of Ervin E. and Shirley Holbert, the southerly line of Franklin
rive, 16
feet wide, land now or formerly of F. Charlotte McWilliams, Bette and William
McWilliams,
along the southerly line of a 20 foot right of way as called for in D.B.V.
978, Page
85 and southerly line of other land of William R. and Bette Williams, S 89°
37>
43» e,
1983.17 feet to a point in the center of the former Pennsylvania Railroad right
of way,
(now a "rails to trails" path); thence along said former railroad right of way
centerline
S 39° 13' 38" E, 210.75 feet to a point of tangency; thence by same in a
southerly
direction by a curve to the right having a radius of 859.02 feet, an arc
distance of 705.47
feet to a point at or near the centef of a stream; thence, away from former
railroad
right of way and along or nea* s|:M:;center
of stream the following bearings and distances:                                                        '
'

       

      S50° 30'
00" W, 109.83 feet; S 33° 30' 00" W, 240.90 feet; S 17° 15' 00" W, 242.55 feet;
S 10° 51' 11" E, 144.33 feet; S 22° 30'00" W, 469.42 feet; S 23° 30' 00" E,
346.50 feet; S 29° 00' 00" E, 179.85 feet;

       

      To a
point; thence, along the northerly line of land now or formerly of Community
Development Corporation of Butler County, N 89° 45' 00" W, 1,056.48 feet to a
point; thence, along the easterly line of other land now and formerly of Sarver
Development, L.L.C, N 17° 58' 00" W, 300.00 feet to a point thence, along
northerly line of same N 89° 45' 00" W, 763.95 feet to the centerline of
aforementioned North Pike Road (S.R. 0356); thence along said centerline the
following bearings and distances:

       

      N 18° 30'
00" W, 403.72
feet;                                                                                     

      N 22° 30'
00" W, 327.39 feet; N 18° 15' 00" W, 330.00 feet;

      N 18° 00'
00" W, 284.43 feet to the Point and Place of Beginning. 

       

      Containing
a total area of 4,753,521.75 square feet or 109.126
acres.

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