Document:

Exhibit
10.1

EXECUTION
COPY

 

ASSET PURCHASE AGREEMENT

between

HD PARTNERS ACQUISITION CORPORATION

(“Buyer”)

and

NATIONAL HOT ROD ASSOCIATION

(“Seller”)

Dated as of May
30, 2007

 

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
  ARTICLE I. PURCHASE AND SALE OF ASSETS

  	
   

  	
   

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.1

  	
   

  	
  Purchase and Sale

  	
   

  	
   

  	
   

  	
  2

  
	
   

  	
   

  	
  1.2

  	
   

  	
  Assumption of Liabilities

  	
   

  	
   

  	
   

  	
  2

  
	
   

  	
   

  	
  1.3

  	
   

  	
  Excluded Liabilities

  	
   

  	
   

  	
   

  	
  3

  
	
   

  	
   

  	
  1.4

  	
   

  	
  Consideration

  	
   

  	
   

  	
   

  	
  5

  
	
   

  	
   

  	
  1.5

  	
   

  	
  Delivery of Estimated Balance Sheet; Post-Closing
  Adjustment

  	
   

  	
   

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II. CLOSING

  	
   

  	
   

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.1

  	
   

  	
  Closing

  	
   

  	
   

  	
   

  	
  8

  
	
   

  	
   

  	
  2.2

  	
   

  	
  Deliveries by Buyer at Closing

  	
   

  	
   

  	
   

  	
  8

  
	
   

  	
   

  	
  2.3

  	
   

  	
  Deliveries by Seller at Closing

  	
   

  	
   

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III. REPRESENTATIONS AND WARRANTIES OF
  SELLER

  	
   

  	
   

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.1

  	
   

  	
  Organization and Good Standing; Subsidiaries

  	
   

  	
   

  	
   

  	
  10

  
	
   

  	
   

  	
  3.2

  	
   

  	
  Authority; No Conflict

  	
   

  	
   

  	
   

  	
  11

  
	
   

  	
   

  	
  3.3

  	
   

  	
  Books and Records

  	
   

  	
   

  	
   

  	
  12

  
	
   

  	
   

  	
  3.4

  	
   

  	
  Financial Statements

  	
   

  	
   

  	
   

  	
  12

  
	
   

  	
   

  	
  3.5

  	
   

  	
  Assets

  	
   

  	
   

  	
   

  	
  13

  
	
   

  	
   

  	
  3.6

  	
   

  	
  Real Property

  	
   

  	
   

  	
   

  	
  14

  
	
   

  	
   

  	
  3.7

  	
   

  	
  Absence of Certain Changes and Events

  	
   

  	
   

  	
   

  	
  15

  
	
   

  	
   

  	
  3.8

  	
   

  	
  Taxes

  	
   

  	
   

  	
   

  	
  17

  
	
   

  	
   

  	
  3.9

  	
   

  	
  Employees and Employee Benefits

  	
   

  	
   

  	
   

  	
  18

  
	
   

  	
   

  	
  3.10

  	
   

  	
  Compliance with Legal Requirements; Governmental
  Authorizations

  	
   

  	
   

  	
   

  	
  20

  
	
   

  	
   

  	
  3.11

  	
   

  	
  Proceedings; Orders

  	
   

  	
   

  	
   

  	
  21

  
	
   

  	
   

  	
  3.12

  	
   

  	
  Contracts; No Defaults

  	
   

  	
   

  	
   

  	
  21

  
	
   

  	
   

  	
  3.13

  	
   

  	
  Insurance

  	
   

  	
   

  	
   

  	
  24

  
	
   

  	
   

  	
  3.14

  	
   

  	
  Environmental Matters

  	
   

  	
   

  	
   

  	
  25

  
	
   

  	
   

  	
  3.15

  	
   

  	
  Employee Matters

  	
   

  	
   

  	
   

  	
  25

  
	
   

  	
   

  	
  3.16

  	
   

  	
  Intellectual Property

  	
   

  	
   

  	
   

  	
  27

  
	
   

  	
   

  	
  3.17

  	
   

  	
  Major Sponsors

  	
   

  	
   

  	
   

  	
  28

  
	
   

  	
   

  	
  3.18

  	
   

  	
  Inventory

  	
   

  	
   

  	
   

  	
  28

  
	
   

  	
   

  	
  3.19

  	
   

  	
  No Other Agreements to Sell Assets or Equity

  	
   

  	
   

  	
   

  	
  28

  
	
   

  	
   

  	
  3.20

  	
   

  	
  Related Party Transactions

  	
   

  	
   

  	
   

  	
  29

  
	
   

  	
   

  	
  3.21

  	
   

  	
  Brokers and Finders

  	
   

  	
   

  	
   

  	
  29

  
	
   

  	
   

  	
  3.22

  	
   

  	
  Accredited Investor Status; Investment
  Representation

  	
   

  	
   

  	
   

  	
  29

  
	
   

  	
   

  	
  3.23

  	
   

  	
  Seller Disclosure Information

  	
   

  	
   

  	
   

  	
  29

  
	
   

  	
   

  	
  3.24

  	
   

  	
  Limited Warranties

  	
   

  	
   

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF BUYER

  	
   

  	
   

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.1

  	
   

  	
  Organization and Good Standing

  	
   

  	
   

  	
   

  	
  30

  

 

 i
 

 

	
  

  	
   

  	
  4.2

  	
   

  	
  Authority; No Conflict

  	
   

  	
   

  	
   

  	
  30

  
	
   

  	
   

  	
  4.3

  	
   

  	
  Financial Statements

  	
   

  	
   

  	
   

  	
  31

  
	
   

  	
   

  	
  4.4

  	
   

  	
  Proceedings; Orders

  	
   

  	
   

  	
   

  	
  32

  
	
   

  	
   

  	
  4.5

  	
   

  	
  Brokers or Finders

  	
   

  	
   

  	
   

  	
  32

  
	
   

  	
   

  	
  4.6

  	
   

  	
  Financing

  	
   

  	
   

  	
   

  	
  32

  
	
   

  	
   

  	
  4.7

  	
   

  	
  Capitalization

  	
   

  	
   

  	
   

  	
  32

  
	
   

  	
   

  	
  4.8

  	
   

  	
  SEC Filings

  	
   

  	
   

  	
   

  	
  32

  
	
   

  	
   

  	
  4.9

  	
   

  	
  Compliance with Legal Requirements

  	
   

  	
   

  	
   

  	
  33

  
	
   

  	
   

  	
  4.10

  	
   

  	
  Information in Proxy Statement

  	
   

  	
   

  	
   

  	
  33

  
	
   

  	
   

  	
  4.11

  	
   

  	
  Absence of Certain Changes or Events

  	
   

  	
   

  	
   

  	
  34

  
	
   

  	
   

  	
  4.12

  	
   

  	
  Taxes

  	
   

  	
   

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V. COVENANTS

  	
   

  	
   

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.1

  	
   

  	
  Access and Investigation

  	
   

  	
   

  	
   

  	
  34

  
	
   

  	
   

  	
  5.2

  	
   

  	
  Conduct of Purchased Business

  	
   

  	
   

  	
   

  	
  35

  
	
   

  	
   

  	
  5.3

  	
   

  	
  Required Consents and Approvals; Separation of
  Contracts

  	
   

  	
   

  	
   

  	
  37

  
	
   

  	
   

  	
  5.4

  	
   

  	
  Notification

  	
   

  	
   

  	
   

  	
  39

  
	
   

  	
   

  	
  5.5

  	
   

  	
  No Negotiation

  	
   

  	
   

  	
   

  	
  40

  
	
   

  	
   

  	
  5.6

  	
   

  	
  Best Efforts

  	
   

  	
   

  	
   

  	
  40

  
	
   

  	
   

  	
  5.7

  	
   

  	
  Payment of Liabilities

  	
   

  	
   

  	
   

  	
  40

  
	
   

  	
   

  	
  5.8

  	
   

  	
  Preparation of Additional Purchased Business
  Financial Statements

  	
   

  	
   

  	
   

  	
  40

  
	
   

  	
   

  	
  5.9

  	
   

  	
  Proxy Statement

  	
   

  	
   

  	
   

  	
  40

  
	
   

  	
   

  	
  5.10

  	
   

  	
  Buyer Stockholders’ Meeting

  	
   

  	
   

  	
   

  	
  41

  
	
   

  	
   

  	
  5.11

  	
   

  	
  Employee Matters

  	
   

  	
   

  	
   

  	
  42

  
	
   

  	
   

  	
  5.12

  	
   

  	
  Delivery and Objections to Title and Survey

  	
   

  	
   

  	
   

  	
  43

  
	
   

  	
   

  	
  5.13

  	
   

  	
  Pre-Closing “Gap” Title Defects

  	
   

  	
   

  	
   

  	
  45

  
	
   

  	
   

  	
  5.14

  	
   

  	
  Conveyance of Title

  	
   

  	
   

  	
   

  	
  45

  
	
   

  	
   

  	
  5.15

  	
   

  	
  Environmental Assessments

  	
   

  	
   

  	
   

  	
  45

  
	
   

  	
   

  	
  5.16

  	
   

  	
  Transition Services Agreement

  	
   

  	
   

  	
   

  	
  46

  
	
   

  	
   

  	
  5.17

  	
   

  	
  Cooperation with respect to Insurance Obligations

  	
   

  	
   

  	
   

  	
  46

  
	
   

  	
   

  	
  5.18

  	
   

  	
  2006 Audited Historical Financial Statements

  	
   

  	
   

  	
   

  	
  47

  
	
   

  	
   

  	
  5.19

  	
   

  	
  Interim Repairs

  	
   

  	
   

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI. CONDITIONS TO CLOSING

  	
   

  	
   

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.1

  	
   

  	
  Conditions to Obligations of Buyer

  	
   

  	
   

  	
   

  	
  47

  
	
   

  	
   

  	
  6.2

  	
   

  	
  Conditions to Obligations of Seller

  	
   

  	
   

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII. INDEMNIFICATION; REMEDIES

  	
   

  	
   

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.1

  	
   

  	
  Survival of Representations, Etc

  	
   

  	
   

  	
   

  	
  51

  
	
   

  	
   

  	
  7.2

  	
   

  	
  Indemnification

  	
   

  	
   

  	
   

  	
  52

  
	
   

  	
   

  	
  7.3

  	
   

  	
  Buyer Trust Account

  	
   

  	
   

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII. CERTAIN TAX MATTERS

  	
   

  	
   

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8.1

  	
   

  	
  Books & Records; Cooperation

  	
   

  	
   

  	
   

  	
  57

  

 

 ii
 

 

	
  

  	
   

  	
  8.2

  	
   

  	
  Transfer Taxes

  	
   

  	
   

  	
   

  	
  57

  
	
   

  	
   

  	
  8.3

  	
   

  	
  Allocation of Seller Taxes

  	
   

  	
   

  	
   

  	
  57

  
	
   

  	
   

  	
  8.4

  	
   

  	
  Notices

  	
   

  	
   

  	
   

  	
  58

  
	
   

  	
   

  	
  8.5

  	
   

  	
  Withholding

  	
   

  	
   

  	
   

  	
  58

  
	
   

  	
   

  	
  8.6

  	
   

  	
  Form W-2s

  	
   

  	
   

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX. OTHER POST-CLOSING COVENANTS

  	
   

  	
   

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.1

  	
   

  	
  Post-Closing Access

  	
   

  	
   

  	
   

  	
  59

  
	
   

  	
   

  	
  9.2

  	
   

  	
  Publicity

  	
   

  	
   

  	
   

  	
  59

  
	
   

  	
   

  	
  9.3

  	
   

  	
  Confidential Information

  	
   

  	
   

  	
   

  	
  59

  
	
   

  	
   

  	
  9.4

  	
   

  	
  Further Assurances

  	
   

  	
   

  	
   

  	
  61

  
	
   

  	
   

  	
  9.5

  	
   

  	
  Assigned Accounts Receivable; Quarterly Adjustments

  	
   

  	
   

  	
   

  	
  62

  
	
   

  	
   

  	
  9.6

  	
   

  	
  Protection of Goodwill of Purchased Business

  	
   

  	
   

  	
   

  	
  62

  
	
   

  	
   

  	
  9.7

  	
   

  	
  Protection of Goodwill of Retained Business

  	
   

  	
   

  	
   

  	
  62

  
	
   

  	
   

  	
  9.8

  	
   

  	
  Exhibition and Promotional Drag Racing

  	
   

  	
   

  	
   

  	
  63

  
	
   

  	
   

  	
  9.9

  	
   

  	
  Equitable Relief

  	
   

  	
   

  	
   

  	
  64

  
	
   

  	
   

  	
  9.10

  	
   

  	
  Special Severability Provisions

  	
   

  	
   

  	
   

  	
  64

  
	
   

  	
   

  	
  9.11

  	
   

  	
  Buyer Employee Non-Solicitation

  	
   

  	
   

  	
   

  	
  64

  
	
   

  	
   

  	
  9.12

  	
   

  	
  Seller Employee Non-Solicitation.

  	
   

  	
   

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X. TERMINATION

  	
   

  	
   

  	
   

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  10.1

  	
   

  	
  Termination Events

  	
   

  	
   

  	
   

  	
  65

  
	
   

  	
   

  	
  10.2

  	
   

  	
  Effect of Termination

  	
   

  	
   

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI. MISCELLANEOUS

  	
   

  	
   

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.1

  	
   

  	
  Assignment

  	
   

  	
   

  	
   

  	
  67

  
	
   

  	
   

  	
  11.2

  	
   

  	
  Notices

  	
   

  	
   

  	
   

  	
  67

  
	
   

  	
   

  	
  11.3

  	
   

  	
  Governing Law

  	
   

  	
   

  	
   

  	
  68

  
	
   

  	
   

  	
  11.4

  	
   

  	
  Entire Agreement

  	
   

  	
   

  	
   

  	
  68

  
	
   

  	
   

  	
  11.5

  	
   

  	
  Amendment or Modification

  	
   

  	
   

  	
   

  	
  68

  
	
   

  	
   

  	
  11.6

  	
   

  	
  Waiver

  	
   

  	
   

  	
   

  	
  69

  
	
   

  	
   

  	
  11.7

  	
   

  	
  Cumulative Remedies

  	
   

  	
   

  	
   

  	
  69

  
	
   

  	
   

  	
  11.8

  	
   

  	
  Multiple Counterparts

  	
   

  	
   

  	
   

  	
  69

  
	
   

  	
   

  	
  11.9

  	
   

  	
  Expenses

  	
   

  	
   

  	
   

  	
  69

  
	
   

  	
   

  	
  11.10

  	
   

  	
  Severability

  	
   

  	
   

  	
   

  	
  69

  
	
   

  	
   

  	
  11.11

  	
   

  	
  Titles

  	
   

  	
   

  	
   

  	
  70

  
	
   

  	
   

  	
  11.12

  	
   

  	
  Arbitration

  	
   

  	
   

  	
   

  	
  70

  
	
   

  	
   

  	
  11.13

  	
   

  	
  Burden and Benefit

  	
   

  	
   

  	
   

  	
  70

  
	
   

  	
   

  	
  11.14

  	
   

  	
  Legal Fees

  	
   

  	
   

  	
   

  	
  70

  
	
   

  	
   

  	
  11.15

  	
   

  	
  Representation by Counsel

  	
   

  	
   

  	
   

  	
  70

  
	
   

  	
   

  	
  11.16

  	
   

  	
  Specific Performance

  	
   

  	
   

  	
   

  	
  71

  
	
   

  	
   

  	
  11.17

  	
   

  	
  Construction of Agreement

  	
   

  	
   

  	
   

  	
  71

  
	
   

  	
   

  	
  11.18

  	
   

  	
  Limitation of Liability

  	
   

  	
   

  	
   

  	
  71

  

 

 iii
 

 

	
  ANNEXES

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  I.

  	
   

  	
  DEFINED TERMS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  II.

  	
   

  	
  2007 CAPITAL EXPENDITURE BUDGET

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.

  	
   

  	
  FORM OF BRAND LICENSE AGREEMENT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B.

  	
   

  	
  FORM OF COMMERCIALIZATION AGREEMENT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  C.

  	
   

  	
  FORM OF OPERATIONAL SUPPORT AGREEMENT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  D.

  	
   

  	
  FORM OF SANCTIONING AGREEMENT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  E.

  	
   

  	
  FORM OF ASSOCIATION DRAG RACING ACCESS AGREEMENT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  F.

  	
   

  	
  FORM OF PROMOTIONAL ACCESS AGREEMENT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  G.

  	
   

  	
  FORM OF OFFICE LEASE.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  H.

  	
   

  	
  FORM OF REGISTRATION RIGHTS AGREEMENT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  I.

  	
   

  	
  FORM OF ASSUMPTION AGREEMENT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  J.

  	
   

  	
  FORM OF BILL OF SALE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  K.

  	
   

  	
  FORM OF ASSIGNMENT AND ASSUMPTION OF CONTRACT RIGHTS
  AND OBLIGATIONS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  L.

  	
   

  	
  FORM OF ASSIGNMENT AND ASSUMPTION OF REAL PROPERTY
  LEASES

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  M.

  	
   

  	
  FORM OF ASSIGNMENT OF INTELLECTUAL PROPERTY ASSETS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  N.

  	
   

  	
  FORM OF NHRA-HDP MEMBER TRACK AGREEMENT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  O.

  	
   

  	
  FORM OF RESPONSIBILITY AGREEMENT

  

 

 iv

ASSET
PURCHASE AGREEMENT

This
ASSET PURCHASE AGREEMENT,  dated as of May
30, 2007 (this “Agreement”),
is by and between HD Partners Acquisition Corporation, a Delaware corporation (“Buyer”
or “HDP”), and the National Hot Rod Association, a California nonprofit
mutual benefit corporation (“Seller” or the “Association”).  Capitalized terms used in this Agreement,
unless otherwise defined herein or in Annex I hereto, shall have the
meanings ascribed to them in that certain Key Definitions Agreement, dated as
of the date hereof (the “Key Definitions Agreement”), between Buyer and
Seller.

RECITALS

A.            Seller owns, operates,
markets and promotes Professional Drag Racing and Association Drag Racing, and
it is the intention of Buyer and Seller that, upon the consummation of the
transactions contemplated hereby, Buyer shall thereafter conduct Professional
Drag Racing and Seller shall continue to conduct Association Drag Racing on the
terms and subject to the conditions set forth in the Ongoing Business
Agreements.

B.            Seller desires to sell
to Buyer, and Buyer desires to purchase from Seller, Seller’s rights, title and
interests in and to the Purchased Business, Professional Drag Racing, the
Racetracks, the Headquarters Building, the Video Library, the Photo Archive,
and various contracts and other related assets (collectively, and as more fully
described in Annex I hereto, the “Purchased Assets”).

C.            On the Closing Date,
Buyer and Seller shall enter into the Brand License Agreement and the other
Ongoing Business Agreements.

D.            The Board of Directors
of Buyer (the “Buyer Board”) and the board of directors of Seller (the “Seller
Board”) have each approved the entrance of Buyer and Seller, respectively,
into this Agreement, subject to the terms and conditions set forth in this
Agreement.

E.             Concurrently with the
parties execution hereof, (i) Thomas Compton has entered into (A) an Employment
Agreement with Buyer and (B) a Consulting Agreement with Seller, and (ii) Peter
Clifford has entered into (A) an Employment Agreement with Seller and (B) a
Consulting Agreement with Buyer (collectively, the “Key Executive Agreements”),
each of which is subject to the consummation of the transactions contemplated
hereby.

AGREEMENT

In consideration of the
mutual covenants and promises contained herein and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:

ARTICLE
I.

PURCHASE AND SALE OF ASSETS

1.1           Purchase and Sale.  Upon the terms and subject to the conditions
set forth herein, on the Closing Date, Seller shall take all such actions as
may be necessary to sell, convey, transfer, assign and deliver to Buyer, and
Buyer shall acquire from Seller or one or more of its Subsidiaries, good title
to the Purchased Assets, in each case free and
clear of all Encumbrances other than Permitted Encumbrances and other than the
Buyer Accepted Title Matters; provided that Seller’s rights, title and
interest in and to the portion of the Shared Assets that constitute Purchased
Assets shall be sold, conveyed, transferred, assigned and/or delivered to Buyer
subject to Seller’s reservations of rights with respect to the Shared Assets as
and to the extent contemplated elsewhere in this Agreement or in any Ancillary
Agreement.  The transfer of the Purchased
Assets pursuant to this Agreement shall not include the assumption of any
Liability other than the Assumed Liabilities assumed pursuant to Section 1.2.

1.2           Assumption of Liabilities.  Upon the terms and subject to the conditions
contained in this Agreement, at the Closing, Buyer shall assume and agree to
pay and discharge when due, without duplication, the following, and only the
following, Liabilities of Seller arising from operation of the Purchased
Business (collectively, the “Assumed Liabilities”):

(a)           All Liabilities accruing after the Closing
Date or arising out of, or relating to, events or occurrences happening after
the Closing Date under (i) the Transferred Contracts listed on Schedule 3.12(a),
(ii) Contracts related to the Purchased Business that result from
bifurcation of Shared Contracts pursuant to Section 5.3(c) listed
on Schedule 3.12(a) and Schedule 3.12(b), (iii) the Transferred
Contracts primarily related to the Purchased Business that are not required to
be listed on Schedule 3.12(a) and that were entered into in the Ordinary
Course of Business, (iv) all other Contracts related to the Purchased Business
that result from bifurcation of Shared Contracts pursuant to Section 5.3(c)
not required to be listed on Schedule 3.12(a) or Schedule 3.12(b)
and that were entered into in the Ordinary Course of Purchased Business; provided
that each of the foregoing shall exclude (x) any Liability for any Default or
other occurrences or events occurring prior to the Closing Date under any
Transferred Contract or Shared Contract, (y) any Liability under any
Transferred Contract or any Shared Contract to the extent, if any, related to
Excluded Assets or Excluded Liabilities, and (z) any other Excluded
Liability;

(b)           All Liabilities arising
on or after the Closing Date under any Transferred Contract included in the
Purchased Assets that is entered into by Seller after the date of this
Agreement and in the Ordinary Course of the Purchased Business in accordance
with the provisions of this Agreement (other than any Liability arising out of
or relating to a breach that occurred prior to the Closing Date);

(c)           Any Environmental,
Health and Safety Liabilities related to the Owned Real Property or the Leased
Real Property to the extent arising from actions, events or occurrences
happening prior to the Closing Date;

(d)           The principal balance
outstanding under the Seller Loan Agreements set forth in Schedule 1.2(d)
as of the Closing Date, together with all interest accrued thereon and, to 

 2
 

the extent discharged by Buyer
at Closing, any and all pre-payment penalties and other charges and fees
necessary to discharge fully the Liabilities thereunder (such amount, in the
aggregate, the “Seller Loan Balance”); provided that the Seller
Loan Balance shall exclude (x) any Liability for any Default under any Seller
Loan Agreement occurring prior to the Closing Date and (y) any Indebtedness
incurred under any Seller Loan Agreement in violation of the provisions set
forth in Section 5.2; provided  further, that, with respect
to any Seller Loan Agreement (A) in which Buyer is unable to assume all of the
Liabilities of Seller thereunder (other than those expressly excluded by
subclauses (x) and (y) of this Section 1.2(d)) for any reason
(including, without limitation, as a result of the non-assignability of such
Seller Loan Agreement) or (B) under which the lender refuses for any reason to
release Seller in writing fully from any and all Liabilities thereunder
following the assumption by Buyer of such Seller Loan Agreement at the Closing,
then, with respect to any such Seller Loan Agreement (each, a “Non-Assignable
Seller Loan Agreement”), at the Closing Buyer shall either (1) pay the
principal balance outstanding as of the Closing Date, together with all
interest accrued thereon and any and all pre-payment penalties and other
charges and fees necessary to discharge fully the Liabilities of Seller under
each Non-Assignable Seller Loan Agreement (such amounts, collectively, the “Loan
Payoff Amount”), to the lender under each Non-Assignable Seller Loan
Agreement or (2) in the event that Buyer is unable for whatever reason to make
a direct payment to the lender of the Loan Payoff Amount at the Closing with
respect to any Non-Assignable Seller Loan Agreement, pay an amount to Seller
equal to that portion of the Seller Loan Balance attributable to such
Non-Assignable Seller Loan Agreements, in which case (I) Seller shall remain
solely liable for such Non-Assignable Seller Loan Agreements and (II) such
Non-Assignable Seller Loan Agreements shall constitute Excluded Liabilities and
shall be subject to indemnification by Seller pursuant to Section
7.2(a)(iii);

(e)           Any Assumed Accounts
Payable; and

(f)            All Liabilities, to
the extent arising in connection with the ownership and use of a Purchased
Asset and/or the conduct of the Purchased Business after the Closing.

1.3           Excluded Liabilities.  Notwithstanding any other provision of this
Agreement and regardless of whether or not any of the following are reflected
in the Purchased Business Financial Statements, except for the Assumed
Liabilities, Buyer shall not assume, or otherwise be responsible for, any
Liabilities of Seller or any of its Affiliates, in each case, whether
liquidated or unliquidated, or known or unknown, and whether arising out of
occurrences prior to, at or after the Closing Date (the “Excluded Liabilities”),
which Excluded Liabilities include, without limitation, the following:

(a)           Any Liability of Seller
or any of its ERISA Affiliates to or in respect of any current or former
employee, director, consultant or other service provider of Seller or any of
its ERISA Affiliates, or any dependent or beneficiary thereof, including
without limitation (i) any Liability under any Seller Plan and (ii) any claim
of an unfair labor practice, unjust or wrongful dismissal or for termination
pay or severance pay under statute or common law or any claim made against
Seller under any state or local unemployment compensation, employment insurance
or workers’ compensation law or under any Employment Statute;

 3
 

(b)           Any Liability for Taxes
for which Seller is liable, including without limitation (i) any income
Taxes of Seller, (ii) any Taxes for which Seller is liable pursuant to Section
3.8 or Article VIII (including, but not limited to, any sales or use
taxes of Seller allocable to Pre-Closing Tax Periods) or pursuant to any other
provision of this Agreement, (iii) Taxes which have not been explicitly
assumed by Buyer pursuant to this Agreement, (iv) any Taxes that will
arise as a result of the sale of the Purchased Assets pursuant to this
Agreement (except as otherwise provided herein) and (v) any deferred Taxes of
any nature for which Seller is liable;

(c)           Any Liability of Seller
arising from any injury to or death of any Person or damage to or destruction
of any property prior to the Closing Date, whether based on negligence, breach
of warranty, strict liability, enterprise liability or any other legal or
equitable theory arising from defects in services performed by or on behalf of,
or products distributed by, Seller;

(d)           Any Liability of Seller
under any Transferred Contract that Buyer has accepted and assumed, which
arises on or after the Closing Date to the extent that such Liability relates
to any action or inaction of Seller that occurred prior to the Closing Date;

(e)           Any Liability of Seller
under any Transferred Contract that is required to be listed on, but is not
listed on Schedule 3.12(a) that Buyer does not expressly elect to
assume;

(f)            Any Liability of
Seller for Accounts Payable (other than the Assumed Accounts Payable);

(g)           Any Liability of Seller
(other than an Assumed Environmental Liability) arising out of or resulting
from its compliance or noncompliance with any Legal Requirement or Order;

(h)           Any Liability of Seller
arising out of or related to any Proceeding against it or any Proceeding
relating to the Purchased Business that was asserted prior to the Closing Date
or relates to actions of Seller;

(i)            Any Liability of
Seller resulting from entering into, performing its obligations pursuant to
this Agreement or any of the Ancillary Agreements or consummating the
Transactions (including without limitation any Liability of Seller pursuant to Article
VII (Indemnification; Remedies));

(j)            Any Liability to the
extent related to (i) any Retained Business or (ii) any Excluded
Asset;

(k)           Any Liability of Seller
for Indebtedness outstanding as of the Closing Date other than only
Indebtedness included in the Assumed Liabilities;

(l)            Any Liability arising
before the Closing Date relating to any Facilities other than an Assumed
Environmental Liability;

(m)          Any Liability of Seller
to any of its Affiliates;

 4
 

(n)           Any Liability related
to any mechanic’s, materialmen’s or similar liens arising out of actions,
events or occurrences taking place prior to the Closing Date; and

(o)           Any Liability arising
out of or related to Seller’s actions prior to the Closing Date to terminate
any agreements related to the Purchased Business.

For the avoidance of doubt, nothing in this Agreement
shall affect Seller’s and its Affiliates’ liability, if any, to any Person
other than Buyer and any Seller Indemnified Party for all Excluded Liabilities.

1.4           Consideration.

(a)           Aggregate Purchase
Price.  Upon the terms and subject to
the conditions set forth herein, at the Closing Buyer shall purchase the
Purchased Assets from Seller for the aggregate consideration of One Hundred
Twenty-One Million Dollars ($121,000,000) plus the Capital Expenditures
Balance (such sum, the “Aggregate Purchase Price”).  The Aggregate Purchase Price shall be payable
as set forth in Section 1.4(b) below and shall be subject to adjustment
as set forth in Section 1.5.

(b)           The Aggregate Purchase
Price shall be payable on the Closing Date as follows:

(i)            Buyer shall deliver, or cause to be delivered,
to Seller a number of shares of Buyer Common Stock (the “Buyer Common Shares”)
equal to the quotient (rounded downward to the nearest whole number) obtained
by dividing (x) Nine Million Five Hundred Thousand Dollars ($9,500,000) (the “Buyer
Common Share Amount”) by (y) the average closing price per share of Buyer
Common Stock, as quoted on AMEX, for the period of twenty (20) trading days
ending immediately prior to the earlier of (A) the date of this Agreement or
(B) Buyer’s first public announcement or disclosure of the Transactions,
whether through the issuance of a press release, the filing of a document with
the SEC, or otherwise;

(ii)           Buyer shall assume the Assumed Liabilities;
and

(iii)          Buyer shall pay, by wire transfer of
immediately available funds to an account designated by Seller, an amount (such
amount, the “Closing Payment”) determined pursuant to the following
formula: Aggregate Purchase Price minus the sum of (x) the Buyer Common
Share Amount plus (y) the Seller Loan Balance (including, without
duplication, any Loan Payoff Amount)  =
the Closing Payment.

(c)           Allocation of
Consideration.  Buyer and Seller
shall cooperate with each other in the preparation of an allocation of the
Aggregate Purchase Price (including the Assumed Liabilities to the extent
properly taken into account under the Code and the Treasury regulations
promulgated thereunder) among the Purchased Assets, and use their Best Efforts
to complete such allocation (the “Allocation”) in a manner mutually
acceptable to the parties prior to the Closing or by such earlier date as may
be required or requested by the SEC in connection with the preparation of the
Proxy Statement, which Allocation shall be binding upon Buyer and Seller.  In the event that Buyer and Seller are unable
to agree upon the Allocation during the period 

 5
 

specified above, such
disagreement shall be submitted to an Arbitrator for resolution either (i) after
the Closing or (ii) to the extent completion of the Allocation is required or
requested by the SEC in connection with the preparation of the Proxy Statement,
as promptly as practicable and, in any event, prior to the filing or mailing of
the Proxy Statement.  In rendering its
decision, the Arbitrator shall take into account the relevant sections of the
Code, and the rules and regulations promulgated thereunder, and the relative
fair market value of each of the Purchased Assets.  Not later than thirty (30) days prior to the
filing of their respective Forms 8594 related to the Transactions, each of
Buyer and Seller shall deliver to the other a copy of its Form 8594.  Each of Buyer and Seller agrees to (i) be
bound by the Allocation, (ii) act in accordance with the Allocation in the
preparation of all financial statements and the filing of all Tax Returns
(including without limitation filing Form 8594 with their United States federal
income Tax Return for the taxable year that includes the Closing Date) and in
the course of any Tax audit, Tax review or Tax litigation related thereto, and
(iii) take no position and cause or permit their respective Affiliates to
take no position inconsistent with the Allocation for income Tax purposes,
including United States federal and state income Tax, and foreign income Tax,
unless otherwise required pursuant to a “determination” within the meaning of
Section 1313(a) of the Code.  In the
event that the Allocation is disputed by any Governmental Entity, the party
receiving notice of such dispute shall promptly notify and consult with the
other party and keep the other party apprised of material developments
concerning resolution of such dispute.

1.5           Delivery of Estimated Balance Sheet;
Post-Closing Adjustment.

(a)           At least five (5)
Business Days prior to the expected Closing Date, Seller shall deliver to Buyer
(i) an estimated balance sheet of the Purchased Business, calculated in
accordance with GAAP and in a manner consistent with the Purchased Business
Financial Statements and setting forth Seller’s good faith estimate, as of the
Closing Date, of its current assets and current liabilities (the “Estimated
Closing Balance Sheet”) and (ii) a written statement (the “Estimated
Closing Statement”), setting forth, in reasonable detail, (A) the Seller
Loan Balance, (B) the Capital Expenditures Balance and (C) Seller’s good faith
estimate of the Purchased Business Cash Balance (including Seller’s good faith
estimates of the Deferred Revenue Amount and the Prepaid Purchased Business
Expense Balance), which shall be calculated in accordance with GAAP and in a
manner consistent with the Purchased Business Financial Statements.  The Estimated Closing Statement shall be
accompanied by invoices or other reasonable documentation reflecting the Seller’s
actual payment of the funds included within the Capital Expenditures
Balance.  Without prejudice to the
parties’ rights and obligations under this Section 1.5, if Buyer objects
to any of the amounts set forth on the Estimated Balance Sheet or the Estimated
Closing Statement, Buyer and the Seller shall work in good faith to mutually
agree on such amounts prior to the Closing Date.  In the event that the parties cannot agree on
any amount set forth on the Estimated Balance Sheet and/or the Estimated
Closing Statement, such amount shall be resolved in connection with the
determination of the Adjustment Amount pursuant to Section 1.5(c).

(b)           Within sixty (60) days
after the Closing Date, Buyer shall cause to be prepared and delivered to
Seller (i) a balance sheet of the Purchased Business, calculated in accordance
with GAAP and in a manner consistent with the Estimated Balance Sheet and
setting forth Buyer’s calculation, as of the Closing Date, of the current
assets and current liabilities set forth on the Estimated Closing Balance Sheet
(the “Final Closing Balance Sheet”) and (ii) a 

 6
 

written statement (the “Final
Closing Statement”), setting forth Buyer’s calculation of the (A) the
Seller Loan Balance, (B) the Capital Expenditures Balance, (C) Purchased
Business Cash Balance (including Buyer’s calculation of the Deferred Revenue
Amount and the Prepaid Purchased Business Expense Balance), which shall be
calculated in accordance with GAAP and in a manner consistent with the
Purchased Business Financial Statements, and (D) the Adjustment Amount.

(c)           Within thirty (30) days
following receipt by Seller of the Final Closing Balance Sheet and the Final
Closing Statement, Seller shall deliver written notice to Buyer of any dispute
it has with respect to the preparation or contents thereof.  If Seller does not notify Buyer of a dispute
with respect to the Final Closing Balance Sheet or the Final Closing Statement
within such 30-day period, such Final Closing Balance Sheet and the Final
Closing Statement will be final, conclusive and binding on the parties.  In the event of such notification of a
dispute, Buyer and Seller shall negotiate in good faith to resolve such
dispute.  If Buyer and Seller,
notwithstanding such good faith effort, fail to resolve such dispute within
thirty (30) days after Seller advises Buyer of its objections, then Buyer and
Seller shall submit such dispute for arbitration in accordance with Section
11.12 hereto for final and binding resolution.

(d)           The Estimated Closing
Balance Sheet, the Estimated Closing Statement, the Final Closing Balance Sheet
and the Final Closing Statement shall be prepared by Seller or Buyer (as the
case may be) and shall be accompanied by reasonable detail supporting the
nature and amounts included thereon.  For
purposes of complying with the terms set forth in this Section 1.5, each
party shall cooperate with and make available to the other party and its
Representatives, at the other party’s sole cost and expense, all information,
records, data and working papers and shall permit access to its facilities and
personnel at reasonable times during business hours, as may be reasonably
required in connection with the preparation and analysis of the Estimated
Closing Balance Sheet, the Estimated Closing Statement, the Final Closing
Balance Sheet and the Final Closing Statement.

(e)           Within five (5)
Business Days after the date on which the contents of the Final Closing Balance
Sheet and the Final Closing Statement and the Adjustment Amount are finally
determined pursuant to Section 1.5(c), Seller and Buyer shall take
the following actions:

(i)            If the final determination of the Adjustment
Amount results in a Closing Shortfall, Seller shall pay or cause to be paid to
Buyer the amount of such Closing Shortfall by bank wire transfer of immediately
available funds to the account designated in writing by Buyer within such five
(5) Business Day period.

(ii)           If the final determination of the Adjustment
Amount results in a Closing Surplus, Buyer shall pay or cause to be paid to
Seller the amount of such Closing Surplus by bank wire transfer of immediately
available funds to the account designated in writing by Seller within such five
(5) Business Day period.

(iii)          If the final determination of the contents of
the Adjustment Amount results in neither a Closing Surplus nor a Closing
Shortfall, neither Buyer nor Seller shall be required to make any cash payments
to the other party pursuant to this Section 1.5.

 7
 

ARTICLE II.

CLOSING

2.1           Closing.  Upon the terms
and subject to the conditions set forth herein, the closing of the Transactions
(the “Closing”) shall be held at 10:00 a.m. local time on the Closing Date at
the offices of Latham & Watkins, 633 West Fifth Street, Suite 4000, Los
Angeles, California 90071-2007 unless the parties hereto otherwise agree.

2.2           Deliveries by Buyer at Closing.

(a)           Consideration to
Seller.  Buyer shall deliver, or
cause to be delivered, to Seller the Closing Payment and the Buyer Common
Shares in accordance with the provisions set forth in Section 1.4(a).

(b)           Assumption Agreement.  Upon the terms and subject to the conditions
contained herein, at the Closing, Buyer shall deliver to Seller the instrument
of assumption attached hereto as Exhibit I, evidencing Buyer’s
assumption, of the Assumed Liabilities pursuant to Section 1.2.

(c)           Buyer Certificates.  Buyer shall furnish Seller with:

(i)            a certificate executed by the Secretary of
Buyer certifying as of the Closing Date (x) a true and complete copy of
the Organizational Documents of Buyer, and (y) incumbency matters with
respect to Buyer;

(ii)           a certificate of the appropriate
Governmental Entity certifying the status or Good Standing of Buyer in the
State of Delaware; and

(iii)          a certificate signed by an officer of Buyer
as to the fulfillment of the conditions set forth in Sections 6.2(a) and
(b).

(d)           Ancillary Agreements.  Buyer shall have executed and delivered each
of the Ongoing Business Agreements, substantially in the forms attached hereto
as Exhibits A through F, and the other Ancillary Agreements to
which it is a party, and such agreements shall be in full force and effect.

2.3           Deliveries by Seller at Closing.

(a)           Transfer of
Purchased Business Cash Balance. 
Seller shall pay, by wire transfer of immediately available funds to an
account designated by Buyer, an amount of funds equal to the Purchased Business
Cash Balance as set forth on the Estimated Closing Statement.

(b)           Instruments and
Possession.  To effect the sale and
transfer referred to in Section 1.1, Seller shall execute and
deliver to Buyer or its designee, as applicable:

(i)            one or more bills of sale, in the form
attached hereto as Exhibit J, conveying title to all of Seller’s owned
personal property included in the Purchased Assets and evidence that all
Encumbrances on the Purchased Assets (other than Permitted 

 8
 

Encumbrances) have been discharged or
released in full (together with UCC filings reflecting releases of Encumbrances
under the Seller Credit Facility on the Purchased Assets that constitute
Collateral (as defined in the Seller Credit Facility) under the Seller Credit
Facility);

(ii)           the Assignment and Assumption of Contract
Rights and Obligations, executed by Seller, attached hereto as Exhibit K;

(iii)          the Assignment and Assumption of Real
Property Leases, executed by Seller, attached hereto as Exhibit L;

(iv)          the Assignment of Intellectual Property
Assets, executed by Seller, attached hereto as Exhibit M;

(v)           such evidence as the Title Company may
reasonably require as to the authority of the person or persons executing
documents on behalf of Seller;

(vi)          such affidavits as may be customarily and
reasonably required by the Title Company;

(vii)         an executed closing statement prepared by the
Title Company and reasonably acceptable to Seller;

(viii)        Deeds conveying each Owned Real Property to
Buyer (or its designee) prepared in the manner set forth in Section 5.14;

(ix)           a Title Policy for each Owned Real Property,
evidencing that all Encumbrances (other than Permitted Encumbrances) have been
discharged or released in full (together with evidence of the release of all
Encumbrances under the Seller Credit Facility on any Owned Real Property that
constitutes Collateral (as defined in the Seller Credit Facility) under the
Seller Credit Facility); and

(x)            such other instruments as shall be
reasonably requested by Buyer to vest in Buyer title in and to the Purchased
Assets in accordance with the provisions hereof.

(c)           Ancillary Agreements.  Seller shall have executed and delivered each
of the Ongoing Business Agreements, substantially in the forms attached hereto
as Exhibits A through G, and the other Ancillary Agreements to
which it is a party and such agreements shall be in full force and effect.

(d)           Seller Certificates.  Seller shall furnish Buyer with:

(i)            a certificate executed by the Secretary of
Seller certifying as of the Closing Date (x) a true and complete copy of
the Organizational Documents of Seller as of a recent date by the appropriate
Governmental Entity of its jurisdiction of organization, and
(y) incumbency matters with respect to Seller;

 9
 

(ii)           a certificate of the appropriate
Governmental Entity certifying the status or Good Standing of Seller in the
State of California;

(iii)          a certificate signed by Seller as to the
fulfillment of the conditions set forth in Sections 6.1(a) and (b);
and

(iv)          the forms and certificates described in Section
8.5.

(e)           Consents.  Seller shall deliver to Buyer executed copies
of each Material Consent listed on Schedule 3.2(c); provided that
any Material Consent received directly by Buyer shall be deemed delivered by
Seller.

(f)            Shared Contracts.  Seller shall deliver to Buyer all amendments
and/or other agreements resulting from the apportionment of the Shared
Contracts pursuant to Section 5.3(c).

(g)           Form of Instruments.  To the extent that a form of any document to
be delivered by a party hereunder is not attached as an Exhibit hereto, such
documents shall be in form and substance, and shall be executed and delivered
in a manner, reasonably satisfactory to the other party.

(h)           Books and Records.  All original Books and Records pertaining
solely to the Purchased Assets and copies of all Books and Records used or held
for use in the Purchased Business (other than Books and Records related solely
to Excluded Assets or Excluded Liabilities) shall be delivered by Seller to
Buyer at the Closing; provided, however, that Seller may redact
those portions of the Books and Records that relate to the Retained Business; provided
further, that Seller may retain a copy of all original Books and Records
deemed delivered to Buyer in accordance with this Section 2.3(h).  Notwithstanding the foregoing, any Books and
Records to be delivered to Buyer pursuant to this Section 2.3(h) shall
be deemed delivered to and owned by Buyer at and as of Closing, and no physical
delivery of such Books and Records shall be required, to the extent that such
Books and Records are physically located in the Headquarters Building or the
Racetracks, and accessible to Buyer from and after the Closing Date.

ARTICLE III.

REPRESENTATIONS
AND WARRANTIES OF SELLER

Seller hereby represents
and warrants to Buyer that the following representations and warranties are
true and correct:

3.1           Organization and Good Standing;
Subsidiaries.

(a)           Seller is a nonprofit
mutual benefit corporation duly organized, validly existing and in Good
Standing under the laws of the State of California with full power and
authority to conduct the Purchased Business as it is now being conducted, to
own or use the Purchased Assets, and to perform all its obligations under the
Transferred Contracts to which it is a party. 
Seller is duly qualified to do business and is in Good Standing under
the laws of each 

 10
 

state or other jurisdiction in
which either the ownership of the Purchased Assets or the operation of the
Purchased Business requires such qualification, except where the failure to do
so will not have a Seller Material Adverse Effect.  Seller has made available to the Buyer true
and complete copies of its Organizational Documents, and Seller is not in
Default under or in violation of any of its Organizational Documents.

(b)           Schedule 3.1(b)
sets forth (i) the name and jurisdiction of formation of each Subsidiary of
Seller, (ii) the authorized capital stock or other equity securities of each
Subsidiary of Seller, and (iii) the number of issued and outstanding shares of
capital stock or other equity securities of each Subsidiary of Seller and the
holder(s) thereof.  Each Subsidiary of
Seller is duly organized, validly existing and in Good Standing under the laws
of the state or other jurisdiction of formation with full power and authority
to conduct the Purchased Business as it is now being conducted by such
Subsidiary, to own or use the Purchased Assets, and to perform all its
obligations under the Transferred Contracts to which it is a party.  Each Subsidiary of Seller is duly qualified
to do business and is in Good Standing under the laws of each state or other
jurisdiction in which either the ownership of any of the Purchased Assets or
the operation of the Purchased Businesses conducted by such Subsidiary requires
such qualification, except where the failure to do so will not have a Seller
Material Adverse Effect.  Seller has made
available to the Buyer true and complete copies of the Organizational Documents
of each Subsidiary of Seller, and no Subsidiary of Seller is in Default under
or in violation of any of its Organizational Documents.

3.2           Authority; No Conflict.

(a)           Seller has all
requisite power, authority and capacity, and has taken all action necessary, to
execute, deliver and perform its obligations under this Agreement and each
Ancillary Agreement to which it is a party. 
This Agreement has been duly authorized, executed and delivered by
Seller and constitutes the legal, valid, and binding obligation of Seller,
enforceable against Seller in accordance with its terms, and, upon the
execution and delivery by Seller or any of its Subsidiaries of the Ancillary
Agreements to which it is a party, such Ancillary Agreements will have been
duly authorized, executed and delivered by Seller and will constitute the
legal, valid and binding obligations of Seller or such Subsidiary, enforceable
against Seller or such Subsidiary in accordance with their respective terms,
except that enforceability of this Agreement and the Ancillary Agreements may
be limited by (i) bankruptcy, insolvency, moratorium, reorganization and
other similar laws affecting creditors’ rights generally and (ii) the
general principles of equity, regardless of whether asserted in a proceeding in
equity or at law.

(b)           Except as set forth on Schedule
3.2(b), neither the execution and delivery of this Agreement and the
Ancillary Agreements to which Seller or any of its Subsidiaries is a party nor
the consummation or performance of any of the Transactions will, directly or
indirectly (with or without notice or lapse of time):

(i)            contravene, conflict with or result in a
violation of (A) any provision of the Organizational Documents of Seller
or any of its Subsidiaries or (B) any resolution adopted by the board of
directors of Seller or any of its Subsidiaries;

 11
 

(ii)           contravene, conflict with or result in a
violation of, or give any Governmental Entity the right to challenge any of the
Transactions under, any Legal Requirement or any Order to which either Seller
or the Purchased Assets may be subject;

(iii)          contravene, conflict with or result in a
violation of any of the terms or requirements of, or give any Governmental
Entity the right to revoke, withdraw, suspend, cancel, terminate or modify, any
Governmental Authorization that is held by Seller or any of its Subsidiaries
and that relates to the Purchased Business or the Purchased Assets;

(iv)          contravene, conflict with, result in a
violation or breach of any provision of, constitute a Default under, accelerate
or modify the performance of, cancel, terminate or modify any Transferred
Contract; or

(v)           result in the imposition or creation of any
Encumbrance (other than Permitted Encumbrances) upon or with respect to the
Purchased Assets.

(c)           Except (i) as may be
required under Antitrust Laws and (ii) for the Material Consents set forth on Schedule
3.2(c), no notices, reports, registrations or other filings are required to
be made by Seller with, nor are any Consents required to be obtained that have
not already been obtained by Seller or any of its Subsidiaries from, any Person
in connection with the execution, delivery or the performance of this Agreement
or any of the Ancillary Agreements by Seller or any of its Subsidiaries, except
where the failure to make such notice, report, registration or other filing or
obtain such Consent would not have a Seller Material Adverse Effect.

3.3           Books and Records.  Since January 1, 2003, Seller has made and
kept (and given Buyer access to) Books and Records, which, in reasonable
detail, accurately and fairly reflect the activities of Seller and its
Subsidiaries.  Schedule 3.3 sets forth,
for each category of books, records and other documents included within the
definition of Books and Records, a description of whether and to what extent
such Books and Records are maintained separately from or together with the
books, records and other documents of the Retained Business. The minute books
of Seller previously delivered or made available to Buyer accurately and
adequately reflect in all material respects all action previously taken by the
Seller Board related to the Purchased Business and the Purchased Assets.  Seller has previously delivered or made
available to Buyer (including by directing Buyer to the revisions to the 2007
NHRA Rulebook found at http://www.nhra.com/content/general.asp?articleid=17519 and
attached to Schedule 3.3) a true, correct and complete copy of the 2007
NHRA Rulebook, as in effect on the date hereof.

3.4           Financial Statements.

(a)           Seller has delivered to
Buyer (i) consolidated audited statements of financial position of Seller as of
December 31, 2004 and December 31, 2005 and the related audited statements of activities
and cash flows for the fiscal years then ended and (ii) internal balance sheets
of Seller as of March 31, 2006 and March 31, 2007 and the related internal
statements of income for the three-month periods then ended (such audited and
internal financial statements, collectively, the “Historical Financial
Statements”).  The Historical
Financial 

 12
 

Statements are attached to and
made part of Schedule 3.4, and, except as noted on Schedule 3.4(a),
the Historical Financial Statements have been prepared in accordance with GAAP
consistently applied throughout the periods covered by such statements, are
consistent with the Books and Records of the Seller, and fairly present in all
material respects the consolidated financial position of Seller as of the dates
set forth therein and, with respect to the December 31, 2004 and December 31,
2005 financial statements referred to above, the consolidated changes in net
assets and consolidated cash flows for the periods presented.

(b)           Seller has delivered to
Buyer (i) audited combined balance sheets of the Purchased Business as of
December 31, 2004, December 31, 2005 and December 31, 2006 and the related audited
combined statements of operations, parent’s investment and comprehensive income
and cash flows for the fiscal years then ended and (ii) internal balance sheets
of the Purchased Business as of March 31, 2006 and March 31, 2007 and the
related internal statements of income and changes in net assets for the
three-month periods then ended (such audited and internal financial statements,
collectively, the “Purchased Business Financial Statements”).  The Purchased Business Financial Statements
are attached to and made part of Schedule 3.4, and, except as noted
on Schedule 3.4(b), the Purchased Business Financial Statements
have been prepared in accordance with GAAP consistently applied throughout the
periods covered by such statements, are consistent with the Books and Records
of the Seller, and fairly present in all material respects the financial
position of the Purchased Business as of the dates set forth therein and, with
respect to the December 31, 2004, December 31, 2005 and December 31, 2006
financial statements referred to above, the results of operations and cash
flows for the periods presented.

(c)           Seller has no
Liabilities with respect to the Purchased Business of the type and magnitude
required to be reflected or reserved against on a consolidated balance sheet of
Seller prepared in accordance with GAAP or the notes thereto, except
Liabilities: (i) as and to the extent set forth on the audited balance sheet of
the Purchased Business, as of December 31, 2006 (including the notes thereto),
or (ii) incurred after December 31, 2006 in the Ordinary Course of Business.

3.5           Assets.

(a)           Except as set forth on Schedule
3.5(a), Seller or one of its Subsidiaries is the sole legal and beneficial
owner of the Purchased Assets (other than the Leased Real Property) with good
title, free and clear of any Encumbrances (other than Permitted Encumbrances)
and upon the consummation of the Transactions, Buyer will acquire good title,
free and clear of any Encumbrances other than Permitted Encumbrances.

(b)           Except as set forth on Schedule
3.5(b) and assuming that the services to be provided by Seller, and the
Intellectual Property rights to be granted to Buyer, pursuant to the Ancillary
Agreements in the forms attached to this Agreement are so provided or granted,
the Purchased Assets (other than any items of Tangible Personal Property that
are not actually in use) include all assets (i) currently used in the Purchased
Business or (ii) necessary for the conduct of the Purchased Business
substantially as currently conducted as of the date of this Agreement.

(c)           Except as set forth on Schedule
3.5(c), all material items of Tangible Personal Property, to the extent
that such items are actually in use, are in good operating 

 13
 

condition and repair (having
regard to normal wear and tear, their use, age and scheduled maintenance) and
are usable in the Ordinary Course of Business.

3.6           Real Property.

(a)           Owned Real Property.  Schedule 3.6(a) lists all Real
Property owned by Seller or any of its Subsidiaries (the “Owned Real
Properties”).  Other than as set
forth on Schedule 3.6(a), with respect to each of the Owned Real
Properties:

(i)            the identified owner thereof has good and
marketable title to its Owned Real Property, free and clear of any
Encumbrances, other than Permitted Encumbrances;

(ii)           there are no leases, subleases, licenses,
occupancy agreements, concessions, or other agreements granting, or agreeing to
grant, to any third party or third parties the right of use or occupancy of any
Owned Real Property, or any portion thereof and there is no third party in
possession of any Owned Real Property; and

(iii)          there are no outstanding options, rights of
first refusal or rights of first offer to purchase any Owned Real Property, or
any portion thereof or interest therein, and neither Seller nor any of its
Subsidiaries is a party to any agreement with respect to the grant of any such
option or right.

(b)           Leased Real Property.  Schedule 3.6(b) lists all Real
Property leased by Seller or any of its Subsidiaries (to the extent such Real
Property constitutes a Purchased Asset) (the “Leased Real Properties”).  Other than as set forth on Schedule 3.6(b),
with respect to the Leased Real Properties,

(i)            Seller or one of its Subsidiaries is the
sole tenant under each of the lease agreements evidencing Seller’s or its
Subsidiary’s interest, as a tenant, in the Leased Real Property (the “Real
Property Leases”) with a valid leasehold interest thereunder, free and
clear of any Encumbrances (other than Permitted Encumbrances);

(ii)           upon the consummation of the Transactions,
Buyer will have a valid leasehold interest in each of the Leased Real Properties,
free and clear of any Encumbrances other than Permitted Encumbrances; and

(iii)          Neither Seller nor any of its Subsidiaries is
a party to, and, to the Knowledge of Seller, none of the Leased Real Properties
is subject to, any sublease, licenses, occupancy agreements, options, rights,
concessions or other agreements granting, or agreeing to grant, to any third
party or third parties the right of use or occupancy of any Leased Real
Property, or any portion thereof and there is no third party in possession of
any Leased Real Property.

(c)           Sufficiency.  Except as set forth on Schedule 3.6(c),
the Owned Real Properties and the Leased Real Properties comprise all of the
Real Property used in the Purchased Business.

 14
 

(d)           Real Property Leases.  Except as set forth on Schedule 3.6(d),
none of the Real Property Leases has been, in any material respect, modified,
amended, renewed or extended and each of the Real Property Leases is in full
force and effect.  Seller and each
Subsidiary has paid all rent and other charges due and complied, in all
material respects, with all of its respective obligations under the Real
Property Leases.  Seller has delivered to
Buyer true, correct and complete copies of the Real Property Leases, including
all amendments, modifications, notices or memoranda of lease thereto, and all
estoppel certificates, and subordination, non-disturbance and attornment
agreements related thereto.

(e)           Real Property
Rights, Utilities.  Seller and its
Subsidiaries have sufficient rights of physical and legal ingress and egress to
and from the Owned Real Property and the Leased Real Property to the extent
required to operate the Facilities used in the Purchased Business located on
such Real Property as currently operated, and to the Knowledge of Seller no conditions
exist that would reasonably be expected to result in the termination of such
rights of ingress and egress.  Each
Facility is supplied with utilities and other services (including gas,
electricity, water (including well water if applicable), drainage, sanitary
sewer or septic systems, storm sewer, fire protection and telephone) necessary
for the operation of such Facility as the same is currently operated.

(f)            Actions.  Except as set forth in Schedule 3.6(f)
and except for the Permitted Encumbrances, there are no pending, nor, to the
Knowledge of Seller, Threatened, condemnation, fire, health, safety, building,
zoning or other land use regulatory proceedings or other Proceedings relating
to any portion of the Facilities, nor has Seller received written notice of any
pending or Threatened special assessment proceedings with respect to the
Facilities.

(g)           Improvements,
Fixtures and Equipment.  Except as
set forth on Schedule 3.6(g), the improvements constructed on the
Facilities, including without limitation all Leasehold Improvements, and all
Tangible Personal Property and other tangible assets owned, leased or used by
Seller and/or its Subsidiaries at such Facilities, to the extent such
improvements constitute Purchased Assets, are: (i) to the Knowledge of Seller,
insured to the extent and in a manner customary in the industry of which the
Purchased Business is a part and (ii) to the Knowledge of Seller, structurally
sound and free from defects (whether patent or latent) defects, (iii) in
good operating condition and repair, subject to ordinary wear and tear, (iv)
not in need of maintenance, repair or correction except for ordinary routine
maintenance and repair and (v) in conformity with all applicable Legal
Requirements, in each case, except as would not materially adversely impact the
Purchased Business.

3.7           Absence of Certain Changes and Events.  Except as set forth on Schedule 3.7, as
contemplated by this Agreement or the Ancillary Agreements, or as requested or
consented to in writing by Buyer, since December 31, 2006, Seller has conducted
the Purchased Business in the Ordinary Course of Business.  Without limiting the generality of the
foregoing and except as expressly provided herein or as set forth on Schedule 3.7,
since December 31, 2006, there has been no:

(a)           Seller Material Adverse
Change;

 15
 

(b)           change in accounting
methods, principles or practices by Seller or any of its Subsidiaries in
connection with the Purchased Business other than as required by GAAP or other
applicable law;

(c)           other than in the
Ordinary Course of Business, revaluation by Seller or any of its Subsidiaries of any of the Purchased
Assets, including without limitation writing down the value of Inventory or
writing off notes that are Purchased Assets;

(d)           damage, destruction or loss
(whether or not covered by insurance) with an adverse economic consequence of
more than $50,000 on the Purchased Assets or the Purchased Business (other than
damage, destruction or loss to Excluded Assets);

(e)           waiver or release by
Seller or any of its Subsidiaries of any right or claim of Seller or any of its Subsidiaries related to its activities or
properties which had or will have an adverse economic consequence of more than
$50,000 on the Purchased Business (other than rights or claims related solely
to Excluded Assets other than the Intellectual Property Assets therein);

(f)            to the Knowledge of
Seller, adverse change in employee relations which has or is reasonably likely
to adversely and materially affect the productivity, financial condition, or
results of operations of the Purchased Business or the relationships between
any Business Employee and Seller, or, from and after the Closing Date, Buyer;

(g)           except as may be provided in the Key Executive Agreements, (i) increase in,
or agreement or promise to increase, the compensation or rate of commission of
any Purchased Business Employee who is proposed to be an officer or member of
the senior management of the Purchased Business or (ii) with respect to any
other Purchased Business Employee, increase in, or agreement or promise to
increase, the compensation or rate of commission of any such Purchased Business
Employee other than in the Ordinary Course of Business;

(h)           except as may be provided in the Key Executive Agreements, (i) bonus,
incentive compensation or other similar benefit granted or made to or for the
benefit of any Purchased Business Employee who is proposed to be an officer or
member of the senior management of the Purchased Business or (ii) with respect
to any other Purchased Business Employee, bonus, incentive compensation or
other similar benefit granted or made to or for the benefit of any such
Purchased Business Employee other than in the Ordinary Course of Business;

(i)            adoption, entering into, amendment, modification or
termination of any Seller Plan covering any Purchased Business Employee (other
than in the Ordinary Course of Business with respect to Purchased Business
Employees who are not officers or directors of the Seller or senior management
of the Purchased Business) or any promise or commitment to undertake any of the
foregoing;

(j)            amendment,
cancellation or termination of any Transferred Contract, commitment, agreement,
lease, transaction or Permit related to the Purchased Assets or the Purchased
Business (other than related solely to Excluded Assets other than the
Intellectual Property Assets therein) or entry into any Transferred Contract,
commitment, agreement, lease,

 16

transaction or Permit related
to the Purchased Assets or the Purchased Business (other than related solely to
Excluded Assets other than the Intellectual Property Assets therein), in each
case, which is not in the Ordinary Course of Business and involves payments or
the exchange of goods or services relating to the Purchased Business in excess
of $50,000;

(k)           mortgage, pledge or
other Encumbrance of any Purchased Asset other than Permitted Encumbrances
incurred in the Ordinary Course of Business and Encumbrances under the Seller
Credit Facility or the Seller Loan Agreements;

(l)            sale, assignment or
transfer of any of the assets related to or used in the Purchased Business
(other than Excluded Assets other than the Intellectual Property Assets
therein) with a value in excess of $50,000 in the aggregate other than in the
Ordinary Course of Business;

(m)          payment, discharge or
satisfaction of any Liabilities of Seller using Purchased Assets other than in
the Ordinary Course of Business;

(n)           failure to pay or satisfy
when due any Liability of Seller or any of its Subsidiaries related to the Purchased Assets or the
Purchased Business (other than Excluded Liabilities) other than in the
Ordinary Course of Business;

(o)           disposition,
assignment, exclusive licensing, abandonment or lapsing of any Intellectual
Property Assets or disclosure to any Person of any Intellectual Property Assets
not theretofore a matter of public knowledge, except for disclosures made in
connection with operating the Purchased Business in the Ordinary Course of
Business with obligations of confidentiality appropriate for the Intellectual
Property Assets disclosed; or

(p)           agreement by Seller or any of its Subsidiaries to
do any of the things described in the preceding clauses (a) through (o) other than
as expressly provided for herein.

3.8           Taxes.  Except as set forth on Schedule 3.8:

(a)           Filing of Tax
Returns and Payment of Taxes.  Seller
and its Subsidiaries has timely filed or caused to be filed all material Tax
Returns of Seller or any of its Subsidiaries required to be filed (taking into
account valid extensions of time to file), and such Tax Returns are accurate
and complete in all material respects and Seller has timely paid or caused to
be paid all Taxes due and payable.  No
material claim has been made since January 1, 2004 by a Governmental Entity in
a jurisdiction where Seller does not file Tax Returns that Seller is or may be
subject to taxation by that jurisdiction because of the Purchased Assets or the
Purchased Business.

(b)           Audits, Investigations,
Disputes or Claims.  There are no Tax
deficiencies outstanding, assessed or proposed in writing against Seller or any
of its Subsidiaries related to the Purchased Assets or the Purchased
Business.  Since January 1, 2004, no
claims have been asserted in writing with respect to any Taxes related to the
Purchased Business for which Buyer reasonably could be held liable, and, to the
Knowledge of Seller, there is no basis for the assertion of any such
claim.  Seller has delivered or made
available to Buyer complete and accurate copies of all examination reports and
statements of deficiencies assessed against or 

 17
 

agreed to by Seller since
January 1, 2004 relating to the Purchased Assets or the Purchased
Business.  Since January 1, 2004, neither
Seller nor any of its Subsidiaries waived any statute of limitations in respect
of Taxes or agreed to any extension of time with respect to a Tax assessment or
deficiency relating to the Purchased Assets or the Purchased Business.

(c)           Asset Liens.  There are no Encumbrances for Taxes on any of
the Purchased Assets or the Purchased Business, except for those constituting
Permitted Encumbrances.

(d)           Tax Sharing
Agreements.  After the Closing Date,
neither any of the Purchased Assets nor the Purchased Business shall be bound
by any Tax-sharing agreements or similar arrangements or have any Liability
thereunder for amounts due in respect of Pre-Closing Tax Periods.

(e)           Tax Exempt Status.  Seller is an exempt organization pursuant to
Section 501(c)(6) of the Code.

(f)            Permanent
Establishment.  Neither Seller nor
any of its Subsidiaries has had a permanent establishment in any foreign
country, as defined in any applicable Tax treaty or convention between the
United States of America and such foreign country, as a result of the operation
of the Purchased Business or the ownership of the Purchased Assets.

(g)           Transferee Liability.  Neither Seller nor any of its Subsidiaries
has any Liability for the Taxes of any Person (i) under Treasury regulation
Section 1.1502-6 (or any similar provision of state, local or foreign law),
(ii) as a transferee or successor, (iii) by contract, or (iv) otherwise.

3.9           Employees and Employee Benefits.

(a)           General.  Schedule 3.9(a) sets forth each Seller
Plan.  True and complete copies of each
Seller Plan and all amendments thereto, including as applicable, but not
limited to (i) any trust instrument and/or insurance contract forming a part
thereof, (ii) the most recent determination or opinion letter, if any, issued
by the Internal Revenue Service and any government and regulatory approvals
received from any foreign Governmental Entity, (iii) the most recent summary
plan descriptions (including any material modifications), (iv) the most
recently filed Form 5500 and (v) all other filings made with any Governmental
Entity (including without limitation any filings under the Employee Plans
Compliance Resolution System or the Department of Labor Delinquent Filer
Program) made by Seller with respect to any Seller Plan, have been supplied or
made available to Buyer.  Except as set
forth in Schedule 3.9(a), neither Seller nor any of its Subsidiaries has
made any plan or commitment to create any additional Seller Plan or modify or
change any existing Seller Plan that would increase the compensation or benefits
provided to any consultant of the Purchased Business or Purchased Business
Employee or the spouses, beneficiaries or other dependents thereof.

(b)           Plan Compliance.  Except as set forth in Schedule 3.9(b),
with respect to each Seller Plan: (i) such Seller Plan has been operated and
administered in compliance with its terms and all applicable laws and
regulations (including but not limited to ERISA, the Code and any applicable
foreign laws); (ii) there are no pending or, to the Knowledge of Seller, Threatened

 18
 

claims against, by or on behalf
of such Seller Plan or the assets, fiduciaries or administrators thereof (other
than routine claims for benefits); (iii) no Encumbrance has been imposed on any
Seller Plan under the Code, ERISA or any comparable foreign law; and (iv) all
contributions (including all employer contributions and employee salary
reduction contributions), premiums and expenses to or in respect of such Seller
Plan have been timely paid in full or, to the extent not yet due, have been
adequately accrued on Seller’s consolidated financial statements.

(c)           Certain Pension
Plans. No Seller Plan is, and neither Seller, its Subsidiaries nor any
ERISA Affiliate thereof contributes to, has contributed to or has any Liability
or obligation, whether actual or contingent, with respect to any employee
benefit plan that is (i) a “multiemployer plan” (within the meaning of Section
3(37) of ERISA), (ii) a “multiple employer plan” (within the meaning of Section
413(c) of the Code), (iii) a single employer plan or other pension plan subject
to Title IV or Section 302 of ERISA or Section 412 of the Code, or (iv) any
foreign plan that provides defined benefits.

(d)           Post-Termination
Benefits.   Except as set forth in Schedule
3.9(d), neither Seller nor any of its Subsidiaries has any obligation to
provide health, accident, disability, life insurance or death benefits with
respect to any consultant of the Purchased Business or Purchased Business
Employee, beyond the termination of employment or service of such employees,
consultants, directors or retirees, whether under a Seller Plan or otherwise,
other than as required under Section 4980B of the Code or other applicable
Legal Requirement.  There has been no
written or, to the Knowledge of Seller, other communication to any consultant
of the Purchased Business or Purchased Business Employee that would reasonably
be expected to promise or guarantee any such health, accident, disability, life
insurance or death benefits.

(e)           Accelerated Payments.  Except as set forth in Schedule 3.9(e),
neither the execution and delivery of this Agreement, nor the consummation of
the transactions contemplated hereby, either alone or in combination with
another event (whether contingent or otherwise) will (i) entitle any consultant
of the Purchased Business or Purchased Business Employee to any payment; (ii)
increase the amount of compensation or benefits due to any consultant of the
Purchased Business or Purchased Business Employee; or (iii) accelerate the
vesting, funding or time of payment of any compensation, equity award or other
benefit with respect to any consultant of the Purchased Business or Purchased
Business Employee.

(f)            Equity Compensation.  Neither Seller nor any of its Subsidiaries
maintains any plan, program or arrangement and is not a party to any agreement
that provides any benefits or payments to any consultant of the Purchased
Business or Purchased Business Employee, based on or measured by the value of,
any equity security of, or interest in, Seller.

(g)           Indebtedness.  No consultant of the Purchased Business or
Purchased Business Employee is indebted to Seller or any of its Subsidiaries or
Affiliates for any amount in excess of $10,000.

 19
 

3.10         Compliance with Legal Requirements;
Governmental Authorizations.

(a)           Except as set forth on Schedule
3.10(a):

(i)            Seller and each of its Subsidiaries is, and
at all times since January 1, 2004 has been, in compliance in all material
respects with each Legal Requirement that is or was applicable to it in
connection with the conduct or operation of the Purchased Business or the
ownership or use of any of the Purchased Assets;

(ii)           no event has occurred or circumstance exists
(with or without notice or lapse of time) (A) that is reasonably likely to
constitute or result in a material violation by Seller or any of its
Subsidiaries of, or a material failure on the part of Seller or any of its
Subsidiaries to comply with, any Legal Requirement or (B) that is reasonably
likely to give rise to any material obligation on the part of Seller or any of
its Subsidiaries with respect to the Purchased Assets to undertake, or to bear
all or any portion of the cost of, any remedial action of any nature; and

(iii)          neither Seller nor any of its Subsidiaries
has received, at any time since January 1, 2004, any written notice or other
written communication from any Governmental Entity regarding (A) any actual or
alleged, violation of, or failure to comply with, any Legal Requirement or (B)
any actual or alleged obligation on the part of Seller to undertake, or to bear
all or any portion of the cost of, any remedial action of any nature, in each
case, related to the Purchased Business or the Purchased Assets or Assumed
Liabilities.

(b)           Schedule 3.10(b)
sets forth a true, correct and complete list of all Permits held by Seller and
its Subsidiaries that are material to the conduct of the Purchased Business or
to the Purchased Assets or Assumed Liabilities. 
The Permits set forth on Schedule 3.10(b) collectively constitute
all of the Permits necessary for Seller and its Subsidiaries to lawfully
conduct and operate the Purchased Business as currently conducted as of the
date of this Agreement and to permit Seller and its Subsidiaries to own and use
the Purchased Assets.  Except as set
forth on Schedule 3.10(b), Seller and its Subsidiaries are and at all
times since January 1, 2005 have been in compliance in all material
respects with all Permits applicable to the conduct and operations of the
Purchased Business, or related to or affecting the Purchased Assets or Assumed
Liabilities.  Neither Seller nor any of
its Subsidiaries has received any written notice advising of (i) any
actual or alleged violation of, or failure to comply with, any such Permits or
(ii) any actual or alleged, revocation, withdrawal, suspension, cancellation
or termination of, or any modification to, any Permit set forth on or required
to be set forth on Schedule 3.10(b). 
To the Knowledge of Seller, no event has occurred or circumstance exists
that (with or without notice or lapse of time) (i) is reasonably likely to
constitute or result directly or indirectly in a material violation by Seller
or any of its Subsidiaries of, or a failure on the part of Seller or any of its
Subsidiaries to comply with, any such Permits or (ii) result directly or
indirectly in the revocation, withdrawal, suspension, cancellation or
termination of, or any material modification to, any Permit set forth on or
required to be set forth on Schedule 3.10(b).  All applications for or renewals of all
Permits have been timely filed.  No
Permit will expire or be terminated as a result of the consummation of the
Transactions.  Schedule 3.10(b)
also separately identifies with an asterisk (*) such Permits set forth thereon
that are held by Seller or any of its Subsidiaries in connection with the
operation of both the Purchased Business and the Retained Business.

 20
 

3.11         Proceedings; Orders.  Except as set forth on Schedule 3.11, there
is no Proceeding or Order (a) pending or, to the Knowledge of Seller,
Threatened against or affecting Seller or any of its Subsidiaries related to
the Purchased Business or the Purchased Assets or Assumed Liabilities; or (b)
that challenges or that may have the effect of preventing, making illegal,
delaying or otherwise interfering with any of the Transactions.  Except as described on Schedule 3.11,
the Proceedings set forth or required to be set forth on Schedule 3.11 will
not, individually or in the aggregate, have a Seller Material Adverse Effect on
the Purchased Assets, the Assumed Liabilities or the Purchased Business.  Except as set forth on Schedule 3.11, Seller
is not subject to any Order of any Governmental Entity related to the Purchased
Business or the Purchased Assets. 
Neither Seller nor any of its Subsidiaries is in Default with respect to
any Order of any Governmental Entity relating to the Purchased Assets, the
Assumed Liabilities, or the Purchased Business, and there are no unsatisfied
judgments against or affecting Seller or any of its Subsidiaries related to the
Purchased Business or the Purchased Assets or Assumed Liabilities.

3.12         Contracts; No Defaults.

(a)           Schedule 3.12(a)
contains a complete and accurate list, and Seller has made available to Buyer
true and complete copies, of:

(i)            each Transferred Contract that involves the
television or radio broadcasting or dissemination through other media of
Professional Drag Racing;

(ii)           each Transferred Contract that involves the
merchandising, marketing or promotion of the Purchased Business during any
twelve (12) month period of an amount or value, individually or, for a series
of related Transferred Contracts, in the aggregate, in excess of $50,000;

(iii)          each Transferred Contract that provides for
Seller’s or any of its Subsidiaries’ use of racetracks (other than the
Racetracks) in connection with Professional Drag Racing;

(iv)          each Transferred Contract that grants any
Person sponsorship rights with respect to the Purchased Business during any
twelve (12) month period of an amount or value, individually or, for a series
of related Transferred Contracts, in the aggregate, in excess of $50,000;

(v)           each Transferred Contract that involves
performance of services or delivery of goods, materials, supplies, equipment,
products, commodities, inventory or other personal property (excluding the
Intellectual Property Assets) to or by Seller or any of its Subsidiaries in
connection with the Purchased Business during any twelve (12) month period of
an amount or value, individually or, for a series of related Transferred
Contracts, in the aggregate, in excess of $50,000;

(vi)          each Transferred Contract related to the
Purchased Business that was not entered into in the Ordinary Course of Business
and that involves goods or services of an amount or value in excess of $50,000;

 21
 

(vii)         each Real Property Lease;

(viii)        each lease of Tangible Personal Property of
Seller or any of its Subsidiaries and other Transferred Contracts, in each
case, affecting the ownership of, leasing of, title to, use of, or any
leasehold or other interest in, any other Purchased Asset (except personal
property leases and installment and conditional sales agreements having a value
per item or aggregate payments, in each case, of less than $50,000 and with
terms of less than one year);

(ix)           each licensing agreement, covenants not to
sue or co-existence agreements involving Seller or any of its Subsidiaries
related to any Purchased Asset, Assumed Liability and/or Shared Asset, in each
case with respect to any of the Intellectual Property Assets, including forms
of agreements with current employees, consultants or contractors regarding the
appropriation or the non-disclosure of any of the Intellectual Property Assets,
excluding Transferred Contracts relating to off-the-shelf shrink-wrap software
used in the Purchased Business which does not involve payment of license,
maintenance, support, transaction fees and other fees and expenses of $50,000
or more per year;

(x)            each joint venture or partnership involving
Seller or any of its Subsidiaries and any other Person, in each case involving
a sharing of profits, losses, costs or Liabilities related to the Purchased
Business, any Purchased Asset or Assumed Liability;

(xi)           each Transferred Contract related to the
Purchased Business, any Purchased Asset or Assumed Liability containing
covenants that restrict the right of Seller or any of its Subsidiaries or
Affiliates to engage in or compete with any Person in any business or in any
geographical area or which contains an exclusivity, most-favored nations or
other similar provision;

(xii)          each Transferred Contract related to the
Purchased Business, any Purchased Asset or Assumed Liability providing for
payments to or by any Person based on sales, purchases or profits, other than
direct payments for goods with a value less than $50,000;

(xiii)         each Transferred Contract related to the
Purchased Business, any Purchased Asset or Assumed Liability for capital
expenditures in excess of $50,000;

(xiv)        each Transferred Contract related to the
Purchased Business, any Purchased Asset or Assumed Liability between Seller or any
of its Subsidiaries and any of Seller’s former or current directors, officers
and employees (other than employment, confidentiality and incentive
compensation agreements or arrangements listed on Schedule 3.9(a));

(xv)         each Transferred Contract consisting of a
written warranty, guaranty, and or other similar undertaking for the payment of
monies or performance of services with a value in excess of $50,000 with
respect to contractual performance 

 22
 

extended by Seller or any of its Subsidiaries
in connection with the Purchased Business, any Purchased Asset or Assumed
Liability; and

(xvi)        each amendment, supplement, and modification
(whether oral or written) in respect of any of the foregoing.

For each Transferred
Contract set forth on Schedule 3.12(a) that is not evidenced by a
written agreement that fully provides the material terms governing such
Transferred Contract or for which Seller has not provided to Buyer a true and
complete copy, Schedule 3.12(a) sets forth a true, correct and complete
description of the material terms and conditions applicable to such Transferred
Contract set forth therein.  Schedule 3.12(a)
also separately identifies with an asterisk (*) each Transferred Contract
listed thereon that is a Shared Transferred Contract, and set forth on Exhibit
B to the form of Commercialization Agreement, attached hereto as Exhibit
B, is a reasonably complete summary description of the nature and extent of
the services provided and/or the nature of the relationship to the Retained
Business under the Shared Transferred Contracts.  Set forth on Exhibit A to the form of
Commercialization Agreement is a list of the Existing Sponsor Inventory
Agreements (as defined in the form of Commercialization Agreement), which
contains a reasonably complete summary of the Existing Sponsor Inventory (as
defined in the form of Commercialization Agreement) referred to therein.

(b)           Schedule 3.12(b)
contains a complete and accurate list, and Seller has made available to Buyer
true and complete copies, of:

(i)            each Seller Contract that involves the
television or radio broadcasting or dissemination through other media of
Association Drag Racing;

(ii)           each Seller Contract that involves the
merchandising, marketing or promotion of the Retained Business during any
twelve (12) month period of an amount or value, individually or, for a series
of related Seller Contracts, in the aggregate, in excess of $50,000; and

(iii)          each Seller Contract that grants any Person
sponsorship rights with respect to the Retained Business during any twelve (12)
month period of an amount or value, individually or, for a series of related
Transferred Contracts, in the aggregate, in excess of $50,000.

Schedule 3.12(b)
also separately lists each Seller Contract that is a Shared Retained Contract,
and set forth on Exhibit B to the form of Commercialization Agreement,
attached hereto as Exhibit B, is a
reasonably complete summary description of the nature and extent of the
services provided and/or the nature of the relationship to the Purchased
Business under the Shared Retained Contracts.

(c)           Except as set forth on Schedule
3.12(c), to the Knowledge of Seller, no officer, director, agent, employee,
consultant or contractor of Seller or any of its Subsidiaries is bound by any
Contract that purports to limit the ability of such officer, director, agent,
employee, consultant or contractor to engage in or continue any conduct,
activity or practice related to the Purchased Business.

 23
 

(d)           Except as set forth on Schedule
3.12(d), each Contract identified or required to be identified on Schedule 3.12(a)
and Schedule 3.12(b) is in full force and effect and is valid and
enforceable in accordance with its terms, except to the extent enforceability
may be limited by (i) bankruptcy, insolvency, fraudulent transfer (other
than as applied to Seller or any of its Subsidiaries), moratorium,
reorganization and other similar laws affecting creditors’ rights generally and
(ii) the general principles of equity, regardless of whether asserted in a
proceeding in equity or at law.

(e)           Except as set forth on Schedule
3.12(e),

(i)            Seller or its Subsidiary is in compliance
in all material respects with all terms and requirements of each Transferred
Contract and each Shared Retained Contract;

(ii)           to the Knowledge of Seller, each other
Person that has or had any obligation or Liability under any Transferred
Contract or Shared Retained Contract is in compliance with all terms and
requirements of such Transferred Contract or Shared Retained Contract;

(iii)          to the Knowledge of Seller, no event has
occurred or circumstance exists that (with or without notice or lapse of time)
is reasonably likely to violate or breach or give either Seller, any of its
Subsidiaries or any other Person the right to declare a Default or exercise any
remedy under, or to accelerate the maturity or performance of, or to cancel,
terminate or modify, any Transferred Contract or any Shared Retained Contract;
and

(iv)          neither Seller nor or any of its Subsidiaries
has given to or received from any other Person any written notice or other
written communication regarding any actual or alleged violation or breach of,
or Default under, any Transferred Contract or any Shared Retained Contract.

(f)            Except as set forth on
Schedule 3.12(f), there are no renegotiations of, attempts to renegotiate,
or outstanding rights to renegotiate any amounts paid or payable to Seller or
any of its Subsidiaries in excess of $50,000 under current or completed
Transferred Contracts or Shared Retained Contracts with any Person and no such
Person has made written demand for such renegotiation.

(g)           Except as set forth on Schedule
3.12(g), all of the Transferred Contracts set forth on Schedule 3.12(a)
are assignable to Buyer without the Consent of any other Person, except where
the failure to obtain such Consent would not have a Seller Material Adverse
Effect.

3.13         Insurance.  Schedule 3.13 sets forth each
Insurance Policy covering Seller or any of its Subsidiaries with respect to the
Purchased Business and the Purchased Assets, which Insurance Policies provide
types and amounts of coverage with respect to the Purchased Business and the
Purchased Assets equal to or greater than the coverages set forth on Schedule
5.17(b).  Each Insurance Policy
set forth on Schedule 3.13 is in full force and effect, and is sufficient
for compliance with all applicable Legal Requirements related to the Purchased
Business and all Transferred Contracts related to the Purchased Business to
which Seller or any 

 24
 

of its Subsidiaries is a party. 
Seller is not in Default under any of such policies or binders, and
Seller has given all notices and presented all claims under each such policy or
binder in a due and timely fashion. 
Seller has delivered to Buyer a true, correct and complete list of all
claims made under the Insurance Policies related to the Purchased Business or
the Purchased Assets since January 1, 2004.  Except as set forth on Schedule 3.13,
each Insurance Policy set forth on Schedule 3.13 is assignable to Buyer
without the Consent of any other Person.

3.14         Environmental Matters.  Except as set forth on Schedule 3.14:

(a)           To the Knowledge of
Seller, (i) Seller and each of its Subsidiaries is, and within the period of
all applicable statutes of limitation has been, in material compliance with all
Environmental Laws applicable to the operation of the Facilities, and (ii)
neither Seller nor any of its Subsidiaries has any material Liability under any
such Environmental Law.

(b)           To the Knowledge of
Seller, Seller and its Subsidiaries (i) hold all Environmental Permits (each of
which is in full force and effect) required for the Facilities and (ii) are,
and within the period of all applicable statutes of limitation have been, in
material compliance with all such Environmental Permits.  To the Knowledge of Seller, each of the
Environmental Permits held by Seller or its Subsidiaries and currently in
effect as of the date of this Agreement will be renewed effective prior to the
expiration of such Environmental Permit, subject to any terms or conditions
contained in any such Environmental Permits and without material expense.

(c)           Since January 1, 2002
Seller has not received any written notice, demand, letter or request for
information relating to the Facilities alleging violation of or Liability under
any Environmental Law.  No Environmental
Claim is pending or, to the Knowledge of Seller, Threatened against Seller or
any of its Subsidiaries.

(d)           To the Knowledge of
Seller, neither Seller nor any of its Subsidiaries nor any other Person for
whose conduct Seller is or may be held responsible, has any Environmental,
Health, and Safety Liabilities with respect to the Facilities.

(e)           To the Knowledge of
Seller, no Release or Threat of Release of, or other conditions pertaining to,
Hazardous Materials are present in, on or under the Facilities, that would
reasonably be expected to form the basis of any material Environmental Claim
against Seller, any past, present or future occupant of the Facilities or any
Person (including any predecessor of Seller or any of its Subsidiaries) whose
Liability has been imposed upon, retained by, or assumed by, Seller or any of
its Subsidiaries, in each case either contractually or by operation of law.

3.15         Employee Matters.

(a)           Employment.  Except as set forth on Schedule
3.15(a) and except for such violations for which the amount claimed, or
that could be claimed, does not exceed $1,500 individually or $30,000 in the
aggregate, neither Seller nor any of its Subsidiaries has violated any Employment Statute or other applicable
law or regulation regarding the terms and conditions of employment of
employees, former employees or prospective employees or other labor related
matters, including without limitation any laws, orders, judgments or awards
relating to wrongful 

 25
 

discharge,
discrimination, personal rights, wages, hours, collective bargaining, fair
labor standards or occupational health and safety.  Schedule 3.15(a)  sets forth
the names and current annual salary rates or current hourly wages of all
current Purchased Business Employees.  No
Purchased Business Employee at the vice president level or higher has given
notice of intent to terminate such Purchased Business Employee’s employment
with Seller, and, to the Knowledge of Seller, no such Purchased Business
Employee intends to give such notice.  No
Purchased Business Employee is employed by any Subsidiary of Seller.

(b)           Labor.  Neither Seller nor any of its
Subsidiaries is or has ever been a party to any
collective bargaining or similar agreement, and there are no labor unions or
other organizations representing, purporting to represent or, to the Knowledge
of Seller, attempting to represent, any employee of Seller or any of its
Subsidiaries. 
There are no unfair labor practice complaints pending against Seller
or any of its Subsidiaries before the National
Labor Relations Board or any other Governmental Entity nor, to the Knowledge of
Seller, are any such complaints Threatened. 
Since January 1, 2004, neither Seller nor any of its Subsidiaries
has experienced any strike, slowdown, work
stoppage or lockout with respect to any employees of Seller or any of
its Subsidiaries during the past three years,
and, to the Knowledge of Seller, no such strikes, slowdowns, work stoppages or
lockouts are Threatened.

(c)           Employee Classification; Withholding.  Seller has
properly classified all of the Purchased Business Employees as either employees
or independent contractors and has withheld and paid to the appropriate
Governmental Entity all amounts required to be withheld from compensation paid
to such employees, except where the failure to so classify all of such
employees will not result in a Buyer Material Adverse Effect. Neither Seller nor
any of its Subsidiaries is liable for any
arrears of taxes, penalties or other sums in a material amount for failure to
withhold and pay applicable taxes. 
Seller has paid in full to the Purchased Business Employees or
adequately accrued for in accordance with GAAP all wages, salaries,
commissions, bonuses, benefits and other compensation due to or on behalf of
such employees.  There is no claim
against Seller or any of its Subsidiaries with respect to payment of wages, salary or overtime pay that has been
asserted in writing since January 1, 2005 or is now pending or, to the
Knowledge of Seller, Threatened with respect to any Purchased Business
Employee.

(d)           Workers’ Compensation.  There are no
material Liabilities, whether contingent or absolute, of Seller or any
of its Subsidiaries relating to workers’
compensation benefits that are not fully insured against by a bona fide
third-party insurance carrier.

(e)           WARN Act.  In the three years prior to the date of this
Agreement, neither Seller nor any of its Subsidiaries has effectuated (i) a “plant closing” (as defined in
the Worker Adjustment and Retraining Notification Act (the “WARN Act”)
or pursuant to any similar state, local or foreign Legal Requirement) affecting
any site of employment or one or more facilities or operating units within any
site of employment or facility of Seller or any of its Subsidiaries or (ii) a “mass layoff” (as defined in the WARN Act,
or any similar state, local or foreign law) affecting any site of employment or
facility of Seller or any of its Subsidiaries.

 26
 

3.16         Intellectual Property.

(a)           Schedule 3.16(a)
hereto sets forth a correct and complete list of all Intellectual Property
Assets owned by Seller or any of its Subsidiaries, which assets are related to
or used in connection with the Purchased Business as conducted at any time from
and after January 1, 2002, which assets are registered, or for which an application
for registration is pending, with any Governmental Entity in the name of Seller
or any of its Subsidiaries or beneficially owned by Seller (in which case, Schedule
3.16(a) also provides the name of the Person holding record title under
such registration or application).  Schedule 3.16(a)
also separately identifies with an asterisk (*) each Intellectual Property
Asset listed thereon that also relates to or is used in the Retained Business
(such marked items of Intellectual Property, together with each Intellectual
Property Asset not listed on such schedule that relates to or is used in both
the Purchased Business and the Retained Business, the “Shared Intellectual
Property”).

(b)           Except as set forth on Schedule
3.16(b), (i) to the Knowledge of Seller, Seller’s and its Subsidiaries’
operation of the Purchased Business has not interfered with, infringed upon or
misappropriated any Intellectual Property rights of any third-party, and (ii)
neither Seller nor any of its Subsidiaries has received any charge, complaint,
claim, demand, or other written notice alleging any such interference,
infringement, misappropriation, or violation (including any claim that Seller
or any of its Subsidiaries must license or refrain from using any Intellectual
Property rights of any third-party).

(c)           Except as set forth on Schedule
3.16(c), to the Knowledge of Seller, no third-party interferes with,
infringes upon or misappropriates any Intellectual Property Assets owned by
Seller or any of its Subsidiaries. 
Except as set forth on Schedule 3.16(c), the Intellectual
Property Assets owned by Seller and its Subsidiaries are not being challenged
in or the subject of any pending Proceeding, and, to the Knowledge of Seller,
no such Proceeding has been Threatened.

(d)           Except as set forth on Schedule
3.16(d), (i) Seller and its Subsidiaries own all right, title and interest
in the Intellectual Property Assets set forth on Schedule 3.16(a) free
and clear of all Encumbrances (other than Permitted Encumbrances); (ii) Seller
and its Subsidiaries have a valid and binding license to use the Intellectual
Property Assets that they do not own, including, without limitation, those
licensed to Seller or any of its Subsidiaries pursuant to the license
agreements set forth on Schedule 3.12 
(a)   (ix) in which Seller or
one of its Subsidiaries is the licensee and such licenses are free and clear of
all Encumbrances (other than Permitted Encumbrances); (iii) the
Intellectual Property Assets owned by Seller and its Subsidiaries are valid and
in full force and effect and Seller and its Subsidiaries have taken all
commercially reasonable actions required to maintain their validity and
effectiveness; (iv) there are no restrictions on the direct or indirect
transfer of any license or other agreement, or any interest therein, held by
Seller or any of its Subsidiaries in respect of the Intellectual Property
Assets owned by Seller or any of its Subsidiaries; (v) Seller and its
Subsidiaries have taken commercially reasonable measures to protect the
confidentiality of its Trade Secrets; (vi) all licenses relating to the
Intellectual Property Assets are in full force and effect, and neither Seller
nor any of its Subsidiaries is, nor has Seller or any of its Subsidiaries
received any notice that it is, in Default (or, with the giving of notice or
lapse of time or both, would be in Default) under any license relating to such
Intellectual Property Assets; and (vii) with respect to each Composite 

 27
 

Mark within the Intellectual
Property Assets, Seller or one of its Subsidiaries has the right to use each
third party trademark that forms part of each such Composite Mark.

(e)           Schedule 3.16(e)
hereto sets forth the Intellectual Property Assets to be sold, conveyed, transferred, assigned and/or delivered to Buyer
at Closing (the “Transferred Intellectual Property Assets”).  Notwithstanding anything to the contrary set
forth in this Agreement, with respect to the Intellectual Property Assets,
Seller and its Subsidiaries are selling, assigning and conveying all of Seller’s
and its Subsidiaries’ rights, title and interests only to the Transferred
Intellectual Property Assets, and all Intellectual Property Assets not listed
on Schedule 3.16(e) shall be deemed to be Excluded Assets.  The Transferred Intellectual Property Assets,
together with Intellectual Property Assets to be licensed by Seller to Buyer
pursuant to the Brand License Agreement, constitute all Intellectual Property
(i) currently used in the Purchased Business or (ii) necessary for the conduct
of the Purchased Business substantially as currently conducted as of the date
of this Agreement.  With respect to each
Composite Mark within the Transferred Intellectual Property Assets (“APA
Composite Mark”), Seller or one of its Subsidiaries’ rights, titles and
interests in each such APA Composite Mark are set forth in the applicable
Transferred Contract or Shared Transferred Contract.  By the assignment of Seller’s or one of its
Subsidiaries’ rights, titles and interests to such Transferred Contract or
Shared Transferred Contract, as applicable, to Buyer at the Closing, Buyer
shall acquire all of Seller’s or one of its Subsidiaries’ rights, titles and
interests with respect to such APA Composite Mark and Buyer will have the right
to use such APA Composite Mark in the manner used by Seller or its Subsidiaries
in connection with the Purchased Business, subject to the terms and conditions
of the applicable Transferred Contract or Shared Transferred Contract.

3.17         Major Sponsors.  Schedule 3.17 contains a complete and
accurate list of the twenty (20) largest Sponsors during the twelve (12) months
ended December 31, 2006 (measured by dollar volume, based upon cash
compensation and Seller’s good faith estimate of the value of any non-cash
compensation, value or benefit), listed in alphabetical order.  The Books and Records include current
information necessary to identify all direct Sponsors, their contact
information, and their past advertising purchases from Seller or any of its
Subsidiaries related to the Purchased Business.

3.18         Inventory.  Schedule 3.18 lists all locations where the
Inventory is physically located.  None of
the Inventory is consigned to, or held on consignment from, any third-party,
and all such Inventory was acquired and has been stored in good condition and
maintained in accordance with the regular business practices of Seller and
consists of new and unused items of a quality and quantity substantially all of
which is usable or saleable in the Ordinary Course of Business.  Except for any items of obsolete or damaged
material or material below standard quality, substantially all of which have
been written down to net realizable market value or for which adequate reserves
have been provided, and, except as described in Schedule 3.18, the present
quantities of Inventory are saleable in the Ordinary Course of Business and
consistent with the average level of Inventory in the past twelve (12) months.

3.19         No Other Agreements to Sell Assets or
Equity.  Except as set forth on
Schedule 3.19, neither Seller nor any of its Subsidiaries or Affiliates
has any commitment or legal obligation, absolute or contingent, to any other
Person, other than as contemplated by this Agreement, to sell, assign, transfer
or effect a sale of the Purchased Business or the Purchased 

 28
 

Assets (other than Inventory in the Ordinary Course of Business), to
sell or effect a sale of the equity interests in Seller or any of its
Subsidiaries, to effect any merger, consolidation, liquidation, dissolution or
other reorganization of Seller or any of its Subsidiaries or to enter into any
agreement or cause the entering into of an agreement with respect to any of the
foregoing.

3.20         Related Party Transactions.  Except as set forth in Schedule 3.20, neither
Seller nor any of its Subsidiaries or Affiliates or management employees (or
members of their immediate family) currently owns nor has owned (of record or
as a beneficial owner) an equity interest or any other financial or profit
interest in, a Person that has had business dealings or a financial interest in
any transaction with Seller or any of its Subsidiaries related to the Purchased
Business (other than related solely to Excluded Assets other than the
Intellectual Property Assets therein) other than business dealings or
transactions conducted in the Ordinary Course of Business with Seller at
substantially prevailing market prices and on substantially prevailing market
terms.  Except as set forth in Schedule 3.20,
no Affiliate of Seller is a party to any Contract with, or has any claim or
right against, Seller or any of its Subsidiaries related to the Purchased
Business (other than related solely to Excluded Assets (other than the
Intellectual Property Assets therein) or Excluded Liabilities).

3.21         Brokers and Finders.  Neither Seller nor any of its Subsidiaries or
Affiliates nor any of its or their Representatives have incurred any obligation
or Liability for brokerage or finders’ fees or agents’ commissions or other
similar payment in connection with this Agreement.  Seller agrees to indemnify Buyer against, and
to hold Buyer harmless from, any claims for brokerage or similar commission or
other compensation which may be made against Buyer by any third-party in
connection with the Transactions, which claim is based upon such third-party
having acted as broker, finder, investment banker, advisor, consultant or
appraiser or in any similar capacity on behalf of Seller or any of its
Subsidiaries or Affiliates.

3.22         Accredited Investor Status; Investment
Representation.  Seller is an “accredited
investor” as such term is defined under Rule 501 of the Securities Act.  Seller is acquiring the Buyer Common Shares
for its own account with the present intention of holding the Buyer Common
Shares for investment purposes and not with a view to or for sale in connection
with any public distribution of such Buyer Common Shares.  Seller has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of an investment in the Buyer Common Shares.  Seller acknowledges that the Buyer Common
Shares have not been registered under the Securities Act or any applicable
state or foreign securities laws (but may be registered in accordance with the
terms and subject to the conditions set forth in the Registration Rights
Agreement) and that the Buyer Common Shares may not be sold, transferred,
offered for sale, pledged, hypothecated or otherwise disposed of unless such
transfer, sale, assignment, pledge, hypothecation or other disposition is
registered under the Securities Act or applicable state or foreign securities
laws or pursuant to an exemption from registration under the Securities Act or
applicable state or foreign securities laws.

3.23         Seller Disclosure Information.  The Seller Disclosure Information supplied by
Seller for inclusion in the Proxy Statement and any other document filed with
the SEC by Buyer in connection with the Transactions (taking into account any
amendment thereof or supplement thereto), at the date first mailed to the
stockholders of Buyer, at the time of the Buyer Stockholder’s Meeting and at
the time filed with the SEC, as the case may be, will not contain 

 29
 

any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.

3.24         Limited Warranties.  Except as otherwise expressly provided in
this Agreement, Seller makes no representations or warranties whatsoever to
Buyer, express or implied, concerning the Purchased Assets or the Purchased
Business, including, without limitation, any representation or warranty as to
value, quality, quantity, condition, merchantability, suitability or use,
salability, obsolescence, working order, validity or enforceability.

ARTICLE
IV.

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer hereby represents
and warrants to Seller as follows:

4.1           Organization and Good Standing.  Buyer is a corporation duly organized,
validly existing and in Good Standing under the laws of the State of Delaware
with full power and authority to conduct its business as it is now being
conducted, to own or use its assets, and to perform its obligation under all
material Contracts to which it is a party. 
Buyer is duly qualified to do business and is in Good Standing under the
laws of each state or other jurisdiction in which either the ownership of its
assets or the operation of its business requires such qualification, except
where the failure to so qualify will not have a Buyer Material Adverse Effect.  Buyer has made available to the Seller true
and complete copies of its Organizational Documents, and Buyer is not in
Default under or in violation of any of its Organizational Documents.

4.2           Authority; No Conflict.

(a)           Assuming the Consents
and filings specified in Section 4.2(c) are obtained or made, as
applicable, Buyer has all requisite power, authority and capacity, and has
taken all action necessary, to execute, deliver and perform its obligations
under this Agreement and each Ancillary Agreement to which it is a party.  This Agreement has been duly authorized,
executed and delivered by Buyer and constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms,
and, upon the execution and delivery by Buyer of the Ancillary Agreements to
which it is a party, such Ancillary Agreements will have been duly authorized,
executed and delivered by Buyer and will constitute the legal, valid and
binding obligations of Buyer, enforceable against Buyer in accordance with
their respective terms, except that enforceability of this Agreement and the
Ancillary Agreements may be limited by (i) bankruptcy, insolvency,
moratorium, reorganization and other similar laws affecting creditors’ rights
generally and (ii) the general principles of equity, regardless of whether
asserted in a proceeding in equity or at law.

(b)           Assuming the Consents
and filings specified in Section 4.2(c) are obtained or made, as
applicable, neither the execution and delivery of this Agreement and the Ancillary
Agreements to which Buyer is a party nor the consummation or performance of any
of the Transactions will, directly or indirectly (with or without notice or
lapse of time):

 30
 

(i)            contravene, conflict with or result in a
violation of (A) any provision of the Organizational Documents of Buyer or
(B) any resolution adopted by the Buyer Board;

(ii)           contravene, conflict with or result in a
violation of, or give any Governmental Entity or other Person the right to
challenge any of the Transactions or to exercise any remedy or obtain any
relief under, any Legal Requirement or any Order to which either Buyer or any
material portion of its assets may be subject;

(iii)          contravene, conflict with or result in a
violation of any of the terms or requirements of, or give any Governmental
Entity the right to revoke, withdraw, suspend, cancel, terminate or modify, any
Governmental Authorization that is held by Buyer;

(iv)          contravene, conflict with or result in a
violation or breach of any provision of, or give any Person the right to
declare a default or exercise any remedy under, or to accelerate the maturity
or performance of, or to cancel, terminate or modify, any material Contract to
which Buyer is a party; or

(v)           result in the imposition or creation of any
Encumbrance (other than Permitted Encumbrances) upon or with respect to any
material portion of the assets of Buyer.

(c)           Except (i) as may be
required by Antitrust Laws, (ii) for the Required Buyer Stockholder Approval
and (iii) for filings (x) required under the Exchange Act, (y) required by AMEX
with respect to the Transactions and (z) as may otherwise be required for Buyer
to comply with applicable federal and state securities laws, Buyer is not and
will not be required to obtain any Consent from any Person in connection with
the execution and delivery of this Agreement or the consummation or performance
of any of the Transactions.

4.3           Financial Statements.

(a)           Buyer has delivered to
Seller (i) audited balance sheets of Buyer as of December 31, 2005, March 31,
2006, and December 31, 2006, and the related audited statements of income,
changes in shareholders’ equity, and cash flows for the periods from (v)
January 1, 2006 to March 31, 2006, (w) December 6, 2005 to December 31, 2005,
(x) December 6, 2005 to March 31, 2006, (y) January 1, 2005 to December 31,
2005 and (z) January 1, 2006 to December 31, 2006; and (ii) the unaudited
balance sheet of Buyer as of March 31, 2007 and the related unaudited
statements of income, changes in shareholders’ equity, and cash flows for the
three-month period then ended.  The
audited and unaudited financial statements referenced in the foregoing sentence
have been prepared in accordance with GAAP consistently applied throughout the
periods covered by such statements, are consistent with the books and records
of Buyer, and fairly present in all material respects the specified net working
capital amounts and operating income of Buyer as of and for the periods
presented.

(b)           Buyer has no
Liabilities of the type and magnitude required to be reflected or reserved
against on a consolidated balance sheet of Buyer prepared in accordance with
GAAP or the notes thereto, except Liabilities incurred after December 31, 2006
in the Ordinary Course of Business.

 31
 

4.4           Proceedings; Orders.  There is no Proceeding or Order (a) pending
or, to the Knowledge of Buyer, Threatened against or affecting Buyer, its
business or any material portion of its assets; or (b) that challenges or that
may have the effect of preventing, making illegal, delaying or otherwise
interfering with any of the Transactions. 
Buyer is not subject to any Order of any Governmental Entity, and there
are no unsatisfied judgments against or affecting Buyer, its business or any
material portion of its assets.

4.5           Brokers or Finders.  Buyer and its Representatives have incurred
no obligation or Liability, for brokerage or finders’ fees or agents’
commissions or other similar payment in connection with this Agreement, other
than obligations or Liabilities to Morgan Joseph & Co., Inc. for which
Buyer shall be solely responsible.  Buyer
agrees to indemnify Seller against, and to hold Seller harmless from, any
claims for brokerage or similar commission or other compensation which may be
made against Seller by any third-party in connection with the Transactions,
which claim is based upon such third-party having acted as broker, finder,
investment banker, advisor, consultant or appraiser or in any similar capacity
on behalf of Buyer.

4.6           Financing.  Buyer has, and at the Closing will have,
access to sufficient cash or other sources of immediately available funds to
enable it to pay the Closing Amount and any other amounts to be paid by it
hereunder or under any other of the Ancillary Agreements.

4.7           Capitalization.

(a)           The authorized capital
stock of Buyer consists of 60,000,000 shares of Buyer Common Stock and 1,000,000
shares of Buyer Preferred Stock.  As of
the date hereof:  (i) 23,437,500
shares of Buyer Common Stock were issued and outstanding; and (ii) no
shares of Buyer Preferred Stock were issued and outstanding.  Except as set forth on Schedule 4.7(a)
or in the Buyer SEC Documents, as of the date of this Agreement, there are no
subscriptions, options, warrants, calls, convertible or exchangeable
securities, rights, commitments or agreements of any character providing for
the issuance of any shares of Buyer Capital Stock or obligating Buyer to issue
or sell any shares of capital stock of, or other equity interests in, Buyer.

(b)           As of the date of this
Agreement, except as set forth in Schedule 4.7(b) or in the Buyer SEC
Documents, there are no outstanding obligations of Buyer to repurchase, redeem
or otherwise acquire any shares of capital stock, voting securities or equity
interests (or any options, warrants or other rights to acquire any shares of
capital stock, voting securities or equity interests) of Buyer.

(c)           All Buyer Common Shares
which may be issued pursuant to this Agreement will be, when issued, duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights.

4.8           SEC Filings.

(a)           Buyer has filed and
furnished all required reports, schedules, forms, prospectuses and
registration, proxy and other statements required to be filed or furnished by
it with or to the SEC since January 1, 2006 (collectively, and in each case
including all schedules thereto and documents incorporated by reference
therein, the “Buyer SEC Documents”). 
As of their respective effective dates (in the case of Buyer SEC
Documents that are registration statements filed pursuant to the requirements
of the Securities Act) and as of the

 32

respective dates of the last
amendment filed with the SEC (in the case of all other Buyer SEC Documents),
the Buyer SEC Documents complied in all material respects with the requirements
of the Exchange Act and the Securities Act, as the case may be, and the rules
and regulations of the SEC promulgated thereunder, each as in effect on the
applicable date referred to above, applicable to such Buyer SEC Documents, and
none of the Buyer SEC Documents as of such respective dates contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

(b)           Neither Buyer, nor, to the Knowledge
of Buyer, any director, officer, agent, employee or other Person acting on
behalf of Buyer, has: (i) used any corporate or other funds for unlawful
contributions, payments or gifts, or made any unlawful expenditures relating to
political activity to government officials or others or established or
maintained any unlawful or unrecorded funds, in any case in violation of
Section 30A of the Exchange Act; or (ii) accepted or received any unlawful
contributions, payments, gifts or expenditures. 
Except as set forth in Buyer SEC Documents, since January 1, 2006, no
event has occurred that would be required to be reported under the caption “Certain
Relationship or Related Transaction” pursuant to Item 404 of Regulation S-K
promulgated by the SEC.

4.9           Compliance
with Legal Requirements.  Except as
set forth on Schedule 4.9 or in the Buyer SEC Documents:

(a)   Buyer
is, and at all times since January 1, 2006 has been, in compliance in all
material respects with each Legal Requirement that is or was applicable to it
in connection with the ownership of its assets or the operation of its
business;

(b)   no
event has occurred or circumstance exists that (with or without notice or lapse
of time) (i) that is reasonably likely to constitute or result in a material
violation by Buyer of, or a material failure on the part of Buyer to comply
with, any Legal Requirement or (B) that is reasonably likely to give rise to
any material obligation on the part of Buyer with respect to the its assets, or
to bear all or any portion of the cost of, any remedial action of any nature;
and

(c)   Buyer
has not received, at any time since January 1, 2006, any written notice or
other communication from any Governmental Entity or any other Person regarding
(A) any actual or alleged, violation of, or failure to comply with, any Legal
Requirement or (B) any actual or alleged obligation on the part of Buyer to
undertake, or to bear all or any portion of the cost of, any remedial action of
any nature, in each case related to the ownership of its assets or the operation
of its business.

4.10         Information
in Proxy Statement.  The Proxy
Statement and any other document filed with the SEC by Buyer in connection with
the Transactions (taking into account any amendment thereof or supplement
thereto), at the date first mailed to the stockholders of Buyer, at the time of
the Buyer Stockholder’s Meeting and at the time filed with the SEC, as the case
may be, will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading, and the Proxy Statement and such 

 33
 

other documents filed with the SEC by Buyer will comply with the
provisions of the Exchange Act;  provided,
however, that no representation is made by Buyer with respect to statements
made therein based on information supplied by Seller for inclusion in such
documents.

4.11         Absence
of Certain Changes or Events.  Except
as set forth on Schedule 4.11 or in the Buyer SEC Documents or as contemplated
by this Agreement or the Ancillary Agreements, since December 31, 2006, Buyer
has conducted its business in the Ordinary Course of Business.  Without limiting the generality of the
foregoing and except as expressly provided herein or as set forth on Schedule
4.11 or in the Buyer SEC Documents, since December 31, 2006, there has been
no:

(a)           Buyer Material Adverse Change;

(b)           change in accounting methods,
principles or practices by Buyer in connection with its assets, liabilities or
business, other than as required by GAAP or other applicable law;

(c)           declaration, setting aside or payment
of any dividend or other distribution (whether in cash, stock or property) with
respect to the Buyer Capital Stock; or

(d)           split, combination or
reclassification of the Buyer Capital Stock or any issuance or the
authorization of any issuance of any other securities in exchange or in
substitution for shares of the Buyer Common Stock.

4.12         Taxes.

(a)           Buyer has timely filed (or has had
timely filed on its behalf) or will file or cause to be timely filed, all Tax
Returns required by applicable law to be filed by any of them prior to or as of
the Closing.  All such Tax Returns are,
or will be at the time of filing, true, complete and correct in all material
respects.

(b)           Buyer has paid (or has had paid on
its behalf), or where payment is not yet due, has established (or has had
established on its behalf), or will establish or cause to be established on or
before the Closing, an adequate accrual for the payment of, all material Taxes
due with respect to any period ending prior to or as of the Closing.

ARTICLE
V.

COVENANTS

Seller and Buyer covenant
and agree with each other as follows:

5.1           Access
and Investigation.  Without limiting Seller’s
obligations pursuant to Section 5.9, between the date of this Agreement through
the earlier of the Closing Date or the valid termination of this Agreement in
accordance with Article X, Seller shall, and shall cause each of its
Subsidiaries to, (a) afford Buyer and its Representatives reasonable access
during normal business hours, in a manner that does not unreasonably interfere
with Seller’s business and operations, to its personnel, properties, Contracts,
Books and Records, Seller Plans and other 

 34
 

documents and data related to the Purchased Business and the Purchased
Assets, (b) furnish Buyer and its Representatives with copies of all such
Contracts, Books and Records, Seller Plans and other existing documents and
data related to the Purchased Business as they may reasonably request and (c)
furnish Buyer and its Representatives with such additional financial, operating
and other data and information related to the Purchased Business as they may
reasonably request; provided, however, that nothing contained herein shall
require Seller to furnish to Buyer or provide Buyer with access to any
marketing information, pricing information or other sensitive competitive
information the review of which legal counsel to Buyer or Seller, as
applicable, reasonably concludes may give rise to Liability under Antitrust
Laws; provided, further that any investigation pursuant to this section shall
be conducted in such manner as not to unreasonably interfere with the conduct
of Seller’s business.  In addition,
Seller shall be entitled to redact the relevant portions of the Books and
Records that relate to the Retained Business.

5.2           Conduct
of Purchased Business.  Prior to the
Closing, except as requested or consented to by Buyer in writing, Seller shall,
and shall cause each of its Subsidiaries to, conduct the Purchased Business
only in the Ordinary Course of Business, and to use Best Efforts to preserve
intact the Purchased Business and its relationships with its employees,
suppliers, distributors, dealers and others having business relationships with
it.  Without limiting the generality of
the foregoing, except as specifically contemplated by this Agreement or the
Ancillary Agreements, or as set forth on Schedule 5.2, Seller shall not,
and shall not permit any of its Subsidiaries to, do any of the following with
respect to the Purchased Business and the Purchased Assets without the prior
written consent of Buyer, which consent shall not be unreasonably withheld or
delayed:

(a)           sell, lease, transfer, mortgage,
incur any Encumbrances (other than Permitted Encumbrances) on or assign any
Purchased Asset, other than items held for sale in the Ordinary Course of
Business;

(b)           enter into any Transferred Contract
(or series of related Transferred Contracts) related to the Purchased Business
involving payments of more than $100,000 in the aggregate, other than to the
extent that (i) such Transferred Contract is entered into in the Ordinary
Course of Business and (ii) Seller has provided Buyer with a written notice
setting forth the principal terms of such Transferred Contract prior to its
entrance into any such Transferred Contract;

(c)           take any action outside the Ordinary
Course of Business that could result in the acceleration, termination,
modification, or cancellation of any Transferred Contract (or series of related
Transferred Contracts) related to the Purchased Business involving payments of
more than $50,000 in the aggregate (or in the Ordinary Course of Business, in
excess of $250,000 in the aggregate), other than any Transferred Contract that
is not assumed by Buyer pursuant to this Agreement;

(d)           other than in the Ordinary Course of
Business or pursuant to the Seller Credit Facility, issue any note, bond, or
other debt security or create, incur, assume, or guarantee any Indebtedness for
borrowed money or capitalized lease obligation, in each case secured in whole
or in part by an Encumbrance on any Purchased Assets or affecting the Purchased
Business;

 35
 

(e)           cancel, compromise, waive, or release
any right or claim (or series of related rights and claims) related to the
Purchased Assets or the Purchased Business involving more than $100,000 in the
aggregate, except for such right or claim which constitute Excluded
Liabilities;

(f)            institute, settle, or agree to
settle any Proceeding related to the Purchased Assets, Assumed Liabilities or
the Purchased Business, except with respect to claims having a value less than
$100,000 in the aggregate and other than claims and Proceedings constituting
Excluded Liabilities;

(g)           with respect to any Intellectual
Property Asset, abandon any rights or allow any application or registration to
lapse, grant any license or sublicense of any rights under or enter into any
settlement regarding any breach or infringement, or modify any existing rights
with respect thereto;

(h)           make any loans to, or enter into any
other transaction with, any Purchased Business Employee that is intended to be
a Transferring Employee other than routine payment of remuneration, provision
of benefits and reimbursement of business expenses;

(i)            except for the Key Executive
Agreements, enter into any employment contract, sales commission agreement,
consulting agreement, deferred compensation, severance, retirement or similar
agreement or collective bargaining agreement, written or oral, or modify the
terms of any such existing contract or agreement with respect to any Purchased
Business Employee that is intended to be a Transferring Employee, other than as
required by applicable Legal Requirement;

(j)            enter into any employment contract,
sales commission agreement, consulting agreement, deferred compensation,
severance, retirement or similar agreement or collective bargaining agreement,
written or oral, with respect to any new employee that is intended to be a
Transferring Employee; provided, however, that Seller may, without the consent
of Buyer, (A) hire new employees for new positions terminable at will with an
annual compensation not in excess of $50,000 individually or $100,000 in the
aggregate, subject to Buyer’s written consent to the treatment of such new
employees as Transferring Employees or (B) hire new employees to replace any
terminated Purchased Business Employee who was intended to be a Transferring
Employee at substantially the same compensation as that paid to such terminated
Purchased Business Employee; provided that Seller shall notify Buyer in writing
promptly following the hiring of any such replacements for senior management
personnel of Seller who was intended to be a Transferring Employee;

(k)           grant any increase in the base
compensation of or agree to pay a bonus to or increase a rate of commission for
any Purchased Business Employee that is intended to be a Transferring Employee
or make any commitment to engage in any of the foregoing, other than ordinary
annual increases in base compensation consistent with past practice;

(l)            adopt, amend, modify or terminate
any Seller Plan covering Purchased Business Employees or make any commitment to
engage in any of the foregoing, other than as required to permit compliance by
Seller with applicable Legal Requirements;

 36
 

(m)          make or commit to make any new,
non-maintenance capital expenditure related to the Purchased Business outside
the Ordinary Course of Business;

(n)           make any change in any accounting
practices followed by it with respect to the Purchased Business (other than
changes required by GAAP or applicable law and changes related solely to
Excluded Assets or Excluded Liabilities);

(o)           make or change any election in
respect of Taxes that would affect the Purchased Assets or the Purchased
Business, enter into any Tax allocation agreement, Tax-sharing agreement, Tax
indemnity agreement or closing agreement relating to the Purchased Assets or
the Purchased Business, settle or compromise any claim, notice, audit report or
assessment in respect of Taxes relating to the Purchased Assets or the
Purchased Business, or consent to any extension or waiver of the limitation
period applicable to any claim or assessment in respect of Taxes relating to
the Purchased Assets or the Purchased Business, except for claims and
assessments which constitute Excluded Liabilities;

(p)           fail to maintain the Books and
Records on a basis consistent with past practice; or

(q)           enter into any Contract to do any of
the foregoing.

5.3           Required
Consents and Approvals; Separation of Contracts.

(a)           Each party hereto hereby agrees to
cooperate with each other party and use its Best Efforts to promptly prepare
and file all necessary documentation to effect all necessary notices, reports,
registrations or other filings and documents and to obtain as promptly as
reasonably practicable all Material Consents. 
Each party hereto further agrees to cooperate with each other party and
to use commercially reasonable efforts to obtain prior to Closing all other
Consents of all third parties and Governmental Entities mutually agreed to be
reasonably necessary or advisable to consummate the Transactions.  Without limiting the generality of the
foregoing, each party hereto agrees to cooperate with each other party in
identifying all filings, Consents or approvals that are mutually agreed to be
reasonably necessary or advisable under the HSR Act or other applicable
Antitrust Laws to consummate the Transactions (collectively, the “Antitrust
Approvals”).  In carrying out the foregoing
obligations, each of Buyer and Seller shall act reasonably and as promptly as
practicable.  Each of Buyer and Seller
agree that it will keep the other party apprised of the status of matters
relating to completion of the Transactions, including promptly furnishing the
other with copies of notice or other communications received by Buyer, Seller
or their respective Affiliates from all third parties and Governmental Entities
with respect to the Transactions contemplated herein.

(b)           Each party agrees to promptly prepare
and file the notification, report form and/or other documentation required to
obtain Antitrust Approvals as agreed between the parties in accordance with Section
5.3(a).  To the extent possible under
applicable law and practice, each party hereby covenants to request early
termination of the waiting period required under the Antitrust Laws of any
jurisdiction where Antitrust Approval is sought (unless otherwise agreed by
their legal counsel) and, if and as necessary, to use Best Efforts to cooperate
with the other party to in making any supplemental presentations to the
applicable Governmental Entities and, 

 37
 

if requested by such entities,
to promptly amend or furnish additional information thereunder.  Each party shall provide copies to the other
party of the final drafts of all correspondence and filings prior to submission
of such correspondence and filings to the applicable Governmental Entities in
connection with the Transactions and shall provide copies to the other party of
the final correspondence and filings immediately after the submission or filing
of such documents.  Notwithstanding any
of the foregoing, neither Seller nor Buyer shall be under any obligation to
(i) accept any conditions or modifications imposed or requested by any
Governmental Entity, (ii) propose and/or accept divestitures, or (iii)
initiate or defend any legal action relating to a decision of a Governmental
Entity not to clear and/or approve the Transactions under any Antitrust Law.

(c)           On or prior to the Closing Date,
Seller shall use its Best Efforts to either amend all Shared Contracts and/or
assign to Buyer those rights under such Shared Contracts that are useful or
necessary for the Purchased Business, as reasonably determined by Buyer,
without adversely affecting the rights necessary for the operation of the
Retained Business, so that, after the Closing Date, each Shared Contract shall
be equitably apportioned between the Purchased Business and the Retained
Business through such amendment and/or assignment, including, if commercially
practicable, on substantially the same economic terms as such arrangements
exist as of the Closing Date.  If with
respect to any Shared Contract, such amendment or assignment cannot be obtained,
or if an attempted amendment or assignment thereof would adversely affect in a
material respect the rights of Seller or Buyer thereunder, Seller and Buyer
shall use their Best Efforts to negotiate a mutually acceptable arrangement
under which (i) Buyer shall obtain the benefits and assume the obligations
under such Shared Contract to the extent related to the Purchased Business,
including entering into sub-contracting, sub-licensing or sub-leasing
arrangements for the benefit of Buyer, or (ii) Seller shall enforce for
the benefit of Buyer, with Buyer assuming Seller’s obligations thereunder, any
and all rights of Seller against a third-party to the extent related to
the Purchased Business; provided, however, that following the expiration or
other termination of any such Shared Contract, neither Buyer nor Seller shall
be obligated to continue the foregoing arrangement.   For any Shared Contract that has not been
amended or assigned in the manner set forth in this Section 5.3(c), subject to
obtaining the consent of the third party, (i) Buyer may require Seller to make
(and Seller hereby agrees to make) any changes to any Shared Retained Contract
in Buyer’s sole discretion to the extent that such changes relate solely to the
Purchased Business and do not adversely affect the rights of Seller thereunder;
and (ii) Seller may require Buyer to make (and Buyer hereby agrees to make) any
changes to any Shared Transferred Contract in Seller’s sole discretion to the
extent that such changes relate solely to the Retained Business and do not
adversely affect the rights of Buyer thereunder.   For avoidance of doubt, the arrangement set
forth in Schedule 5.3(c) shall be deemed to be a Shared Transferred Contract.

(d)           Each of Schedules 3.12(a) and 3.12(b)
hereto, Exhibit B to the form of Commercialization Agreement attached hereto as
Exhibit B and the related provisions thereof characterize various
Contracts listed herein and therein as Transferred Contracts, Retained
Contracts, Shared Retained Contracts, or Shared Transferred Contracts (as the
case may be). Notwithstanding the foregoing, the parties hereby agree that,
between the date hereof and the Closing, if Buyer requests a
re-characterization of any of such Contracts, Seller will consider such request
in good faith, and, in the event that the parties cannot reach agreement on
such 

 38
 

characterization, the matter
will thereafter be submitted to Expedited Arbitration in accordance with the
provisions of Section 11.12 hereof.

(e)           Seller shall use its Best Efforts to
assign, transfer or convey the Permits to Buyer, as applicable, or if such
assignment, transfer or conveyance of a Permit is not permitted by law or would
have a material adverse effect on the Retained Business, Seller shall provide
reasonable assistance, documentation and other support to Buyer, as reasonably
necessary to enable Buyer to obtain the same benefits, rights and privileges
available to Seller as the holder of such Permit.

(f)            Notwithstanding anything to the
contrary in this Agreement but subject to the provisions of Section 1.2(d)
with respect to the assignment of the Seller Loan Agreements, this Agreement
shall not constitute an agreement to assign any Transferred Contract, Real
Property Lease or Permit related to the Purchased Business or any claim or
right or any benefit arising thereunder or resulting therefrom if an attempted
assignment thereof, without the Consent of a third-party thereto, would
constitute a Default thereof or in any way adversely affect the rights of
Seller or Buyer thereunder.  If such
Consent is not obtained, or if an attempted assignment thereof would be
ineffective or would affect the rights thereunder so that Buyer would not
receive all such rights, Seller will enter into a mutually acceptable
arrangement with Buyer to provide to Buyer the benefits under any Transferred
Contract, Real Property Lease, Permit or any claim or right, including without
limitation enforcement for the benefit of Buyer of any and all rights of Seller
or any of its Subsidiaries against a third-party thereto arising out of
the Default or cancellation by such third-party or otherwise.  Nothing in this Section 5.3(f)
shall affect Buyer’s right to terminate this Agreement under Section 10.1
based on the failure of the condition to Buyer’s obligation to close in Section
6.1(d) in the event that any Material Consent is not obtained.

5.4           Notification.  Between the date of this Agreement and the
Closing, each party will promptly notify the other parties hereto in writing if
such party becomes aware of any fact or condition that causes or constitutes a
breach of any of its representations and warranties as of the date of this
Agreement, or if such party becomes aware of the occurrence after the date of
this Agreement of any fact or condition that would (except as expressly
contemplated by this Agreement) cause or constitute a breach of any such
representation or warranty had such representation or warranty been made as of
the time of occurrence or discovery of such fact or condition; provided,
however, that such disclosure shall not be deemed to cure any breach of a
representation or warranty.  Should any
such fact or condition require any change in the Disclosure Letter if such
schedules were dated as of the date of the occurrence or discovery of any such
fact or condition, the discovering party will promptly deliver to each other
party a supplement to the Disclosure Letter specifying such change; provided,
however, that such supplement shall not be deemed to cure any breach of a
representation or warranty.  During the
same period, each party to this Agreement will promptly notify the other
parties hereto of the occurrence of any breach of any covenant or agreement by
such party in this Agreement or of the occurrence of any event that may make
the satisfaction of the conditions in Article VI impossible or unlikely;
provided, however, that such disclosure shall not be deemed to cure any breach
of a covenant or agreement or to satisfy a condition.  Each party to this Agreement shall promptly
notify the other parties if it becomes aware of a threat or commencement of any
Proceeding before the Closing that either (i) could in any way affect the
Purchased Business or the ability of 

 39
 

such party to consummate the Transactions or (ii) if such Proceeding
were determined adversely to such party, could materially and adversely affect
such party.

5.5           No
Negotiation.  From the date of this
Agreement through the Closing Date, or unless this Agreement is earlier
terminated pursuant to Article X, Seller shall not, and shall not authorize or
encourage its Affiliates and Representatives, to directly or indirectly (a)
solicit, initiate or encourage any inquiries or proposals from, (b) negotiate
with, or (c) provide any non-public information to any Person (other than Buyer
and its Affiliates and Representatives) relating to any transaction involving
the sale of all or a substantial portion of the Purchased Business, whether
affected by sale of assets, sale of equity interests, merger or otherwise.  In the event that Seller or any of its Affiliates
or Representatives receives an unsolicited inquiry, proposal or offer for such
a transaction or obtains information that any such inquiry, proposal or offer
is likely to be made, Seller will (i) promptly provide Buyer with written
notice thereof, including the identity of the prospective purchaser or
soliciting party, (ii) furnish Buyer with a copy of any proposed response to
such purchaser or soliciting party prior to delivery thereof and (iii) respond
to such inquiry, proposal or offer by indicating, in substance and effect, that
Seller is a party to a binding agreement and referencing its obligations under
this Section 5.5.

5.6           Best
Efforts.  Between the date of this
Agreement through the earlier of the Closing Date or the valid termination of
this Agreement in accordance with Article X, each of the parties hereto shall
use its Best Efforts to cause the conditions in Sections 6.1 and 6.2 to be
satisfied.

5.7           Payment
of Liabilities.  Between the date of
this Agreement and the Closing Date, Seller shall pay or otherwise satisfy in
the Ordinary Course of Business all of its Liabilities and obligations related
to or incurred in connection with the Purchased Business (other than Excluded
Liabilities).  The parties acknowledge
that it may not be practicable to comply or attempt to comply with the
procedures of any bulk sales laws or similar law of any or all of the states in
which the Purchased Assets are situated or of any other state which may be
asserted to be applicable to the Transactions. 
The parties hereby agree to waive compliance with any such laws.

5.8           Preparation
of Additional Purchased Business Financial Statements.  In connection with the consummation of the
Transactions, Seller shall prepare and deliver to Buyer, and shall take such
steps as may be reasonably requested by Buyer to obtain the assistance of
Seller’s independent accountants, Grant Thornton LLP, in the preparation of, an
unaudited balance sheet of the Purchased Business as of March 31, 2007 and the
related unaudited statements of operations and cash flows for the fiscal quarter then
ended.  From the date of this Agreement
through the earlier of the Closing Date or the valid termination of this
Agreement in accordance with Article X, Seller shall prepare and deliver to
Buyer, and shall take such steps as may be reasonably requested by Buyer to
obtain the assistance of Grant Thornton LLP in the preparation of, unaudited
balance sheets of the Purchased Business as of the last day of each fiscal
quarter and the related unaudited statements of operations and cash flows for such quarterly period and the
year-to-date period then ended.

 40
 

5.9           Proxy
Statement.

(a)           Promptly following
the date of this Agreement, Seller shall, and shall use Best Efforts to cause
its Representatives and Affiliates to: (i) furnish to Buyer and its Representatives
all of the information regarding Seller, the Purchased Business, the Purchased
Assets and the Assumed Liabilities (such information, the “Seller Disclosure
Information”) that Buyer may reasonably request in connection with the
preparation of the Proxy Statement and (ii) cooperate with Buyer and its
Representatives and Affiliates in the preparation of pro forma financial
information required to be included, or reasonably requested by Buyer for
inclusion, in the Proxy Statement.  As
promptly as reasonably practicable after Buyer’s receipt from Seller of all
Seller Disclosure Information, Buyer shall prepare and cause the Proxy
Statement to be filed with the SEC. 
Buyer shall use Best Efforts to cause the Proxy Statement to comply with
the rules and regulations promulgated by the SEC.

(b)           Buyer shall
promptly: (i) notify Seller upon the receipt of any comments or requests for
additional information from the SEC relating to the Proxy Statements; (ii)
promptly respond to any such comments or requests for additional information
following the receipt of any such comments or requests; and (iii) provide
Seller with copies of correspondence between Buyer and its Representatives, on
the one hand, and the SEC and its staff, on the other hand, with respect to the
Proxy Statement.   Seller shall promptly
furnish to Buyer any Seller Disclosure Information reasonably requested by
Buyer in connection with its response to any such comments.

(c)           Prior to the
filing or mailing of the Proxy Statement, or responding to any comments or
requests for information from the SEC, Buyer shall provide Seller with the
opportunity to review and comment on any drafts of the Proxy Statement and
related correspondence and filings.

(d)           If
at any time prior to the Buyer Stockholders’ Meeting any event shall occur, or
fact or information shall be discovered by Buyer, that is required to be set
forth in an amendment of or a supplement to the Proxy Statement, Buyer shall,
in accordance with the procedures set forth in this Section 5.9, prepare
and file with the SEC such amendment or supplement as soon thereafter as is
reasonably practicable and cause such amendment or supplement to be distributed
to the stockholders of Buyer if and to the extent required by any Legal
Requirement.  Seller agrees to furnish to
Buyer all information concerning Seller and its Affiliates as may be reasonably
requested in connection with the foregoing. 
If any event relating to any of Seller Disclosure
Information occurs, or if Seller becomes aware of any Seller Disclosure
Information, that should be disclosed in an amendment or supplement to the
Proxy Statement, then Seller shall promptly inform Buyer thereof and shall
cooperate with Buyer in filing such amendment or supplement with the SEC.

(e)           Buyer shall
cause the Proxy Statement to be mailed to Buyer’s stockholders as promptly as
reasonably practicable after the SEC notifies Buyer that it has no further
comments on the preliminary Proxy Statement.

5.10         Buyer
Stockholders’ Meeting.

(a)           Buyer shall take all action necessary
to call, give notice of and hold a meeting of Buyer’s stockholders to approve
the Transactions (the “Buyer Stockholders’ 

 41
 

Meeting”).
The Buyer Stockholders’ Meeting will be held as promptly as reasonably
practicable after the date on which the Proxy Statement is mailed to the
stockholders of Buyer, consistent with applicable Legal Requirements.

(b)           Subject to Section 5.10(c):
(i) the Proxy Statement shall include a statement to the effect that the Buyer
Board recommends that Buyer’s stockholders vote to approve the Transactions
(such recommendation, the “Buyer Board Recommendation”); (ii) the Buyer
Board Recommendation shall not be withdrawn or adversely modified, and (iii) no
resolution by the Buyer Board or any committee thereof to withdraw or adversely
modify the Buyer Board Recommendation shall be adopted or proposed. Buyer shall
use Best Efforts to obtain the Required Buyer Stockholder Approval; provided,
however, that, notwithstanding anything to the contrary contained in
this Agreement, nothing shall in any way limit the right of Buyer and the Buyer
Board to comply with their obligations under the Exchange Act or other
applicable Legal Requirements.

(c)           Notwithstanding anything to the
contrary contained in Section 5.10(b), at any time prior to obtaining
the Required Buyer Stockholder Approval, the Buyer Board Recommendation may be
withdrawn or adversely modified, if the fairness opinion or the valuation
opinion obtained by Buyer in connection with the Transactions (the “Buyer
Fairness Opinion”) is rescinded, withdrawn or adversely modified

5.11         Employee
Matters.

(a)           After the date hereof and prior to
the Closing Date, Buyer shall extend offers of employment to each Purchased
Business Employee listed on Schedule 5.11(a), effective from the Closing
Date (all such employees who accept Buyer’s offer of employment are referred to
as the “Transferring Employees”). 
Such offers shall provide for no less than twelve (12) calendar months
of employment with Buyer following the Closing Date, and while so employed,
Buyer shall continue to provide, all of the Transferring Employees with (i)
base salary, bonus and commission structures which are no less favorable than
that which they received from Seller immediately prior to the Closing Date, and
(ii) a 401(k) matching plan with terms and conditions (including matching
contributions) at least as favorable as Seller’s current plan; and (iii) other
employee benefits no less favorable in costs, quality and substance, on an
aggregate basis, to that which they received from Seller immediately prior to
the Closing Date.  In addition, Buyer
shall provide the Transferring Employees and their beneficiaries with immediate
participation in a group health plan and shall (i) waive all limitations as to
preexisting conditions, exclusions and waiting periods with respect to
participation and coverage requirements applicable to the Transferring
Employees under any such plan and (ii) provide each Transferring Employee with
credit for any co-payments and deductibles paid prior to the Closing Date in
satisfying any applicable deductible or out-of-pocket requirements under any
Buyer welfare plans that Transferring Employees are eligible to participate in
after the Closing Date.  On and after the Closing, Buyer and
any employee benefit plans maintained by Buyer or its affiliates in which
Transferring Employees participate shall recognize the service of such
Transferring Employees with the Seller for purposes of determining entitlement
to vacation and vacation pay (prorated for a partial year) and for purposes of
vesting and eligibility under any employee benefit plan, but not for purposes
of benefit accrual under any “employee pension benefit plan” as defined in
Section 3(2) of ERISA.  Seller shall
terminate the employment of all Transferring Employees 

 42
 

immediately prior to the
Closing and shall cooperate with and use their Best Efforts to assist Buyer in
its efforts to secure satisfactory employment arrangements with those employees
of Seller to whom Buyer makes offers of employment.

(b)           Seller shall be liable for, and upon
termination of each Transferring Employee’s employment with Seller immediately
prior to Closing shall pay to such Transferring Employee, an amount equal to
(i) the vacation benefits accrued by such Transferring Employee through the day
immediately prior to the Closing Date and (ii) all previously unreimbursed
expenses incurred by such Transferring Employee at any time prior to the
Closing Date.

(c)           Seller shall comply with the
requirements of the WARN Act or any similar state or local law with respect to
any “plant closing” or “mass layoff,” as those terms (or similar terms) are
defined in the WARN Act or such other applicable state or local law, which may
result from the termination of employment of any of Seller’s employees in
connection with the Transactions through the Closing Date.  Without limiting the generality of Section
1.3(a), Buyer shall not assume any Seller Plan, any Liability arising in
connection with any Seller Plan or any liability arising in connection with the
service relationship between Seller, on the one hand, and any Purchased
Business Employee or any consultant or other service provider of Seller, on the
other hand, which Liabilities shall remain the sole obligation of Seller.  To the extent that any Transferring Employee
becomes entitled to any severance, termination or other payment or benefit in
connection with a termination of employment by Seller, as contemplated by Section
5.11(a) or otherwise, any such payment or benefit shall be and remain solely
the obligation of Seller, and Buyer shall not assume or incur any liability in
connection with any such termination of employment.

(d)           Seller and its ERISA Affiliates shall
comply, if applicable, with the provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”) with respect to any
Purchased Business Employee who is covered under any Group Health Plan
maintained by Seller or its ERISA Affiliates as of the Closing Date or whose “qualifying
event” within the meaning of Section 4980B(f) of the Code, occurs on or prior
to the Closing Date, whether pursuant to the provisions of COBRA or otherwise.

(e)           No provision of this Agreement shall
create any third party beneficiary rights in any Transferring Employee, any
beneficiary or dependents thereof with respect to the compensation, terms and
conditions of employment and benefits that may be provided to any Transferring
Employee by Buyer or under any benefit plan which Buyer may maintain.  No provision of this Agreement shall confer
upon any Transferring Employee any right with respect to continued employment
with Buyer or any of its affiliates, nor shall anything herein interfere with
the right of Buyer to terminate the employment of any Transferring Employee at
any time, with or without cause, nor, except as provided otherwise in Section
5.11(a), restrict Buyer in the exercise of its independent business judgment in
modifying any of the terms and conditions of employment, compensation and/or
employee benefits provided to Transferring Employees.

5.12         Delivery
and Objections to Title and Survey.

(a)           As soon as reasonably practicable,
but in no event later than ten (10) days after the date hereof, Seller shall
request the Title Company to deliver to Buyer for each of the 

 43
 

Owned Real Properties, (i) a
current preliminary title report issued by the Title Company; and (ii) legible
copies of all documents referred to in each preliminary title report.  Buyer shall have the right (but not the obligation)
to obtain, at Buyer’s sole cost and expense, and approve, a new or updated ALTA
survey of each of the Owned Real Properties to be prepared by a licensed
surveyor or engineer hired by Buyer (the “Surveys”).  If Buyer elects to obtain any such Surveys,
then Buyer will cause such Surveys to be completed within forty (40) days after
the date hereof.  The documents referred
to in (i) - (ii) of this Section 5.12(a) are collectively referred to as
the “Title Documents.”

(b)           Buyer shall have the right to review
the Title Documents and otherwise examine the condition of the title to each of
the Owned Real Properties during the period which is twenty (20) days following
the later of the date on which (i) the last of the Title Documents have been
delivered to Buyer, or (ii) Buyer has received the last of the updated or new
Surveys, as the case may be (hereinafter referred to as the “Title
Inspection Period”).

(c)           During the Title Inspection Period,
Seller shall request the Title Company to deliver to Buyer an ALTA “extended
coverage” supplemental report or reports for each of the Owned Real Properties
covered by the Surveys; provided Buyer shall pay any additional expense
therefor and satisfy any other Title Company requirements for the issuance
thereof.

(d)           Subject to Section 5.12(e),
Buyer shall notify Seller in writing (the “Title Notice”) prior to the
expiration of the Title Inspection Period which exceptions to title (including
survey matters), if any, will not be accepted by Buyer.  If Buyer fails to notify Seller in writing of
any exceptions to title for any of the Owned Real Properties by the expiration
of the Title Inspection Period, then Buyer shall be deemed to have approved the
condition of title for such Owned Real Property.  If Buyer notifies Seller in writing that
Buyer objects to any exceptions to title, then Seller shall have five (5) days
after receipt of the Title Notice to notify Buyer in writing (i) that, as a
condition to Closing in favor of Buyer, but not as a covenant of Seller, Seller
will remove such objectionable exceptions from title on or before the Closing;
or (ii) that Seller elects not to cause such exceptions to be removed.  Seller may elect either action referred to in
subparagraph (i) or (ii) above in its sole and absolute discretion.  If Seller fails to notify Buyer in writing of
its election within said five (5) day period, Seller shall be deemed to have
elected not to cure such exception.  The
procurement by Seller of a commitment for the issuance of the Title Policy or
endorsements thereto for each of the Owned Real Properties satisfactory to
Buyer and insuring Buyer against any title exception which was disapproved
pursuant to this Section 5.12(d) shall be deemed a cure by Seller of
such disapproval.  If Seller gives Buyer
notice under clause (ii) above, or fails to notify Buyer in writing of its
election within said five (5) day period, then Buyer shall have five (5) days
within which to notify Seller in writing that Buyer will either (x) proceed
with the purchase and take title to the Owned Real Property, subject to such
uncured exceptions and without waiving any right of Buyer to seek
indemnification for Seller’s breach of any of its representations or warranties
set forth in Section 3.6 or elsewhere in this Agreement in accordance
with the provisions of Article VII or (y) terminate this Agreement
in accordance with the provisions of Article X.  If Buyer fails to notify Seller in writing of
its election within said five (5) day period, then Buyer shall be deemed to
have elected to proceed with the purchase and take title to the Owned Real
Property, subject to such uncured exceptions and without waiving any right of
Buyer to seek indemnification for Seller’s breach of any of its representations
or 

 44
 

warranties set forth in Section 3.6
or elsewhere in this Agreement in accordance with the provisions of Article
VII.

(e)           Whether or not Buyer objects, in
accordance with Section 5.12(d), to any title exception consisting of a
mortgage lien or any other Encumbrance which affects any of the Owned Real
Properties and that may be removed solely by the payment of a liquidated sum of
money (and the execution and/or recordation of an appropriate lien release
document), including without limitation any liens for unpaid Taxes then due and
payable, Seller shall be obligated and hereby covenants to satisfy and remove
of record or cure, as the case may be, each of such Encumbrances on or before
the Closing Date.  Seller may use all or
any portion of the Aggregate Purchase Price to effect such cure at the
Closing.  If Seller fails to remove any
such Encumbrance prior to Closing, then Buyer may apply such portion of the
Aggregate Purchase Price as is necessary to cause the removal of such
Encumbrance prior to Closing, in which case the proceeds of the Aggregate
Purchase Price to be otherwise distributed to Seller upon Closing shall be
reduced by the amount so applied.

5.13         Pre-Closing
“Gap” Title Defects.  Buyer may, at
or prior to Closing, notify Seller in writing (the “Gap Notice”) of any
objections to title (a) raised by the Title Company between the expiration of
the Title Inspection Period and the Closing and (b) not disclosed by the Title
Company or otherwise known to Buyer prior to the expiration of the Title
Inspection Period.  Buyer must notify Seller
of such objection to title within five (5) days of being made aware of the
existence of such exception.  If Buyer
sends a Gap Notice to Seller, then Buyer and Seller shall have the same rights
and obligations with respect to such notice as apply to a Title Notice under
Section 5.12.

5.14         Conveyance
of Title.  At Closing Seller shall
convey and transfer to Buyer the Owned Real Properties, by execution and
delivery of a Deed and such other conveyance documentation as may be required
to effectuate such conveyance and transfer (collectively, the “Real Property
Conveyance Documents”).  The form and
substance of the Real Property Conveyance Documents and the sharing of
recording fees, escrow fees, title insurance, and Transfer Taxes, if any, for
each Owned Real Property shall be in accordance with the local custom and
practice for the jurisdiction where such Owned Real Property is located.  Within thirty (30) days after the date of
this Agreement, Buyer shall submit for Seller’s approval the Real Property
Conveyance Documents, which approval shall not be unreasonably withheld.  If Buyer and Seller are unable to agree upon
the form and substance of any Real Property Conveyance Document within six (6)
Business Days after the date Seller receives such Real Property Conveyance
Document from Buyer, then either party may submit such matter for resolution
through Expedited Arbitration.  The Title
Policy issued by the Title Company shall evidence delivery of title to each
Owned Real Property.

5.15         Environmental
Assessments.  Buyer shall have the
right (but not the obligation) to obtain, at Buyer’s sole cost and expense, and
approve, a new Phase 1 environmental assessment for each of the Owned Real
Properties and Leased Real Properties (the “Phase 1 Reports”).  If Buyer elects to obtain any such Phase 1
Reports, then Buyer will cause such Phase 1 Reports to be prepared and
delivered to Buyer within sixty (60) days after the date hereof.  Within ten (10) Business Days following
receipt of each such Phase 1 Report, Buyer shall have the option to either (x)
proceed with the purchase and take title to the Owned Real Property or 

 45
 

Leased Real Property (as the case may be) to which the Phase 1 Report
relates, subject to the matters disclosed therein and without waiving any right
of Buyer to seek indemnification for Seller’s breach of any of its
representations or warranties set forth in Section 3.14 or elsewhere in this
Agreement in accordance with the provisions of Article VII, or (y)
terminate this Agreement in accordance with the provisions of Article X.  If Buyer fails to notify Seller in writing of
its election within such ten (10) Business Day period, then Buyer shall be
deemed to have elected to proceed with the purchase and take title to such
Owned Real Property or Leased Real Property (as the case may be), subject to
the matters disclosed in such Phase 1 Report and without waiving any right of
Buyer to seek indemnification for Seller’s breach of any of its representations
or warranties set forth in Section 3.14 or elsewhere in this Agreement in
accordance with the provisions of Article VII.

5.16         Transition
Services Agreement.  Concurrently with the Closing, Buyer and
Seller shall enter into an agreement on terms and conditions mutually
acceptable to Buyer and Seller (the “Transition Services Agreement”), pursuant
to which Seller shall provide Buyer with, and Buyer shall reimburse Seller for
its reasonable, out-of-pocket costs and expenses in connection with the
provision of, the following services for a mutually agreed upon transition
period: (a) human resources and similar types of employee administrative
services with respect to Transferring Employees, (b) integration services with
respect to Buyer’s information technology and systems and associated computer
programs, products, equipments and services, (c) solely to the extent that the
Closing shall occur on or before the final National Event of the 2007 NHRA
Racing Season, Support Services (as defined in the Operational Support
Agreement) and Sanctioning Services (as defined in the Sanctioning Agreement),
in the manner that such services are contemplated to be performed pursuant to
the terms of the Operational Support Agreement and the Sanctioning Agreement,
respectively, for the remaining National Events in the 2007 NHRA Racing Season
and (d) such other transitional and integration services as may be set forth
therein.  If Buyer and Seller are unable
to agree upon the form and substance of the Transition Services Agreement prior
to the Closing, the Closing shall not be delayed solely for this reason and
such dispute shall be submitted for arbitration.  For the period between the Closing and the
Arbitrator’s decision, each party shall in good faith exercise their Best
Efforts to provide the transition services described in this Section 5.16
at cost so that neither the Purchased Business nor the Retained Business is
adversely affected in any material respects pending the decision of the
Arbitrator.

5.17         Cooperation
with respect to Insurance Obligations. 
From the date of this Agreement through the Closing Date, Buyer and
Seller shall cooperate in good faith to enter into insurance arrangements on
terms and conditions mutually acceptable to Buyer and Seller (including,
without limitation, joint insurance policies entered into by Buyer and Seller)
with respect to the Retained Business and the Purchased Business and the
performance by Buyer and Seller of their respective obligations under the
Ongoing Business Agreements (such arrangement, “Mutual Insurance”).  In the event that Buyer and Seller are unable
to obtain Mutual Insurance, at Closing, and as a condition thereof, Seller and
Buyer shall obtain, at the respective party’s sole cost and expense, insurances
policies or other forms of insurance evidencing insurance coverage of the types
and in the amounts listed in Schedule 5.17(a), in the case of Seller,
and Schedule 5.17(b), in the case of Buyer, each of which policies and
coverages shall name the other party as an additional insured.  In the event that Buyer and/or Seller is
unable to obtain such coverage, at Closing, and as a condition thereof, Buyer
and/or Seller shall 

 46
 

have obtained such other equivalent arrangements as shall be reasonably
satisfactory to the other party.

5.18         2006
Audited Historical Financial Statements. 
Seller shall use Best Efforts to deliver, or cause to be delivered, to
Buyer as promptly as practicable following the sixtieth (60th) day after the date of this
Agreement (or such earlier date as they may become available), and in no event
later than thirty (30) days prior to the Closing Date, the consolidated audited
statements of financial position of Seller as of December 31, 2006 and the
related audited statements of activities and cash flows for the fiscal year
then ended, which financial statements will fairly present in all material
respects the consolidated financial position of Seller as of such date and the
consolidated changes in net assets and consolidated cash flows for such fiscal
year.

5.19         Interim
Repairs.  Prior to the Closing,
Seller shall, at Seller’s sole cost and expense, take all steps reasonably
necessary to complete, or cause to be completed, the maintenance and repairs set
forth on Schedule 5.19 with respect to the Racetracks and Headquarters Building.

ARTICLE
VI.

CONDITIONS TO CLOSING

6.1           Conditions
to Obligations of Buyer.  The
obligation of Buyer to consummate the Transactions and to take the other
actions to be taken by Buyer at the Closing is subject to the satisfaction at
or prior to the Closing, of each of the following conditions (any of which may
be waived in whole or in part by Buyer subject to the provisions of
Section 11.5):

(a)           Representations and Warranties.  The representations and warranties of Seller
set forth in this Agreement shall have been true and correct in all material
respects (except for such representations and warranties as are qualified by
materiality, which representations and warranties shall be true and correct in
all respects), as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date (other than such representations and
warranties that are expressly made as of an earlier date which need only be
true and correct in all material respects or true and correct, as the case may
be, as of such earlier date, and except as Buyer may otherwise have consented in
writing), and Buyer shall have received a certificate, dated as of the Closing
Date, signed by an authorized officer of Seller certifying to that effect.

(b)           Covenants.  Seller shall have performed in all material
respects all obligations required to be performed by Seller under this
Agreement (including without limitation under Sections 2.3 and 8.5)
and any applicable Ancillary Agreement at or prior to the Closing Date, and
Buyer shall have received a certificate, dated as of the Closing Date, signed
by an authorized officer of Seller to that effect.

(c)           Litigation.

(i)            Governmental
Prohibition.  No Governmental Entity of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered a Legal Requirement
(whether temporary, preliminary or permanent) that is in effect at the time 

 47
 

of Closing, which restrains, enjoins or
otherwise prohibits the consummation of the sale of the Purchased Assets (each,
a “Governmental Prohibition”).

(ii)           Other
Litigation.  (i) No Governmental Entity shall have instituted any
action, litigation or suit that seeks a Governmental Prohibition (a “Governmental
Challenge”) or have made a Material Adverse Governmental Determination, and
(ii) no other Person shall have instituted any action, litigation or suit (whether
civil, criminal or administrative) before any Governmental Entity (x) which
seeks to prohibit the consummation of, or challenges the validity or legality
of, the sale of the Purchased Assets and (y) which Buyer has determined in
good faith, based upon the advice of counsel, has a reasonable basis for
success.

(d)           Antitrust Approvals; Consents;
Government Approvals.

(i)            The
Antitrust Approvals shall have been made, or applicable mandatory waiting
periods shall have expired, as the case may be.

(ii)           All Material Consents listed in Schedule 3.2(c)
shall have been obtained and all Shared Contracts shall have been apportioned
pursuant to Section 5.3(c).

(e)           Required Buyer Stockholder
Approval.  The Required Buyer
Stockholder Approval shall have been obtained.

(f)            Buyer Fairness Opinion.  The Buyer Board shall have received the Buyer
Fairness Opinion, and such Buyer Fairness Opinion shall not have been
rescinded, withdrawn or adversely modified by the financial advisor(s)
providing such Buyer Fairness Opinion (other than any rescission, withdrawal or
modification resulting or arising, directly or indirectly, from (i) any
intentional failure by Buyer to provide to such financial advisor(s) any
material, written information received from Seller, or (ii) willful misrepresentation
on the part of Buyer or any of its Representatives in connection with the
preparation and issuance of such Buyer Fairness Opinion).

(g)           Ancillary Agreements.  Seller shall have entered into and delivered
to Buyer each Ancillary Agreement to which it is a party.

(h)           Key Executive Agreements.  No Key Executive Agreement to which Buyer is
a party shall have been terminated by any other party thereto, and no other
party to any such Key Executive Agreement shall be in default of its
obligations thereunder.

(i)            No Seller Material Adverse Change.  From the date of this Agreement through the
Closing, there shall not have been a Seller Material Adverse Change.

(j)            Insurance Coverage.  If the parties are unable to obtain Mutual
Insurance prior to the Closing in accordance with the provisions of Section
5.17, then Seller shall have obtained, at its sole cost and expense, insurances
policies or other forms of insurance evidencing insurance coverage of the types
and in the amounts listed in Schedule 5.17(a) or, if such coverage is
not obtained, then Seller shall have obtained such other equivalent
arrangements as shall be reasonably satisfactory to Buyer.

 48

6.2           Conditions
to Obligations of Seller.  The
obligation of Seller to consummate the Transactions and to take the other
actions to be taken by Seller at the Closing is subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any of which may
be waived in whole or in part by Seller subject to the provisions of
Section 11.5):

(a)           Representations and Warranties.  The representations and warranties of Buyer
set forth in this Agreement shall have been true and correct in all material
respects as of the date of this Agreement and shall be true and correct in all
material respects (except for such representations and warranties as are
qualified by materiality, which representations and warranties shall be true
and correct in all respects) as of the Closing Date as though made on and as of
the Closing Date (other than such representations and warranties that are
expressly made as of an earlier date which need only be true and correct in all
material respects or true and correct, as the case may be, as of such earlier
date, and except as Seller may otherwise have consented to in writing), and
Seller shall have received a certificate, dated as of the Closing Date, signed
by an authorized officer of Buyer to such effect.

(b)           Covenants.  Buyer shall have performed in all material
respects all obligations required to be performed by it under this Agreement
(including without limitation under Section 2.2) at or prior to the
Closing Date, and Seller shall have received a certificate, dated as of the
Closing Date, signed by an authorized officer of Buyer to such effect.

(c)           Litigation.

(i)            Governmental
Prohibition.  No Governmental Entity of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any Governmental Prohibition.

(ii)           Other
Litigation.  (i) No Governmental Entity shall have instituted any
Governmental Challenge or have made a Material Adverse Governmental
Determination, and (ii) no other Person shall have instituted any action,
litigation or suit (whether civil, criminal or administrative) before any
Governmental Entity (x) which seeks to prohibit the consummation of, or
challenges the validity or legality of, the sale of the Purchased Assets
and (y) which Seller has determined in good faith, based upon the advice of
counsel, has a reasonable basis for success (such action, litigation or
lawsuit, a “Non-Frivolous Seller Claim”).

(iii)          Buyer
Indemnification.  Notwithstanding
anything else contained herein:

(1)   the
conditions set forth in this Section 6.2(c) shall be deemed satisfied
with respect to any Governmental Challenge or Material Adverse Governmental
Determination to the extent that Buyer has agreed in writing (x) to assume, at
its sole cost and expense, the defense of such Governmental Challenge or
Material Adverse Governmental Determination and (y) to indemnify, defend and
hold harmless Seller and all Seller Indemnified Parties from and against any
and all Damages incurred in connection with, arising out of or resulting from
such Governmental Challenge or Material Adverse Governmental Determination; 

 49
 

provided, however,
that, in the event that Seller’s prospective Damages are reasonably likely to
consist of either criminal sanctions and/or the loss of Seller’s tax-exempt
status, (x) Buyer’s indemnification pursuant to this clause (iii) shall be
presumed to be ineffective and (y) the conditions set forth in clause (ii) of
this Section 6.2(c) shall continue to apply; provided, further,
that Buyer shall in any event have the right to seek a declaratory judgment
with respect to any such Governmental Challenge or Material Adverse
Determination;

(2)   the
conditions set forth in this Section 6.2(c) shall be deemed satisfied
with respect to any Non-Frivolous Seller Claim to the extent that Buyer has
agreed in writing (x) to assume, at its sole cost and expense, the defense of
such Non-Frivolous Seller Claim and (y) to indemnify, defend and hold harmless
Seller and all Seller Indemnified Parties from and against any and all Damages
incurred in connection with, arising out of or resulting from such
Non-Frivolous Seller Claim; and

(3)   Buyer
shall have the right to cease its defense of any Governmental Challenge,
Material Adverse Governmental Determination or Non-Frivolous Seller Claim (as
the case may be) following written notice to Seller at any time prior to the
Closing, in which case the conditions set forth in clause (ii) of this Section
6.2(c) shall continue to apply; provided, however, that any
cessation by Buyer of such defense shall not relieve Buyer of its indemnification
obligations to Seller and all Seller Indemnified Parties for any Damages
arising prior to the date on which Buyer ceased the defense of such
Governmental Challenge, Material Adverse Governmental Determination or
Non-Frivolous Seller Claim.

(d)           Antitrust Approvals; Consents;
Government Approvals.

(i)            The
Antitrust Approvals shall have been made, or applicable mandatory waiting
periods shall have expired, as the case may be.

(ii)           All Material Consents
listed in Schedule 3.2(c) shall have been obtained and all Shared
Contracts shall have been apportioned pursuant to Section 5.3(c).

(e)           Seller Fairness Opinion.

(i)            The
Seller Board shall have received the Seller Fairness Opinion, and such Seller
Fairness Opinion shall not have been rescinded, withdrawn or adversely modified
by the financial advisor(s) providing such Seller Fairness Opinion (other than
any rescission, withdrawal or modification resulting or arising, directly or
indirectly, from any intentional failure to provide information or willful
misrepresentation on the part of Seller or any of its Representatives in
connection with the preparation and issuance of such Fairness Opinion).

(ii)           Solely
to the extent that (x) not less than nine (9) months have elapsed since the
date of this Agreement and (y) there has been a material, positive change in
the results of operations of the Purchased Business, as operated by Seller and
without regard to (x) any event or circumstance conditioned upon, or
attributable to, the 

 50
 

expected consummation of the transactions
contemplated hereby or (y) any efforts undertaken by Buyer or any of its
Affiliates or Representatives with respect to the Purchased Business), the
Seller Board shall have received a written bring-down of the Seller Fairness
Opinion from the financial advisor(s) providing the Seller Fairness Opinion,
stating that the terms and conditions of this Agreement and the transactions
contemplated hereby are fair, as of the date of such written bring-down, to
Seller from a financial point of view.

(f)            Ancillary Agreements.  Buyer shall have entered into and delivered
to Seller each Ancillary Agreement to which it is a party.

(g)           No Buyer Material Adverse Change.  From the date of this Agreement through the
Closing, there shall not have been a Buyer Material Adverse Change.

(h)           Insurance Coverage.  If the parties are unable to obtain Mutual
Insurance prior to the Closing in accordance with the provisions of Section
5.17, then Buyer shall have obtained, at its sole cost and expense, insurances
policies or other forms of insurance evidencing insurance coverage of the types
and in the amounts listed in Schedule 5.17(b) or, if such coverage is
not obtained, then Buyer shall have obtained such other equivalent arrangements
as shall be reasonably satisfactory to Seller.

ARTICLE
VII.

INDEMNIFICATION; REMEDIES

7.1           Survival
of Representations, Etc.

(a)           Survival.  The representations and warranties of Seller
and Buyer contained herein shall survive until the second (2nd) anniversary of the Closing
Date; provided, however, that the representations and warranties contained in Section 3.8
(Taxes) and Section 3.14 (Environmental Matters) shall survive until the
later of such date or sixty (60) days after the expiration of the statutes of
limitations applicable to claims of third-parties or Governmental Entities
regarding such matters arising in or related to periods prior to Closing
(giving effect to any waiver or extension of such statutes of limitations) and
that the representations and warranties contained in Section 3.2
and Section 4.2  (Authority; No
Conflict) shall survive the Closing indefinitely.

(b)           Investigation; Waiver.  The right to indemnification, payment of
Damages or other remedy based on such representations, warranties, covenants,
agreements and obligations herein will not be affected by any investigation
conducted with respect to, or any Knowledge acquired (or capable of being
acquired) at any time, whether before or after the execution and delivery of
this Agreement or the Closing Date, with respect to the accuracy or inaccuracy
of or compliance with, any such representation, warranty, covenant, agreement
or obligation.  No waiver of any
condition based on the inaccuracy of any representation or warranty, or on the non-performance
of or non-compliance with any covenant, agreement or obligation, will affect in
any way a party’s right to indemnification, payment of Damages, or other
remedies based on such representations, warranties, covenants, agreements and
obligations.  Without limiting the
generality of the foregoing and notwithstanding anything to the contrary set
forth herein, Seller shall be liable to the Seller Indemnified Parties for any
Damages arising from 

 51
 

a breach of any representation,
warranty, covenant or agreement of Seller, whether or not known by or waived by
Buyer prior to Closing.

7.2           Indemnification.

(a)           By Seller.  From and after the Closing, Seller shall
indemnify, defend and hold harmless Buyer and its Affiliates, Subsidiaries and
Representatives (collectively, the “Seller
Indemnified Parties”), from and against any and all costs, losses,
Liabilities, obligations, damages, lawsuits, deficiencies, claims, demands or
expenses (whether or not arising out of thirty party claims), including without
limitation interest, penalties, reasonable legal fees of outside counsel and
all reasonable amounts paid in investigation or defense, and all amounts paid
in settlement, of any of the foregoing (collectively, “Damages”) incurred in connection
with, arising out of or resulting from:

(i)            any
breach of any representation or warranty made by Seller in this Agreement;

(ii)           any
breach of any covenant or agreement made by Seller in this Agreement;

(iii)          any
Excluded Liability; and

(iv)          any
claim by any Person for brokerage or finder’s fees or commissions or similar
payments based on any agreement or understanding alleged to have been made by
such Person with either Seller or any of its Affiliates (or any Person acting
(or purportedly acting) on behalf of any such Person) in connection with the
Transactions.

(b)           By Buyer.  From and after
the Closing, Buyer shall indemnify, defend and hold harmless Seller and its
Affiliates and Representatives (the “Buyer
Indemnified Parties”) from and against any and all Damages incurred
in connection with, arising out of, resulting from:

(i)            any
breach of any representation or warranty made by Buyer in this Agreement;

(ii)           any
breach of any covenant or agreement made by Buyer in this Agreement;

(iii)          any
Assumed Liability; and

(iv)          any
claim by any Person for brokerage or finder’s fees or commissions or similar
payments based on any agreement or understanding alleged to have been made by
such Person with either Buyer or any of its Affiliates (or any Person acting
(or purportedly acting) on behalf of any such Person) in connection with the
Transactions.

(c)           The term “Damages” as used in
this Section 7.2 is not limited to matters asserted by third
parties against any indemnified party, but includes Damages incurred or 

 52
 

sustained by an indemnified
party in the absence of third-party claims and expenses of pursuing any
claims.

(d)           Notice of Claims.  If a
claim for Damages (a “Claim”)
is to be made by a party entitled to indemnification hereunder against the
indemnifying party, the party claiming such indemnification shall, give written
notice (a “Claim Notice”)
to the indemnifying party as soon as practicable after the party entitled to
indemnification becomes aware of any fact, condition or event which may give
rise to Damages for which indemnification may be sought under this Section 7.2.

(e)           Defense of Third-party
Claims.

(i)            If
any lawsuit or enforcement action is filed by a third party against any party
entitled to the benefit of indemnity hereunder with respect thereto, written
notice thereof shall be given to the indemnifying party as promptly as
practicable (and in any event within fifteen (15) calendar days after the
service of the citation or summons).  The
failure of any indemnified party to give timely notice hereunder shall not affect
rights to indemnification hereunder, except to the extent that the indemnifying
party has been damaged by such failure. 
After such notice, if the indemnifying party shall acknowledge in
writing to the indemnified party that the indemnifying party is obligated under
the terms of its indemnity hereunder in connection with such lawsuit or action,
then the indemnifying party shall be entitled, if it elects to do so, at its
own cost, risk and expense, (i) to take control of the defense and
investigation of such lawsuit or action, (ii) to employ and engage legal
counsel of its own choice, but, in any event, reasonably acceptable to the
indemnified party, to handle and defend the same unless the named parties to
such action or proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and the indemnified party has been
advised by counsel that there may be one or more legal defenses available to
such indemnified party that are different from or additional to those available
to the indemnifying party, in which event the indemnified party shall be
entitled, at the indemnifying party’s cost, risk and expense, to separate
counsel of its own choosing.  The
indemnifying party shall not, without the written consent of the indemnified
party, which shall not be unreasonably withheld, conditioned or delayed,
(i) settle or compromise any Claim or consent to the entry of any judgment
which does not include an unconditional written release by the claimant or
plaintiff of the indemnified party from all Liability in respect of such Claim,
(ii) settle or compromise any Claim if the settlement imposes equitable
remedies or material obligations on the indemnified party other than financial
obligations for which such indemnified party will be indemnified hereunder or (iii)
settle or compromise any Claim if such settlement or compromise would affect
the Tax position or Tax liability of the indemnified party for any Post-Closing
Tax Period.  No Claim which is being
defended in good faith by the indemnifying party in accordance with the terms
of this Agreement shall be settled or compromised by the indemnified party
without the written consent of the indemnifying party, which consent shall not
be unreasonably withheld.

(ii)           If
the indemnifying party fails to assume the defense of such lawsuit or action
within thirty (30) calendar days after receipt of the Claim Notice, the
indemnified party against which such lawsuit or action has been asserted will
(upon 

 53
 

delivering notice to such effect to the
indemnifying party) have the right to undertake, at the indemnifying party’s
cost and expense, the defense, compromise or settlement of such lawsuit or
action on behalf of and for the account and risk of the indemnifying party; provided,
however, that such lawsuit or action shall not be compromised or settled
without the written consent of the indemnifying party, which consent shall not
be unreasonably withheld.  If the
indemnified party settles or compromises such lawsuit or action without the
prior written consent of the indemnifying party, the indemnifying party will
bear no Liability hereunder for or with respect to such lawsuit or action
unless the indemnifying party unreasonably withheld consent.

(iii)          In
the event either party assumes the defense of a particular lawsuit or action in
the manner contemplated above, the party assuming such defense will keep the
other party reasonably informed of the progress of any such defense, compromise
or settlement.  The indemnifying party
shall be liable for any settlement of any action effected pursuant to and in
accordance with this Section 7.2 and for any final judgment
(subject to any right of appeal), and the indemnifying party agrees to
indemnify and hold harmless the indemnified party from and against any Damages
by reason of such settlement or judgment.

(f)            Exclusivity.  Subject to the limitations contained in Section
11.17 and elsewhere in this Agreement, the indemnification provided in this
Article VII shall be the sole and exclusive remedy of any Seller
Indemnified Party or Buyer Indemnified Party in respect of matters addressed in
Sections 7.2(a) and (b), respectively.  Subject to the limitations set forth in Section
11.17 and elsewhere in this Agreement, the indemnification provisions of
this Article VII shall govern all claims by the parties for
breaches of this Agreement except with respect to breaches based upon common
law fraud or intentional misrepresentation, as to which the parties shall have,
in addition to the indemnification provisions of this Article VII,
all of their rights and remedies at law.

(g)           Limitation on
Indemnity/Commitments.

(i)            The
indemnification obligations of Seller with respect to any breach of any
representation or warranty pursuant to Section 7.2(a)(i) shall be
limited to Claims made on or prior to the last date of survival thereof
referred to in Section 7.1. 
The indemnification obligations of Seller with respect to any other
bases for indemnification obligations of Seller pursuant to clauses (ii), (iii)
and (iv) of Section 7.2(a) shall survive until the expiration of
the applicable statutes of limitations, subject to the terms of this Agreement.

(ii)           The
indemnification obligations of Buyer with respect to any breach of any
representation or warranty pursuant to Sections 7.2(b)(i) shall be
limited to Claims made on or prior to the last date of survival thereof
referred to in Section 7.1. 
The indemnification obligations of Buyer with respect to any other bases
for indemnification obligations of Buyer pursuant to clauses (ii), (iii) and
(iv) of Section 7.2(b) shall survive until the expiration of the
applicable statutes of limitations, subject to the terms of this Agreement.

 54
 

(iii)          The
Seller Indemnified Parties may not recover Damages from Seller pursuant to Section 7.2(a)(i)
until the aggregate amount of Damages relating to such Claims for which the
Seller Indemnified Parties, in the aggregate, are seeking indemnification under
Section 7.2(a)(i) exceeds an amount equal to Six Hundred Thousand
Dollars ($600,000) (the “Threshold”), at which point Seller shall be liable for, and
the Seller Indemnified Parties shall be entitled to recover only the Damages in
excess of the Threshold; provided, however, that Claims for
Damages pursuant to Section 7.2(a)(i) resulting from common law
fraud, intentional misrepresentation or a breach of the representations and
warranties set forth in Section 3.2 (Authority; No Conflict), Section
3.8 (Taxes), and Section 3.14 (Environmental Matters) shall not be
subject to the Threshold, and shall be recoverable from the first dollar.  The Seller Indemnified Parties shall have the
right to make a Claim under Section 7.2(a)(i) prior to the time the
Threshold has been surpassed for the purpose of asserting such Claim within the
relevant survival period and any such Claim made within such period shall, to
the extent the Threshold ultimately is met, survive until its final
resolution.  This Section 7.2(g)(ii)
shall not apply to Claims for indemnification made pursuant to clauses (ii) or
(iii) of Section 7.2(a).

(iv)          The
aggregate amount of Damages that may be recovered by the Seller Indemnified
Parties pursuant to Section 7.2(a)(i) shall not exceed Fifteen
Million Dollars ($15,000,000); provided, however, that this
limitation shall not apply to Claims for Damages pursuant to Section 7.2(a)(i)
resulting from common law fraud, intentional misrepresentation or a breach of
the representations and warranties set forth in Section 3.2 (Authority;
No Conflict), Section 3.8 (Taxes), and Section 3.14
(Environmental Matters).  This Section 7.2(f)(iii)
shall not apply to Claims for indemnification made pursuant to clauses (ii) or
(iii) of Section 7.2(a).

(v)           For
purposes of (x) determining, from and after the Closing Date, whether Seller
has breached any representation or warranty set forth in Article III
hereof and (y) calculating the amount of Damages that is subject to
indemnification under this Agreement in connection with the breach of any such
representation or warranty, the determination of such breach and the
calculation of the amount of such Damages (as the case may be) shall be
determined without regard to any “material,” “Seller Material Adverse Effect,” “Buyer
Material Adverse Effect” or like materiality qualifier set forth in any such
representation or warranty.

(vi)          Neither
(A) the termination of the representations or warranties contained herein, nor
(B) the expiration of the indemnification obligations described above, will
affect the rights of a Person in respect of any Claim made by such Person prior
to the expiration of the applicable survival period provided herein.

(vii)         To
the extent that any Liability that is subject to indemnification under this
Agreement is covered by insurance, the amount of any indemnity payment shall be
net of the Net Proceeds of any insurance policy paid to the indemnified party
with respect to such Liability.  For
purposes of this Section, “Net Proceeds” shall mean the insurance proceeds
actually received, from any insurance source, less any expenses of recovery,
deductibles, and/or co-payments.  If any
amounts are reimbursed under 

 55
 

insurance coverage from any insurance source
subsequent to indemnification under this Article, the indemnified party shall
reimburse the indemnifying party in an amount equal to the amounts subsequently
received under insurance coverage (net of the expenses of recovery).

(viii)        Notwithstanding
anything herein to the contrary, no breach of any representation, warranty,
covenant or agreement contained herein will give rise to any right on the part
of Buyer or Seller, after the Closing, to rescind this Agreement or any of the
transactions contemplated hereby, and any and such rescission rights are hereby
waived.

(ix)           In
addition to the limitations set forth in Section 11.17 and elsewhere in
this Agreement, in no event shall an indemnifying party be liable for punitive
damages sustained or claimed by an indemnified party except to the extent such
damages arise from a third-party Claim. 
An indemnified party shall use reasonable efforts to mitigate any
Damages.  Damages shall be determined after
taking into account any indemnity, contribution or other similar payment
received by the indemnified party from any third-party with respect thereto.

7.3           Buyer
Trust Account.

(a)           Seller has read a copy of Buyer’s
Registration Statement on Form S-1 (SEC File No. 333-130531), as declared
effective by the SEC on June 1, 2006 (the “Buyer Prospectus”).  Seller understands that Buyer is a special
purpose company formed for the sole purpose of consummating a “business
combination” and that Buyer has established a trust account at JP Morgan Chase
NY Bank (the “Trust Account”), maintained by American Stock &
Transfer Company acting as trustee, initially in the amount of $142,575,000 and
thereafter increased by any earned and accrued interest thereon and decreased
by any applicable state or federal Taxes thereon (collectively, the “Trust
Assets”).  Seller acknowledges that
the Trust Assets are to be held for the benefit of Buyer’s stockholders and
either distributed as part of the consummation of a business combination
between Buyer and a business entity or entities meeting certain requirements or
returned to Buyer’s stockholders.  As of
March 31, 2007 Buyer owned liquid assets of approximately $1,075,000 outside of
the Trust Account which it intends to use for its working capital and other
corporate purposes (the “Non-Trust Assets”).

(b)           As consideration for Buyer’s
execution of this Agreement, Seller, on its own behalf and on behalf of its
Affiliates and Representatives (collectively the “Seller Claimants”)
hereby agrees that neither it nor any Seller Claimant will now or at any time
in the future have any claim to, or make any claim against, the Trust Assets or
any part of them, whether such claim arises as a result of Buyer’s obligations
under this Agreement or Buyer’s conduct in negotiating or implementing this
Agreement or in any other way that is directly or indirectly related to this
Agreement or the Transactions, and regardless of whether such claim arises
based on contract or tort or any other theory of Liability (any and all such
claims being collectively refereed to hereafter as “Transaction Claims”).  Seller, on its behalf and on behalf of the
Seller Claimants, hereby waives any right it or they otherwise may have now or
hereafter to part or all of the Trust Assets based upon, or related in any way
to, any Transaction Claim and 

 56
 

agrees that it and their sole
recourse for any of Transaction Claim shall be against the Non-Trust Assets
unless and until this Agreement is consummated with Seller.

(c)           Notwithstanding anything to the
contrary set forth herein, upon the consummation of the Transactions the waiver
set forth in Section 7.3(b) shall cease to exist and shall be of no
further force and effect, and Seller shall thereafter have full recourse to the
Trust Assets, subject to the terms and conditions set forth in this Agreement.

ARTICLE
VIII.

CERTAIN TAX MATTERS

8.1           Books
& Records; Cooperation.  Buyer,
on one hand, and Seller, on the other hand, agree to furnish or cause to be
furnished to the other, upon request, as promptly as practicable, such
information and assistance related to the Purchased Assets and the Purchased
Business, including without limitation access to Books and Records in its
possession, as is reasonably necessary for the filing of all Tax Returns by Buyer
or Seller, the making of any election related to Taxes, the preparation for any
audit by any taxing authority, and the prosecution or defense of any claim,
suit or proceeding related to any Taxes. 
Each of Buyer, on one hand, and Seller, on the other hand, shall retain
all Books and Records with respect to Taxes pertaining to the Purchased Assets
and the Purchased Business, (other than Books and Records related solely to
Excluded Assets (other than the Intellectual Property Assets therein) or
Excluded Liabilities) for a period of at least six (6) years following the
Closing Date.  Buyer, on one hand, and
Seller, on the other hand, shall cooperate fully with the other in the conduct
of any audit, litigation or other Proceeding related to Taxes involving the
Purchased Assets and the Purchased Business (other than Taxes related solely to
Excluded Assets (other than the Intellectual Property Assets therein) or
Excluded Liabilities).  Buyer, on one
hand, and Seller, on the other hand, further agree, upon request, to use their
Best Efforts to obtain any certificate or other document from any Governmental
Entity or any other Person as may be necessary to mitigate, reduce or eliminate
any Tax that could be imposed (including, but not limited to, with respect to the
Transactions).

8.2           Transfer
Taxes.  Buyer and/or Seller shall be
liable for all sales and use Taxes imposed by any Tax jurisdiction domestic or
foreign by reason of the sale of the Purchased Assets pursuant to this
Agreement.  All Transfer Taxes incurred
in connection with the transfer of each Owned Real Property shall be borne by
Buyer and/or Seller in accordance with local custom and practice in the
jurisdiction where such Owned Real Property is located.

8.3           Allocation
of Seller Taxes.

(a)           Seller shall be responsible for and
shall promptly pay when due all Taxes levied with respect to the operation of
the Purchased Business or ownership of the Purchased Assets for any Pre-Closing
Tax Period.  All such Taxes levied with
respect to the operation of the Purchased Business (other than portions of the
Purchased Business related solely to Excluded Assets) or ownership of the
Purchased Assets, for any Straddle Period shall be apportioned between the
Pre-Closing Tax Period and the Post-Closing Tax Period, as follows:

 57
 

(i)            in
the case of any Taxes other than Taxes based upon or related to income or
receipts, the portion allocable to the Pre-Closing Tax Period shall be deemed
to be the amount of such Tax for the entire Straddle Period multiplied by a
fraction the numerator of which is the number of days in the Straddle Period
ending on the Closing Date and the denominator of which is the number of days
in the entire Straddle Period, and

(ii)           in
the case of any Tax based upon or related to income or receipts, the portion
allocable to the Pre-Closing Tax Period shall be deemed equal to the amount
which would be payable if the relevant Straddle Period ended on the Closing
Date.

(b)           Upon
receipt by Buyer, on the one hand, or Seller, on the other hand, of any bill
for such Taxes related to the Purchased Assets, the party receiving such bill
shall present a statement to the other setting forth the amount of
reimbursement to which each is entitled under this Section 8.3  together with such supporting evidence as is reasonably necessary
to calculate the proration amount.  The
proration amount shall be paid by the party owing it to the other within ten
(10) days after delivery of such statement. 
In the event that Buyer or Seller shall make any payment for which it is
entitled to reimbursement under this Section 8.3, the applicable
party shall make such reimbursement promptly but in no event later than ten
(10) days after the presentation of a statement setting forth the amount of
reimbursement to which the presenting party is entitled along with such
supporting evidence as is reasonably necessary to calculate the amount of
reimbursement.  Notwithstanding the
foregoing, none of the Seller Indemnified Parties shall be liable for, and
Seller shall indemnify and hold the Seller Indemnified Parties harmless from
and against (i) any Taxes of Seller or its predecessors or Affiliates
levied with respect to the Purchased Assets attributed to Pre-Closing Tax
Periods, or (ii) any other Taxes of Seller or its predecessors or Affiliates
for any periods.

8.4           Notices.  Seller shall promptly notify Buyer in writing
upon receipt by Seller of notice of any pending or Threatened federal, state,
local or foreign Tax audits or assessments related to the income, properties or
operations of Seller that reasonably may be expected to relate to the Purchased
Assets or the Purchased Business (other than portions of the Purchased Business
related solely to Excluded Assets other than the Intellectual Property Assets
therein).

8.5           Withholding.  At the Closing, Seller shall deliver to Buyer
all necessary forms and certificates complying with applicable Law, in form and
substance reasonably satisfactory to Buyer, duly executed and acknowledged,
certifying that the Transactions are exempt from withholding under Section 1445
of the Code.

8.6           Form
W-2s.  Pursuant to Revenue Procedure
2004-53, 2004-2 C.B .320, provided that Seller provide Buyer with all necessary
payroll records for the calendar year which includes the Closing Date, Buyer
shall furnish a Form W-2 to each employee employed by Buyer who had been
employed by Seller disclosing all wages and other compensation paid for such
calendar year, and taxes withheld therefrom, and Seller shall be relieved of
the responsibility for doing so.

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ARTICLE
IX.

OTHER POST-CLOSING COVENANTS

9.1           Post-Closing
Access.  Each party hereto agrees
that it will cooperate with and make available to the other party, during
normal business hours and upon reasonable notice, (i) all Books and Records,
(ii) information related to the Purchased Business and (iii) employees (without
substantial disruption of employment), in each case, retained and/or remaining
in existence after the Closing which are necessary or useful in connection with
any Tax inquiry, audit, investigation or dispute, any litigation or
investigation or any other matter requiring any such Books and Records,
information or employees for any reasonable business purpose.  The party requesting any such Books and
Records, information or employees shall bear all of the out-of-pocket
costs and expenses (including without limitation legal fees, but excluding
reimbursement for salaries and employee benefits) reasonably incurred in
connection with providing such Books and Records, information or employees.  All information received pursuant to this
Section 9.1 shall be kept confidential by the party obtaining such information,
subject to any disclosure that is required to be made by such party in order to
comply with applicable Legal Requirements or the rules or regulations of any
securities exchange upon which its securities are traded.

9.2           Publicity.  Except (i) as required by Legal Requirement
or (ii) in the case of Buyer, for any filings required to be made with the SEC
or AMEX or other actions that Buyer in good faith determines to be necessary or
appropriate in connection with seeking to obtain the Required Buyer Stockholder
Approval (including in connection with the Proxy Statement), without prior
written approval of Buyer and Seller, none of Buyer, Seller or their respective
Affiliates shall issue any press release or make any public statement regarding
this Agreement and the Transactions contemplated hereby other than the fact
that Buyer acquired the Purchased Business; provided, however, that nothing set
forth in this Section 9.2 shall prohibit the Buyer Board from exercising its
fiduciary duties in its communications to the stockholders of Buyer.  In the case of announcements, statements,
acknowledgments or revelations which either party is required by Legal
Requirement to make, issue or release, the making, issuing or releasing of any
such announcement, statement, acknowledgment or revelation by the party so
required to do so by Legal Requirement shall not constitute a breach of this
Agreement if such party shall have given, to the extent reasonably practicable,
not less than two (2) calendar days prior notice to the other party, and shall
have attempted, to the extent reasonably possible, to clear such announcement,
statement, acknowledgment or revelation with the other party.  Each party hereto agrees that it will not
unreasonably withhold any such consent or clearance.  In furtherance of the foregoing, the parties
acknowledge and agree that concurrently with the execution of this Agreement, the
parties will issue a mutual press release with respect to the transactions
contemplated hereby.

9.3           Confidential
Information.  Buyer and Seller
acknowledge and agree as follows:

(a)           Subject to Section 9.2, the
provisions of the Confidentiality Agreement shall continue to be in effect
until the Closing, at which time (i) the Confidentiality Agreement shall
terminate and be of no further effect and (ii) the conditions set forth in this
Section 9.3 shall thereafter apply.

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(b)           Seller and Buyer acknowledge that the
success of the Purchased Business and the Retained Business after the Closing
depends upon the continued preservation of the confidentiality of certain
confidential and proprietary information related to Seller, the Purchased
Business and the Purchased Assets, and the Retained Business and the Excluded
Assets (as the case may be) in each case, including without limitation
technical or marketing information, ideas, methods, developments, inventions,
improvements, business plans, trade secrets, scientific or statistical data,
diagrams, drawings, specifications or other proprietary information related
thereto, together with all analyses, compilations, studies or other documents,
records or data possessed by Seller and its Affiliates (“Confidential
Information”), that the preservation of the confidentiality of such
Confidential Information by Seller, Buyer and their respective Affiliates is an
essential premise of the bargain between Seller and Buyer.  Accordingly, Seller and Buyer hereby agree
that:

(i)            Seller
and its Affiliates will not, and Seller will cause its Affiliates and its
Representatives not to, at any time, directly or indirectly, without the prior
written consent of Buyer, disclose or use, any Confidential Information
involving or relating to the Purchased Business or the Purchased Assets, except
(A) for any information that prior to the Closing was primarily used in the
Retained Business or (B) to the extent necessary for Seller to operate and
conduct the Retained Business and provide the services under the Ancillary
Agreements following the Closing;

(ii)           Buyer
and its Affiliates will not, and Buyer will cause its Affiliates and its
Representatives not to, at any time, directly or indirectly, without the prior
written consent of Seller, disclose or use, any Confidential Information involving
or relating to the Retained Business or the Excluded Assets, except (A) for any
information that prior to the Closing was primarily used in the Purchased
Business or (B) to the extent necessary for Buyer to operate and conduct the
Purchased Business following the Closing; and

(iii)          Buyer
and Seller shall each use Best Efforts to maintain the confidentiality of any
Confidential Information involving or relating to the Retained Business or the
Excluded Assets, on the one hand, and the Purchased Business or the Purchased
Assets, on the other hand, from the employees of the other party due to the
close proximity of the location of the employees of Buyer and Seller following
the Closing.

For purposes of this Section
9.3, Confidential Information will not include any information: (i)
generally available to, or known by, the public (other than as a result of
disclosure in violation hereof); (ii) solely with respect to the Confidential
Information of Buyer, that becomes available to Seller on a non-confidential
basis from a source other than the Buyer or any of its Affiliates or
Representatives, provided that the source of such information was not
known by Seller, after due inquiry, to be bound by a confidentiality agreement
with or other contractual, legal or fiduciary obligation of confidentiality to
Buyer or any other Person with respect to such information; or (z) solely with
respect to the Confidential Information of Seller, that becomes available to
Buyer on a non-confidential basis from a source other than the Seller or any of
its Affiliates or Representatives, provided that the source of such
information was not known by Buyer, after due inquiry, to be bound by a
confidentiality agreement with or other contractual, legal or fiduciary 

 60
 

obligation of confidentiality
to Seller or any other Person with respect to such information.  Each of Seller and Buyer agree that it will
be responsible for any breach or violation of the provisions of this Section 9.3(b)
by any of its Affiliates or Representatives. 
Notwithstanding the foregoing, Seller shall owe no duties to Buyer and
have no obligation to maintain confidentiality with respect to any information
relating solely to the Excluded Assets, the Excluded Liabilities or the
Retained Business, and, following the Closing, Buyer shall owe no duties to
Seller and have no obligation to maintain confidentiality with respect to any
information relating solely to the Purchased Business and the Purchased Assets.

(c)           If Seller, Buyer or any of their
respective Representatives or Affiliates is requested or required by Proceeding
or Legal Requirement to disclose any Confidential Information, each party shall
provide the other with prompt written notice of such request or requirement,
which notice shall, if practicable, be at least forty-eight (48) hours prior to
making such disclosure, so that the other party may seek a protective order or
other appropriate remedy and/or waive compliance with the provisions of this
Agreement.  If, in the absence of a
protective order or other remedy or the receipt of such a waiver, Seller, Buyer
or any of their respective Representatives or Affiliates are nonetheless, in
the opinion of counsel, legally compelled to disclose Confidential Information,
then Seller or Buyer may disclose that portion of the Confidential Information
which such counsel advises is legally required to be disclosed, provided
that such party uses its reasonable efforts to preserve the confidentiality of
the Confidential Information in accordance with the provisions of this Section
9.3, whereupon such disclosure shall not constitute a breach of this
Agreement.

(d)           Notwithstanding the foregoing nothing
set forth in this Section 9.3 shall prohibit Buyer from disclosing any
Confidential Information to the extent (i) required by Legal Requirement to be
disclosed by Buyer in any filings required to be made with the SEC or AMEX or
(ii) that Buyer in good faith determines such disclosure to be necessary in
connection with exercising its fiduciary duties in its communications to the
stockholders of Buyer.

9.4           Further
Assurances.  From and after the
Closing Date, Seller and Buyer shall take all further actions consistent with
the intent of this Agreement and the Ancillary Agreements necessary (i) to
enable Buyer to operate the Purchased Business in substantially the same manner
operated prior to the Closing Date, (ii) to enable Seller to continue to
operate the Retained Business in the manner contemplated by the Ongoing
Business Agreements, and (iii) upon successful completion of Seller’s
obligations under the Ancillary Agreements, to enable Buyer to operate the
Purchased Business on an independent basis, in each case, assuming due
performance by Buyer and Seller of their respective obligations under this
Agreement and the Ancillary Agreements. 
In furtherance of the foregoing, from time to time after the Closing
Date, the parties hereto agree to (i) furnish upon request to each other
such further assurances, information, documents and instruments of transfer or
assignment and (ii) promptly execute, acknowledge, and deliver any such further
assurances, documents and instruments of transfer or assignment, in each case
that the other party may reasonably request for the purpose of carrying out the
intent of this Agreement and the Ancillary Agreements, including without
limitation to transfer and assign to Buyer those assets of Seller used or held
for use in the conduct of the Purchased Business to the extent not otherwise
transferred hereby or thereby.  As
promptly as possible after the Closing Date, Seller shall make any filings
and/or give any notices required by applicable Legal Requirements to be made or
given by them in order to consummate the 

 61
 

Transactions that were not made or given prior to the Closing, shall
obtain all other required Consents not obtained prior to the Closing, and shall
use their Best Effort to apportion any Shared Contract not apportioned prior to
the Closing; provided that neither Buyer nor Seller shall be required to make
any payments, commence litigation or agree to any modification to the terms of
any Contract in order to obtain any such Consent or apportion any Shared
Contract.  To the extent that the
inclusion within the Purchased Assets of any of (i) Seller’s right, title and
interest in and to the business, properties, assets and rights of any kind,
whether tangible or intangible, real or personal, primarily related to or
primarily used in connection with the Purchased Business (but excluding
therefrom the Excluded Assets) would have resulted in the cancellation,
invalidity or termination of such rights or (ii) the portion of Seller’s right,
title and interest in and to all Shared Assets that relates to the Purchased
Business to the extent that such portion of the Shared Assets or the benefits
thereof would have resulted in the cancellation, invalidity or termination of
such Shared Assets, then in each case, if and when such inclusion would no
longer result in such cancellation, invalidity or termination, then Seller
shall take all actions necessary to effectuate such inclusion and assignment of
all of Seller’s right, title and interest therein to Buyer.

9.5           Assigned
Accounts Receivable; Quarterly Adjustments.

(a)           At the Closing, Buyer will acquire
hereunder, and thereafter Buyer or its designee shall have the right and
authority to collect for Buyer’s account, all Assigned Accounts Receivable.

(b)           From and after the Closing Date until
the first anniversary thereof, Buyer and Seller shall meet quarterly in order
to determine whether any payments have been paid or received by Seller with
respect to the Assumed Accounts Payable or Assigned Accounts Receivable (as
applicable) and whether any payments have been paid or received by Buyer with
respect to any Accounts Payable other than the Assumed Accounts Payable or with
respect to any Accounts Receivable other than the Assigned Accounts Receivable
(as applicable), and Buyer or Seller (as the case may be) shall thereafter
promptly make any payments required to be made to the other party in respect of
any of the foregoing in order to ensure that the parties have given effect to
the assignment and assumption by Buyer of the Assigned Accounts Receivable and
the Assumed Accounts Payable and the retention by Seller of the other Accounts
Receivable and the other Accounts Payable, hereunder.

9.6           Protection
of Goodwill of Purchased Business. 
Except as otherwise set forth in the Ongoing Business Agreements, during
the Restricted Period, Seller will not, directly or indirectly, in whole or in
part, either alone, together or with others, do any of the following within the
Restricted Territory:  Sponsor or
Conduct, or support, aid, help or otherwise assist any third party to Sponsor
or Conduct, Professional Drag Racing, except to the extent required to fulfill
its obligations to Buyer under the Ongoing Business Agreements.

9.7           Protection
of Goodwill of Retained Business.

(a)           Except as otherwise set forth in the
Ongoing Business Agreements, during the Restricted Period, Buyer will not,
directly or indirectly, in whole or in part, either alone, together or with
others, do any of the following:

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(i)            Sponsor or Conduct, or support, aid, help
or otherwise assist any third party to Sponsor or Conduct, Association Drag
Racing within the Restricted Territory, except to the extent required to
fulfill its obligations to Seller under the Ongoing Business Agreements.

(ii)           Sponsor or Conduct, or render, support, aid,
help or otherwise assist any third party to Sponsor or Conduct or render,
within the Territory any of the Sanctioning Services or in any other manner act
or hold itself out as a “sanctioning body” for the sport of drag racing.

(b)           Without limiting the
generality of the provisions set forth in Section 9.7(a) above and
except as otherwise set forth in the Ongoing Business Agreements, during the
Restricted Period:

(i)            Buyer shall not, within the Territory,
Sponsor or Conduct or permit to be Sponsored or Conducted any NE Association
Races and/or any other drag races at a National Event Series and/or at any
National Event, unless such drag races satisfy Buyer’s Economic Test and the
Sanctioning Requirement; provided, however, that Buyer may
continue to Conduct Pro Modified Drag Racing events at Existing National Events
in substantially the same manner as Pro Modified Drag Racing was Conducted at
Existing National Events during the 2006 Racing Season pursuant to that certain
agreement for AMS Pro Mod Exhibition, dated February 21, 2006, between Seller
and AMS Staff Leasing; and

(ii)           Buyer shall not, within the Territory,
Sponsor or Conduct or permit to be Sponsored or Conducted any NE Association
Races or other drag races outside of a National Event Series and/or a National
Event which do not satisfy the applicable HDP Economic Test and the Sanctioning
Requirement, except in Buyer’s capacity as an owner and/or operator of the
Racetracks (or any subsequently acquired racetracks), as and to the same extent
available to any other NHRA Member Track owner and/or operator.

(c)           Notwithstanding
anything to the contrary set forth in this Section 9.7, Buyer shall have
the right to Sponsor and Conduct the activities as contemplated by (i) the
definition of “Commercial Exploitation Rights,” as set forth in the Key
Definitions Agreement, or (ii) the Ongoing Business Agreements.

9.8           Exhibition and Promotional Drag Racing.  Notwithstanding anything to the contrary set
forth in Sections 9.6 and 9.7 above, both Seller and Buyer shall have the right
to Conduct any Exhibition or Promotional drag racing activity designed and
conducted primarily for marketing, promotion and/or entertainment purposes and
not for Competition purposes (e.g. celebrity drag racing, reality drag racing,
et cetera) as follows:

(a)           With respect to
Exhibitions of Vintage Drag Racing and Nostalgia Drag Racing, (i) Buyer may
Conduct such Exhibitions at any event, including, without limitation, any
National Event or New Professional Drag Racing Event, so long as the Conduct
thereof does not in any way constitute a series); and (ii) Seller may Conduct
such Exhibitions at any event other than a National Event or New Professional
Drag Racing Event.

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(b)           With respect to Top
Fuel and/or Fuel Funny Car Exhibition and/or Promotional activities, (A) Buyer
may Conduct such at any Buyer event; and (ii) Seller may Conduct such but not
at National Events or any New Professional Drag Racing Events.  Seller further agrees that it (x) will not
Conduct Exhibitions of Top Fuel or Funny Car vehicles in any manner that would
constitute a series; and (y) will only Conduct such Exhibitions in conjunction
with Association Drag Racing and not as a stand-alone event; and (z) except for
the activities described in paragraphs (a), (b) and (c)(iii) of the definition
of the term “Association Drag Racing” as set forth in the Key Definitions
Agreement, and except in connection with the exercise of its Protected TV
Rights (as defined in the Brand License Agreement), Seller will not produce any
television program about an Association Drag Racing activity that includes
footage of any Top Fuel or Fuel Funny Car Exhibition.

(c)           Except as otherwise set
forth in Sections 9.8(a) and (b) above, with respect to all other classes of
vehicles, Buyer may Conduct such Exhibition and/or Promotional activities
without restriction and Seller may Conduct or such Exhibition and/or
Promotional activities at any Association Drag Racing event.

9.9           Equitable Relief.  Each of Buyer and
Seller acknowledges that the terms, conditions and restrictions in Sections
9.6, 9.7 and 9.8 above are reasonable and necessary in order to protect and
maintain the goodwill, proprietary and other legitimate business interests of
the Purchased Business and the Retained Business.  Each of Buyer and Seller further agrees that
the actual or Threatened breach by Buyer and/or Seller of such covenants would
cause immediate, substantial, and irreparable harm to the other party, for
which the full extent of resulting injury would be impossible to calculate, and
Buyer and/or Seller therefore will not have an adequate remedy at law.  Accordingly, each of Buyer and Seller agrees
that temporary and permanent injunctive relief would be appropriate remedies
against such breach, without bond or security, which is hereby waived by each
of Buyer and Seller to the fullest extent permitted by applicable Legal
Requirements.

9.10         Special Severability Provisions.  If one or more provisions of Sections 9.6,
9.7, 9.8 or 9.9 are held to be illegal, overly broad, or otherwise
unenforceable, it is the intent of the parties to this Agreement that such
illegal, overly broad, or otherwise unenforceable portion(s) shall be amended
(by blue-penciling or otherwise) or, if blue-penciling or similar procedures
are not available, limited or excluded from Sections 9.6, 9.7, 9.8 or 9.9, as
applicable and as necessary, so that the remaining provisions of Sections 9.6,
9.7, 9.8 or 9.9, as applicable, shall be enforceable in accordance with their
terms.

9.11         Buyer Employee Non-Solicitation.  During the period commencing on the Closing
Date and ending on the second anniversary of the Closing Date, neither Seller
nor any of its Affiliates shall, directly or indirectly, solicit any employee
of Buyer or any Affiliate of Buyer, including any Transferring Employee, to
become employed with Seller or any of its Affiliates, or induce or encourage
any such employee to leave the employ or terminate or limit his or her business
relationship with Buyer or any Affiliate of Buyer.

9.12         Seller Employee Non-Solicitation.  Neither Buyer nor any of its Affiliates
shall, directly or indirectly, do any of the following:

 64
 

(a)   with respect to any employee of Seller or any of its
Affiliates who is rendering or participating in the rendering of any services
to Buyer or any of its Affiliates under any of the Ongoing Business Agreements
(a “Seller Service Employee”), and so long as such Seller Service
Employee continues to render or participate in the rendering of services under
any of the Ongoing Business Agreement and for the one year period thereafter,
solicit any Seller Service Employee to become employed with Buyer or any of its
Affiliates, or induce or encourage any such Seller Service Employee to leave the
employ or terminate or limit his or her business relationship with Seller or
any Affiliate of Seller; and/or

(b)   with respect to any employee of the National Dragster (a “National Dragster Employee”),
and at no time after the Closing Date, solicit any National Dragster Employee
to become employed with Buyer or any of its Affiliates, or induce or encourage
any such National Dragster Employee to leave the employ or terminate or limit
his or her business relationship with Seller or any Affiliate of Seller; and/or

(c)   with respect to any other employee of Seller or any
of its Affiliates (other than a Seller Service Employee or National Dragster
Employee) (an “Other Seller Employee”), and during the period from the
Closing Date through the second anniversary of the Closing Date, solicit any
Other Seller Employee to become employed with Buyer or any of its Affiliates,
or induce or encourage any such Other Seller Employee to leave the employ or
terminate or limit his or her business relationship with Seller or any Affiliate
of Seller.

ARTICLE
X.

TERMINATION

10.1         Termination Events.  This Agreement and the Transactions may, by
notice given prior to or at the Closing, be terminated as follows:

(a)           by mutual agreement of
Buyer and Seller;

(b)           by Buyer, on the one
hand, or Seller, on the other hand, if the Closing has not occurred (other than
through the failure of any party seeking to terminate this Agreement to comply
with its obligations under this Agreement) on or before the later of (i) December
31, 2007 or (ii) forty (40) days following Buyer’s receipt of notification from
the SEC that it has no further comments to the preliminary Proxy Statement;
provided that in no event shall such date be later than May 30, 2008 (such
later date being referred to herein as the “Outside Date”);

(c)           by either Buyer or
Seller if the Buyer Stockholders’ Meeting shall have been held and Buyer’s
stockholders shall have taken a final vote on the proposal to approve the
Transactions and failed to obtain the Required Buyer Stockholder Approval;

(d)           by Buyer if, prior to
the Required Buyer Stockholder Approval having been obtained, Buyer receives a
written communication from the financial advisor(s) providing the Buyer
Fairness Opinion rescinding, withdrawing or adversely modifying such Buyer
Fairness Opinion;

 65
 

(e)           by Seller if at any
time prior to Closing, Seller receives a written communication from the
financial advisor(s) providing the Seller Fairness Opinion rescinding,
withdrawing or adversely modifying such Seller Fairness Opinion;

(f)            by Seller, on the one
hand, or by Buyer, on the other hand, if a material breach of this Agreement
has been committed by the other party and such material breach has not been
expressly waived in writing;

(g)           (i) by Buyer if
satisfaction of any of the conditions in Section 6.1 becomes
impossible prior to the Outside Date (other than through the failure of Buyer
to comply with its obligations under this Agreement) and Buyer has not
expressly waived such condition in writing on or before termination of this Agreement;
or (ii) by Seller, if satisfaction of any of the conditions in Section 6.2
becomes impossible prior to the Outside Date (other than through the failure of
Seller to comply with its obligations under this Agreement) and Seller has not
expressly waived such condition in writing on or before termination of this
Agreement;

(h)           by Buyer pursuant to Sections
5.12(d) or 5.15; or

(i)            by either Buyer or
Seller if there shall be any law or regulation that makes consummation of the
Transactions illegal or otherwise prohibited or if consummation of the
Transactions would violate any non-appealable Order of any Governmental Entity
having competent jurisdiction.

The party who has
committed a material breach referred to in Section 10.1(f) shall be
referred to in this Article X as the “Breaching Party.”  The party who first gives notice of
termination pursuant to this Section 10.1 shall be referred to herein as
the “Terminating Party”.  The
party who receives a notice of termination pursuant to this Section 10.1 (other
than as the “Breaching Party” pursuant to Section 10.1(f)) shall
be referred to herein as the “Other Party”.

10.2         Effect of Termination.

(a)           If this Agreement is
terminated pursuant to Section 10.1, all further obligations of the
parties under this Agreement will terminate; provided, however,
that:

(i)            if this Agreement is terminated by Buyer,
on the one hand, or Seller, on the other hand, pursuant to Section 10.1(f),
the sole and exclusive remedy of the Terminating Party against the Breaching
Party (in addition to termination of this Agreement) shall be limited to an
action against the Breaching Party for Damages arising out of the material
breach committed by the Breaching Party; provided, however, that
such Damages shall be limited to the actual out-of-pocket costs and expenses
(including without limitations all legal, accounting, financial advisor, and
other third party fees) reasonably incurred by the Terminating Party in
connection with the Transactions from and after November 1, 2006; and

(ii)           if this Agreement is terminated by either
Buyer or Seller as a result of the failure to obtain the Required Buyer
Stockholder Approval in accordance with Section 10.1(c), then Buyer
shall pay to Seller all of the reasonable legal fees, costs and expenses incurred
by Seller in connection with the Transactions (including, without 

 66
 

limitation, the fees of counsel for the
Seller and the fees of counsel for Messrs. Tom Compton and Peter Clifford), all
of the fees and expenses of the provider of the Seller Fairness Opinion, and
all of the fees and expenses of the compensation consultant hired by the
Seller, such payment to be made by Buyer to Seller within ten (10) Business
Days after Buyer receives copies of invoices reflecting the amount of such
fees, costs and expenses.

(b)           Notwithstanding the
foregoing, the provisions of Section 7.3 shall survive any
termination of this Agreement.

ARTICLE XI.

MISCELLANEOUS

11.1         Assignment.  Neither this Agreement nor any of the parties’
rights or obligations hereunder may be assigned by either party without the
prior written consent of the other party; provided, however, that, without such
consent but with prior notice to Seller, Buyer may assign its rights hereunder
to any wholly-owned Subsidiary of Buyer that executes a joinder to and agrees
to be bound by this Agreement; provided, further, that no such assignment shall
release the assignor from any of its obligations hereunder.

11.2         Notices.  All notices, requests, demands, Claims and
other communications which are required or may be given under this Agreement
shall be in writing and shall be deemed to have been duly given when received
if personally delivered; when transmitted if transmitted by facsimile,
electronic or digital transmission method; the first Business Day after it is
sent, if sent for next business day delivery to a domestic address by
recognized overnight delivery service (e.g., Federal Express); and five (5)
Business Days after the date mailed by certified or registered mail, postage
prepaid, if sent by certified or registered mail, return receipt
requested.  In each case notice shall be
sent to:

If to Seller, addressed
to:

National Hot Rod Association

2035 Financial Way

Glendora,
California 91741-4602

Attn:  Mr. Peter W. Clifford, Executive Vice
President and General Manager

Telephone:  (626) 250-2237

Fax:  (626) 914-5481

with a copy to:

Morrison & Foerster LLP

555 West Fifth
Street, Suite 3500

Los Angeles,
California 90013

Attn:  Michael C. Cohen, Esq.

Telephone: (213)
892-5404

Fax:  (213) 892-5454

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If to Buyer, addressed to:

HD Partners Acquisition Corporation

2601 Ocean Park
Boulevard, Suite 320

Santa Monica, CA
90405

Attn:      Eddy Hartenstein

                Bruce
Lederman

Telephone:  (310) 209-8308

Fax:  (310) 399-7303

with a copy to:

Latham &
Watkins LLP

633 W. Fifth Street, Suite 4000

Los Angeles, CA 90071-2007

Attn:       Richard L. Wirthlin, Esq.

Telephone: 
(213) 485-1234

Fax:  (213) 891-8763

or to such other place
and with such other copies as either party may designate as to itself by
written notice to the others.

11.3         Governing Law.  This Agreement shall be construed in
accordance with and governed by the internal laws of the State of California
(without giving effect to its choice of law principles).  Unless otherwise specified, all references to
money amounts are to lawful currency of the United States.

11.4         Entire Agreement.  This Agreement, including the Exhibits
hereto, the Disclosure Letter and the other agreements, documents and written
understandings referred to herein or otherwise entered into or delivered by the
parties hereto on the date of this Agreement (including without limitation the
Ancillary Agreements), constitute the entire agreement and understanding and
supersede all other prior covenants, agreements, undertakings, obligations,
promises, arrangements, communications, representations and warranties, whether
oral or written, by any party hereto or by any director, officer, employee,
agent, Affiliate or Representative of any party hereto.  There are no covenants, agreements,
undertakings or obligations with respect to the subject matter of this
Agreement other than those expressly set forth or referred to herein or in
other agreements and written understandings entered into by the parties hereto
on the date of this Agreement, and no representations or warranties of any kind
or nature whatsoever, express or implied, including any implied warranties of
merchantability or fitness for a particular purpose, are made or shall be
deemed to be made herein by the parties hereto except those expressly made
herein.

11.5         Amendment or Modification.  This Agreement may not be amended except in
an instrument in writing signed on behalf of each of the parties hereto.  No amendment, supplement, modification or
waiver of this Agreement shall be binding unless executed in writing by the
party to be bound thereby.

 68
 

11.6         Waiver. 
Except where a specific period for action or inaction is provided
herein, neither the failure nor any delay on the part of any party in
exercising any right, power or privilege under this Agreement or the documents
referred to in this Agreement shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any such right, power or privilege, nor any
single or partial exercise of any such right, power or privilege, preclude any
other or further exercise thereof or the exercise of any other such right,
power or privilege.  The failure of a
party to exercise any right conferred herein within the time required shall
cause such right to terminate with respect to the transaction or circumstances giving
rise to such right, but not to any such right arising as a result of any other
transactions or circumstances.

11.7         Cumulative Remedies.  Except as otherwise expressly set forth in
this Agreement, and subject to the limitations expressly set forth in this
Agreement, all rights and remedies of either party hereto are cumulative of
each other and of every other right or remedy such party may otherwise have at
law or in equity, and the exercise of one or more rights or remedies shall not
prejudice or impair the concurrent or subsequent exercise of other rights or
remedies.

11.8         Multiple Counterparts.  This Agreement may be executed in one or more
counterparts, each of which when executed shall be deemed an original but all
of which together shall constitute one and the same instrument.

11.9         Expenses.  Except as otherwise expressly provided herein
(including without limitations the provisions of Section 10.2(a)) whether or
not the Transactions are consummated, all costs and expenses incurred in
connection with this Agreement and the Transactions shall be paid by the party
incurring such expenses.  Notwithstanding
the foregoing, (a) all sales, use and Transfer Taxes shall be paid in
accordance with Section 8.2, and (b) each of Buyer and Seller shall pay
one-half of the fees and costs of applying for new Permits and obtaining the
transfer of existing Permits which may be lawfully transferred, (c) Buyer shall
pay all filing fees for the notification, report form and/or other document
required to obtain the Antitrust Approvals, (d) Buyer and Seller shall each pay
one-half of the fees and costs of Grant Thorton LLP incurred in connection with
the preparation of the audited and unaudited financial statements of the
Purchased Business required to be delivered pursuant to Section 5.8 with
respect to any period ending on or prior to March 31, 2007, (e) Buyer shall pay
seventy-five percent (75%) and Seller shall pay twenty-five percent (25%) of
the fees and costs of Grant Thornton LLP incurred in connection with the
preparation of the unaudited financial statements of the Purchased Business
required to be delivered pursuant to Section 5.8 with respect to the period
ending on June 30, 2007, and (f) Buyer shall pay all fees and costs of Grant
Thorton LLP incurred in connection with the preparation of the audited and
unaudited financial statements of the Purchased Business, as required to be
delivered pursuant to Section 5.8, with respect to any period ending after June
30, 2007.

11.10       Severability.  If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other terms or other provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the Transactions is not affected in any manner adverse to any
party.  Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as 

 69
 

to effect the original intent of the parties as closely as possible in
an acceptable manner to the end that the Transactions are fulfilled to the
greatest extent possible.

11.11       Titles. 
The titles, captions or headings of the Articles and Sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.

11.12       Arbitration.

(a)           It is understood and
agreed between the parties hereto that if the Transactions contemplated hereby
are consummated, from and after the Closing Date, any and all claims,
grievances, demands, controversies, causes of action or disputes of any nature
whatsoever (including, but not limited to, tort and contract claims, and claims
upon any law, statute, Order, or regulation), arising out of, in connection
with, or in relation to (i) this Agreement, or (ii) questions of
arbitrability under this Agreement, shall be resolved by Standard Arbitration
or, to the extent reasonably requested by either party, Expedited Arbitration.

(b)           By signing this
Agreement, the parties hereto are giving up their respective right to a jury
trial, to the fullest extent that such waiver is enforceable under applicable
Legal Requirements.

11.13       Burden and Benefit.  This Agreement shall be binding upon and
shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns.  This
Agreement and all of its conditions and provisions are for the sole and
exclusive benefit of the parties hereto and their respective successors and
permitted assigns, and nothing in this Agreement, express or implied, is
intended to confer upon any Person other than the parties hereto any rights or
remedies of any nature whatsoever under or by reason of this Agreement or any
provision hereof; provided, however, that any Person that is not a party to
this Agreement but, by the terms of Section 7.2, is entitled to
indemnification, shall be considered a third-party beneficiary of this
Agreement, with full rights of enforcement as though such Person was a
signatory to this Agreement.

11.14       Legal Fees.  If any party to this Agreement brings an
action to enforce its rights under this Agreement prior to the Closing Date,
the prevailing party shall be entitled to recover its costs and expenses,
including without limitation reasonable legal fees, incurred in connection with
such action, including any appeal of such action.  From and after the Closing Date, the recovery
of such legal fees and other costs and expenses shall be subject to the
provisions set forth in Section 11.12(a).

11.15       Representation by Counsel.  Each party hereto represents and agrees with
each other that it has been represented by or had the opportunity to be
represented by, independent counsel of its own choosing, and that it has had
the full right and opportunity to consult with its respective attorney(s), that
to the extent, if any, that it desired, it availed itself of this right and
opportunity, that it or its authorized officers (as the case may be) have
carefully read and fully understand this Agreement in its entirety and have had
it fully explained to them by such party’s respective counsel, that each is
fully aware of the contents thereof and its meaning, intent and legal effect,
and that it or its authorized officer (as the case may be) is competent to
execute this Agreement and has executed this Agreement free from coercion,
duress or undue influence.

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11.16       Specific Performance.  Each of the parties hereto acknowledges and
agrees that the other parties would be damaged irreparably in the event any of
the provisions of this Agreement are not performed in accordance with its
specific terms or otherwise are breached. 
Accordingly, each of the parties hereto agrees that the other parties
shall be entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically this Agreement and the
terms and provisions hereof (including, but not limited to, the right to compel
a party to consummate the transactions contemplated hereby) in any action
instituted in any court of the United States or any state thereof having
jurisdiction over the parties and the matter, in addition to any other remedy
to which they may be entitled, at law or in equity.

11.17       Construction of Agreement.  Each of the parties hereto have participated
in the drafting and preparation of this Agreement and the Exhibits hereto,
which shall be construed fairly in accordance with their respective terms, and
not in favor of or against any particular party because such party drafted it.

11.18       Limitation of Liability.  In addition to the other limitations set
forth in this Agreement, including, without limitation, Section 10.2, and
notwithstanding anything else to the
contrary which may be contained in this Agreement, in no event shall any party
hereto be liable for any punitive damages arising from a claim brought by
another party hereto occasioned by any failure to perform or the breach of any
representation, warranty, covenant or other obligation under this Agreement.

[Signature Page Follows]

 71

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed on
their respective behalf, by their respective officers thereunto duly
authorized, all as of the day and year first above written.

	
  

  	
   

  	
  BUYER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HD
  PARTNERS ACQUISITION 

  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Eddy W.
  Hartenstein

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: Eddy W.
  Hartenstein

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SELLER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NATIONAL
  HOT ROD ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/   Dallas Gardner

  	
   

  
	
   

  	
   

  	
    Dallas Gardner, Chairman of the Board

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/   Peter W. Clifford

  	
   

  
	
   

  	
   

  	
    Peter W.
  Clifford, Executive Vice 
   President and General Manager

  
						

 

 S-1

ANNEX I

DEFINED
TERMS

As used herein, the terms below shall have the
following meanings.  Any of such terms,
unless the context otherwise requires, may be used in the singular or plural,
depending upon the reference.

“Accounts Payable” shall mean accounts payable
and accrued expenses of Seller.

“Accounts Receivable” shall mean all accounts
receivable of Seller.

“Acquisition Subsidiary” shall have the meaning
set forth in Section 11.1.

“Adjustment Amount” shall mean the sum,
expressed as a positive or negative number, of the following: (i) the amount by
which the Seller Loan Balance set forth on the Final Closing Statement exceeds
the Seller Loan Balance set forth on the Estimated Closing Statement plus
(ii) the amount (if any) by which the Capital Expenditures Balance set forth on
the Estimated Closing Statement exceeds the Capital Expenditures Balance set
forth on the Final Closing Statement plus (iii) the amount by which the
Purchased Business Cash Balance set forth on the Estimated Closing Statement
exceeds the Purchased Business Cash Balance set forth on the Final Closing
Statement plus (iv) the amount by which the Assumed Accounts Payable set
forth on the Final Closing Balance Sheet exceeds the Assumed Accounts Payable
set forth on the Estimated Closing Balance Sheet plus (v) the amount by
which the Assigned Accounts Receivable set forth on the Estimated Closing
Balance Sheet exceeds the Assigned Accounts Receivable set forth on the Final
Closing Balance Sheet.  In the event that
the Adjustment Amount is a positive number, such amount is referred to as a “Closing
Shortfall.”  In the event that the
Adjustment Amount is a negative number, such amount is referred to as a “Closing
Surplus.”

“Aggregate Purchase Price” shall have the
meaning set forth in Section 1.4.

“Agreement” shall mean this Asset Purchase
Agreement.

“Allocations” shall have the meaning set forth
in Section 1.4.

“Ancillary Agreements” shall mean the Office
Lease, the Registration Rights Agreement, the Ongoing Business Agreements, the
NHRA-HDP Member Track Agreement, the Real Property Conveyance Documents and all
instruments executed, filed or otherwise prepared, exchanged or delivered in
accordance with this Agreement.

“Antitrust Approvals” shall have the meaning
set forth in Section 5.3(a).

“Antitrust Laws” shall mean all statutes,
rules, regulations and other laws that are designed or intended to prohibit,
restrict or regulate actions or transactions having the purpose or effect of
monopolization, lessening of completion or restraint of trade.

“APA Composite Mark” shall have the meaning set
forth in Section 3.16(e).

 I-1
 

“Assigned Accounts Receivable” shall mean any
Accounts Receivable accrued or invoiced with respect to services or products to
be provided by the Purchased Business, solely to the extent (i) such Accounts
Receivable is allocable to the Purchased Business and (ii) such services or
products are to be provided after the Closing Date.

“Assumed Accounts Payable” shall mean any
Accounts Payable owed or accrued with respect to services or products to be
provided to the Purchased Business, solely to the extent (i) such Accounts
Payable is allocable to the Purchased Business, (ii) such services or products
are to be provided after the Closing Date and (iii) such Accounts Payable arose
from the operation of the Purchased Business in the Ordinary Course of
Business.

“Assumed Liabilities” shall have the meaning
set forth in Section 1.2.

“Best Efforts” shall mean the commercially
reasonable efforts that a prudent Person desirous of achieving a result would
use in similar circumstances to achieve such result as expeditiously as
possible on commercially reasonable terms and conditions.

“Books and Records” shall mean (i) all books,
records, accounts and other documents of Seller used primarily or held for use
primarily in the Purchased Business (other than books, records and other
documents related solely to Excluded Assets), including without limitation
customer and supplier lists and files; distribution lists; mailing lists; sales
materials; accounting records; internal audit work papers; purchasing and sales
records; personnel records; operating, production and other manuals; computer
program data records; technical data; records of product specifications;
records relating to work standards and quality control records and procedures;
inventory records; advertising and promotional materials and similar
information, plans, files, documents and records; packaging design and artwork
records; records regarding Intellectual Property Assets; cost and pricing information;
appraisals; and engineering and environmental studies; and (ii) the portions
related to the Purchased Business of all other such books, records and other
documents used or held for use in the Purchased Business (other than books,
records and other documents related solely to Excluded Assets) that also are
used or held for use in the Retained Business, but excluding any portion of
such records that cannot physically be segregated from portions of records
related to the Retained Business. 
Notwithstanding the foregoing, “Books and Records” shall not include
information that, if delivered to Buyer in any form, would violate any privacy
laws, regulations, rules, opinions, statements or positions of a Governmental
Entity.

“Business Day” shall mean any day other than a
Saturday, Sunday or day on which banks are permitted to close in Los Angeles,
California.

“Buyer” shall have the meaning set forth in the
first paragraph of this Agreement.

“Buyer Accepted Title Matters” shall mean, with
respect to the Owned Real Property, those exceptions to title (including survey
matters), if any, accepted or approved or deemed accepted or approved by Buyer
pursuant to Section 5.12.

“Buyer Board” shall have the meaning set forth
in the recitals of this Agreement.

 I-2
 

“Buyer Board Recommendation” shall have the
meaning set forth in Section 5.10(b).

“Buyer Capital Stock” shall mean the Buyer
Common Stock and Buyer Preferred Stock.

“Buyer Common Shares” shall have the meaning
set forth in Section 1.4(a).

“Buyer Common Stock” shall mean the common
stock, par value $0.001 per share, of Buyer.

“Buyer Fairness Opinion” shall have the meaning
set forth in Section 5.10(c).

“Buyer Indemnified Parties” shall have the
meaning set forth in Section 7.2(b).

“Buyer IPO Shares” shall have the meaning set
forth in the definition of “Required Buyer Stockholder Approval.”

“Buyer Material Adverse Effect” or “Buyer
Material Adverse Change” shall mean 
(a) any material adverse effect on or change in the ability of a Buyer
to consummate the Transactions or (b) any event or condition that would be
reasonably likely to have, with the passage of time, a Buyer Material Adverse
Effect or a Buyer Material Adverse Change; provided, however,
that the following shall be excluded from any determination as to whether a
Buyer Material Adverse Effect or Buyer Material Adverse Change has occurred or
may occur: changes, effects, developments or circumstances (i) affecting the
(A) the laws or regulations relating to the sport of drag racing, (B) United
States securities markets generally or (C) economic, regulatory, or political
conditions generally, in each case, to the extent that Buyer is not
disproportionately impacted thereby; (ii) resulting from the announcement or
performance of this Agreement or the Transactions contemplated hereby; or (iii)
resulting from the filing of any litigation relating to the matters disclosed
in Schedule 3.11, not resulting in the entry of a temporary restraining
order, preliminary or permanent injunction prior to the Closing Date.

“Buyer Preferred Stock” shall mean the
preferred stock, par value $0.001 per share, of Buyer.

“Buyer Prospectus” shall have the meaning set
forth in Section 7.3.

“Buyer SEC Documents” shall have the meaning
set forth in Section 4.8.

“Buyer Stockholders’ Meeting” shall have the
meaning set forth in Section 0.

“Capital Expenditures Balance” shall mean an
amount equal to the lesser of (i) the aggregate amount actually expended by
Seller prior to the Closing Date in connection with the completion of the
Gainesville Capital Improvement Project and (ii) Two Million Four Hundred
Thousand Dollars ($2,400,000).

“CERCLA” shall mean the United States
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
§ 9601 et seq., as amended.

 I-3
 

“Claim” shall have the meaning set forth in Section 7.2(d).

“Claim Notice” shall have the meaning set forth
in Section 7.2(d).

“Cleanup” shall mean any investigation,
cleanup, removal, containment or other remediation or response actions.

“Closing” shall have the meaning set forth in Section 2.1.

“Closing Payment” shall have the meaning set
forth in Section 1.4(b).

“COBRA” shall have the meaning set forth in Section
5.11(d).

“Confidential Information” shall have the
meaning set forth in Section 9.3(b).

“Confidentiality Agreement” means that certain
and sole Confidentiality Agreement, executed by Buyer and Seller in 2006 in
connection with the transactions contemplated hereby.

“Consent” shall mean any approval, consent,
ratification, waiver, or other authorization from any Person (including any
Governmental Authorization).

“Contract” shall mean any agreement, contract,
note, loan, evidence of indebtedness, purchase order, letter of credit,
indenture, security or pledge agreement, covenant not to compete, license,
lease, instrument, commitment, consensual obligation, commercial relationship
evidenced by a course of dealing (whether or not legally binding), promise or
undertaking (whether written or oral and whether express or implied).

“Contract Rights” shall mean (i) all of the
rights and obligations of Seller or any of its Subsidiaries under the
Transferred Contracts primarily related to or primarily used in connection with
the Purchased Business (other than Seller Contracts related solely to Excluded
Assets or Excluded Liabilities), and (ii) all of the rights and obligations of
Seller or any of its Subsidiaries under Shared Contracts to the extent assigned
or provided to Buyer pursuant to Section 5.3(c).

“Damages” shall have the meaning set forth in Section 7.2(a).

“Deeds” shall mean (i) a grant deed duly
executed, notarized and otherwise in recordable form for Owned Real Properties
located in California, and (ii) a warranty deed duly executed, notarized and
otherwise in recordable (or the equivalent of a warranty deed or a grant deed)
for the Owned Real Properties located in States other than California, and
(iii) in the case of each deed described in clauses (i) and (ii) of this
definition, subject only to the Permitted Encumbrances.

“Default” shall mean (i) a breach of or default
under any Contract, (ii) the occurrence of an event that with the passage of
time or the giving of notice or both would constitute a breach of or default
under any Contract or (iii) the occurrence of an event that with 

 I-4
 

or without the passage of
time or the giving of notice or both would give rise to a right of termination,
renegotiation or acceleration under any Contract.

“Deferred Revenue Amount” shall mean the amount
of monies collected by Seller as of the close of business on the Closing Date
to the extent that such monies are attributable to services or products to be
provided by the Purchased Business after the Closing Date.

“Disclosure Letter” shall mean the disclosure
letter prepared and delivered by Seller for and to Buyer and dated as of the
date of this Agreement which sets forth the exceptions to the representations
and warranties contained herein and certain other information called for by
this Agreement.  Unless otherwise
specified, each reference in this Agreement to any numbered schedule is a
reference to that numbered schedule which is included in the Disclosure Letter.

“Employment Statute” shall mean any federal,
state or municipal employment, labor law or employment discrimination law,
including without limitation, the National Labor Relations Act, Title VII of
the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age
Discrimination in Employment Act of 1967, the Americans with Disabilities Act
of 1990, the Fair Labor Standards Act, ERISA, the WARN Act, the Family and Medical
Leave Act, the Immigration Reform and Control Act of 1986, the California Fair
Employment and Housing Act, the California Family Rights Act, the California
Labor Code, and all amendments to each such Act as well as any regulations
promulgated thereunder.

“Encumbrance” shall mean any charge, claim,
community property interest, condition, equitable interest, lien, option,
pledge, security interest, deed of trust, mortgage, right-of-way, easement,
encroachment, servitude, right of first option, right of first refusal, right
of first offer or similar restriction, including any restriction on use, voting
(in the case of any security or equity interest), transfer, receipt of income
or exercise of any other attribute of ownership.

“Environment” shall mean soil, land surface or
subsurface strata, surface waters (including navigable waters, ocean waters,
streams, ponds, drainage basins and wetlands), groundwater, drinking water
supply, stream sediments, ambient air (including indoor air), plant and animal
life and any other environmental medium or natural resource.

“Environmental Claim” means any investigation,
review, hearing, claim, action, suit, litigation or proceeding by any Person
relating to Liability or potential Liability (including Liability or potential
Liability for enforcement, investigatory costs, Cleanup costs, governmental
response costs, natural resource damages, property damage, personal injury,
fines or penalties) arising out of, based on or resulting from (i) the
presence, discharge, emission, Release or Threat of Release of any Hazardous
Materials at the Facilities, (ii) circumstances forming the basis of any
violation or alleged violation of any Environmental Laws applicable to the
Facilities or Environmental Permits required for the Facilities, or
(iii) otherwise relating to obligations or Liabilities under any
Environmental Law applicable to the Facilities.

“Environmental, Health and Safety Liabilities”
shall mean any cost, damage, expense, Liability, obligation or other
responsibility arising from or under any Environmental Law or Occupational
Safety and Health Law and consisting of or relating to:

 I-5
 

(a)       any
environmental, health or safety matters or conditions (including on-site or
off-site contamination, occupational safety and health and regulation of
chemical substances or products);

(b)       fines,
penalties, judgments, awards, settlements, legal or administrative proceedings,
damages, losses, claims, demands and response, investigative, remedial,
monitoring or inspection costs and expenses (including legal and consultant
costs and expenses) arising under any Environmental Law or Occupational Safety
and Health Law;

(c)       financial
responsibility under any Environmental Law or Occupational Safety and Health
Law for Cleanup costs or corrective action, including any Cleanup required by
applicable Environmental Law or Occupational Safety and Health Law (whether or
not such Cleanup has been required or requested by any Governmental Entity or
any other Person) and for any natural resource damages; or

(d)       any
other compliance, corrective, investigative or remedial measures required under
any Environmental Law or Occupational Safety and Health Law.

The terms “removal,” “remedial” and “response action”
include, among other things, the types of activities covered by CERCLA.

“Environmental Law” shall mean all federal,
state, regional, district, local and foreign laws, all rules or regulations
promulgated thereunder and all Orders, Consent orders, judgments, common law
decisions, rulings, notices, notice requirements, policies, agency guidelines
or restrictions and licenses, permits or demand letters issued, promulgated or
entered pursuant thereto, relating to pollution or protection of the
Environment, including without limitation (i) laws relating to emissions,
discharges, Releases or Threats of Release of pollutants, contaminants,
chemicals, materials, sewage, wastes or other substances into the Environment
and (ii) laws relating to the identification, generation, manufacture,
processing, distribution, use, treatment, storage, disposal, recovery,
transport or other handling of pollutants, contaminants, chemicals, industrial
materials, sewage, wastes or other substances. 
Environmental Laws shall include, without limitation, CERCLA, the
Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the
Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.,
as amended, the Safe Drinking Water Act (21 U.S.C. § 349, 42 U.S.C.
§§ 201, 300f), the Toxic Substances Control Act (15 U.S.C. § 2601 et
seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.) or any
other similar federal, state, regional, district,
local or foreign law of similar effect, each as amended.

“Environmental Permits” shall mean all
licenses, permits, approvals, authorizations, Consents or Orders of, or filings
with, any Governmental Entity required for the operation of the Facilities
under Environmental Laws.

“ERISA” shall mean the Employee Retirement
Income Security Act of 1974 or any successor law, and regulations and rules
issued pursuant to that Act or any successor law.

“ERISA Affiliate” shall mean any Person which
is (or at any relevant time was) a member of a “controlled group of
corporations” with or under “common control” with Seller within the meaning of
Section 414(b) or (c) of the Code or which is otherwise (or at any relevant 

 I-6
 

time was) required to be
treated, together with Seller as a single employer under Sections 414(m) or (o)
of the Code.

“Estimated Closing Balance Sheet” shall have
the meaning set forth in Section 1.5(a).

“Estimated Closing Statement” shall have the
meaning set forth in Section 1.5(a).

“Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.

“Excluded Assets” shall mean the following
assets, properties, goodwill and rights of Seller and its Subsidiaries, which
are not to be acquired by Buyer hereunder:

(a)           the
minute books, stock records and corporate seals of Seller;

(b)           all
Books and Records that Seller is required under applicable Legal Requirements
to retain in original form; provided that in each case Seller shall have
delivered copies thereof to Buyer to the extent that delivery of such Books and
Records is required hereunder;

(c)           all
Permit Rights to the extent not transferable by law or by the terms of any
Permit, subject to Seller’s compliance in full with its obligations under Section
5.3(d);

(d)           all
Contract Rights that cannot be assigned to Buyer after Seller has fully
complied with Section 5.3(c);

(e)           all
rights and obligations of Seller under all employment agreements,
non-competition agreements and offer letters listed under item 2 of Schedule
3.15(a);

(f)            all
rights of Seller under this Agreement and the Ancillary Agreements;

(g)           all
business equipment and similar tangible assets normally located at, on or in
Seller’s corporate offices at 2035 Financial Way, Glendora Way, California, except
for computer software primarily related to or used primarily in connection
with the Purchased Business and the information contained therein, all Books
and Records, all office furniture, personal computers, personal office supplies
and equipment of Transferring Employees (other than Tangible Personal Property
that is subject to a lease that is not assigned to Buyer pursuant to the terms
of this Agreement);

(h)           all
known or unknown, liquidated or unliquidated, contingent or fixed, rights,
claims or causes of action, choses in action, rights of recovery and rights of
set-off of any kind, and indemnities against any Person that Seller may have
against any Person to the extent related to any of the Excluded Assets or the
Excluded Liabilities;

(i)    all
cash, cash equivalents and short-term investments in excess of the Purchased
Business Cash Balance;

 I-7
 

(j)            all
Accounts Receivable (other than Assigned Accounts Receivable);

(k)           all
claims for refund of Taxes and other governmental charges of whatever nature;

(l)            all
rights in connection with and assets of any Seller Plans;

(m)          all
Intellectual Property Assets (other than the Transferred Intellectual Property
Assets);

(n)           any
still negatives, film, printed photographs and still digital images housed at
the Museum as of the date hereof;

(o)           the
Member List (as defined in the form of Commercialization Agreement) of Seller’s
membership program; and

(p)           any
and all other assets, properties, goodwill and rights of Seller that are not
related to, used in or necessary for the Purchased Business.

“Excluded Liabilities”
shall have the meaning set forth in Section 1.3.

“Facilities” shall
mean the Owned Real Property and the Leased Real Property, including without
limitation the Racetracks, garages, warehouses, offices, administration
buildings, improvements and all Real Property and related facilities located
thereon or used or held for use by Seller or any of its Subsidiaries in
connection with the conduct of the Purchased Business.

“Final Closing Balance
Sheet” shall have the meaning set forth in Section 1.5(b).

“Final Closing Statement” shall have the
meaning set forth in Section 1.5(b).

“GAAP” shall mean
United States generally accepted accounting principles and practices applied on
a consistent basis.

“Gainesville Capital Improvement Project” shall
mean the planned capital improvement construction project, including, without
limitation, new tower/office building, new electrical wiring, new front
entrance, restrooms and the like, for the Racetrack located in Gainesville,
Florida, the details of which are set forth on Annex II hereto.

“Gap Notice” shall
have the meaning set forth in Section 5.13.

“Good Standing”
with respect to a company or corporation means that such company or corporation
is current in all required filings with any Governmental Entity in its
incorporating jurisdiction or jurisdiction(s) where it carries on business, as
applicable, and in all payments of governmental fees or taxes in such
applicable jurisdiction(s), where the failure to make such filings or payments
would make it liable to cease to exist under the laws of the incorporating
jurisdiction or jurisdiction(s) where it carries on business, as applicable.

 I-8
 

“Governmental Authorization” shall mean any
approval, Consent, license, permit, waiver or other authorization issued,
granted, given or otherwise made available by or under the authority of any
Governmental Entity or pursuant to any Legal Requirement.

“Governmental Prohibition” shall have the
meaning set forth in Section 6.1(c).

“Group Health Plan” shall mean any group health
plan as defined in Section 5000(b)(1) of the Code.

“Hazardous Activity” shall mean the
distribution, generation, handling, importing, management, manufacturing,
processing, production, refinement, Release, storage, transfer, transportation,
treatment or use (including any withdrawal or other use of groundwater) of
Hazardous Materials in, on, under, about or from the Facilities or any part
thereof into the Environment and any other act, business, operation or thing
that increases the danger or risk of danger or poses an unreasonable risk of
harm to Persons or property on or off the Facilities or that may affect the
value of the Facilities or the Purchased Business.

“Hazardous Materials” shall mean any waste or
other substance that is listed, defined, designated or classified as, or
otherwise determined to be, hazardous, radioactive infectious, reactive,
corrosive, ignitable, flammable or toxic or a pollutant or a contaminant
subject to regulation, control or remediation under any Environmental Law
(whether solids, liquids or gases), including any mixture or solution thereof,
and specifically including petroleum and all derivatives thereof or synthetic
substitutes therefor, polychlorinated biphenyls, radon gas, urea formaldehyde
and asbestos or asbestos-containing materials.

“Headquarters Building” means that certain
office building located at 2035 Financial Way in Glendora, California.

“Historical Financial Statements” shall have
the meaning set forth in Section 3.4(a).

“HSR Act” shall mean the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended.

“Indebtedness” means, with respect to Seller,
the following, without duplication:

(a)           all items which, in
accordance with GAAP, would be included in determining total Liabilities as
shown on the liability side of a balance sheet of Seller at the date as of
which Indebtedness is to be determined, including without limitation
(i) all indebtedness of Seller or any of its Subsidiaries for borrowed
money or for the deferred purchase price of any property or services;
(ii) any other indebtedness of Seller or any of its Subsidiaries which is
evidenced by a note, bond, debenture or similar instrument; (iii) all
obligations of Seller under capital leases; (iv) all Liabilities of Seller or
any of its Subsidiaries for overdrafts or outstanding checks; (v) all
Liabilities of Seller for current trade Liabilities incurred in the Ordinary
Course of Business; (vi) all Liabilities of Seller or any of its
Subsidiaries for accrued expenses including, without limitation, employees’
unused vacation, bonuses, severance, sick time and personal time and health and
welfare benefits and warranty and other reserves; and (vii) all accrued
but unpaid 

 I-9
 

interest, any premiums payable or any other charges on
any of the obligations set forth in clauses (i) through (vi) above;

(b)           all Liabilities
secured by any Encumbrance on any Purchased Asset or any property owned by
Seller or any of its Subsidiaries whether or not Seller or any of its
Subsidiaries has assumed or otherwise becomes liable for the payment thereof;

(c)           any Liabilities for
financial incentives from any Governmental Entity which will come due or
otherwise require prepayment as a result of the consummation of the
Transactions;

(d)           all obligations of
other Persons which Seller or any of its Subsidiaries has guaranteed; and

(e)           all reimbursement obligations
in connection with letters of credit or letter of credit guaranties issued for
the account of Seller or any of its Subsidiaries.

“Insurance Policies” shall mean any insurance
policy maintained, or contract of insurance entered into, by Seller or any of
its Subsidiaries in connection with the Purchased Business or with respect to
any Purchased Assets.

“Intellectual Property” shall mean: (a)
patentable inventions and discoveries, improvements thereto, and patents,
patent applications, invention disclosures, and other rights of invention,
worldwide, including without limitation any reissues, divisions, continuations
and continuations-in-part, provisionals, reexamined patents or other
applications or patents claiming the benefit of the filing date of any such
application or patent; (b) trademarks, service marks, trade names, trade dress,
logos, Internet domain names, product names and slogans, including any common
law rights, registrations, and applications for registration for any of the
foregoing, and the goodwill associated with all of the foregoing, worldwide;
(c) copyrightable works, all rights in copyrights, including moral rights and
copyrights, and other works of authorship, and any applications, registrations
and renewals in connection therewith, worldwide; (d)Trade Secrets; (e) all
claims, causes of action and rights to sue for past, present and future
infringement, misappropriation or unconsented use of any of the Intellectual
Property, the right to file applications and obtain registrations, and all
products, proceeds and revenues arising from or relating to any and all of the
foregoing, throughout the world; and (f) any other proprietary, intellectual
property and other rights relating to any or all of the foregoing anywhere in
the world.

“Intellectual Property Assets” shall mean all
Intellectual Property owned by or licensed to Seller or any of its Subsidiaries
primarily related to or primarily used in connection with, or necessary for,
the conduct of the Purchased Business.  “Intellectual
Property Assets” shall include without limitation all of the rights of
Seller in and to (i) the Legacy Marks, (ii) the Internet domain name
http://www.nhra.com and (iii) the Transferred Intellectual Property Assets.

“Internal Revenue Service” shall mean the United
States Internal Revenue Service or any successor agency.

 I-10
 

“Inventory” shall mean all merchandising
inventory of finished products bearing the Legacy Trademarks held for sale in
the Purchased Business.

“Key Definitions Agreement” shall have the
meaning set forth in the recitals of this Agreement.

“Key Executive Agreements” shall have the
meaning set forth in the recitals of this Agreement.

“Knowledge” of Seller shall mean the actual
knowledge, after reasonable inquiry, of Peter Clifford, Tom Compton, Linda
Louie, Gary Darcy, Vice President of Marketing, and any other Business Employee
at the level of vice president or higher.

“Leased Real Properties” shall have the meaning
set forth in Section 3.6(b); provided, however, that the term “Leased
Real Properties” shall not include any real property, buildings, improvements,
facilities and fixtures that are identified as “National Event Leases” in
Schedule 3.12(a) of the Disclosure Schedule.

“Leasehold Improvements” shall mean all
leasehold improvements situated at, on or in the Leased Real Property and
owned, leased or used by Seller or any of its Subsidiaries.

“Loan Payoff Amount” shall have the meaning set forth in Section 1.2(d).

“Material Adverse
Governmental Determination” shall mean a determination by any Governmental
Entity (i) that the sale of the Purchased Assets would either (x) violate any applicable
Legal Requirement or (y) result in the loss of Seller’s tax-exempt status and
(ii) which the parties’ have reasonably determined in good faith is highly
likely to result in such Governmental Entity seeking a Governmental Prohibition
either prior to or after Closing.

“Material Consent” shall mean the Governmental
Authorizations and Consents of the third-parties to the Contracts listed on Schedule
3.2(c).

“Mutual
Insurance” shall have the meaning set forth in Section 5.17.

“NHRA-HDP
Member Track Agreement” shall mean the NHRA Member Track Agreement,
attached hereto as Exhibit O, to be entered into between Buyer and
Seller at Closing with respect to each Racetrack.

“NHRA Member
Track Agreement” shall have the meaning set forth in Section 1 of
the Sanctioning Agreement.

“Non-Assignable
Seller Loan Agreements” shall have the meaning set forth in Section 1.2(d).

“Non-Trust Assets” shall have the meaning set
forth in Section 7.3.

“Occupational Safety and Health Law” shall mean
any Legal Requirement designed to provide safe and healthful working conditions
and to reduce occupational safety and health hazards, and any program, whether
governmental or private (including those promulgated 

 I-11
 

or sponsored by industry
associations and insurance companies), designed to provide safe and healthful
working conditions.

“Office Lease” shall mean the Commercial Office
Lease, attached hereto as Exhibit H, to be entered into between Buyer,
as lessor, and Seller, as lessee, at Closing with respect to the Headquarters
Building.

“Order” shall mean any award, decision,
injunction, judgment, order, ruling, subpoena or verdict entered, issued, made
or rendered by any court, administrative agency or other Governmental Entity or
by any arbitrator.

“Organizational Documents” shall mean (a) the
articles or certificate of incorporation, all certificates of determination and
designation, and the bylaws of a corporation; (b) the partnership agreement and
any statement of partnership of a general partnership; (c) the limited
partnership agreement and the certificate or articles or declaration of limited
partnership of a limited partnership; (d) the operating agreement, limited
liability company agreement and the certificate or articles of organization or
formation of a limited liability company; (e) the declaration of trust or
similar document of any trust; (f) any charter or similar document adopted or
filed in connection with the creation, formation or organization of a Person;
and (g) any amendment to any of the foregoing.

“Outside Date” shall have the meaning set forth
in Section 10.1(b).

“Owned Real Properties” shall have the meaning
set forth in Section 3.6(a) and shall include, without limitation, (a)
the Racetracks located in (i) Gainesville, Florida, (ii) Commerce, Georgia,
(iii) Clermont, Indiana and (iv) Hebron, Ohio, in each case, operated by Seller
or one of its Subsidiaries and (b) the Headquarters Building.

“Permit Rights” shall mean all of the rights
and obligations of Seller or any of its Subsidiaries under the Permits
primarily related to or primarily used in connection with the Purchased
Business and all pending applications therefor and renewals thereof, including
without limitation those Permits set forth on Schedule 3.10(b).

“Permits” shall mean all licenses, permits,
franchises, approvals, authorizations, certificates, easements, variances,
exemptions, Consents or Orders of, or filings with, any Governmental Entity, or
any other Person, necessary for the present conduct of, or related to the
operation of the business of such Person under any Legal Requirements including
without limitation any Environmental Permits.

“Permitted Encumbrances” shall mean
(i) Encumbrances consisting of zoning or planning restrictions, easements,
permits and other restrictions or limitations on the use of Real Property or
irregularities in title thereto which do not materially detract from the value
of, or materially impair the use of, such property in connection with the
Purchased Business, (ii) Encumbrances for current Taxes, assessments or
governmental charges or levies on property not yet due, (iii) mechanic’s,
materialmen’s and similar liens arising in the Ordinary Course of Business, in
each case, to the extent released at or prior to Closing, and (iv) the
Encumbrances securing Seller’s obligations under the Seller Loan Agreements,
unless paid off at Closing by Buyer or Seller pursuant to Section 1.2(d) above.

 I-12
 

“Person” shall mean any individual, corporation
(including any non-profit corporation), general or limited partnership, limited
liability company, joint venture, estate, trust, association, organization,
labor union or other entity or Governmental Entity.

“Post-Closing Tax Period” shall mean any Tax period beginning
after the Closing Date and that portion of any Straddle Period beginning after
the Closing Date.

“Pre-Closing Tax Period” shall mean any Tax period ending on or
before the Closing Date and the portion of any Straddle Period ending on the
Closing Date.

“Prepaid Purchased Business Expense Balance”
shall mean the amount of expenses prepaid by Seller as of the close of business
on the Closing Date to the extent that such prepaid expenses constitute a
pre-payment of an Assumed Accounts Payable.

“Proxy Statement” shall mean the proxy
statement to be mailed to Buyer’s stockholders in connection with the Buyer
Stockholders’ Meeting.

“Purchased Assets” shall mean all of the Seller’s
and its Subsidiaries’ rights, title and interests in and to (i) the Racetracks,
(ii) the Headquarters Building, (iii) the Video Library and Photo Archive, and
(iv) the Purchased Business, including, without limitation, all of the rights,
title and interests of Seller or any of its Subsidiaries in and to the following:

(a)       all cash equal to the Purchased Business
Cash Balance;

(b)       all Assigned Accounts Receivable;

(c)       all Contract Rights;

(q)       all
Owned Real Properties;

(r)        all
Leased Real Properties and Real Property Leases;

(s)       all
Leasehold Improvements;

(t)        all
Tangible Personal Property;

(u)       all
Inventory;

(v)       all
Books and Records;

(w)      all
Permit Rights;

(x)        all
Transferred Intellectual Property Assets;

(y)       all
of Seller’s or any of its Subsidiaries’ available merchandising and marketing materials,
sales literature, promotional literature, customer, supplier and distributor
lists, art work, photographs, display units primarily used in or primarily held
for use in the Purchased Business and telephone and fax numbers used
exclusively at the Facilities in connection with the Purchased Business
(collectively, the “Commercial Properties”); provided, 

 I-13
 

however, that
Commercial Properties shall expressly exclude the Member List (as defined in
the form of Commercialization Agreement) of Seller’s membership program, which
is an Excluded Asset.

(z)        all
rights arising in connection with the operation of the Purchased Business on or
after the Closing Date under or pursuant to all warranties, representations and
guarantees, whether express or implied, made by suppliers in connection with
the Purchased Assets or services furnished to the Purchased Business to the
extent such warranties, representations and guarantees are assignable;

(aa)     all
goodwill associated with the Purchased Business; and

(bb)     all other assets, properties and other
intangible rights of Seller or any of its Subsidiaries primarily related to or
primarily used in connection with the Purchased Business.

“Purchased Business Cash Balance” shall mean an
amount of cash equal to product of the following formula: (x) Deferred Revenue
Amount minus (y) Prepaid Purchased Business Expense Balance.

“Purchased Business Employee” shall the
employees of Seller listed on Schedule 3.15(a).

“Purchased Business Financial Statements” shall
have the meaning set forth in Section 3.4(b).

“Purchase Price Reduction” shall have the
meaning set forth in Section 1.4(c).

“Real Property” shall mean (a) one or more
parcels of land, together with all privileges, entitlements, development
rights, air rights, water rights, easements and other appurtenances pertaining
to such land, including, without limitation, all right, title and interest held
by the owner of such land in and to adjacent streets, roads, alleys, and
rights-of-way, and  minerals, oil, gas,
and any other hydrocarbon substances, and (b) all the buildings, structures,
fixtures and other improvements affixed to or located on such land, excluding
fixtures owned by tenants, if any, of such buildings or owned by other third
parties.

“Real Property Conveyance Documents” shall have
the meaning set forth in Section 5.14.

“Real Property Leases” shall have the meaning
set forth in Section 3.6(b); provided, however, that the term “Real
Property Leases” shall not include any of the Transferred Contracts identified as
“National Event Leases” in Schedule 3.12(a) of the Disclosure Schedule.

“Release” shall mean any spilling, leaking,
pumping, pouring, injecting, emitting, discharging, depositing, escaping,
leaching, migrating, dumping or other releasing into the Environment or the
workplace, whether intentional or unintentional and otherwise defined in any
Environmental Law.

 I-14
 

“Registration Rights Agreement” shall mean the
Registration Rights Agreement, attached hereto as Exhibit I, to be
entered into between Buyer and Seller at Closing.

“Remedial Action” means all actions required by
or pursuant to Environmental Law, including corrective actions, to
(i) investigate, clean up, remove, treat or in any other way address any
Hazardous Material; (ii) prevent the Release of any Hazardous Material so
it does not endanger or threaten to endanger public health or welfare or the
indoor or outdoor Environment; or (iii) perform pre-remedial studies
and investigations or post-remedial monitoring and care.

“Required Buyer Stockholder Approval” shall
mean (i) an affirmative vote by a majority of the shares of Buyer Common Stock
issued in connection with Buyer’s initial public offering consummated on June
7, 2006 (such Buyer Common Stock, the “Buyer IPO Shares”) voted at a
duly convened meeting to approve the Transactions, and (ii) holders of less
than twenty-percent (20%) of the Buyer IPO Shares both vote against the
Transactions and demand that Buyer convert such shares into cash.

“Responsibility Agreement” shall mean the
Responsibility Agreement, attached hereto as Exhibit O, to be entered
into between Buyer and Seller at Closing.

“Restricted Period” shall mean the longest of
the following periods permitted by applicable law:

(i)            From
and after the Closing Date in perpetuity;

(ii)           So
long as any Ongoing Business Agreement remains in effect;

(iii)          The
period commencing on the Closing Date and ending on the twenty-fifth (25th)
anniversary of the Closing Date;

(iv)          The
period commencing on the Closing Date and ending on the twentieth (20th) anniversary
of the Closing Date;

(v)           The
period commencing on the Closing Date and ending on the fifteenth (15th)
anniversary of the Closing Date;

(vi)          The
period commencing on the Closing Date and ending on the tenth (10th)
anniversary of the Closing Date; or

(vii)         The
period commencing on the Closing Date and ending on the fifth (5th) anniversary
of the Closing Date.

“Restricted Territory”
shall mean the broadest of the following geographic areas permitted by
applicable law:

(i)            the entire world;

(ii)           North America, Europe and Asia;

 I-15
 

(iii)          North America and Europe;

(iv)          North America and Asia;

(v)           the Territory; or

(vi)          the United States.

“Seller” shall have the meaning set forth in
the first paragraph of this Agreement.

“Seller Board” shall have the meaning set forth
in the recitals of this Agreement.

“Seller Claimants” shall have the meaning set
forth in Section 7.3.

“Seller Contracts” shall mean all Contracts
(i) under which Seller or any of its Subsidiaries has or may acquire any
rights or benefits or (ii) under which Seller or any of its Subsidiaries
has or may become subject to any obligation or Liability.

“Seller Credit Facility” shall mean that
certain revolving credit facility of up to Three Million Dollars ($3,000,000)
under that certain Third Amended and Restated Loan Agreement by and between
Seller and Union Bank of California, N.A. dated September 1, 2005, and any
related notes, collateral documents, letters of credit, guarantees, and other
loan documents, in each case, as amended, modified, supplemented or restated
through and including the date hereof.

“Seller Disclosure Information” shall have the
meaning set forth in Section 5.9.

“Seller Fairness Opinion” shall mean the
fairness opinion obtained by Seller in connection with the Transaction.

“Seller Indemnified Parties” shall have the
meaning set forth in Section 7.2(a).

“Seller Loan Agreements” shall mean the loan
agreements and related documents set forth in Schedule 1.2(d).

“Seller Loan Balance” shall have the meaning set forth in Section 1.2(d).

“Seller Material Adverse Effect” or “Seller
Material Adverse Change” shall mean (a) any material adverse effect on or
material adverse change in (i) the condition (financial or other),
business, results of operations, Liabilities or operations of the Purchased
Business or the Purchased Assets taken as a whole or (ii) the ability of
Seller and its Subsidiaries, taken as a whole, to consummate the Transactions
or (b) any event or condition that would be reasonably likely to have, with the
passage of time, a Seller Material Adverse Effect or a Seller Material Adverse
Change; provided, however,
that the following shall be excluded from any determination as to whether a
Seller Material Adverse Effect or Seller Material Adverse Change has occurred
or may occur: changes, effects, developments or circumstances (x) affecting the
(A) United States securities markets generally or (B) economic, regulatory, or
political conditions generally, in each case, to the extent that Seller is not
disproportionately impacted thereby; (y) 

 I-16
 

arising from or relating
to this Agreement, the Transactions contemplated hereby or the announcement of
the pendency of such Transactions; or (z) resulting from the filing of any
litigation relating to the matters disclosed in Schedule 3.11, not
resulting in the entry of a temporary restraining order, preliminary or
permanent injunction prior to the Closing Date.

“Seller Plan” shall mean each employment,
consulting, severance, termination, retirement, profit-sharing, bonus,
incentive, deferred compensation, retention, change in control, stock option,
restricted stock, phantom stock, stock appreciation right, restricted stock
unit or other equity-based plan, program, arrangement, agreement or commitment
and each, pension, retirement, savings, life, health, disability, workers’
compensation, supplemental unemployment, accident, medical, insurance,
vacation, other welfare fringe benefit or other employee compensation or
benefit plan, program, arrangement, agreement, policy or commitment (whether formal
or informal, insured or self-insured), including each “employee benefit plan”
as defined in Section 3(3) of ERISA, in each case, under which Seller or any of
its Subsidiaries has any obligation, whether actual or contingent, direct or
indirect, to provide compensation or benefits to any Purchased Business
Employee.

“Shared Assets” shall mean all Shared Contracts
and Shared Intellectual Property.

“Shared Contracts” shall mean, collectively,
the Shared Retained Contracts and Shared Transferred Contracts.

“Shared Retained Contract” shall mean each
Seller Contract that is not a Transferred Contract under which services or
goods are provided, or is otherwise related, to both the Purchased Business and
the Retained Business.

“Shared Transferred Contract” shall mean each
Transferred Contract under which services or goods are provided, or is
otherwise related, to both the Purchased Business and the Retained Business.

“Shared Intellectual Property” shall have the
meaning set forth in Section 3.16(a).

“Sponsor” shall mean any Person that purchases
from Seller or any of its Subsidiaries advertisements, sponsorships and/or
naming or branding rights that is or will be displayed or utilized in
connection with the Purchased Business.

“Straddle Period” shall mean any Tax period
beginning before and ending after the Closing Date.

“Subsidiary” shall
mean, with respect to any Person, any corporation or other Person of which
securities or other interests having the power to elect a majority of that
corporation’s or other Person’s board of directors or similar governing body,
or otherwise having the power to direct the business and policies of that
corporation or other Person (other than securities or other interests having
such power only upon the happening of a contingency that has not occurred) are
held by such person; provided, however, that Seller and Buyer hereby
acknowledge that the Museum shall not be deemed a Subsidiary of Seller under
the foregoing definition either for purposes of this Agreement or for purposes
of any of the Ongoing Business Agreements or otherwise.

 I-17
 

“Surveys” shall have the meaning set forth in Section
5.12(a).

“Tangible Personal Property” means (a) all
items of tangible personal property (other than Inventory) of every kind owned
or leased by Seller or any of its Subsidiaries (or owned or leased for the
benefit of Seller or any of its Subsidiaries) primarily related to or primarily
used in connection with the Purchased Business and (b) personal computers,
personal office supplies and equipment, and vehicles used by Transferring
Employees, in each case together with the rights to claims arising on or after
the Closing Date under any express or implied warranty by the manufacturers or
Seller or any of its Subsidiaries or lessors of any item or component part
thereof and all documents related thereto.

“Tax Return” shall mean  any return, declaration, report, claim for
refund, or information return or statement related to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.

“Threat of Release”
shall mean a substantial likelihood of a Release that will require
action pursuant to Environmental Law in order to prevent or mitigate damage to
the Environment that may result from such Release.

“Threshold” shall have the meaning set forth in
Section 7.2(g)(ii).

“Title Company” shall mean First American Title
Insurance Company.

“Title Documents” shall have the meaning set
forth in Section 5.12(a).

“Title Inspection Period” shall have the
meaning set forth in Section 5.12(b).

“Title Notice” shall have the meaning set forth
in Section 5.12(d).

“Title Policy” shall mean an ALTA Extended
Coverage Owner’s Policy of Title Insurance (together with all endorsements
reasonably required by Buyer), issued by the Title Company, in the amount to be
determined by Buyer, in its reasonable business judgment, insuring Buyer (or
its designee) as the holder of fee simple title to the applicable Owned Real
Property, subject only to Permitted Encumbrances.

“Trade Secrets” shall mean confidential and
proprietary information, including without limitation, customer and supplier
lists and related information, pricing and cost information, business and
marketing plans, research and development, advertising statistics, any other
financial, marketing and business data, technical data, specifications,
designs, drawings, methods, schematics and know-how, unless any such
information or item (a) is or becomes publicly known through no act or omission
of the receiving party; (b) was rightfully known by the receiving party before
receipt from the disclosing party; (c) becomes rightfully known to the
receiving party without confidential or proprietary restriction from a source
other than the disclosing party that does not owe a duty of confidentiality to
the disclosing party with respect to such information or item; or (d) is
independently developed by the receiving party without the use of or reference
to the Trade Secrets of the disclosing party.

“Transaction Claim” shall have the meaning set
forth in Section 7.3.

 I-18
 

“Transactions” shall mean the acquisition of
the Purchased Assets and the other transactions contemplated by this Agreement
and the Ancillary Agreements.

“Transferred Contracts” shall mean all Seller
Contracts relating to the Purchased Business or by which any of the Purchased
Assets is or may become bound, including, without limitation, the contracts set
forth on Schedule 3.12(a).

“Transferred Intellectual Property Assets”
shall have the meaning set forth in Section 3.16(e).

“Transfer Taxes” shall mean all transfer,
documentary, conveyance, or other similar Taxes imposed by any Tax jurisdiction
domestic or foreign, with respect to the sale or transfer of any Real Property.

“Transferring Employee” shall have the meaning
set forth in Section 5.11(a).

“Transition Services Agreement” shall mean a
the meaning set forth in Section 5.16.

“Treasury Regulations” shall mean the Treasury
Regulations promulgated under the Code.

“Trust Account” shall have the meaning set
forth in Section 7.3.

“Trust Assets” shall have the meaning set forth
in Section 7.3.

“WARN Act”
shall have the meaning set forth in Section 3.15(e).

 I-19

ANNEX II

2007
CAPITAL EXPENDITURE BUDGET

 EX-1Exhibit
  4.1

 

THIS INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT (AS AMENDED, FROM TIME TO TIME, THE “SUBORDINATION AGREEMENT”) DATED AS OF JUNE 1, 2007, AMONG BANK OF AMERICA, N.A., LCC INTERNATIONAL, INC. AND CERTAIN OF ITS SUBSIDIARIES AND WIRELESS FACILITIES, INC., AND THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF THE SUBORDINATION AGREEMENT.

 

SUBORDINATED PROMISSORY NOTE

	
            $21,583,651
 	
            June 1, 2007
 

FOR VALUE RECEIVED, LCC International, Inc., a Delaware corporation (the “Maker”), promises to pay to Wireless Facilities, Inc., a Delaware corporation (the “Holder”), at Bridge Pointe Corporate Center, 4810 Eastgate Mall, San Diego, California 92121, or at such other place as the Holder of this Note may from time to time designate, on June 1, 2010 (the “Maturity Date”), the principal amount of Twenty-One Million Five Hundred Eighty-three Thousand Six Hundred Fifty-one Dollars ($21,583,651) (which amount may be increased or decreased from time to time without further consent of the Maker and the Holder pursuant to the terms of the Purchase Agreement, as defined below, as reflected on Schedule
1 attached hereto), or such lesser amount as may be outstanding under this Note on the Maturity Date, together with interest on the unpaid principal amount hereof from the date hereof, until paid in full, said interest to be computed and paid as set forth below.  For purposes of clarification, (i) any increase to the principal amount under this Note pursuant to the terms of the Purchase Agreement shall be deemed to be outstanding as of the date hereof and interest shall accrue on such principal amount from the date of this Note and (ii) any decrease to the principal amount under this Note pursuant to the terms of the Purchase Agreement shall be deemed to be made as of the date hereof and the interest under this Note shall be calculated accordingly. All payments hereunder shall be made in lawful money of the United States of America.

 

Interest
  on the unpaid principal amount hereof shall be computed on the basis of actual
  days elapsed over a 360-day year, at a floating rate of one-month LIBOR (LIBOR
  to reset on the first Business Day of each month) plus 

 

 

	
             
 	
            (a)
 	
            from the date of this Note to and including June 30, 2007, 4% per annum,
 

	
             
 	
            (b)
 	
            from July 1, 2007 to and including July 31, 2007, 5% per annum,
 

	
             
 	
            (c)
 	
            from August 1, 2007 to and including August 31, 2007, 6% per annum,
 

	
             
 	
            (d)
 	
            from September 1, 2007 to and including September 30, 2007, 7% per annum,
 

	
             
 	
            (e)
 	
            from October 1, 2007 to and including December 31, 2007, 8% per annum,
 

	
             
 	
            (f)
 	
            from January 1, 2008 to and including June 30, 2008, 9% per annum,
 

	
             
 	
            (g)
 	
            from July 1, 2008 to and including December 31, 2008, 10% per annum,
 

  	
         

      	
        (h)
          

      	
        from
          January 1, 2009 to and including June 30, 2009, 11% per annum,

      
	
         

      	
        (i)
          

      	
        from
          July 1, 2009 to and including December 31, 2009, 12% per annum,

      
	
         

      	
        (j)
          

      	
        from
          January 1, 2010 to (but not including) the Maturity Date, 13% per annum,
          and

      

(k)        if
  the principal amount and interest accrued thereon under this Note is not paid
  in full on or prior to the Maturity Date, an increase of 1% per annum to the
  then applicable rate determined hereunder for each six month period beginning
  on July 1 and January 1 of each year, until the Note is paid in full. 

For purposes of this Note, “LIBOR” means, for any interest period described above, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such interest period, for dollar deposits (for delivery on the first day of such interest period) with a term most closely approximating such interest period.  

 

Subject to the terms of the Subordination Agreement, interest payments shall be due (i) with respect to the period commencing on the Closing Date and ending on June 30, 2007, in arrears on the fifth (5th) Business Day following the date on which the Maker shall have delivered to the lenders the financial statements for, and the Compliance Certificate (as defined in the Credit Agreement (as defined below)) with respect to, calendar quarter ended June 30, 2007 required to be delivered under the Credit Agreement  and (ii) with respect to each calendar quarter commencing on or after July 1, 2007, in arrears on the fifth (5th) Business Day following the date on which the Maker shall have delivered to the Lenders the financial statements for, and the Compliance Certificate with respect to, such calendar quarter required to be delivered under the Credit Agreement  (each an
“Interest Payment Date”).  All accrued and unpaid interest shall be paid in full on the Maturity Date.  

 

In the event the Maker fails to pay interest under this Note within five (5) Business Days following the date on which the Maker is required to deliver quarterly or annual financial statements, as applicable, under the Credit Agreement (i) with respect to any two (2) consecutive Interest Payment Dates during the period commencing on July 1, 2007 and ending on June 30, 2008 or (ii) with respect to any one Interest Payment Date occurring after July 1, 2008, the Holder shall be entitled, by delivery of written notice to the Maker within forty-five (45) days following such Interest Payment Date (the “Election Notice”), to convert the total amount of interest due on such Interest Payment Date, or in the case of the foregoing clause (i), such two (2) Interest Payment Dates (the “Total Unpaid
Interest”) into a number of shares of the Maker’s Class A Common Stock, par value $0.01 per share (the “Maker Common Stock”) equal to the quotient obtained by dividing (a) the Total Unpaid Interest on the date of the Election Notice by (b) the average of the closing prices of the Maker Common Stock as reported on the NASDAQ Global Market or other national stock exchange for the last ten (10) trading day period ending two (2) days prior to the delivery of the Election Notice in accordance with the terms hereof (the “Common Stock Price”).  No fractional shares will be issued upon the conversion of the Total Unpaid Interest.  In lieu of any fractional shares to which Holder would otherwise be entitled, Maker shall pay Holder in cash that amount of the unconverted Total Unpaid Interest equal to such fraction multiplied by the Common Stock Price. Maker shall issue and deliver to Holder within seven (7) Business Days after the date of the Election Notice a certificate for the number of shares of Maker Common Stock to which Holder is entitled upon such conversion of the Total Unpaid
Interest, including a check payable to Holder for any cash amounts payable in lieu of fractional shares as described above.  Holder’s Election Notice shall contain such representations as the Maker shall reasonably request to satisfy itself that the issuance of such shares to the Holder is exempt from registration under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “1933 Act”) and applicable state securities laws.  Notwithstanding the foregoing, in the event Maker is subject to NASDAQ Marketplace Rule 4350(i) (the “Marketplace Rule”) at the time of such issuance, Maker shall not issue any shares which shall result in the aggregate number of shares of Maker Common Stock issued pursuant to this Note to exceed of 19.999% of the shares of Maker Common Stock outstanding on the date hereof (taking into account any stock
splits or reverse stock splits in the Maker Common Stock occurring after the date hereof) without first obtaining the required stockholder consent pursuant to the Marketplace Rule; provided, however, that Maker shall use its commercially reasonable best efforts to obtain any required stockholder approval as soon as possible following receipt of any Election Notice. Any shares of Maker Common Stock issued pursuant to this paragraph, including any Maker Common Stock issued as a dividend or other distribution with respect to, or in exchange for, or in replacement of such Maker Common Stock, shall be subject to registration for resale under the 1933 Act upon the terms and conditions set forth in Exhibit A hereto. 

Subject to the terms of the Subordination Agreement, the unpaid principal amount of, and any accrued interest on, this Note must be prepaid:

 

 (a)        with the one hundred percent (100%) of the Net Cash Proceeds received by the Maker or its Subsidiaries (as defined in the Credit Agreement), until this Note is paid in full, in respect of any issuance of equity security for cash (other than pursuant to employee benefit plans) or debt financing that is subordinated to the obligations of the Maker and its Subsidiaries under the Credit Agreement, other than (i) any debt financing under the Credit Agreement, (ii) a refinancing of existing debt financing or (iii) debt financing for working capital of one or more Foreign Subsidiaries; and

 

 (b)        upon a Change of Control (as defined below) of the Maker, provided that no event of default under the Credit Agreement (other than an event of default as a result of such Change of Control) has occurred and is continuing.  

 

Any prepayment, including under subsections (a) or (b) above, shall be without premium or penalty.  

Subject to the Subordination Agreement, the unpaid principal amount of, and any accrued interest on, this Note may be prepaid in whole or in part at any time or times without premium or penalty.  

 

For purposes of this Note, a “Change of Control” means (a) an event or series of events by which any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “1934 Act”) but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all Equity Interests that such person or group has the right to
acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of fifty-one percent (51%) of the Equity Interests of the Maker entitled to vote for members of the board of directors or equivalent governing body of the Maker on a fully diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right) or (b) the sale or transfer of all or substantially all of the assets of the Maker, whether in a single transaction or a series of related transactions. 

 

For purposes of this Note, the following defined terms shall have the meanings provided for such terms in that certain Amended and Restated Credit Agreement (as amended, modified, restated, supplemented or refinanced from time to time, the “Credit Agreement”), dated as of  May 29, 2007, among the Maker, certain Subsidiaries of the Maker, the lenders party thereto and Bank of America, N.A. as administrative agent, as in effect on May 29, 2007:  “Net Cash Proceeds,”  “Foreign Subsidiaries” and  “Equity Interests.” 

 

Each prepayment shall be applied first to the payment of all interest and other amounts accrued hereunder on the date of any such prepayment, and the balance of any such prepayment shall be applied to the principal amount hereof.   No prepayment shall entitle any person to be subrogated to the rights of the Holder unless and until this Note has been paid in full.

 

This Note is made and delivered pursuant to and in accordance with the terms and conditions of that certain Asset Purchase Agreement (the “Purchase Agreement”), dated as of May 29, 2007, by and between the Maker and the Holder and is subject to the terms and conditions of the Purchase Agreement, which are, by this reference incorporated herein and made a part hereof.  Capitalized terms used but not defined herein shall have the meanings given to such terms in the Purchase Agreement.    

 

So long as any principal or interest payments are outstanding hereunder, the Maker agrees to provide to the Holder of this Note, at such Holder’s election, the following:

 

 (a)         A copy of each quarterly and annual Compliance Certificate delivered by the Maker to Bank of America, N.A. pursuant to the requirements of the Credit Agreement;

 (b)         Notice of any default or event of default given or received under the Credit Agreement; and

 

 (c)         In the event that the Maker ceases to be a public company, (i) a consolidated and consolidating balance sheet of the Maker and its Subsidiaries as of the end of each fiscal year thereafter, and the related consolidated and consolidating statements of income or operations, shareholders’ equity and cash flows for such fiscal year, and (ii) a consolidated balance sheet of the Maker and its Subsidiaries as of the end of each of the first three fiscal quarters of each fiscal year thereafter, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year.

 

The occurrence of any one or more of the following events with respect to the Maker shall constitute an event of default (“Event of Default”) hereunder:

(a)          Failure to pay, when due, the principal or any interest payable hereunder, and continuance of such failure for fifteen (15) business days after the Holder notifies the Maker thereof in writing; provided, however, that the exercise by the Maker in good faith of its right of setoff pursuant to this Note, whether or not ultimately determined to be justified, shall not constitute an Event of Default;

 

(b)          The admission by the Maker in writing of its inability to pay its debts as such debts become due, or the making by the Maker of any general assignment for the benefit of creditors;

 

(c)          The commencement by the Maker of any case, proceeding, or other action seeking reorganization, arrangement, adjustment, liquidation, dissolution, or composition of it or its debts under any law relating to bankruptcy, insolvency, or reorganization, or relief of debtors, or seeking appointment of a receiver, trustee, custodian, or other similar official for it or for all or any substantial part of its property; or

 

(d)          The commencement of any case, proceeding, or other action against the Maker seeking to have any order for relief entered against the Maker as debtor, or seeking reorganization, arrangement, adjustment, liquidation, dissolution, or composition of the Maker or its debts under any law relating to bankruptcy, insolvency, reorganization, or relief of debtors, or seeking appointment of a receiver, trustee, custodian, or other similar official for the Maker or for all or any substantial part of the property of the Maker, and (i) the Maker shall, by any act or omission, indicate its consent to, approval of, or acquiescence in such case, proceeding, or action, or (ii) such case, proceeding, or action results in the entry of an order for relief which is not fully stayed within seven (7)
Business Days after the entry thereof, or (iii) such case, proceeding, or action remains undismissed for a period of sixty (60) days or more or is dismissed or suspended only pursuant to Section 305 of the United States Bankruptcy Code or any corresponding provision of any future United States bankruptcy law.

 

Subject
  to the subordination provisions of the Subordination Agreement, upon the occurrence
  of any such Event of Default hereunder, the entire principal amount hereof,
  and all accrued and unpaid interest thereon, shall, at the option of the Holder,
  be accelerated, and shall thereupon become immediately due and payable and the
  Holder shall be entitled to exercise any one or more of
  the rights and remedies provided by applicable law; provided
  that in the case of clauses (b), (c) and (d) above, such acceleration shall
  occur automatically without demand or notice. Failure to exercise said option
  or to pursue such other remedies shall not constitute a waiver of such option
  or such other remedies or of the right to exercise any of the same in the event
  of any subsequent Event of Default hereunder.
  

The Holder of this Note, by acceptance hereof, agrees that the Note and the indebtedness represented hereby, and the payment of principal of and all present and future interest hereon, is expressly subordinated and junior in right of payment to the prior payment in full of the Senior Debt (as defined in the Subordination Agreement).

 

The Holder of this Note may at any time assign all (but not less than all) of its rights and obligations under this Note to an assignee; provided, however, that prior to June 1, 2008, the Holder may assign its rights and obligations under this Note to an assignee only upon (a) a consolidation or merger of the Holder with and into another entity or (b) a sale by the Holder of all or substantially all of its assets.  Subject to the preceding sentence, this Note will be binding in all respects upon the Maker and inure to the benefit of the Holder and its successors and assigns.  

 

Any payment on this Note coming due on a Saturday, a Sunday, or a day which is a legal holiday in the place at which a payment is to be made hereunder shall be made on the next succeeding day which is a Business Day, and any such extension of the time of payment shall be included in the computation of interest hereunder.

 

Except as explicitly provided herein, the Maker hereby waives presentment, protest, demand, notice of dishonor, and all other notices, and all defenses and pleas on the grounds of any extension or extensions of the time of payments or the due dates of this Note, in whole or in part, before or after maturity, with or without notice. 

 

No single or partial exercise by the Holder of any right hereunder shall preclude any other or further exercise thereof or the exercise of any other rights.  No delay or omission on the part of the Holder in exercising any right hereunder shall operate as a waiver of such right or of any other right under this Note.

 

This Note and all agreements between the Maker and the Holder relating hereto are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration or otherwise, shall the amount paid or agreed to be paid to the Holder for the use, forbearance or detention of money hereunder exceed the maximum amount permissible under applicable law.  If from any circumstance whatsoever fulfillment of any provision hereof, at the time performance of such provision shall be due, shall involve transcending the limit of validity prescribed by law, then, ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity, and if from any such circumstance the Holder shall ever receive interest, or anything which might be deemed interest under applicable law,
which would exceed the highest lawful rate, such amount which would be excessive interest shall be applied to the reduction of the principal amount owing on account of this Note and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal of this Note, such excess shall be refunded to the Maker.  All sums paid or agreed to be paid to the Holder for the use, forbearance or detention of the indebtedness of the Maker to the Holder shall, to the extent permitted by applicable law, be deemed to be amortized, prorated, allocated and spread throughout the full term of such indebtedness until payment in full so that the actual rate of interest on account of such indebtedness is uniform throughout the term thereof.  The terms and provisions of this paragraph shall control and supersede every other provision of this Note and all other agreements between the Maker and the Holder.

Except as otherwise provided in Exhibit A, this Note shall be governed by the laws of the State of New York, without regard to the conflicts of law principles that would result in the application of any law other than the law of the State of New York.

 

Except as otherwise provided in this Note, including without limitation in Exhibit A, (a) all notices, communications and deliveries required or made pursuant to this Note shall be made in accordance with the procedures specified in Section 12.1 of the Purchase Agreement and (b) any dispute arising out of or relating to this Note shall be resolved in accordance with the procedures specified in Section 12.7 of the Purchase Agreement.

 

                          IN WITNESS WHEREOF, the Maker has executed this Note as of the date first set forth above.

 

	
             
 	
            LCC INTERNATIONAL, INC.

              

            
 
	
             
 	
            By:  /s/ Louis Salamone Jr.
 Name: Louis Salamone Jr.
 Title: Executive Vice President & CFO
 
	
             
 	
             
 
	
            Acknowledged and Agreed 
 as of the date first set forth above:  
 	
             
 
	
             

            WIRELESS FACILITIES, INC.
	
             
 
	
             

            By: /s/ James R. Edwards

              Name: James R. Edwards
	
             
 
	
             
 	
   
 

 

 

 

 

 

[SIGNATURE PAGE TO PROMISSORY NOTE]

SCHEDULE 1

 

1.  The principal amount of  $21,583,651 represents the amount determined pursuant to Sections 3.3.1(a)(i)  and 3.3.1(b) of the Purchase Agreement.

 

 

 

Exhibit A

 

HOLDER REGISTRATION RIGHTS

 

	
             
  	
            1.
 	
            Certain Definitions.
 

Capitalized terms used herein which are defined in the main text of this Note shall have the meanings set forth in therein, unless otherwise defined herein. As used in this Exhibit A, the following terms shall have the following meanings:

“Affiliate” means, with respect to any Person, any other Person which directly or indirectly controls, is controlled by, or is under common control with, such Person.

“Business Day” means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business.

“Common Stock” means the Maker’s Common Stock.

“Company” means LCC International, Inc., a Delaware corporation.

“Investors” means the Holder and any Affiliate or permitted transferee of any Holder who is a subsequent holder of any Registrable Securities.

“Person” means any individual, corporation, partnership, joint venture, limited liability company, trust, unincorporated organization or governmental entity.

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

“Prospectus” means the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus.

“Register,” “registered” and “registration” refer to a registration made by preparing and filing a Registration Statement or similar document in compliance with the 1933 Act, and the declaration or ordering of effectiveness of such Registration Statement or document.

“Registrable Securities” means (i) the Shares, and (ii) any other securities issued or issuable with respect to or in exchange for Registrable Securities; provided, that, a security shall cease to be a Registrable Security (A) upon sale pursuant to a Registration Statement or Rule 144 under the 1933 Act, or (B) at such time that all such securities are eligible for sale by the Investors pursuant to Rule 144(k).

“Registration Statement” shall mean any registration statement of the Company filed under the 1933 Act that covers the resale of any of the Registrable Securities pursuant to the provisions of this Exhibit A (including the Registration Statement referred to in Section 2 of this Exhibit A), amendments and supplements to such Registration Statement(s), including the Prospectus, post-effective amendments, all exhibits and all material filed and incorporated by reference in such Registration Statement.

“Required Investors” mean the Investors holding a majority of the Registrable Securities.

“Rule 144”, “Rule 144(k)”, “Rule 172”,  “Rule 401”, “Rule 415”, “Rule 416”, “Rule 424(b)(3)”,  “Rule 429” and “Rule 461” mean Rule 144, Rule 144(k),  Rule 172, Rule 401, Rule 415, Rule 416, Rule 424(b)(3), Rule 429 and Rule 461, respectively, each as promulgated by the SEC pursuant to the 1933 Act, as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC having substantially the same effect as such Rule.

“SEC” means the U.S. Securities and Exchange SEC.”  

“Shares” means the shares of Common Stock issued pursuant to this Note.

 

	
             
  	
            2.
 	
            Registration.
 

(a)          Registration Statement.  Within 45 days following the delivery by an Investor of an Election Notice with respect to any Shares (the “Filing Deadline”), the Company shall prepare and file with the SEC a  registration statement covering all Registrable Securities for a secondary or resale offering to be made on a continuous basis pursuant to Rule 415. Such registration statement shall be on Form S-3 or on such other form appropriate for such purpose (the “Registration Statement”) and shall include the plan of distribution attached hereto as Schedule 1.  Such Registration Statement
also shall cover, to the extent allowable under the 1933 Act and the rules promulgated thereunder (including Rule 416), such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends or similar transactions with respect to the Registrable Securities.  Such Registration Statement shall not include any shares of Common Stock or other securities for the account of any other holder without the prior written consent of the Required Investors, except for shares of Common Stock held by the Company’s stockholders having “piggyback” registration rights expressly set forth in registration rights agreements entered into by the Company prior to the date of this Note (the “Piggyback Shares”); provided, however, that the inclusion of any Piggyback Shares on the Registration Statement shall not result in the exclusion of the Registrable
Securities from any such Registration Statement.  A copy of the initial filing of the Registration Statement (and each pre-effective amendment thereto) shall be provided to the Investors and their counsel prior to filing. 

 (b)        Expenses.  The Company will pay all expenses incurred by it associated with the Registration Statement or incident to its performance or compliance with this Exhibit A, including filing and printing fees, the Company’s counsel and accounting fees and expenses, NASD (as defined below) and Nasdaq filing fees, and costs associated with clearing the Registrable Securities for sale under applicable state securities laws, but the Company shall not be liable for fees and expenses incurred by the Investors (including any Investors’ counsel fees), or any discounts, commissions, fees of underwriters, selling brokers, dealer managers or similar securities industry professionals with respect to the
Registrable Securities being offered unless such underwriter, broker or similar industry professional is engaged at the sole election of the Company.
  

(c)   Effectiveness.

(i)           The Company shall use reasonable best efforts to have the Registration Statement declared effective prior to 45 days following the Filing Deadline; provided, however, that, if the SEC reviews and has written comments to the filed Registration Statement that would require the filing of a pre-effective amendment thereto with the SEC, then the date under this clause (c)(i) shall be the 75th day following the Filing Deadline. The Company shall notify the Investors by facsimile or e-mail as promptly as practicable, and in any event, within twenty-four (24) hours, after the Registration Statement is declared effective and shall simultaneously provide the Investors with copies of any related Prospectus to be used in connection
with the sale or other disposition of the securities covered thereby.  

(ii)          For not more than thirty (30) consecutive days or for a total of not more than sixty (60) days in any twelve (12) month period, the Company may delay the disclosure of material non-public information concerning the Company, by suspending the use of any Prospectus included in any registration contemplated by this Section, if such disclosure at the time is not, in the good faith opinion of the Company, in the best interests of the Company (an “Allowed Delay”); provided, that the Company shall promptly (a) notify the Investors in writing of the existence of (but in no event, without the prior written consent of an Investor, shall the Company disclose to such Investor any of the facts or circumstances regarding) an Allowed Delay, (b)
advise the Investors in writing to cease all sales under the Registration Statement until the end of the Allowed Delay and (c) use reasonable best efforts to terminate an Allowed Delay as promptly as practicable.

3.     Company Obligations.  The Company will use reasonable best efforts to effect the registration of the Registrable Securities in accordance with the terms hereof, and pursuant thereto the Company will, as expeditiously as possible (but subject to Section 2(c)(ii) of this Exhibit A): 

(a)          (i) furnish to the Investors, copies of all such documents proposed to be filed, which documents will be subject to their review of such Investors, and (ii) cause its officers and directors, counsel and independent certified public accountants to respond to such inquiries as shall be necessary, to conduct a reasonable review of such documents.  The Company shall not file the Registration Statement or any such Prospectus or any amendments or supplements thereto to which the holders of a majority of the Registrable Securities shall reasonably object in writing within three (3) Business Days of their receipt thereof.

(b)          respond as promptly as possible to any comments received from the SEC with respect to the Registration Statement or any amendment thereto and as promptly as possible provide the Investors true and complete copies of all correspondence from and to the SEC relating to the Registration Statement.

(c)          notify
  the Investors as promptly as possible (and, in the case of (i)(A) below, not
  less than three (3) days prior to such filing) and (if requested by any such
  Person) confirm such notice in writing no later than two (2) Business Days following
  the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective
  amendment to the Registration Statement is filed; (B) when the SEC notifies
  the Company whether there will be a “review” of
  such Registration Statement and whenever the SEC comments in writing on such
  Registration Statement and (C) with respect to the Registration Statement or
  any post-effective amendment, when the same has become effective; (ii) of any
  request by the SEC or any other Federal or state governmental authority for
  amendments or supplements to the Registration Statement or Prospectus or for
  additional information; (iii) of the issuance by the SEC of any stop order suspending
  the effectiveness of the Registration Statement covering any or all of the Registrable
  Securities or the initiation or threatening of any Proceedings for that purpose;
  (iv) if at any time any of the representations and warranties of the Company
  contained in any agreement contemplated hereby ceases to be true and correct
  in all material respects; (v) of the receipt by the Company of any notification
  with respect to the suspension of the qualification or exemption from qualification
  of any of the Registrable Securities for sale in any jurisdiction, or the initiation
  of any Proceeding for such purpose; and (vi) of the occurrence of any event
  or passage of time that makes the financial statements included in a Registration
  Statement ineligible for inclusion therein or any statement made in the Registration
  Statement or Prospectus or any document incorporated or deemed to be incorporated
  therein by reference untrue in any material respect or that requires any revisions
  to the Registration Statement, Prospectus or other documents so that, in the
  case of the Registration Statement or the Prospectus, as the case may be, it
  will not contain any untrue statement of a material fact or omit to state any
  material fact required to be stated therein or necessary to make the statements
  therein, in the light of the circumstances under which they were made, not misleading.

(d)          if requested by the Required Investors, (i) promptly incorporate in a Prospectus supplement or post-effective amendment to the Registration Statement such information as the Company reasonably agrees should be included therein and (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received notification of the matters to be incorporated in such Prospectus supplement or post-effective amendment.

(e)          promptly deliver to each Investor, without charge, at least one conformed copy of the Registration Statement and as many copies of the Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request 

(f)           cooperate
  with the Investors to facilitate the timely preparation and delivery of certificates
  representing Registrable Securities to be sold pursuant to a Registration Statement,
  which certificates, to the extent permitted by applicable federal and state
  securities laws, shall be free of all restrictive legends, and to enable such
  Registrable Securities to be in such denominations and registered in such names
  as any Investor may request in connection with any sale of Registrable Securities.

(g)           use
  reasonable best efforts to cause such Registration Statement to become effective
  and, to remain continuously effective for a period that will terminate upon
  the earlier of (i) the date on which all Registrable Securities covered by such
  Registration Statement as amended from time to time, have been sold, and (ii)
  the date on which all Registrable Securities covered by such Registration Statement
  may be sold pursuant to Rule 144(k) (and the Company shall use reasonable best
  efforts to provide a written opinion letter from Company counsel to the Company's
  transfer agent to such effect and to remove the restrictive legend from the
  certificates of the Registrable Securities) (the "Effectiveness Period")
  and advise the Investors in writing when the Effectiveness Period has expired;

(h)          prepare and file with the SEC such amendments and post-effective amendments to the Registration Statement and the Prospectus as may be necessary to keep the Registration Statement effective for the Effectiveness Period and to comply with the provisions of the 1933 Act and the 1934 Act with respect to the distribution of all of the Registrable Securities covered thereby in accordance with the intended method of disposition as set forth in the Registration Statement, Prospectus or Prospectus supplement;

(i)          use reasonable best efforts to (i) prevent the issuance of any stop order or other suspension of effectiveness or qualification or exemption of qualification and, (ii) if such order is issued, obtain the withdrawal of any such order at the earliest possible moment;

(j)           prior to any public offering of Registrable Securities, use reasonable best efforts to register or qualify or cooperate with the Investors and their counsel in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or blue sky laws of such jurisdictions requested by the Investors, to keep such registration or qualification effective during the Effective Period and do any and all other commercially reasonable acts or things necessary or advisable to enable the distribution in such jurisdictions of the Registrable Securities covered by the Registration Statement; provided, however, that the Company shall not be required in connection therewith or as a
condition thereto to (i) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(j), (ii) subject itself to general taxation in any jurisdiction where it would not otherwise be so subject but for this Section 3(j), or (iii) file a general consent to service of process in any such jurisdiction;

(k)         use reasonable best efforts to cause all Registrable Securities covered by a Registration Statement to be listed on each securities exchange, interdealer quotation system or other market on which similar securities issued by the Company are then listed;

(l)           promptly notify the Investors, at any time when a Prospectus relating to Registrable Securities is required to be delivered under the 1933 Act (including during any period when the Company is in compliance with Rule 172), upon discovery that, or upon the happening of any event as a result of which, the Registration Statement (including the Prospectus), as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and at the request of any such holder, promptly prepare, file with the SEC pursuant to Rule 172 and furnish to such holder a supplement to or an amendment of such Prospectus or
post-effective amendment to such Registration Statement (and have it declared effective as promptly as practicable) as may be necessary so that such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; 

(m)        otherwise use reasonable best efforts to comply with all applicable rules and regulations of the SEC under the 1933 Act and the 1934 Act, including Rule 172, notify the Investors promptly if the Company no longer satisfies the conditions of Rule 172 and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder; and make available to its security holders, as soon as reasonably practicable, but not later than the Availability Date (as defined below), an earning statement covering a period of at least twelve (12) months, beginning after the effective date of each Registration Statement, which earning statement shall satisfy the provisions of Section 11(a) of the 1933 Act, including Rule 158 promulgated thereunder
(for the purpose of this Section 3(m), “Availability Date” means the 45th day following the end of the fourth fiscal quarter that includes the effective date of such Registration Statement, except that, if such fourth fiscal quarter is the last quarter of the Company’s fiscal year, “Availability Date” means the 90th day after the end of such fourth fiscal quarter); and

(n)          upon written notice from an Investor that such Investor has a legal obligation to make a filing with the National Association of Securities Dealers, Inc. (“NASD”) Corporate Financing Department pursuant to NASD Rule 2710(b)(10)(A)(i) with respect to the public offering contemplated by the Registration Statement (an “Issuer Filing”), the Company agrees it will effect such filing prior to the later to occur of the expiration of five days after receipt of the written notice on each of  which days shares of Common Stock have been trading on the principal exchange on which such shares are trading at such time (each, a “Trading Day”) after receipt of the written notice and one Trading Day after the date that the Registration Statement is first filed with the SEC.  The Company shall use reasonable best efforts to pursue the Issuer Filing until the NASD issues a letter confirming that it does not object to the terms of the offering contemplated by the Registration Statement.  The Company will pay any filing fees and expenses in connection with the Issuer Filing.  

 

(o)          With a view to making available to the Investors the benefits of Rule 144 (or its successor rule) and any other rule or regulation of the SEC that may at any time permit the Investors to sell shares of Common Stock to the public without registration, the Company covenants and agrees to: (i) make and keep public information available, as those terms are understood and defined in Rule 144, until the earlier of (A) six months after such date as all of the Registrable Securities may be resold pursuant to Rule 144(k) or any other rule of similar effect or (B) such date as all of the Registrable Securities shall have been resold; (ii) file with the SEC in a timely manner all reports and other documents required of the Company under the 1934 Act; and (iii) furnish to each Investor upon
request, as long as such Investor owns any Registrable Securities, (A) a written statement by the Company that it has complied with the reporting requirements of the 1934 Act, and (B) such other information as may be reasonably requested in order to avail such Investor of any rule or regulation of the SEC that permits the selling of any such Registrable Securities without registration.

	
             
  	
            4.
 	
            Due Diligence Review; Information.  
 

(a)         Subject to paragraph (b) of this Section 4, upon reasonable prior notice, the Company shall make available, during normal business hours, for inspection and review by the Investors, advisors to and representatives of the Investors (who may or may not be affiliated with the Investors and who are reasonably acceptable to the Company), all financial and other records, all filings of the Company with the SEC, and all other corporate documents and properties of the Company as may be reasonably necessary for the purpose of such review, and cause the Company’s officers, directors, employees and independent accountants, within a reasonable time period, to supply all such information reasonably requested by the Investors or any such representative, advisor or underwriter in connection with such Regi

stration Statement (including, without limitation, in response to all questions and other inquiries reasonably made or submitted by any of them), prior to and from time to time after the filing and effectiveness of the Registration Statement for the sole purpose of enabling the Investors and such representatives, advisors and underwriters and their respective accountants and attorneys to conduct initial and ongoing due diligence with respect to the Company
and the accuracy of such Registration Statement.

 (b)        Except as otherwise provided in the Note, the Company shall not disclose material nonpublic information to the Investors, or to advisors to or representatives of the Investors, unless prior to disclosure of such information the Company identifies such information as being material nonpublic information and provides the Investors, such advisors and representatives with the opportunity to accept or refuse to accept such material nonpublic information for review and any Investor wishing to obtain such information enters into an appropriate confidentiality agreement with the Company with respect thereto.

	
             
  	
            5.
 	
            Obligations of the Investors.
 

(a)          Each Investor shall promptly furnish in writing to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably required to effect the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request.  At least ten (10) Business Days prior to the first anticipated filing date of the Registration Statement, the Company shall notify each Investor of the information the Company requires from such Investor if such Investor elects to have any of the Registrable Securities included in the Registration Statement.  An Investor shall provide such information to the
Company at least two (2) Business Days prior to the first anticipated filing date of such Registration Statement if such Investor elects to have any of the Registrable Securities included in the Registration Statement.

(b)         Each Investor agrees that, upon receipt of any notice from the Company of either (i) the commencement of an Allowed Delay  or (ii) the happening of an event pursuant to Section 3(c)(vi) hereof, such Investor will immediately discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities, until the Investor is advised by the Company that the Allowed Delay has terminated or that the Registration Statement or Prospectus, as the case may be, no longer contains any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

	
             
  	
            6.
 	
            Indemnification.
 

(a)   Indemnification by the Company.  To the fullest extent permitted by law, the Company will indemnify and hold harmless each Investor and its officers, directors, members, partners, employees, attorneys and agents, successors and assigns, and each other Person, if any, who controls such Investor within the meaning of the 1933 Act or Section 20 of the 1934 Act (and their officers, directors, partners, members and employees), against any losses, claims, damages, expenses, costs (including reasonable attorney fees) or liabilities, joint or several, to which they may become subject under the 1933 Act or otherwise, insofar as such losses, claims, damages, expenses, costs or liabilities (or actions in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof; (ii) any blue sky application or other document executed by the Company specifically for that purpose or based upon written information furnished by the Company filed in any state or other jurisdiction in order to qualify any or all of the Registrable Securities under the securities laws thereof (any such application, document or information herein called a “Blue Sky Application”); (iii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (iv) any violation by the Company or its agents of any rule or regulation promulgated under the 1933 Act
applicable to the Company or its agents and relating to action or inaction required of the Company in connection with such registration; or (v) any failure to register or qualify the Registrable Securities included in any such Registration in any state where the Company or its agents has affirmatively undertaken or agreed in writing that the Company will undertake such registration or qualification on an Investor’s behalf and will reimburse such Investor, and each such officer, director or member and each such controlling Person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action, which reimbursement shall be made as such expenses are incurred if such Investor has delivered a written undertaking to the Company to repay such reimbursement promptly following any final determination that such Investor was not entitled thereto; provided, however, that the Company will not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by such Investor or any such controlling Person in writing specifically for use in such Registration Statement or Prospectus.

(b)         Indemnification by the Investors.  Each Investor agrees, severally but not jointly, to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors, officers, employees, stockholders and each Person who controls the Company (within the meaning of the 1933 Act) against any losses, claims, damages, liabilities and reasonable expense (including reasonable attorney fees) resulting from any untrue statement of a material fact contained in the Registration Statement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof or any omission of a material fact required to be stated in the Registration Statement or Prospectus or preliminary prospectus or amendment or
supplement thereto or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, to the extent, but only to the extent that such untrue statement or omission is contained in any information furnished in writing by such Investor to the Company specifically for inclusion in such Registration Statement or Prospectus or amendment or supplement thereto.  In no event shall the liability of an Investor be greater in amount than the dollar amount of the net proceeds received by such Investor upon the sale of the Registrable Securities giving rise to such indemnification obligation.

 (c)         Conduct of Indemnification Proceedings.  Any Person entitled to indemnification hereunder shall (i) give prompt notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided that any Person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such Person unless (a) the indemnifying party has agreed to pay such fees or expenses, or (b) the indemnifying party shall have failed
to assume the defense of such claim and employ counsel reasonably satisfactory to such Person or (c) in the reasonable judgment of any such Person, based upon written advice of its counsel, a conflict of interest exists between such person and the indemnifying party with respect to such claims (in which case, if the Person notifies the indemnifying party in writing that such Person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such Person); and provided, further, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the defense of any such claim or litigation.  It
is understood that the indemnifying party shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified parties.  No indemnifying party will, except with the consent of the indemnified party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation, does not impose any injunction or similar restriction on such indemnified party and does not include a statement as to or an admission of fault, liability, culpability or failure to act with respect to any law by an indemnified party.

(d)          Contribution.  If for any reason the indemnification provided for in the preceding paragraphs (a) and (b) is unavailable to an indemnified party or insufficient to hold it harmless, other than as expressly specified therein, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations.  The relative fault of such indemnifying party and  indemnified  party shall be  determined  by reference to, among other things,  whether any action in question,  including any untrue or alleged
untrue statement of a material fact or omission or alleged omission of a material fact, has been  taken  or made  by,  or  relates  to  information  supplied  by,  such indemnifying,  party or indemnified  party,  and the parties'  relative  intent, knowledge,  access to  information  and  opportunity  to correct or prevent such action, statement or omission.  The parties  hereto agree that it would not be just and  equitable if  contribution  pursuant  to this  section were  determined  by pro rata allocation or by any other method of allocation  that does not take into account the foregoing equitable considerations. No Person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution from any Person not guilty of such fraudulent misrepresentation.  In no event shall the contribution obligation of a holder of Registrable Securities be greater in amount than the dollar amount of the proceeds (net of all expenses paid by suc

h holder in connection with any claim relating to this Section 6 and the amount of any damages such holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission) received by it upon the sale of the
Registrable Securities giving rise to such contribution obligation.

(e)   The obligations of the Company and the Investors under this Section 6 shall survive the completion of any offering of Registrable Securities in a Registration Statement filed pursuant to the terms of this Exhibit A.

 

	
             
  	
            7.
 	
            Miscellaneous.
 

(a)          Amendments and Waivers.  This Exhibit A may be amended, modified or waived only by a writing signed by the Company and the Required Investors; provided that if any such amendment, modification or waiver would adversely affect in any material respect any Investor or group of Investors who have comparable rights under this Exhibit A disproportionately to the other Investors having such comparable rights, such amendment, modification, or waiver shall also require the written consent of the Investor(s) so adversely affected.  

(b)          Notices.  All notices and other communications provided for or permitted hereunder shall be made as set forth in Section 12.1 of the Purchase Agreement.

(c)          Assignments and Transfers by Investors.  The provisions of this Exhibit A shall be binding upon and inure to the benefit of the Investors and their respective successors and assigns.  An Investor may transfer or assign, in whole or from time to time in part, to one or more Persons its rights hereunder in connection with the transfer of Registrable Securities by such Investor to such Person, provided that (i) after such assignment or transfer, such Person holds at least twenty-five percent (25%) of the Registrable Securities, (ii) such Investor complies with all laws applicable thereto and provides written notice of assignment to the Company promptly after such assignment is effected and (iii)
the transferee agrees in writing to be bound by this Exhibit A as if it were a party hereto; provided, however, that the limitation set forth in subsection (c)(i) shall not apply to assignments or transfers to a subsidiary, parent or affiliate of the Investor. 

(d)         Assignments and Transfers by the Company.  This Exhibit A may not be assigned by the Company (whether by operation of law or otherwise) without the prior written consent of the Required Investors, provided, however, that the Company may assign its rights and delegate its duties hereunder to any surviving or successor corporation in connection with a merger or consolidation of the Company with another corporation, or a sale, transfer or other disposition of all or substantially all of the Company’s assets to another corporation, without the prior written consent of the Required Investors, after notice duly given by the Company to each Investor.

(e)          Benefits of this Exhibit A.  The terms and conditions of this Exhibit A shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties.  Nothing in this Exhibit A , express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Exhibit A, except as expressly provided in this Exhibit A.

(f)          Titles and Subtitles.  The titles and subtitles used in this Exhibit A are used for convenience only and are not to be considered in construing or interpreting this Exhibit A.

(g)          Severability.  Any provision of this Exhibit A that 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 but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provisions hereof prohibited or unenforceable in any respect.

(h)          Further Assurances.  The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

(i)          Entire Agreement.  This Exhibit A is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein.  This Exhibit A supersedes all prior agreements and understandings between the parties with respect to such subject matter.

(k)         Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.  This Exhibit A shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to the choice of law principles thereof, provided, however, that corporate matters shall be governed by the Delaware General Corporation Law.  Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of New York located in New York County and the United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment
relating to or arising out of this Exhibit A and the transactions contemplated hereby.  Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Exhibit A.  Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court.  Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO
REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS EXHIBIT A AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

(l)         Obligations of Investors. The Company acknowledges that the obligations of each Investor under this Exhibit A are several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor under this Exhibit A.  The decision of each Investor to enter into to this Exhibit A has been made by such Investor independently of any other Investor.  The Company further acknowledges that nothing contained in this Exhibit A, and no action taken by any Investor pursuant hereto, shall be deemed
to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated hereby.  Each Investor shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of this Exhibit A, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose.

 

 

  

Schedule 1

 

Plan of Distribution

 

The selling stockholders, which as used herein includes donees, pledgees, transferees or other successors-in-interest selling shares of common stock or interests in shares of common stock received after the date of this prospectus from a selling stockholder as a gift, pledge, partnership distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of common stock or interests in shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions.  These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.

 

The selling stockholders may use any one or more of the following methods when disposing of shares or interests therein:

 

- ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

 

- block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;

 

- purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

 

	
             
 	
            - an exchange distribution in accordance with the rules of the applicable exchange;
 

 

	
             
 	
            - privately negotiated transactions;
 

 

- short sales effected after the date the registration statement of which this Prospectus is a part is declared effective by the SEC;

 

- through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

 

- broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share; and

 

	
             
 	
            - a combination of any such methods of sale.
 

 

The selling stockholders may, from time to time, pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock, from time to time, under this prospectus, or under an amendment or supplement to this prospectus under Rule 424(b)(3) or other applicable provision of the 1933 Act amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus.  The selling stockholders also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

In connection with the sale of our common stock or interests therein, the selling stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume.  The selling stockholders may also sell shares of our common stock short and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities.  The selling stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell
pursuant to this prospectus (as supplemented or amended to reflect such transaction).

 

The aggregate proceeds to the selling stockholders from the sale of the common stock offered by them will be the purchase price of the common stock less discounts or commissions if any.  Each of the selling stockholders reserves the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents.  We will not receive any of the proceeds from this offering. 

 

The selling stockholders also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the 1933 Act, provided that they meet the criteria and conform to the requirements of that rule.

 

The selling stockholders and any underwriters, broker-dealers or agents that participate in the sale of the common stock or interests therein may be "underwriters" within the meaning of Section 2(11) of the Securities Act.  Any discounts, commissions, concessions or profit they earn on any resale of the shares may be underwriting discounts and commissions under the 1933 Act.  Selling stockholders who are "underwriters" within the meaning of Section 2(11) of the 1933 Act will be subject to the prospectus delivery requirements of the Securities Act.

 

To the extent required, the shares of our common stock to be sold, the names of the selling stockholders, the respective purchase prices and public offering prices, the names of any agents, dealer or underwriter, any applicable commissions or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement that includes this prospectus.

 

In order to comply with the securities laws of some states, if applicable, the common stock may be sold in these jurisdictions only through registered or licensed brokers or dealers.  In addition, in some states the common stock may not be sold unless it has been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.

We have advised the selling stockholders that the anti-manipulation rules of Regulation M under the 1934 Act may apply to sales of shares in the market and to the activities of the selling stockholders and their affiliates.  In addition, the Company has advised each Selling Stockholder that the Commission currently takes the position that coverage of short sales “against the box” prior to the effective date of the registration statement of which this prospectus is a part would be a violation of Section 5 of the Securities Act, as described in Item 65, Section A, of the Manual of Publicly Available Telephone Interpretations, dated July 1997, compiled by the Office of Chief Counsel, Division of Corporate Finance.  Further, we will make copies of this prospectus (as it may be supplemented or amended from time to time) available to the selling stockholders for the purpose of
satisfying the prospectus delivery requirements of the Securities Act.  The selling stockholders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act.

 

We have agreed to indemnify the selling stockholders against liabilities, including liabilities under the 1933 Actand state securities laws, relating to the registration of the shares offered by this prospectus.

 

We have agreed with the selling stockholders to keep the registration statement of which this prospectus constitutes a part effective until the earlier of (1) such time as all of the shares covered by this prospectus have been disposed of pursuant to and in accordance with the registration statement or (2) the date on which the shares may be sold pursuant to Rule 144(k) of the Securities Act.

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