Document:

Unassociated Document

    THIS
      NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
      NOR
      UNDER ANY STATE SECURITIES LAW AND MAY NOT BE PLEDGED, SOLD, ASSIGNED OR
      TRANSFERRED UNLESS (I) A REGISTRATION STATEMENT WITH RESPECT THERETO IS
      EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
      AND ANY APPLICABLE STATE SECURITIES LAW REQUIREMENTS HAVE BEEN MET OR (II)
      EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND
      THE
      REGISTRATION OR QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS
      ARE AVAILABLE.

     

    AGN
      NETWORKS, INC.

     

    8%
      PROMISSORY NOTE

     

    
      	
               

              No.
                JT________

               

            	 	
               

              $250,000

               

            

    

     

    December
      12, 2006

     

     

    AGN
      NETWORKS, INC.
      a
      Delaware corporation (the “Company”), for value received hereby promises to pay
      to the order of X AND O COSMETICS, INC., or its registered assigns (the
“Holder”), the sum of Two Hundred Fifty Thousand Dollars ($250,000) (the
“Principal Amount”) together with any interest accrued thereon as provided in
      this Note, on or before December 12, 2007, (the “Maturity Date”). 

     

    Payment
      for all amounts due hereunder shall be made by mail to the registered address
      of
      the Holder at 154 Toledo Street, Farmingdale, NY 11735, or such other address
      as
      the Holder may, from time to time, notify the Company in writing. 

     

    This
      Note
      is subject to the following additional provisions to which the Holder, by
      acceptance of this Note, agrees:

     

    1.  Prepayment.
      The
      Company may prepay this Note, in whole or in part, at any time and from time
      to
      time without prepayment premium or penalty. Any prepayment shall be credited
      first to accrued and unpaid Interest (as defined below) and then to the
      outstanding Principal Amount.

     

    2.  Computation
      of Interest.

     

    (a)
      Base
      Interest Rate.
      Subject
      to subsections 2(b) and 2(c) below, the outstanding Principal Amount shall
      bear
      interest at the rate of eight percent (8%) per annum, commencing on the date
      hereof (the “Interest”).
      All
      computations of Interest hereunder shall be made based on the actual number
      of
      days elapsed in a year of 365 days (including the first day but excluding the
      last day during which any such Principal Amount is outstanding). The Principal
      Amount of this Note, together with any accrued and unpaid Interest, shall be
      payable on the Maturity Date. 

    

    (b) Default
      Interest.
      If on
      the Maturity Date the Principal Amount, together with any accrued and unpaid
      Interest, (i) has not been paid in full, the rate of interest applicable to
      the
      unpaid Principal Amount shall be adjusted to Twelve percent 12 % per annum
      from
      the date of default until the Company pays all amounts due under this Note;
      provided, that in no event shall the interest rate exceed the Maximum Rate
      provided in Section 2(c) below.

    

    (c) Maximum
      Rate.
      In the
      event that it is determined that, under the laws relating to usury applicable
      to
      the Company or the indebtedness evidenced by this Note (“Applicable
      Usury Laws”),
      the
      interest charges and fees payable by the Company in connection herewith or
      in
      connection with any other document or instrument executed and delivered in
      connection herewith cause the effective interest rate applicable to the
      indebtedness evidenced by this Note to exceed the maximum rate allowed by law
      (the “Maximum Rate”), then such interest shall be recalculated for the period in
      question and any excess over the Maximum Rate paid to the Holder with respect
      to
      such period shall be credited, without further agreement or notice, to the
      outstanding Principal Amount to reduce the outstanding Principal Amount by
      such
      credited amount with the same force and effect as though the Company had
      specifically designated such extra sums to be so applied to the Principal Amount
      and the Holder had agreed to accept such extra payment(s) as a premium-free
      prepayment. All such deemed prepayments shall be applied to the principal
      balance payable on the Maturity Date. In no event shall any agreed-to or actual
      exaction as consideration for this Note exceed the limits imposed or provided
      by
      Applicable Usury Laws to the use or detention of money or to forbearance in
      seeking its collection.

     

    
      
         

      

      
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    3.  Insolvency.
      The
      outstanding Principal Amount of this Note, together with any accrued and unpaid
      Interest, shall become immediately due and payable upon the occurrence of any
      of
      the following events: (a) the dissolution of the Company; (b) the admission
      in
      writing of the Company’s inability to pay its debts as they become due; (c) any
      assignment by the Company for the benefit of creditors; (d) any application
      by
      the Company for appointment of a receiver; (e) the commencement by the Company
      of a voluntary case under any provision of the Federal Bankruptcy Code (the
      “Code”) or amendments thereto or any other federal or state law affording relief
      to debtors; or (f) there shall be commenced against the Company any such
      proceeding, application or an involuntary case under the Code, which proceeding,
      application or case is not dismissed or withdrawn within ninety (90) days of
      commencement or filing, as the case may be.

     

    4.  Restrictions
      on Transfer.
      This
      Note is non-negotiable and it may not be sold, transferred, pledged, assigned
      or
      hypothecated without the prior written consent of the Company (and in accordance
      with the restrictive legend on the first page of this Note). 

     

    5.  Optional
      Purchase of all of the capital stock of the Company by the
      Holder.
      The
      Holder shall have the unlimited, irrevocable option, but not the obligation,
      to
      purchase from the Company, pursuant to the terms and conditions set forth in
      Exhibit
      A
      attached
      hereto, all of the capital stock of the Company. Holder shall incur no liability
      in the event that the Holder does not exercise such option.

     

    6.  Event
      of Default.  

     

    (a)  In
      case
      the Company fails to pay back any outstanding amount of this Note for any reason
      whatsoever, the
      Holder may, by written notice to the Company, declare the full principal amount
      of this Note (and, at such Holder's option, all other Notes then held by such
      Holder), together with interest and other amounts owing in respect thereof,
      to
      the date of acceleration, to be, whereupon the same shall become, immediately
      due and payable in cash. Such declaration may be rescinded and annulled by
      Holder at any time prior to payment hereunder. No such rescission or annulment
      shall affect any subsequent Event of Default or impair any right consequent
      thereon. An Event of Default shall occur upon:

     

    (b)  Any
      default in the payment of the principal of, interest on or liquidated damages
      in
      respect of, this Note, free of any claim of subordination, as and when the
      same
      shall become due and payable (whether on the applicable interest payment date,
      the Maturity Date, by acceleration or otherwise).

     

    (c)  The
      Company or any of its subsidiaries commencing a case under any applicable
      bankruptcy or insolvency laws as now or hereafter in effect or any successor
      thereto, or the Company commencing any other proceeding under any
      reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
      insolvency or liquidation or similar law of any jurisdiction whether now or
      hereafter in effect relating to the Company or any subsidiary thereof; or there
      is commenced against the Company or any subsidiary thereof any such bankruptcy,
      insolvency or other proceeding which remains undismissed for a period of sixty
      (60) days; or the Company or any subsidiary thereof is adjudicated insolvent
      or
      bankrupt; or any order of relief or other order approving any such case or
      proceeding is entered; or the Company or any subsidiary thereof suffers any
      appointment of any custodian or the like for it or any substantial part of
      its
      property which continues undischarged or unstayed for a period of sixty (60)
      days; or the Company or any subsidiary thereof makes a general assignment for
      the benefit of creditors; or the Company shall fail to pay, or shall state
      that
      it is unable to pay, or shall be unable to pay, its debts generally as they
      become due; or the Company or any subsidiary thereof shall call a meeting of
      its
      creditors with a view to arranging a composition or adjustment of its debts;
      or
      the Company or any subsidiary thereof shall by any act or failure to act
      indicate its consent to, approval of or acquiescence in any of the foregoing;
      or
      any corporate or other action is taken by the Company or any subsidiary thereof
      for the purpose of effecting any of the foregoing.

     

    
      
         

      

      
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    (b)  The
      Company’s default in any of its obligations or if an event shall occur, or shall
      fail to occur, which gives (or would give after the passage of time or giving
      of
      notice or both) the payee of any such obligation the right to accelerate the
      payment thereof under any mortgage, credit agreement or other facility,
      indenture agreement, promissory note or other instrument under which there
      may
      be issued, or by which there may be secured or evidenced any indebtedness of
      the
      Company in an amount exceeding one hundred thousand dollars ($100,000), whether
      such indebtedness now exists or shall hereafter be created and such default
      shall result in such indebtedness becoming or being declared due and payable
      prior to the date on which it would otherwise become due and
      payable.

     

    (c)  The
      Company shall be a party to any merger or consolidation pursuant to which the
      Company shall not be the surviving entity or shall sell, transfer or otherwise
      dispose of all or substantially all of its assets in one or more transactions,
      or shall redeem more than a de
      minimis
      number
      of shares of common stock.

     

    7.  Covenants
      of the Company. 

     

    (a) The
      obligations of the Company under this Note shall not be subject to reduction,
      limitation, impairment, termination, defense, set-off, counterclaim or
      recoupment for any reason. Except as expressly provided herein, no provision
      of
      this Note shall alter or impair the obligation of the Company, which is absolute
      and unconditional, to pay the principal of, interest and liquidated damages
      (if
      any) on, this Note at the time, place, and rate, and in the coin or currency,
      herein prescribed. This Note is a direct obligation of the Company. This Note
      ranks pari passu
      with all
      other Notes now or hereafter issued under the terms set forth herein.

     

    (b) The
      Company agrees not to contract with any party, other than the Holder, with
      respect to the sale of any significant percentage (more than 10%) of the
      Company’s capital stock or any significant assets while any amounts are due
      under this Note without the consent of the Holder.

     

    8.  Miscellaneous.

     

    (a)  No
      Recourse.
      No
      recourse shall be had for the payment of the Principal Amount or the Interest
      on
      this Note, or for any claim based hereon or otherwise in respect hereof, against
      any incorporator, shareholder, officer, director, representative or agent as
      such, past, present or future, of the Company or any successor or assign,
      whether by virtue of any constitution, statute or rule of law, or by the
      enforcement of any assessment or penalty or otherwise, all such liability being,
      by the acceptance hereof and as part of the consideration for the issue hereof,
      expressly waived and released by the Holder (and the Holder’s successors and
      assigns).

     

    (b)  Limited
      Rights of Holders.
      This
      Note shall not entitle the Holder to any of the rights of a stockholder of
      the
      Company, including without limitation, the right to vote, to receive dividends
      and other distributions, or to receive any notice of, or to attend, meetings
      of
      stockholders or any other proceedings of the Company.

     

    
      
         

      

      
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    (c)  Loss,
      theft, destruction, or mutilation
      of
      the Note.
      Upon
      receipt by the Company of evidence satisfactory to it of the loss, theft,
      destruction, or mutilation of this Note and (in the case of loss, theft or
      destruction) of an indemnity reasonably satisfactory to it, and upon surrender
      and cancellation of this Note, if mutilated, the Company will deliver a new
      Note
      of like tenor in lieu of this Note. Any Note delivered in accordance with the
      provisions of this Section shall be dated as of the date of this
      Note.

     

    (b) Amendments
      and Waivers.
      No
      provision of this Note may be amended without the express written consent of
      both the Company and the Holder. No delay by the Company in exercising any
      power
      or right hereunder shall operate as a waiver of any power or right, nor shall
      any single or partial exercise of any power or right preclude other or further
      exercise thereof, or the exercise thereof, or the exercise of any other power
      or
      right hereunder or otherwise; and no waiver whatsoever or modification of the
      terms hereof shall be valid unless set forth in writing by the Holder and then
      only to the extent set forth therein. 

     

    (c) Governing
      Law; Jurisdiction.
      This
      Note is made and delivered in, and shall be governed by and construed in
      accordance with the laws of, the State of New York (without giving effect to
      principles of conflicts of laws of the State of New York or any other state),
      and any dispute shall be resolved in the state or federal courts located in
      New
      York County, New York.

     

    (d) Counterparts.
      This
      Agreement may be executed in one or more counterparts, including facsimile
      signatures, each of which shall be deemed an original but all of which together
      will constitute one and the same instrument.

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    [SIGNATURE
      PAGE FOLLOWS]

     

    
      
         

      

      
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    IN
      WITNESS WHEREOF, the Company has caused this Note to be duly executed by a
      duly
      authorized officer as of the date first above indicated.

     

    
      	 	 	 
	 	AGN
              NETWORKS, INC.
	 
 	 
 	 
 
	 	By:  	/s/
              Ernie
              A. Darius
	 	
              
Name:
Ernie
              A. Darius
	 	Title:
              President

    

    
      
        
          Signature
            Page to the Note

        

         

      

      
         

        
          

        

      

      
         

        
          

        

      

    

    Exhibit
      A

     

    Optional
      Purchase Term SheetEXECUTION
      COPY

    SHAREHOLDERS’
      AGREEMENT

     

    THIS
      SHAREHOLDERS’ AGREEMENT (“Agreement”),
      is
      entered into and is effective as of November 21, 2006, by and among Motorsports
      & Entertainment of Tennessee, Inc., a Nevada corporation (the “Corporation”),
      and
      the individuals and entities who have signed the signature page(s) to this
      Agreement (referred to individually as a “Shareholder”
and
      collectively as the “Shareholders”).

     

    WITNESSETH:

     

    WHEREAS,
      the Corporation is authorized to issue Fifty-Five Million (55,000,000) shares
      of
      Common Stock, par value $0.01 per share (collectively the “Common
      Stock”).

     

    WHEREAS,
      the Corporation shall issue One Thousand (1,000) Shares to the Shareholders
      upon
      the execution of this Agreement, and the issued and outstanding shares of Common
      Stock owned by Shareholders will be owned as set forth on the stock ledger
      of
      the Company and listed on Schedule A attached herein (the “Shares”).

     

    WHEREAS,
      upon execution of the Agreement, the only issued and outstanding securities
      of
      the Corporation are the shares of Common Stock owned by the Shareholders, as
      set
      forth on Schedule A.

     

    WHEREAS,
      the parties desire to enter into certain agreements to set forth certain rights
      and obligations among themselves and with the Corporation pertaining to the
      management, direction and operation of the Corporation.

     

    WHEREAS,
      the parties have agreed that, upon the occurrence of certain events, as
      specified in this Agreement, that certain Shareholders or the Corporation shall
      have the right or be obligated to purchase the Shares of certain other
      Shareholders, and in connection therewith that certain limitations and
      restrictions should be placed upon the sale, transfer and/or encumbrance of
      the
      Shares owned by Shareholders.

     

    NOW
      THEREFORE, in consideration of the aforesaid premises and other good and
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the parties do hereby covenant and agree as follows:

     

    1.  RESTRICTIONS
      ON TRANSFER OF SHARES.

     

    1.1.  Restrictions.
      Except
      as hereinafter expressly permitted by this Agreement (in Section 2 or otherwise)
      and subject to the terms hereof, no Shareholder shall, without the prior written
      consent of the Board of Directors, directly
      or indirectly, exchange, sell, bequeath, pledge, mortgage, hypothecate,
      encumber, distribute, transfer (including any transfer pursuant to any
      foreclosure, assignment or default by a Shareholder under any financing
      agreement), give, assign or in any other manner whatsoever dispose or attempt
      to
      dispose of any Shares or any interest in Shares held by such Shareholder at
      any
      time; provided, however, that such prohibition shall be inapplicable with
      respect to purchases of Shares by the Corporation under the terms of any
      restricted stock purchase or similar agreements to which the Corporation and
      a
      Shareholder may be parties. Any transaction which violates the provisions of
      this Section 1 and which does not fully comply with the terms of this Agreement,
      shall be void and ineffective. A copy of this Agreement shall be kept at the
      principal place of business of the Corporation. 

     

    No
      Shareholder shall sell, transfer (including any transfer pursuant to any
      foreclosure, assignment or the default by any Shareholder under any financing
      agreement) or encumber any Shares, unless such Shareholder first provides notice
      to the Corporation of the manner and circumstances of the proposed transfer
      in
      reasonable detail, and a written opinion of counsel to the Corporation or other
      legal counsel who shall be reasonably satisfactory to the Corporation, addressed
      to the Corporation and reasonably satisfactory in form and substance to the
      Corporation’s counsel, to the effect that the proposed transfer of the Shares
      may be effected without registration under the Securities Act of 1933, as
      amended (the “Securities
      Act”)
      and
      applicable state securities laws, or other evidence acceptable to the Board
      of
      Directors that registration is not necessary. No Shareholder shall transfer
      any
      Shares to any person or entity of such person or entity or any of its Affiliates
      is reasonably believed by the Board of Directors to be a competitor of the
      Corporation.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.2.  Stock
      Certificates.
      Upon
      the execution of this Agreement, the Corporation shall imprint upon each stock
      certificate representing Shares the following legend:

     

    THIS
      CERTIFICATE IS SUBJECT TO THE PROVISIONS OF THE SHAREHOLDERS’ AGREEMENT,
DATED
      NOVEMBER 21, 2006,
      BY AND
      AMONG THE CORPORATION AND ITS SHAREHOLDERS NAMED THEREIN, THE ORIGINAL OF WHICH
      IS ON FILE AT THE OFFICES OF THE CORPORATION.

     

    Additionally,
      unless and until the Corporation has registered its stock under applicable
      securities law, or otherwise complied with applicable federal, state and/or
      local laws as to the sale or transfer of securities, each stock certificate
      issued or to be issued shall bear the following additional legend:

     

    THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
      OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THESE
      SHARES FILED UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES
      LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION. TO
      THE
      EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER SUCH SECURITIES
      LAWS.

     

    The
      parties hereto agree that all Shares of the Corporation not presently owned
      by
      the Shareholders, but hereafter issued to or acquired by the Shareholders,
      shall
      be subject to this Agreement and shall have endorsed thereon the above
      legends.

     

    2.  RIGHT
      OF
      FIRST REFUSAL.

     

    A
      Shareholder may sell or transfer all, or any portion, of such Shareholder’s
      Shares to any person or entity (the “Transferee”)
      pursuant to a bona fide, written, all cash offer (an “Offer”)
      without obtaining the consents set forth in this Section 2 if such transfer
      complies in all respects with this Section 2 and any other transfer requirement
      set forth in this Agreement. Such Shareholder (the “Transferring
      Shareholder”)
      shall
      deliver written notice (the “Transfer
      Notice”)
      to the
      Corporation and the other Shareholders (the “Remaining
      Shareholders”).
      The
      Transfer Notice shall set forth the exact terms of the Offer and the number
      of
      Shares which the Transferring Shareholder wishes to sell pursuant to the Offer
      (the “Offered
      Shares”),
      together with a copy of the Offer, and a statement of the desire of the
      Transferring Shareholder to sell the Offered Shares pursuant to the terms and
      conditions of the Offer. Thereafter, the Corporation, and if the Corporation
      fails to act as specified in this Section 2, the Remaining Shareholders, shall
      have the right and option to purchase all, or any portion, of the Offered Shares
      on the terms specified in the Offer and at the price equal the price specified
      in the Offer. If the Corporation desires to exercise its option, it shall give
      notice (the “Counter
      Notice”)
      to
      that effect to the Transferring Shareholder with a copy to the Remaining
      Shareholders within ten (10) days after receipt of the Transfer Notice. Any
      Counter Notice which is delivered after the expiration of such period shall
      be
      ineffective. Such Counter Notice shall set forth a date, not later than ten
      (10)
      days from the service of the Counter Notice, on which the Closing (as
      hereinafter defined) shall be held. By delivering a Counter Notice, the
      Corporation shall be deemed to have irrevocably agreed to purchase all of the
      Offered Shares. The Corporation’s rights under this Section 2 shall be
      assignable.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    If
      the
      Corporation does not deliver a Counter Notice within such twenty (20) days,
      it
      shall give rise to an identical option in favor of the Remaining Shareholders
      to
      purchase, on the terms and at the price previously available to the Corporation,
      all, or any portion, of the Offered Shares. If a Remaining Shareholder desires
      to exercise such Remaining Shareholder’s option, such Remaining Shareholder
      shall have a period of twenty (20) days from the expiration of the time in
      which
      the Shareholders’ Counter Notice could have been served, to give such Remaining
      Shareholder’s Counter Notice (the “Shareholder
      Counter Notice”)
      to the
      Shareholders and the Corporation. Any Shareholder Counter Notice which is
      delivered after the expiration of such period shall be ineffective. The
      Shareholder Counter Notice shall set forth a date, not later than thirty (30)
      days from the service of such Shareholder Counter Notice, on which the Closing
      shall be held. By delivering a Shareholder Counter Notice, a Remaining
      Shareholder shall be deemed to have irrevocably agreed to purchase a pro rata
      number of Offered Shares so that all Remaining Shareholders delivering a
      Shareholder Counter Notice shall maintain their relative proportion of Share
      ownership as among themselves. If more than one Remaining Shareholder delivers
      a
      timely Shareholder Counter Notice, then such Remaining Shareholders shall
      purchase the Offered Shares at a Closing on the latest date specified in any
      such Shareholder Counter Notice. The Remaining Shareholders may purchase all
      of
      the Offered Shares but may not individually or together purchase less than
      all
      of the Offered Shares.

     

    In
      the
      event that none of the Remaining Shareholders or the Corporation exercises
      his,
      her or its respective option to purchase all of the Offered Shares as set forth
      above or timely deliver notice of their intention to do so, then, within sixty
      (60) days from the expiration of the Shareholder Counter Notice option period,
      the Offered Shares may be sold, assigned or transferred by the Transferring
      Shareholder in accordance with the terms of the Offer; provided that (i) the
      Shares of the Transferring Shareholder shall in the hands of the Transferee
      remain subject to the terms and conditions of this Agreement and (ii) the
      Offered Shares may not be transferred to any person or entity that the Board
      of
      Directors in good faith deems to be a competitor of the Corporation. If for
      any
      reason no such transfer shall take place within such sixty (60) day period,
      the
      Offered Shares shall remain subject to this Agreement and any further offer
      or
      sale must be made in accordance with the provisions of this
      Agreement.

     

    Notwithstanding
      the terms of this Section 2, except with the consent of the Board of Directors,
      no Shareholder shall be permitted to be a Transferring Shareholder if any Common
      Stock held by him, her of it is subject to a right of repurchase under a
      restricted stock purchase or similar agreement between such Shareholder and
      the
      Corporation. Notwithstanding the terms of this Section 2, the
      provisions of this Section 2 shall be inapplicable with respect to any sale
      or
      transfer by any Shareholder under Section 3 who is “tagging along” or being
“dragged along.”

     

    3.  TAG
      ALONG; DRAG ALONG.

     

    3.1.  Tag
      Along.
      If any
      Transferring Shareholder elects to sell such Shareholder’s Shares under Section
      3 to an unaffiliated third party and neither the Corporation nor any Remaining
      Shareholder is the purchaser and such shares represent more than fifty percent
      (50%) of
      the
      Corporation’s outstanding shares, then all of the Shareholders shall have the
      right and option to sell all of their Shares which are not then subject to
      a
      right of repurchase under a restricted stock purchase or similar agreement
      at
      the same price per share and on the same terms on which the Transferring
      Shareholder sells such Transferring Shareholder’s Shares under this Section 3;
      and in such case, no Transferring Shareholder may sell any of such Transferring
      Shareholder’s Shares under this Section 3, unless all Shareholders have the
      right and option to sell all of their Shares which are not then subject to
      a
      right of repurchase under a restricted stock purchase or similar agreement
      at
      the same price per Share and on the same terms and conditions. Notwithstanding
      the foregoing, the terms of this Section 3.1 shall be inapplicable to any
      transfer under Section 2 to a Shareholder or the Corporation. The Transferring
      Shareholder shall provide to the other Shareholders complete definitive
      documentation of such a proposed sale at least twenty (20) business days prior
      to any such sale; and the other Shareholders may only exercise such right and
      option by delivering irrevocable and unconditional notice of their intent to
      do
      so within ten (10) business days prior to such sale. In any such event, all
      Shareholders shall vote in favor of such transaction and enter into all
      agreements necessary to effectuate the same and act in all other respects in
      order to effectuate the same, and not assert any dissenters’ or similar rights.
      Notwithstanding anything herein to the contrary, in the event of a sale under
      this Section, no Shareholder shall be required to provide indemnification which
      (i) is not several in nature, or (ii) allows liability in excess of the amount
      of net proceeds actually received by such Shareholder.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    4.  INVOLUNTARY
      TRANSFERS.

     

    Upon
      any
      Involuntary Transfer (as hereinafter defined) of any Shares by any Shareholder,
      (i) such Shareholder shall be deemed to have assigned such Shareholder’s Shares
      to a voting trust (in form and substance reasonably acceptable to such
      Shareholder to the other Shareholder and the Corporation); and (ii) the other
      Shareholder first and the Corporation only if the other Shareholder does not
      exercise its right, shall have an irrevocable right (which shall be assignable)
      to acquire the legal and beneficial interest in such Shareholder’s Shares (and
      all other rights of such Shareholder with respect to such Shares) for an amount
      equal to the fair market value of those Shares as reasonably determined by
      the
      Board of Directors. Such voting trust shall have a perpetual term and the
      trustee shall be a designee of the other Shareholder or the Corporation as
      the
      case may be. For the purposes of this Agreement, “Involuntary
      Transfer”
means
      any involuntary transfer of any interest in any Shares (other than a merger),
      whether by operation of law foreclosure, assignment or the default by any
      Shareholder under any financing agreement, or otherwise, including, but not
      limited to, any transfer incident to any bankruptcy or insolvency proceeding,
      divorce proceeding or escheat proceeding or any levy of attachment or
      execution.

     

    5.  MANAGEMENT
      OF THE CORPORATION

     

    The
      management, control and operation of the Corporation shall be governed by the
      Bylaws and Articles of Incorporation of the Corporation as presently in effect
      and as amended from time to time, subject to and except as otherwise modified
      by
      the following provisions (with respect to the Shareholders):

     

    5.1.  Board
      of Directors.
      

     

    (A)  The
      Board
      of Directors (the “Board”)
      of the
      Corporation shall consist of three (3) members, of which one member shall be
      A.
      Robert Koveleski and the second member shall be Joseph R. Mattioli. The
      remaining member of the Board shall be nominated and approved by the current
      members of the Board (currently, A. Robert Koveleski and Joseph R. Mattiolli,
      III). 

     

    (B)  A
      Director may at any time summon a meeting of the Board. If a Director shall
      be
      absent, such Director shall have the power to appoint any person (including
      any
      other Director) to act as his alternate Director during his absence and at
      his
      discretion to remove such alternate Director. Every such appointment and removal
      shall be effected only by an instrument in writing signed by the appointor
      and
      presented to the Board prior to the Director’s absence. 

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    5.2.  Meetings
      of the Board.
      Unless
      the Directors shall otherwise resolve, at least two (2) Board Meetings shall
      be
      held, either in person or via telephone, in each period of twelve (12) months
      from the date hereof. Meetings of the Board shall be properly constituted (and
      where not properly constituted shall be void) on not less than three (3)
      Business Days’ notice (i.e. disregarding the date on which the notice is served
      and the date on which the meeting is to be held) given to each Director. The
      period of notice for Board Meetings shall be waived if all of the Directors
      (or
      where relevant their alternates) so agree in writing. All
      meetings of the Board of Directors may be conducted at any location either
      in
      person or via telephone.

     

    5.3.  Quorum.
      The
      quorum necessary for meetings of the Board shall be three (3) Directors,
      consisting of at least two (2) directors nominated by American Racing Capital,
      Inc. If a quorum is not present within sixty (60) minutes of the time fixed
      for
      the relevant meeting, the meeting shall stand adjourned for five (5) Business
      Days at the same time and place, and if a quorum is not present within sixty
      (60) minutes of the time fixed for that meeting, the meeting shall be dissolved.
      

     

    5.4.  Voting.
      Each
      Director shall be entitled to one vote. All questions arising at any meeting
      of
      the Board shall be determined by a majority of votes of the Directors present
      in
      person or by alternate and entitled to vote. 

     

    5.5.  Authority.
      A
      resolution in writing signed by all Directors (or in lieu of any Director,
      by
      his/her duly appointed alternate Director) shall be as valid and effective
      as if
      it had been passed at a meeting of the Board duly convened and held. Any such
      resolution may consist of several documents communicated to each Director (or
      alternate Director) by courier in like form, each subsequently signed by and
      correctly bearing the name of each and every Director (including any alternate
      Director where appropriate). The Board shall ensure that full and proper minutes
      of their meetings in a legible format are kept at the head office of the
      Corporation.

     

    5.6.  Vacancies.
      The
      position of a Director shall be automatically vacated if any of the following
      shall take place: (i) if such Director is insolvent or bankrupt; (ii) if such
      Director does not attend personally or through an alternate, for three
      consecutive Board Meetings in any twelve (12) months’ period; (iii) if such
      Director is found guilty of a criminal offence (but not a misdemeanour); (iv)
      if
      such Director resigns from the Board in writing; or (v) if such Director is
      removed by the Shareholder appointing him/her. Nothing shall prevent a
      Shareholder from holding the office of a Director and/or the Chairman of the
      Board.

     

    5.7.  Officers.
      The
      Corporation shall have a Chief Executive Officer/President (the “CEO”),
      which
      shall be nominated by LJ&J. The Corporation’s CEO shall be Joseph R.
      Mattiolli, III. Mr. Mattiolli shall also be Senior Managing Partner. The CEO
      shall be responsible for all tasks necessary and related to the management
      of
      the Corporation in his capacity as CEO, except for such matters as are
      specifically reserved by law for the Board of Directors. The Corporation shall
      have a Secretary (the “Secretary”),
      which
      shall be nominated by American Racing Capital, Inc., a Nevada corporation.
      The
      Corporation’s Secretary shall be A. Robert Koveleski.

     

    5.8.  Access
      to Information; Financial Information.
      The
      Corporation shall comply with the applicable provisions of Nevada law with
      respect to the Shareholders’ access to information of the
      Corporation.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    6.  SHAREHOLDER
      CONSENT REQUIRED.

     

    The
      Corporation shall not, without the prior written consent of 100% percent of
      the
      Shareholders, undertake any of the following:

     

    (a)  modify,
      amend, or in any way alter the Articles of Incorporation and the By-laws of
      the
      Corporation; 

     

    (b)  effect
      a
      liquidation, dissolution or winding up of the Corporation;

     

    (c)  contemplate
      or enter into any plans of merger or winding up of the Corporation;
      and

     

    (d)  institute
      any litigation, arbitration or other similar proceedings (other than proceedings
      against a Shareholder, which do not require the consent of that
      Shareholder).

     

    7.  TERMINATION.

     

    This
      Agreement and the rights and obligations of, and restrictions placed on, and
      the
      undertakings agreed to by the Shareholders hereunder shall terminate and become
      null and void immediately upon the occurrence of any of the following: (i)
      a
      dissolution or liquidation of the Corporation; (ii) a Shareholder becoming
      the
      owner of all of the issued and outstanding Shares; (iii) the execution of an
      instrument by parties to this Agreement holding 75% of the Common Stock pursuant
      to which such parties agree to terminate this Agreement; or (iv) the
      Corporation’s Common Stock are issued in an initial public offering or otherwise
      become publicly traded. This Agreement and the rights and obligations of, and
      restrictions placed on, and the undertakings agreed to by a Shareholder
      hereunder shall terminate and become null and void with respect to such
      Shareholder (but not the party acquiring such Shareholder’s Shares) immediately
      upon such Shareholder’s disposition of all shares owned by him, her or
      it.

     

    8.  CONFIDENTIALITY.

     

    Each
      Shareholder agrees that he, she or it will utilize Confidential Information
      (as
      defined below) solely for the purpose of the business of the Corporation and
      will make no other use of any Confidential Information. For the purposes of
      this
      Agreement, “Confidential Information” means that information which is
      confidential and proprietary to Corporation and which derives (or may derive)
      economic value to Corporation by not being generally known to others, or which
      Corporation is otherwise under an agreement of confidentiality with an
      unaffiliated third party. Confidential Information shall not include any
      information which was: (i) in the public domain prior to disclosure, or
      thereafter comes into the public domain without breach by such Shareholder
      of
      any confidentiality obligation hereunder; (ii) known by such Shareholder prior
      to disclosure to such Shareholder, provided that such information is not known
      by such Shareholder to be subject to another confidentiality agreement or other
      obligation of secrecy to another party; (iii) disclosed to such Shareholder
      by a
      third party not known to such Shareholder to be in violation of any
      confidentiality obligation owed to Corporation; or (iv) information required
      to
      be disclosed by law. Each Shareholder agrees that he, she or it will maintain
      and preserve the confidentiality and secrecy of such Confidential Information,
      including, without limitation, taking such steps to preserve the confidentiality
      of the Confidential Information as such Shareholder takes to preserve the
      confidentiality of his own confidential information. In the event that any
      Shareholder becomes legally compelled to disclose any of the Confidential
      Information, he shall provide Corporation with prompt written notice of such
      requirement so that Corporation may seek a protective order or other appropriate
      remedy. Each Shareholder acknowledges and agrees that the Confidential
      Information is and shall remain the property of Corporation and that upon the
      request of Corporation, such Shareholder shall promptly redeliver to Corporation
      all tangible expressions of the Confidential Information and will not retain
      any
      copies, extracts, compilations, work product or other reproductions in whole
      or
      in part of such Confidential Information.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    9.  NOTICES.

     

    All
      approvals, consents, notices, requests, demands and other communications under
      this Agreement shall be in writing and shall be deemed to have been duly given
      upon delivery, if delivered in person, or on the third business day after
      mailing, if mailed, by registered or certified mail, postage prepaid, return
      receipt requested:

     

    If
      to the
      Corporation:          Motorsports
      & Entertainment of Tennessee, Inc.

    Route
      940

    Pocono
      Lake Office Complex

    Pocono
      Lake, PA 18347

    Attn:
      A.
      Robert Koveleski at (858) 558-0568

    Joseph
      R.
      Mattiolli at (570) 646-0898

    

    If
      to the
      Corporation’s        Kirkpatrick
      & Lockhart Nicholson Graham, LLP

    Counsel:   
        
201
      South
      Biscayne Boulevard, Suite 2000 

    Miami,
      Florida 33131 

    Attention: 
      Clayton
      E. Parker, Esq. 

    Telephone: (305)
      539-3306 

    Facsimile:  
       (305)
      328-7095

     

    If
      to the
      Shareholders to the addresses set forth opposite their names on the signature
      pages hereto; or to such other address or to such other person as such parties
      shall have last designated by notice to the other parties.

     

    10.  MISCELLANEOUS.

     

    10.1.  Competition.
      The
      Corporation, its officers, directors and shareholders understand that Joseph
      R.
      Mattioli, III, is currently involved in other motor racing /NASCAR projects
      and
      venues which may be deemed to be in competition with the Corporation in the
      motor racing business and in the participation of current and future businesses,
      projects or venues and it is hereby agreed that Mr. Mattioli shall be free
      to
      continue to operate, own, participate in the management of and consult with
      any
      and all motor racing and other projects that Mr. Mattioli wishes to participate
      in now and in the future

     

    10.2.  Corporate
      Acts.
      The
      Shareholders hereby agree that, in any case in which the Corporation is
      obligated or has an option to purchase the Shares of a Shareholder pursuant
      to
      the terms of this Agreement, the Shareholder selling Shares shall take such
      action as is necessary and lawful to authorize such purchase.

     

    10.3.  Entire
      Agreement; Modification.
      This
      Agreement constitutes the entire final agreement among the parties with respect
      to the subject matter hereof and supersedes any and all prior agreements among
      the parties both oral and written concerning the subject matter of this
      Agreement. Each Shareholder and the Corporation ratify and approve all transfers
      and issuance of Shares through the date hereof. Neither this Agreement nor
      any
      term hereof may be amended, waived, discharged, or terminated, except by written
      instrument signed by the Corporation, and holders of 100% of the Shares.
      Notwithstanding the foregoing, the execution of a joinder or similar agreement
      by which a transferee of a Shareholder or a new Shareholder agrees to be bound
      by and become a party to this Agreement in the manner contemplated by this
      Agreement shall not be deemed an amendment, and shall be effective upon
      execution by such Shareholder and approval by the Board of
      Directors.

     

    10.4.  Binding
      Effect; Successors and Assigns.
      This
      Agreement shall be binding upon, inure to the benefit of, and be enforceable
      by,
      the parties to this Agreement and their respective administrators, legal
      representatives, nominees, heirs, successors and permitted assigns and
      transferees. If any person or entity shall acquire any Shares in any manner,
      whether by operation of law or otherwise, such Shares shall be held subject
      to
      all of the terms of this Agreement and, by taking and holding such Shares,
      such
      person or entity shall be deemed conclusively to have agreed to be bound by
      and
      to perform all of the terms of this Agreement. No such acquiring person shall
      sell, transfer, assign or encumber such Shares, except in accordance with the
      terms of this Agreement.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    10.5.  Severability.
      If any
      provision of this Agreement shall be held to be invalid or unenforceable, such
      invalidity or unenforceability shall attach only to such provision and shall
      not
      in any way affect or render invalid or unenforceable any other provision of
      this
      Agreement, and this Agreement shall be carried out as if such invalid or
      unenforceable provision were not contained in this Agreement.

     

    10.6.  Counterparts.
      This
      Agreement may be executed in any number of counterparts, all of which together
      shall constitute one and the same instrument.

     

    10.7.  Waivers
      and Remedies.
      The
      waiver by any of the parties of any other party’s prompt and complete
      performance, or breach or violation, of any provision of this Agreement shall
      not operate nor be construed as a waiver of any prior or subsequent breach
      or
      violation, and the waiver by any of the parties to exercise any right or remedy
      which he or it may possess under this Agreement shall not operate nor be
      construed as a bar to the exercise of such right or remedy by such party upon
      the occurrence of any subsequent breach or violation.

     

    10.8.  Attorneys’
      Fees.
      In the
      event that any of the parties to this Agreement institutes suit against any
      other party to this Agreement to enforce any of their rights under this
      Agreement, the prevailing party in such action shall be entitled to recover
      from
      the other party all reasonable costs thereof, including reasonable attorneys’
fees.

     

    10.9.  Additional
      Assurances.
      Each
      party to this Agreement covenants and agrees with the others that each of them
      shall, upon the reasonable request of any other of them, do, execute or cause
      to
      be made, done or executed, all such further lawful acts, deeds, things, devices,
      agreements, instruments and assurances whatsoever for the better or more perfect
      and absolute performance of the terms, conditions and provisions of this
      Agreement.

     

    10.10.  Specific
      Performance.
      Each of
      the parties acknowledges and agrees that the Shares are unique and are not
      freely transferable or marketable and for those reasons, among others, the
      parties would be irreparably damaged in the event that the provisions of this
      Agreement are not performed in accordance with their specific terms or are
      otherwise breached and that monetary damages would not provide an adequate
      remedy in such event. Accordingly, it is agreed that in addition to any other
      remedy to which the parties may be entitled at law or in equity, each of the
      parties shall be entitled to injunctive relief to prevent breaches of the
      provisions of this Agreement and, specifically, to enforce the terms and
      provisions of this Agreement in any action instituted in any court of competent
      jurisdiction thereof.

     

    10.11.  No
      Third Party Beneficiary.
      Nothing
      expressed or implied in this Agreement is intended, or shall be construed,
      to
      confer upon any person or entity other than the parties hereto and their
      respective legal representatives, heirs, successors and permitted assigns and
      transferees, any rights or remedies under or by reason of this
      Agreement.

     

    10.12.  Governing
      Law; Jury Trial Waiver.
      The
      parties acknowledge that this Agreement shall be governed by and construed
      and
      enforced in accordance with the laws of the state in which the Corporation
      is
      then incorporated. THE PARTIES EXPRESSLY WAIVE ANY RIGHTS WHICH THEY MAY HAVE
      TO
      A TRIAL BY JURY.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    10.13.  Construction.
      This
      Agreement shall be interpreted and construed without regard to any rule or
      presumption requiring that this Agreement be interpreted or construed against
      the party causing this Agreement to be drafted.

     

    10.14.  Indemnification.
      The
      Corporation shall indemnify and hold harmless any director, officer, Shareholder
      or employee who is a party to this Agreement against any actual losses, claims,
      damages, liabilities and expenses (including reasonable costs of investigation
      and the costs, fees and expenses of legal counsel) incurred by such person
      in
      connection with the defense of any action, suit or proceeding to which such
      person is made a party by reason of being or having been such director, officer,
      Shareholder or employee, except for gross negligence or intentional wrongdoing
      on the part of such person; provided, however, that in all events such person
      shall indemnify and hold harmless the Corporation against any actual losses,
      claims, damages, liabilities and expenses (including reasonable costs of
      investigation and the costs, fees and expenses of legal counsel) in respect
      of
      any action, suit, cause, claim, demand, payment or liability arising by reason
      of any and all gross negligence and/or intentional wrongdoing on the part of
      such person.

     

    10.15.  Independent
      Legal Representation.
      Each of
      the Shareholders acknowledges and represents that he or it has been advised
      by
      the Corporation, the Corporation’s counsel and the other Shareholders to seek
      independent legal counsel with respect to the negotiation, preparation and
      execution of this Agreement. None of the Shareholders has been represented
      by
      counsel to the Corporation or by the Corporation’s business of tax
      advisors.

     

    [Signatures
      begin on the following pages]

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties to this Agreement have set their hands and seals
      as
      of the day and year first above written.

    
      	 	 	 
	 	MOTORSPORTS
              & ENTERTAINMENT OF TENNESSEE, INC., a
              Nevada corporation
	 
 	 
 	 
 
	 	By:  	/s/
              Joseph R. Mattiolli, III 
	 	
              
Name:
              Joseph R. Mattiolli, III
	 	Title:
              President

    

     

    
      	 	 	 
	 	
              THE
                SHAREHOLDERS:

               

              AMERICAN RACING CAPITAL,
                INC.,
                a
                Nevada corporation

            
	 
 	 
 	 
 
	 	By:    	/s/ A. Robert
              Koveleski
	 	
              
Name:
              A.
              Robert Koveleski
	 	Title:
              President
              and CEO

    

     

    
      	 	 	 
	 	LJ
              & J ENTERPRISES, INC., a
              Pennsylvania corporation
	 
 	 
 	 
 
	 	By:  	/s/
              Joseph R. Mattiolli, III 
	 	
              
Name:
              Joseph R. Mattiolli, III
	 	Title:
              President

    

    

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    Schedule
      A

     

    SHAREHOLDERS
      OF

    MOTORSPORTS
      & ENTERTAINMENT OF TENNESSEE, INC.

     

    
      	
              Name

            	 	
              Address

            	 	
              Total

              Number
                of

              Company
                Common

              Shares
                Owned

            	 	
              Ownership
                Percentage

            
	 	 	 	 	 	 	 
	
              American
                Racing Capital, Inc.

            	 	
              6860
                Robbins Court San 

              Diego,
                CA 92122

            	 	
              510

            	 	
              51%

            
	 	 	 	 	 	 	 
	
              LJ&J
                Enterprises, Inc.

            	 	
              P.O.
                Box 378

              Long
                Pond, PA 18334

            	 	
               

              490

            	 	
              49%

            

    

     

    
      
        
        

      

      
        -11-

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