Document:

exv4w1

 

EXHIBIT 4.1

SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE

AGREEMENT

Dated as of May ___, 2006

among

DIRT MOTOR SPORTS, INC.

and

THE PURCHASERS LISTED ON EXHIBIT A

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	PAGE	 
	ARTICLE I Purchase and Sale of Preferred Stock
	 	 	1	 
	 
	 	 	 	 
	Section 1.1 Purchase and Sale of Stock
	 	 	1	 
	Section 1.2 The Conversion Shares
	 	 	1	 
	Section 1.3 Purchase Price and Closing
	 	 	2	 
	Section 1.4 Series D Warrants
	 	 	2	 
	Section 1.5 Exchange of Promissory Notes
	 	 	2	 
	 
	 	 	 	 
	ARTICLE II Representations and Warranties
	 	 	2	 
	 
	 	 	 	 
	Section 2.1 Representations and Warranties of the Company
	 	 	2	 
	Section 2.2 Representations and Warranties of the Purchasers
	 	 	13	 
	 
	 	 	 	 
	ARTICLE III Covenants
	 	 	16	 
	 
	 	 	 	 
	Section 3.1 Securities Compliance
	 	 	16	 
	Section 3.2 Registration and Listing
	 	 	16	 
	Section 3.3 Inspection Rights
	 	 	16	 
	Section 3.4 Compliance with Laws
	 	 	16	 
	Section 3.5 Keeping of Records and Books of Account
	 	 	16	 
	Section 3.6 Reporting Requirements
	 	 	17	 
	Section 3.7 Amendments
	 	 	17	 
	Section 3.8 Other Agreements
	 	 	17	 
	Section 3.9 Distributions
	 	 	17	 
	Section 3.10 Status of Dividends
	 	 	17	 
	Section 3.11 Intentionally Omitted
	 	 	18	 
	Section 3.12 Future Financings; Right of First Offer and Refusal
	 	 	18	 
	Section 3.13 Reservation of Shares
	 	 	19	 
	Section 3.14 Transfer Agent Instructions
	 	 	20	 
	Section 3.15 Disposition of Assets
	 	 	20	 
	Section 3.16 Reporting Status
	 	 	20	 
	Section 3.17 Disclosure of Transaction
	 	 	20	 
	Section 3.18 Disclosure of Material Information
	 	 	21	 
	Section 3.19 Pledge of Securities
	 	 	21	 
	Section 3.20 Restrictions on Certain Issuances of Securities
	 	 	21	 
	Section 3.21 Independent Board Members
	 	 	21	 
	Section 3.22 Application for Nasdaq Listing
	 	 	21	 
	 
	 	 	 	 
	ARTICLE IV Conditions
	 	 	22	 
	Section 4.1 Conditions Precedent to the Obligation of the Company to Sell the Shares
	 	 	22	 

 

 

	 	 	 	 	 
	 	 	PAGE	 
	Section 4.2 Conditions Precedent to the Obligation of the Purchasers to
Purchase the Shares
	 	 	23	 
	 
	 	 	 	 
	ARTICLE V Stock Certificate Legend
	 	 	25	 
	 
	 	 	 	 
	Section 5.1 Legend
	 	 	25	 
	 
	 	 	 	 
	ARTICLE VI Indemnification
	 	 	27	 
	 
	 	 	 	 
	Section 6.1 General Indemnity
	 	 	27	 
	Section 6.2 Indemnification Procedure
	 	 	27	 
	 
	 	 	 	 
	ARTICLE VII Miscellaneous
	 	 	28	 
	 
	 	 	 	 
	Section 7.1 Fees and Expenses
	 	 	28	 
	Section 7.2 Specific Enforcement, Consent to Jurisdiction
	 	 	28	 
	Section 7.3 Entire Agreement; Amendment
	 	 	29	 
	Section 7.4 Notices
	 	 	29	 
	Section 7.5 Waivers
	 	 	30	 
	Section 7.6 Headings
	 	 	31	 
	Section 7.7 Successors and Assigns
	 	 	31	 
	Section 7.8 No Third Party Beneficiaries
	 	 	31	 
	Section 7.9 Governing Law
	 	 	31	 
	Section 7.10 Survival
	 	 	31	 
	Section 7.11 Counterparts
	 	 	31	 
	Section 7.12 Publicity
	 	 	31	 
	Section 7.13 Severability
	 	 	31	 
	Section 7.14 Further Assurances
	 	 	31	 

ii

 

     SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

     This SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT (the “Agreement”) is dated as of
May ___, 2006 by and among Dirt Motor Sports, Inc., a Delaware corporation (the “Company”), and
each of the Purchasers of shares of Series D Convertible Preferred Stock of the Company whose names
are set forth on Exhibit A hereto (individually, a “Purchaser” and collectively, the
“Purchasers”).

     The parties hereto agree as follows:

ARTICLE I

Purchase and Sale of Preferred Stock

          Section 1.1 Purchase and Sale of Stock. Upon the following terms and conditions, the
Company shall issue and sell to the Purchasers and each of the Purchasers shall purchase from the
Company, the number of shares of the Company’s Series D Convertible Preferred Stock, par value $.01
per share (the “Preferred Shares”), at a purchase price of Three Thousand Dollars ($3,000) per
share, set forth opposite such Purchaser’s name on Exhibit A hereto. Upon the following
terms and conditions, each of the Purchasers shall be issued Series D Warrants, in substantially
the form attached hereto as Exhibit B (the “Warrants”), to purchase the number of shares of
the Company’s common stock, par value $.0001 per share (the “Common Stock”) set forth opposite such
Purchaser’s name on Exhibit A hereto. The aggregate purchase price for the Preferred
Shares and the Warrants shall be
[                                        ]
 Dollars ($                                        ) (the
“Purchase Price”). The designation, rights, preferences and other terms and provisions of the
Series D Convertible Preferred Stock are set forth in the Certificate of Designation of the
Relative Rights and Preferences of the Series D Convertible Preferred Stock attached hereto as
Exhibit C (the “Certificate of Designation”). The Company and the Purchasers are executing
and delivering this Agreement in accordance with and in reliance upon the exemption from securities
registration afforded by Rule 506 of Regulation D (“Regulation D”) as promulgated by the United
States Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as
amended (the “Securities Act”) or Section 4(2) of the Securities Act.

          Section 1.2 The Conversion Shares. The Company has authorized and has reserved and
covenants to continue to reserve, free of preemptive rights and other similar contractual rights of
stockholders, a number of shares of Common Stock equal to at least one hundred twenty percent
(120%) of the number of shares of Common Stock as shall from time to time be sufficient to effect
the conversion of all of the Preferred Shares and exercise of the Warrants then outstanding, in
each case, without regard for any limitations on conversion or exercise. Any shares of Common
Stock issuable upon conversion of the Preferred Shares and exercise of the Warrants (and such
shares when issued) are herein referred to as the “Conversion Shares” and the “Warrant Shares”,
respectively. The Preferred Shares, the Conversion Shares and the Warrant Shares are sometimes
collectively referred to as the “Shares”.

 

 

          Section 1.3 Purchase Price and Closing. The Company agrees to issue and sell to the
Purchasers and, in consideration of and in express reliance upon the representations, warranties,
covenants, terms and conditions of this Agreement, the Purchasers, severally but not jointly, agree
to purchase that number of the Preferred Shares and Warrants set forth opposite their respective
names on Exhibit A. The aggregate Purchase Price of the Preferred Shares and Warrants
being acquired by each Purchaser is set forth opposite such Purchaser’s name on Exhibit A.
The closing of the purchase and sale of the Preferred Shares and Warrants shall take place at the
offices of Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of the Americas, New York, New York
10036 (the “Closing”) at 1:00 p.m. (eastern time) or at such other time and place as the Purchasers
and the Company may agree upon, upon the satisfaction of each of the conditions set forth in
Article IV hereof (the “Closing Date”). Funding with respect to the Closing shall take place by
wire transfer of immediately available funds on or prior to the Closing Date.

          Section 1.4 Series D Warrants. The Company agrees to issue to each of the Purchasers
Warrants to purchase 300 shares of Common Stock for each Preferred Share purchased. The number of
shares of Common Stock issuable upon exercise of each Purchaser’s Warrants issued pursuant to this
Agreement is set forth opposite such Purchaser’s name on Exhibit A hereto. The Warrants
shall expire five (5) years from the Closing Date and shall have an exercise price per share equal
to $4.50.

          Section 1.5 Exchange of Promissory Notes. The Company acknowledges and agrees that a
portion of the Purchase Price shall be paid by certain Purchasers exchanging certain promissory
notes issued by the Company to such Purchasers. Prior to or at the Closing, such Purchasers shall
surrender for cancellation to the Company such promissory notes as more fully set forth on
Schedule 1.5 hereto and upon the Closing, such Purchasers shall receive in exchange for the
surrender of its promissory notes a number of Preferred Shares and Warrants as set forth on
Exhibit A attached hereto. The number of Preferred Shares to be issued to each Purchaser
who is exchanging promissory notes pursuant to this Section 1.5 shall be in an amount equal to the
quotient of (A) one hundred ten percent (110%) of the principal amount plus all accrued interest
outstanding under the promissory notes divided by (B) the purchase price for each Preferred Share.

ARTICLE II

Representations and Warranties

          Section 2.1 Representations and Warranties of the Company. The Company hereby makes
the following representations and warranties to the Purchasers, except as set forth in the
Company’s disclosure schedule delivered with this Agreement as follows:

          (a) Organization, Good Standing and Power. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State of Delaware and has
the requisite corporate power to own, lease and operate its properties and assets and to conduct
its business as it is now being conducted. The Company does not have any subsidiaries except as
set forth in the Company’s Form 10-KSB for the year ended September 30, 2005 and the Company’s Form
10KSB for the transition period from October 1, 2005 to December 31,

2

 

2005, including the accompanying financial statements (collectively, the “Form 10-KSB”), or in
the Company’s Form 10-QSB for the fiscal quarters ended June 30, 2005, March 31, 2005 and December
31, 2004 (collectively, the “Form 10-QSB”), or on Schedule 2.1(a) hereto. The Company and
each such subsidiary is duly qualified as a foreign corporation to do business and is in good
standing in every jurisdiction in which the nature of the business conducted or property owned by
it makes such qualification necessary except for any jurisdiction(s) (alone or in the aggregate) in
which the failure to be so qualified will not have a Material Adverse Effect (as defined in Section
2.1(c) hereof) on the Company’s financial condition.

          (b) Authorization; Enforcement. The Company has the requisite corporate power and
authority to enter into and perform this Agreement, the Registration Rights Agreement attached
hereto as Exhibit D (the “Registration Rights Agreement”), the Irrevocable Transfer Agent
Instructions (as defined in Section 3.14), the Certificate of Designation, and the Warrants
(collectively, the “Transaction Documents”) and to issue and sell the Shares and the Warrants in
accordance with the terms hereof. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by it of the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary corporate action, and no further
consent or authorization of the Company or its Board of Directors or stockholders is required.
This Agreement has been duly executed and delivered by the Company. The other Transaction
Documents will have been duly executed and delivered by the Company at the Closing. Each of the
Transaction Documents constitutes, or shall constitute when executed and delivered, a valid and
binding obligation of the Company enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting
generally the enforcement of, creditor’s rights and remedies or by other equitable principles of
general application.

          (c) Capitalization. The authorized capital stock of the Company and the shares
thereof currently issued and outstanding as of the date hereof are set forth on Schedule
2.1(c) hereto. All of the outstanding shares of the Company’s Common Stock and Series D
Convertible Preferred Stock and other shares of preferred stock have been duly and validly
authorized. Except as set forth in this Agreement and the Registration Rights Agreement and as set
forth on Schedule 2.1(c) hereto, no shares of Common Stock are entitled to preemptive
rights or registration rights and there are no outstanding options, warrants, scrip, rights to
subscribe to, call or commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company. Furthermore, except as set forth in
this Agreement and the Registration Rights Agreement or on Schedule 2.1(c), there are no
contracts, commitments, understandings, or arrangements by which the Company is or may become bound
to issue additional shares of the capital stock of the Company or options, securities or rights
convertible into shares of capital stock of the Company. Except for customary transfer
restrictions contained in agreements entered into by the Company in order to sell restricted
securities or as set forth on Schedule 2.1(c) hereto, the Company is not a party to any
agreement granting registration or anti-dilution rights to any person with respect to any of its
equity or debt securities. The Company is not a party to, and it has no knowledge of, any
agreement restricting the voting or transfer of any shares of the capital stock of the Company.
Except as set forth on Schedule 2.1(c) hereto, the offer and sale of all capital stock,
convertible securities, rights,

3

 

warrants, or options of the Company issued prior to the Closing complied with all applicable
Federal and state securities laws, and no stockholder has a right of rescission or claim for
damages with respect thereto which would have a Material Adverse Effect (as defined below) on the
Company’s financial condition or operating results. The Company has furnished or made available to
the Purchasers true and correct copies of the Company’s Certificate of Incorporation as in effect
on the date hereof (the “Certificate”), and the Company’s Bylaws as in effect on the date hereof
(the “Bylaws”). For the purposes of this Agreement, “Material Adverse Effect” means any material
adverse effect on the business, operations, properties, prospects, or financial condition of the
Company and its subsidiaries and/or any condition, circumstance, or situation that would prohibit
or otherwise materially interfere with the ability of the Company to perform any of its obligations
under this Agreement in any material respect.

          (d) Issuance of Shares. The Preferred Shares and the Warrants to be issued at the
Closing have been duly authorized by all necessary corporate action and the Preferred Shares, when
paid for or issued in accordance with the terms hereof, shall be validly issued and outstanding,
fully paid and nonassessable and entitled to the rights and preferences set forth in the
Certificate of Designation. When the Conversion Shares and the Warrant Shares are issued in
accordance with the terms of the Certificate of Designation and the Warrants, respectively, such
shares will be duly authorized by all necessary corporate action and validly issued and
outstanding, fully paid and nonassessable, and the holders shall be entitled to all rights accorded
to a holder of Common Stock.

          (e) No Conflicts. Except as set forth on Schedule 2.1(e) hereto, the
execution, delivery and performance of the Transaction Documents by the Company, the performance by
the Company of its obligations under the Certificate of Designation and the consummation by the
Company of the transactions contemplated herein and therein do not and will not (i) violate any
provision of the Company’s Certificate or Bylaws, (ii) conflict with, or constitute a default (or
an event which with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of, any agreement,
mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation
to which the Company is a party or by which it or its properties or assets are bound, (iii) create
or impose a lien, mortgage, security interest, charge or encumbrance of any nature on any property
of the Company under any agreement or any commitment to which the Company is a party or by which
the Company is bound or by which any of its respective properties or assets are bound, or (iv)
result in a violation of any federal, state, local or foreign statute, rule, regulation, order,
judgment or decree (including Federal and state securities laws and regulations) applicable to the
Company or any of its subsidiaries or by which any property or asset of the Company or any of its
subsidiaries are bound or affected, except, in all cases other than violations pursuant to clauses
(i) and (iv) above, for such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the aggregate, have a Material
Adverse Effect. The business of the Company and its subsidiaries is not being conducted in
violation of any laws, ordinances or regulations of any governmental entity, except for possible
violations which singularly or in the aggregate do not and will not have a Material Adverse Effect.
The Company is not required under Federal, state or local law, rule or regulation to obtain any
consent, authorization or order of, or make any filing or registration with, any court or
governmental agency in order for it to execute, deliver or perform any of its obligations under

4

 

the Transaction Documents, or issue and sell the Preferred Shares, the Warrants, the
Conversion Shares and the Warrant Shares in accordance with the terms hereof or thereof (other than
any filings which may be required to be made by the Company with the Commission or state securities
administrators subsequent to the Closing, any registration statement which may be filed pursuant
hereto, and the Certificate of Designation); provided that, for purposes of the
representation made in this sentence, the Company is assuming and relying upon the accuracy of the
relevant representations and agreements of the Purchasers herein.

          (f) Commission Documents, Financial Statements. The Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and, since December 31, 2005, the Company has timely filed all reports, schedules,
forms, statements and other documents required to be filed by it with the Commission pursuant to
the reporting requirements of the Exchange Act, including material filed pursuant to Section 13(a)
or 15(d) of the Exchange Act (all of the foregoing including filings incorporated by reference
therein being referred to herein as the “Commission Documents”). The Company has delivered or made
available to each of the Purchasers true and complete copies of the Commission Documents filed with
the Commission since December 31, 2005. The Company has not provided to the Purchasers any
material non-public information or other information which, according to applicable law, rule or
regulation, was required to have been disclosed publicly by the Company but which has not been so
disclosed, other than with respect to the transactions contemplated by this Agreement. At the
times of their respective filings, the Form 10-KSB and the Form 10-QSB complied in all material
respects with the requirements of the Exchange Act and the rules and regulations of the Commission
promulgated thereunder and other federal, state and local laws, rules and regulations applicable to
such documents, and, as of their respective dates, none of the Form 10-KSB and the Form 10-QSB
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. The financial statements of the Company
included in the Commission Documents comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the Commission or other
applicable rules and regulations with respect thereto. Such financial statements have been
prepared in accordance with United States generally accepted accounting principles (“GAAP”) applied
on a consistent basis during the periods involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to
the extent they may not include footnotes or may be condensed or summary statements), and fairly
present in all material respects the financial position of the Company and its subsidiaries as of
the dates thereof and the results of operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments).

          (g) Subsidiaries. Schedule 2.1(g) hereto sets forth each subsidiary of the
Company, showing the jurisdiction of its incorporation or organization and showing the percentage
of each person’s ownership. For the purposes of this Agreement, “subsidiary” shall mean any
corporation or other entity of which at least a majority of the securities or other ownership
interest having ordinary voting power (absolutely or contingently) for the election of directors or
other persons performing similar functions are at the time owned directly or indirectly by the
Company and/or any of its other subsidiaries. All of the outstanding shares of

5

 

capital stock of each subsidiary have been duly authorized and validly issued, and are fully
paid and nonassessable. There are no outstanding preemptive, conversion or other rights, options,
warrants or agreements granted or issued by or binding upon any subsidiary for the purchase or
acquisition of any shares of capital stock of any subsidiary or any other securities convertible
into, exchangeable for or evidencing the rights to subscribe for any shares of such capital stock.
Neither the Company nor any subsidiary is subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of the capital stock of any subsidiary or any
convertible securities, rights, warrants or options of the type described in the preceding
sentence. Neither the Company nor any subsidiary is party to, nor has any knowledge of, any
agreement restricting the voting or transfer of any shares of the capital stock of any subsidiary.

          (h) No Material Adverse Change. Since December 31, 2005, the Company has not
experienced or suffered any Material Adverse Effect, except as disclosed on Schedule 2.1(h)
hereto.

          (i) No Undisclosed Liabilities. Except as set forth on Schedule 2.1(i)
hereto, neither the Company nor any of its subsidiaries has any liabilities, obligations, claims or
losses (whether liquidated or unliquidated, secured or unsecured, absolute, accrued, contingent or
otherwise) other than those incurred in the ordinary course of the Company’s or its subsidiaries
respective businesses since December 31, 2005 and which, individually or in the aggregate, do not
or would not have a Material Adverse Effect on the Company or its subsidiaries.

          (j) No Undisclosed Events or Circumstances. Except as set forth on Schedule
2.1(j) hereto, no event or circumstance has occurred or exists with respect to the Company or
its subsidiaries or their respective businesses, properties, prospects, operations or financial
condition, which, under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or disclosed.

          (k) Indebtedness. The Form 10-KSB, Form 10-QSB or Schedule 2.1(k) hereto sets
forth as of a recent date all outstanding secured and unsecured Indebtedness of the Company or any
subsidiary, or for which the Company or any subsidiary has commitments. For the purposes of this
Agreement, “Indebtedness” shall mean (a) any liabilities for borrowed money or amounts owed in
excess of $100,000 (other than trade accounts payable incurred in the ordinary course of business),
(b) all guaranties, endorsements and other contingent obligations in respect of Indebtedness of
others, whether or not the same are or should be reflected in the Company’s balance sheet (or the
notes thereto), except guaranties by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business; and (c) the present value of
any lease payments in excess of $25,000 due under leases required to be capitalized in accordance
with GAAP. Except as set forth on Schedule 2.1(k), neither the Company nor any subsidiary
is in default with respect to any Indebtedness.

          (l) Title to Assets. Each of the Company and the subsidiaries has good and marketable
title to all of its real and personal property reflected in the Form 10-KSB, free and clear of any
mortgages, pledges, charges, liens, security interests or other encumbrances, except for those
disclosed in the Form 10-KSB, Form 10-QSB or on Schedule 2.1(l) hereto or such that,
individually or in the aggregate, do not cause a Material Adverse Effect on the Company’s

6

 

financial condition or operating results. All said leases of the Company and each of its
subsidiaries are valid and subsisting and in full force and effect.

          (m) Actions Pending. There is no action, suit, claim, investigation, arbitration,
alternate dispute resolution proceeding or any other proceeding pending or, to the knowledge of the
Company, threatened against the Company or any subsidiary which questions the validity of this
Agreement or any of the other Transaction Documents or the transactions contemplated hereby or
thereby or any action taken or to be taken pursuant hereto or thereto. Except as set forth in the
Form 10-KSB, Form 10-QSB or on Schedule 2.1(m) hereto, there is no action, suit, claim,
investigation, arbitration, alternate dispute resolution proceeding or any other proceeding pending
or, to the knowledge of the Company, threatened, against or involving the Company, any subsidiary
or any of their respective properties or assets. Except as set forth in the Form 10-KSB, Form
10-QSB or Schedule 2.1(m) hereto, there are no outstanding orders, judgments, injunctions,
awards or decrees of any court, arbitrator or governmental or regulatory body against the Company
or any subsidiary or any officers or directors of the Company or subsidiary in their capacities as
such.

          (n) Compliance with Law. The business of the Company and the subsidiaries has been
and is presently being conducted in accordance with all applicable federal, state and local
governmental laws, rules, regulations and ordinances, except as set forth in the Form 10-KSB, Form
10-QSB, or such that, individually or in the aggregate, do not cause a Material Adverse Effect.
The Company and each of its subsidiaries have all franchises, permits, licenses, consents and other
governmental or regulatory authorizations and approvals necessary for the conduct of its business
as now being conducted by it unless the failure to possess such franchises, permits, licenses,
consents and other governmental or regulatory authorizations and approvals, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.

          (o) Taxes. Except as set forth in the Form 10-KSB or in the Form 10-QSB, the Company
and each of the subsidiaries has accurately prepared and filed all federal, state and other tax
returns required by law to be filed by it, has paid or made provisions for the payment of all taxes
shown to be due and all additional assessments, and adequate provisions have been and are reflected
in the financial statements of the Company and the subsidiaries for all current taxes and other
charges to which the Company or any subsidiary is subject and which are not currently due and
payable. None of the federal income tax returns of the Company or any subsidiary have been audited
by the Internal Revenue Service. The Company has no knowledge of any additional assessments,
adjustments or contingent tax liability (whether federal or state) of any nature whatsoever,
whether pending or threatened against the Company or any subsidiary for any period, nor of any
basis for any such assessment, adjustment or contingency.

          (p) Certain Fees. Except as set forth in this Agreement or on Schedule 2.1(p)
hereto, no brokers, finders or financial advisory fees or commissions will be payable by the
Company or any subsidiary or any Purchaser with respect to the transactions contemplated by this
Agreement.

          (q) Disclosure. To the best of the Company’s knowledge, neither this

7

 

Agreement or the Schedules hereto nor any other documents, certificates or instruments
furnished to the Purchasers by or on behalf of the Company or any subsidiary in connection with the
transactions contemplated by this Agreement contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements made herein or therein, in the
light of the circumstances under which they were made herein or therein, not misleading.

          (r) Operation of Business. The Company and each of the subsidiaries owns or possesses
all patents, trademarks, domain names (whether or not registered) and any patentable improvements
or copyrightable derivative works thereof, websites and intellectual property rights relating
thereto, service marks, trade names, copyrights, licenses and authorizations as set forth in the
Form 10-KSB, Form 10-QSB and on Schedule 2.1(r) hereto, and all rights with respect to the
foregoing, which are necessary for the conduct of its business as now conducted without any
conflict with the rights of others.

          (s) Environmental Compliance. The Company and each of its subsidiaries have obtained
all material approvals, authorization, certificates, consents, licenses, orders and permits or
other similar authorizations of all governmental authorities, or from any other person, that are
required under any Environmental Laws. The Form 10-KSB or Form 10-QSB describes all material
permits, licenses and other authorizations issued under any Environmental Laws to the Company or
its subsidiaries. “Environmental Laws” shall mean all applicable laws relating to the protection
of the environment including, without limitation, all requirements pertaining to reporting,
licensing, permitting, controlling, investigating or remediating emissions, discharges, releases or
threatened releases of hazardous substances, chemical substances, pollutants, contaminants or toxic
substances, materials or wastes, whether solid, liquid or gaseous in nature, into the air, surface
water, groundwater or land, or relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of hazardous substances, chemical substances,
pollutants, contaminants or toxic substances, material or wastes, whether solid, liquid or gaseous
in nature. The Company has all necessary governmental approvals required under all Environmental
Laws and used in its business or in the business of any of its subsidiaries. The Company and each
of its subsidiaries are also in compliance with all other limitations, restrictions, conditions,
standards, requirements, schedules and timetables required or imposed under all Environmental Laws.
Except for such instances as would not individually or in the aggregate have a Material Adverse
Effect, there are no past or present events, conditions, circumstances, incidents, actions or
omissions relating to or in any way affecting the Company or its subsidiaries that violate or may
violate any Environmental Law after the Closing Date or that may give rise to any environmental
liability, or otherwise form the basis of any claim, action, demand, suit, proceeding, hearing,
study or investigation (i) under any Environmental Law, or (ii) based on or related to the
manufacture, processing, distribution, use, treatment, storage (including without limitation
underground storage tanks), disposal, transport or handling, or the emission, discharge, release or
threatened release of any hazardous substance.

          (t) Books and Record Internal Accounting Controls. The books and records of the
Company and its subsidiaries accurately reflect in all material respects the information relating
to the business of the Company and the subsidiaries, the location and collection of their assets,
and the nature of all transactions giving rise to the obligations or accounts receivable of the
Company or any subsidiary. The Company and each of its subsidiaries maintain a system of

8

 

internal accounting controls sufficient, in the judgment of the Company, to provide reasonable
assurance that (i) transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is
permitted only in accordance with management’s general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing assets at reasonable intervals and
appropriate actions is taken with respect to any differences.

          (u) Material Agreements. Except as set forth in the Form 10-KSB, Form 10-QSB or on
Schedule 2.1(u) hereto, neither the Company nor any subsidiary is a party to any written or
oral contract, instrument, agreement, commitment, obligation, plan or arrangement, a copy of which
would be required to be filed with the Commission as an exhibit to a registration statement on Form
S-3 or applicable form (collectively, “Material Agreements”) if the Company or any subsidiary were
registering securities under the Securities Act. Except as set forth on Schedule 2.1(u) or
in the Commission Documents, the Company and each of its subsidiaries has in all material respects
performed all the obligations required to be performed by them to date under the foregoing
agreements, have received no notice of default and, to the best of the Company’s knowledge are not
in default under any Material Agreement now in effect, the result of which could cause a Material
Adverse Effect. Except as set forth on Schedule 2.1(u) or in the Commission Documents, no
written or oral contract, instrument, agreement, commitment, obligation, plan or arrangement of the
Company or of any subsidiary limits or shall limit the payment of dividends on the Company’s
Preferred Shares, other Preferred Stock, if any, or its Common Stock.

          (v) Transactions with Affiliates. Except as set forth in the Form 10-KSB, Form 10-QSB
or on Schedule 2.1(v) hereto, there are no loans, leases, agreements, contracts, royalty
agreements, management contracts or arrangements or other continuing transactions between (a) the
Company or any subsidiary on the one hand, and (b) on the other hand, any officer, employee,
consultant or director of the Company, or any of its subsidiaries, or any person owning any capital
stock of the Company or any subsidiary or any member of the immediate family of such officer,
employee, consultant, director or stockholder or any corporation or other entity controlled by such
officer, employee, consultant, director or stockholder, or a member of the immediate family of such
officer, employee, consultant, director or stockholder.

          (w) Securities Act of 1933. Based in material part upon the representations herein of
the Purchasers, the Company has complied and will comply with all applicable federal and state
securities laws in connection with the offer, issuance and sale of the Shares and the Warrants
hereunder. Neither the Company nor anyone acting on its behalf, directly or indirectly, has or
will sell, offer to sell or solicit offers to buy any of the Shares, the Warrants or similar
securities to, or solicit offers with respect thereto from, or enter into any preliminary
conversations or negotiations relating thereto with, any person, or has taken or will take any
action so as to bring the issuance and sale of any of the Shares and the Warrants under the
registration provisions of the Securities Act and applicable state securities laws, and neither the
Company nor any of its affiliates, nor any person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of Regulation D under the

9

 

Securities Act) in connection with the offer or sale of any of the Shares and the Warrants.

          (x) Governmental Approvals. Except as set forth in the Form 10-KSB or Form 10-QSB,
and except for the filing of any notice prior or subsequent to the Closing Date that may be
required under applicable state and/or Federal securities laws (which if required, shall be filed
on a timely basis), including the filing of a Form D and a registration statement or statements
pursuant to the Registration Rights Agreement, and the filing of the Certificate of Designation
with the Secretary of State for the State of Delaware, no authorization, consent, approval,
license, exemption of, filing or registration with any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, is or will be necessary
for, or in connection with, the execution or delivery of the Preferred Shares and the Warrants, or
for the performance by the Company of its obligations under the Transaction Documents.

          (y) Employees. Neither the Company nor any subsidiary has any collective bargaining
arrangements or agreements covering any of its employees, except as set forth in the Form 10-KSB,
Form 10-QSB or on Schedule 2.1(y) hereto. Except as set forth in the Form 10-KSB, Form
10-QSB or on Schedule 2.1(y) hereto, neither the Company nor any subsidiary has any
employment contract, agreement regarding proprietary information, non-competition agreement,
non-solicitation agreement, confidentiality agreement, or any other similar contract or restrictive
covenant, relating to the right of any officer, employee or consultant to be employed or engaged by
the Company or such subsidiary. Since December 31, 2005, no officer, consultant or key employee of
the Company or any subsidiary whose termination, either individually or in the aggregate, could
have a Material Adverse Effect, has terminated or, to the knowledge of the Company, has any present
intention of terminating his or her employment or engagement with the Company or any subsidiary.

          (z) Absence of Certain Developments. Except as provided on Schedule 2.1(z)
hereto, since December 31, 2005, neither the Company nor any subsidiary has:

               (i) issued any stock, bonds or other corporate securities or any rights, options or warrants
with respect thereto;

               (ii) borrowed any amount or incurred or become subject to any liabilities (absolute or
contingent) except current liabilities incurred in the ordinary course of business which are
comparable in nature and amount to the current liabilities incurred in the ordinary course of
business during the comparable portion of its prior fiscal year, as adjusted to reflect the current
nature and volume of the Company’s or such subsidiary’s business;

               (iii) discharged or satisfied any lien or encumbrance or paid any obligation or liability
(absolute or contingent), other than current liabilities paid in the ordinary course of business;

               (iv) declared or made any payment or distribution of cash or other property to stockholders
with respect to its stock, or purchased or redeemed, or made any agreements so to purchase or
redeem, any shares of its capital stock;

10

 

               (v) sold, assigned or transferred any other tangible assets, or canceled any debts or claims,
except in the ordinary course of business;

               (vi) sold, assigned or transferred any patent rights, trademarks, trade names, copyrights,
trade secrets or other intangible assets or intellectual property rights, or disclosed any
proprietary confidential information to any person except to customers in the ordinary course of
business or to the Purchasers or their representatives;

               (vii) suffered any substantial losses or waived any rights of material value, whether or not
in the ordinary course of business, or suffered the loss of any material amount of prospective
business;

               (viii) made any changes in employee compensation except in the ordinary course of business and
consistent with past practices;

               (ix) made capital expenditures or commitments therefor that aggregate in excess of $100,000;

               (x) entered into any other transaction other than in the ordinary course of business, or
entered into any other material transaction, whether or not in the ordinary course of business;

               (xi) made charitable contributions or pledges in excess of $25,000;

               (xii) suffered any material damage, destruction or casualty loss, whether or not covered by
insurance;

               (xiii) experienced any material problems with labor or management in connection with the terms
and conditions of their employment;

               (xiv) effected any two or more events of the foregoing kind which in the aggregate would be
material to the Company or its subsidiaries; or

               (xv) entered into an agreement, written or otherwise, to take any of the foregoing actions.

          (aa) Public Utility Holding Company Act and Investment Company Act Status. The
Company is not a “holding company” or a “public utility company” as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended. The Company is not, and as a result of and
immediately upon the Closing will not be, an “investment company” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940, as amended.

          (bb) ERISA. No liability to the Pension Benefit Guaranty Corporation has been
incurred with respect to any Plan by the Company or any of its subsidiaries which is or would be
materially adverse to the Company and its subsidiaries. The execution and delivery of this
Agreement and the issuance and sale of the Preferred Shares will not involve any transaction

11

 

which is subject to the prohibitions of Section 406 of ERISA or in connection with which a tax
could be imposed pursuant to Section 4975 of the Internal Revenue Code of 1986, as amended,
provided that, if any of the Purchasers, or any person or entity that owns a beneficial interest in
any of the Purchasers, is an “employee pension benefit plan” (within the meaning of Section 3(2) of
ERISA) with respect to which the Company is a “party in interest” (within the meaning of Section
3(14) of ERISA), the requirements of Sections 407(d)(5) and 408(e) of ERISA, if applicable, are
met. As used in this Section 2.1(bb), the term “Plan” shall mean an “employee pension benefit
plan” (as defined in Section 3 of ERISA) which is or has been established or maintained, or to
which contributions are or have been made, by the Company or any subsidiary or by any trade or
business, whether or not incorporated, which, together with the Company or any subsidiary, is under
common control, as described in Section 414(b) or (c) of the Code.

          (cc) Dilutive Effect. The Company understands and acknowledges that the number of
Conversion Shares issuable upon conversion of the Preferred Shares and the Warrant Shares issuable
upon exercise of the Warrants will increase in certain circumstances. The Company further
acknowledges that its obligation to issue Conversion Shares upon conversion of the Preferred Shares
in accordance with this Agreement and the Certificate of Designation and its obligations to issue
the Warrant Shares upon the exercise of the Warrants in accordance with this Agreement and the
Warrants, is, in each case, absolute and unconditional regardless of the dilutive effect that such
issuance may have on the ownership interest of other stockholders of the Company.

          (dd) Independent Nature of Purchasers. The Company acknowledges that the obligations
of each Purchaser under the Transaction Documents are several and not joint with the obligations of
any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the
obligations of any other Purchaser under the Transaction Documents. The Company acknowledges that
the decision of each Purchaser to purchase Securities pursuant to this Agreement has been made by
such Purchaser independently of any other purchase and independently of any information, materials,
statements or opinions as to the business, affairs, operations, assets, properties, liabilities,
results of operations, condition (financial or otherwise) or prospects of the Company or of its
Subsidiaries which may have made or given by any other Purchaser or by any agent or employee of any
other Purchaser, and no Purchaser or any of its agents or employees shall have any liability to any
Purchaser (or any other person) relating to or arising from any such information, materials,
statements or opinions. The Company acknowledges that nothing contained herein, or in any
Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be
deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other
kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the Transaction
Documents. The Company acknowledges that each Purchaser shall be entitled to independently protect
and enforce its rights, including without limitation, the rights arising out of this Agreement or
out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be
joined as an additional party in any proceeding for such purpose. The Company acknowledges that
for reasons of administrative convenience only, the Transaction Documents have been prepared by
counsel for the placement agent and such counsel does not represent the Purchasers and the
Purchasers have retained their own individual counsel with respect to the transactions

12

 

contemplated hereby. The Company acknowledges that it has elected to provide all Purchasers
with the same terms and Transaction Documents for the convenience of the Company and not because it
was required or requested to do so by the Purchasers. The Company acknowledges that such procedure
with respect to the Transaction Documents in no way creates a presumption that the Purchasers are
in any way acting in concert or as a group with respect to the Transaction Documents or the
transactions contemplated hereby or thereby.

          (ee) No Integrated Offering. Neither the Company, nor any of its affiliates, nor any
person acting on its or their behalf, has directly or indirectly made any offers or sales of any
security or solicited any offers to buy any security under circumstances that would cause the
offering of the Shares pursuant to this Agreement to be integrated with prior offerings by the
Company for purposes of the Securities Act which would prevent the Company from selling the Shares
pursuant to Rule 506 under the Securities Act, or any applicable exchange-related stockholder
approval provisions, nor will the Company or any of its affiliates or subsidiaries take any action
or steps that would cause the offering of the Shares to be integrated with other offerings. The
Company does not have any registration statement pending before the Commission or currently under
the Commission’s review and since October 1, 2005, the Company has not offered or sold any of its
equity securities or debt securities convertible into shares of Common Stock.

          (ff) Sarbanes-Oxley Act. Except as set forth on Schedule 2.1(ff) hereto, the
Company is in compliance with the applicable provisions of the Sarbanes-Oxley Act of 2002 (the
“Sarbanes-Oxley Act”), and the rules and regulations promulgated thereunder, that are effective,
and intends to comply with other applicable provisions of the Sarbanes-Oxley Act, and the rules and
regulations promulgated thereunder, upon the effectiveness of such provisions.

          (gg) Exchange of Shares and Notes. Upon the completion of the exchanges contemplated
by Sections 4.1 (s) and (t) hereto, no shares of Series B Convertible Preferred Stock and Series C
Convertible Preferred Stock shall remain issued or outstanding. Upon the completion of the
exchange contemplated by Section 4.1(r) and the transactions contemplated hereby, except as set
forth on Schedule 2.1 (gg), all of the promissory notes payable by the Company shall be
delivered for cancellation and no such promissory notes shall remain outstanding.

          Section 2.2 Representations and Warranties of the Purchasers. Each of the Purchasers
hereby makes the following representations and warranties to the Company with respect solely to
itself and not with respect to any other Purchaser:

          (a) Organization and Standing of the Purchasers. If the Purchaser is an entity, such
Purchaser is a corporation or partnership duly incorporated or organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or organization.

          (b) Authorization and Power. Each Purchaser has the requisite power and authority to
enter into and perform this Agreement and to purchase the Preferred Shares and Warrants being sold
to it hereunder. The execution, delivery and performance of this Agreement and the Registration
Rights Agreement by such Purchaser and the consummation by it of the

13

 

transactions contemplated hereby and thereby have been duly authorized by all necessary
corporate or partnership action, and no further consent or authorization of such Purchaser or its
Board of Directors, stockholders, or partners, as the case may be, is required. Each of this
Agreement and the Registration Rights Agreement has been duly authorized, executed and delivered by
such Purchaser and constitutes, or shall constitute when executed and delivered, a valid and
binding obligation of the Purchaser enforceable against the Purchaser in accordance with the terms
thereof.

          (c) No Conflicts. The execution, delivery and performance of this Agreement and the
Registration Rights Agreement and the consummation by such Purchaser of the transactions
contemplated hereby and thereby or relating hereto do not and will not (i) result in a violation of
such Purchaser’s charter documents or bylaws or other organizational documents or (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time or both would become
a default) under, or give to others any rights of termination, amendment, acceleration or
cancellation of any agreement, indenture or instrument or obligation to which such Purchaser is a
party or by which its properties or assets are bound, or result in a violation of any law, rule, or
regulation, or any order, judgment or decree of any court or governmental agency applicable to such
Purchaser or its properties (except for such conflicts, defaults and violations as would not,
individually or in the aggregate, have a material adverse effect on such Purchaser). Such
Purchaser is not required to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute, deliver or perform
any of its obligations under this Agreement or the Registration Rights Agreement or to purchase the
Preferred Shares or acquire the Warrants in accordance with the terms hereof, provided that for
purposes of the representation made in this sentence, such Purchaser is assuming and relying upon
the accuracy of the relevant representations and agreements of the Company herein.

          (d) Acquisition for Investment. Each Purchaser is acquiring the Preferred Shares and
the Warrants solely for its own account for the purpose of investment and not with a view to or for
sale in connection with distribution. Each Purchaser does not have a present intention to sell the
Preferred Shares or the Warrants, nor a present arrangement (whether or not legally binding) or
intention to effect any distribution of the Preferred Shares or the Warrants to or through any
person or entity; provided, however, that by making the representations herein and
subject to Section 2.2(f) below, such Purchaser does not agree to hold the Shares or the Warrants
for any minimum or other specific term and reserves the right to dispose of the Shares or the
Warrants at any time in accordance with Federal and state securities laws applicable to such
disposition. Each Purchaser acknowledges that it is able to bear the financial risks associated
with an investment in the Preferred Shares and the Warrants and that it has been given full access
to such records of the Company and the subsidiaries and to the officers of the Company and the
subsidiaries and received such information as it has deemed necessary or appropriate to conduct its
due diligence investigation and has sufficient knowledge and experience in investing in companies
similar to the Company in terms of the Company’s stage of development so as to be able to evaluate
the risks and merits of its investment in the Company.

          (e) Status of Purchasers. Such Purchaser is an “accredited investor” as defined in
Regulation D promulgated under the Securities Act. Such Purchaser is not required to

14

 

be registered as a broker-dealer under Section 15 of the Exchange Act and such Purchaser is
not a broker-dealer.

          (f) Opportunities for Additional Information. Each Purchaser acknowledges that such
Purchaser has had the opportunity to ask questions of and receive answers from, or obtain
additional information from, the executive officers of the Company concerning the financial and
other affairs of the Company, and to the extent deemed necessary in light of such Purchaser’s
personal knowledge of the Company’s affairs, such Purchaser has asked such questions and received
answers to the full satisfaction of such Purchaser, and such Purchaser desires to invest in the
Company.

          (g) No General Solicitation. Each Purchaser acknowledges that the Preferred Shares
and the Warrants were not offered to such Purchaser by means of any advertisement, article, notice
or other communication published in any newspaper, magazine, or similar media, or broadcast over
television or radio, or any seminar or meeting to which such Purchaser was invited by any of the
foregoing means of communications.

          (h) Rule 144. Such Purchaser understands that the Shares must be held indefinitely
unless such Shares are registered under the Securities Act or an exemption from registration is
available. Such Purchaser acknowledges that such Purchaser is familiar with Rule 144 of the rules
and regulations of the Commission, as amended, promulgated pursuant to the Securities Act (“Rule
144”), and that such person has been advised that Rule 144 permits resales only under certain
circumstances. Such Purchaser understands that to the extent that Rule 144 is not available, such
Purchaser will be unable to sell any Shares without either registration under the Securities Act or
the existence of another exemption from such registration requirement.

          (i) General. Such Purchaser understands that the Shares are being offered and sold in
reliance on a transactional exemption from the registration requirement of Federal and state
securities laws and the Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of such Purchaser set forth herein in
order to determine the applicability of such exemptions and the suitability of such Purchaser to
acquire the Shares.

          (j) Independent Investment. Except as may be disclosed in any filings with the
Commission by the Purchasers under Section 13 and/or Section 16 of the Exchange Act, no Purchaser
has agreed to act with any other Purchaser for the purpose of acquiring, holding, voting or
disposing of the Shares purchased hereunder for purposes of Section 13(d) under the Exchange Act,
and each Purchaser is acting independently with respect to its investment in the Shares.

15

 

ARTICLE III

Covenants

     The Company covenants with each of the Purchasers as follows, which covenants are for the
benefit of the Purchasers and their permitted assignees (as defined herein).

          Section 3.1 Securities Compliance. The Company shall notify the Commission in
accordance with their rules and regulations, of the transactions contemplated by any of the
Transaction Documents, including filing a Form D with respect to the Preferred Shares, Warrants,
Conversion Shares and Warrant Shares as required under Regulation D, and shall take all other
necessary action and proceedings as may be required and permitted by applicable law, rule and
regulation, for the legal and valid issuance of the Preferred Shares, the Warrants, the Conversion
Shares and the Warrant Shares to the Purchasers or subsequent holders.

          Section 3.2 Registration and Listing. The Company will cause its Common Stock to
continue to be registered under Sections 12(b) or 12(g) of the Exchange Act, will comply in all
respects with its reporting and filing obligations under the Exchange Act, will comply with all
requirements related to any registration statement filed pursuant to this Agreement or the
Registration Rights Agreement, and will not take any action or file any document (whether or not
permitted by the Securities Act or the rules promulgated thereunder) to terminate or suspend such
registration or to terminate or suspend its reporting and filing obligations under the Exchange Act
or Securities Act, except as permitted herein. The Company will take all action necessary to
continue the listing or trading of its Common Stock on the OTC Bulletin Board, The Nasdaq Capital
Market or other exchange or market on which the Common Stock is trading.

          Section 3.3 Inspection Rights. The Company shall permit, during normal business hours
and upon reasonable request and reasonable notice, each Purchaser or any employees, agents or
representatives thereof, so long as such Purchaser shall be obligated hereunder to purchase the
Preferred Shares or shall beneficially own any Preferred Shares, or shall own Conversion Shares
which, in the aggregate, represent more than 2% of the total combined voting power of all voting
securities then outstanding, for purposes reasonably related to such Purchaser’s interests as a
stockholder to examine and make reasonable copies of and extracts from the records and books of
account of, and visit and inspect the properties, assets, operations and business of the Company
and any subsidiary, and to discuss the affairs, finances and accounts of the Company and any
subsidiary with any of its officers, consultants, directors, and key employees.

          Section 3.4 Compliance with Laws. The Company shall comply, and cause each subsidiary
to comply, with all applicable laws, rules, regulations and orders, noncompliance with which could
have a Material Adverse Effect.

          Section 3.5 Keeping of Records and Books of Account. The Company shall keep and cause
each subsidiary to keep adequate records and books of account, in which complete entries will be
made in accordance with GAAP consistently applied, reflecting all

16

 

financial transactions of the Company and its subsidiaries, and in which, for each fiscal
year, all proper reserves for depreciation, depletion, obsolescence, amortization, taxes, bad debts
and other purposes in connection with its business shall be made.

          Section 3.6 Reporting Requirements. If the Commission ceases making periodic reports
filed under the Exchange Act available via the Internet, then at a Purchaser’s request the Company
shall furnish the following to such Purchaser so long as such Purchaser shall be obligated
hereunder to purchase the Preferred Shares or shall beneficially own any Preferred Shares, or shall
own Conversion Shares which, in the aggregate, represent more than 2% of the total combined voting
power of all voting securities then outstanding:

          (a) Quarterly Reports filed with the Commission on Form 10-QSB as soon as practical after the
document is filed with the Commission, and in any event within five (5) days after the document is
filed with the Commission;

          (b) Annual Reports filed with the Commission on Form 10-KSB as soon as practical after the
document is filed with the Commission, and in any event within five (5) days after the document is
filed with the Commission; and

          (c) Copies of all notices and information, including without limitation notices and proxy
statements in connection with any meetings, that are provided to holders of shares of Common Stock,
contemporaneously with the delivery of such notices or information to such holders of Common Stock.

          Section 3.7 Amendments. The Company shall not amend or waive any provision of the
Certificate or Bylaws of the Company in any way that would adversely affect the liquidation
preferences, dividends rights, conversion rights, voting rights or redemption rights of the
Preferred Shares; provided, however, that any creation and issuance of another
series of Junior Stock (as defined in the Certificate of Designation) shall not be deemed to
materially and adversely affect such rights, preferences or privileges.

          Section 3.8 Other Agreements. The Company shall not enter into any agreement in which
the terms of such agreement would restrict or impair the right or ability to perform of the Company
or any subsidiary under any Transaction Document.

          Section 3.9 Distributions. So long as any Preferred Shares or Warrants remain
outstanding, the Company agrees that it shall not (i) declare or pay any dividends or make any
distributions to any holder(s) of Common Stock or (ii) purchase or otherwise acquire for value,
directly or indirectly, any Common Stock or other equity security of the Company.

          Section 3.10 Status of Dividends. The Company covenants and agrees that (i) no
Federal income tax return or claim for refund of Federal income tax or other submission to the
Internal Revenue Service will adversely affect the Preferred Shares, any other series of its
Preferred Stock, or the Common Stock, and no deduction shall operate to jeopardize the availability
to Purchasers of the dividends received deduction provided by Section 243(a)(1) of the Code or any
successor provision, (ii) in no report to shareholders or to any governmental

17

 

body having jurisdiction over the Company or otherwise will it treat the Preferred Shares
other than as equity capital or the dividends paid thereon other than as dividends paid on equity
capital unless required to do so by a governmental body having jurisdiction over the accounts of
the Company or by a change in generally accepted accounting principles required as a result of
action by an authoritative accounting standards setting body, and (iii) it will take no action
which would result in the dividends paid by the Company on the Preferred Shares out of the
Company’s current or accumulated earnings and profits being ineligible for the dividends received
deduction provided by Section 243(a)(1) of the Code. The preceding sentence shall not be deemed to
prevent the Company from designating the Preferred Stock as “Convertible Preferred Stock” in its
annual and quarterly financial statements in accordance with its prior practice concerning other
series of preferred stock of the Company. In the event that the Purchasers have reasonable cause
to believe that dividends paid by the Company on the Preferred Shares out of the Company’s current
or accumulated earnings and profits will not be treated as eligible for the dividends received
deduction provided by Section 243(a)(1) of the Code, or any successor provision, the Company will,
at the reasonable request of the Purchasers of 51% of the outstanding Preferred Shares, join with
the Purchasers in the submission to the Service of a request for a ruling that dividends paid on
the Shares will be so eligible for Federal income tax purposes, at the Purchasers expense. In
addition, the Company will reasonably cooperate with the Purchasers (at Purchasers’ expense) in any
litigation, appeal or other proceeding challenging or contesting any ruling, technical advice,
finding or determination that earnings and profits are not eligible for the dividends received
deduction provided by Section 243(a)(1) of the Code, or any successor provision to the extent that
the position to be taken in any such litigation, appeal, or other proceeding is not contrary to any
provision of the Code. Notwithstanding the foregoing, nothing herein contained shall be deemed to
preclude the Company from claiming a deduction with respect to such dividends if (i) the Code shall
hereafter be amended, or final Treasury regulations thereunder are issued or modified, to provide
that dividends on the Preferred Shares or Conversion Shares should not be treated as dividends for
Federal income tax purposes or that a deduction with respect to all or a portion of the dividends
on the Shares is allowable for Federal income tax purposes, or (ii) in the absence of such an
amendment, issuance or modification and after a submission of a request for ruling or technical
advice, the Service shall issue a published ruling that dividends on the shares should not be
treated as dividends for Federal income tax purposes. If the Service specifically determines that
the Preferred Shares or Conversion Shares constitute debt, the Company may file protective claims
for refund.

          Section 3.11 Intentionally Omitted.

          Section 3.12 Future Financings; Right of First Offer and Refusal. (a) For purposes of
this Agreement, a “Subsequent Financing” shall be defined as any subsequent offer or sale to, or
exchange with (or other type of distribution to), any third party of Common Stock or any securities
convertible, exercisable or exchangeable into Common Stock, including debt securities so
convertible, in a private transaction (collectively, the “Financing Securities”) other than a
Permitted Financing. For purposes of this Agreement, “Permitted Financing” shall mean any
transaction involving (i) the Company’s issuance of any Financing Securities (other than for cash)
in connection with an acquisition of the Company, (ii) the Company’s issuance of Financing
Securities in connection with strategic license agreements and other partnering arrangements so
long as such issuances are not for the purpose of raising capital and the

18

 

Company has received the prior written consent of the Purchasers, (iii) the Company’s issuance
of Financing Securities in connection with bona fide firm underwritten public offerings of its
securities, (iv) the Company’s issuance of Common Stock or the issuance or grants of options to
purchase Common Stock pursuant to the Company’s stock option plans and employee stock purchase
plans outstanding on the date hereof and which have been approved by the Board of Directors of the
Company, (v) as a result of the exercise of options or warrants or conversion of convertible notes
or preferred stock which are granted or issued as of the date of this Agreement or issued pursuant
to this Agreement, (vi) any Warrants issued to the Purchasers and any warrants issued to the
placement agent for the transactions contemplated by this Agreement in connection with other
financial services rendered to the Company, or (vii) the payment of any dividend on the Preferred
Shares.

          (b) During the period commencing on the Closing Date and ending on the date that is twelve
(12) months following the Closing Date, the Company covenants and agrees to promptly notify (in no
event later than five (5) days after making or receiving an applicable offer) in writing (a “Rights
Notice”) each Purchaser of the terms and conditions of any proposed Subsequent Financing. The
Rights Notice shall describe, in reasonable detail, the proposed Subsequent Financing, the proposed
closing date of the Subsequent Financing, which shall be within thirty (30) calendar days from the
date of the Rights Notice, including, without limitation, all of the terms and conditions thereof
and proposed definitive documentation to be entered into in connection therewith. The Rights
Notice shall provide each Purchaser an option (the “Rights Option”) during the ten (10) trading
days following delivery of the Rights Notice (the “Option Period”) to inform the Company whether
such Purchaser will purchase up to fifty percent (50%) of the stated value of the Preferred Shares
held by such Purchaser on the date the Rights Notice was delivered to the Purchaser for the
securities being offered in such Subsequent Financing on the same, absolute terms and conditions as
contemplated by such Subsequent Financing (the “First Refusal Rights”). If any Purchaser elects
not to participate in such Subsequent Financing, the other Purchasers may participate on a pro-rata
basis so long as such participation in the aggregate does not exceed fifty percent (50%) of the
stated value of all Preferred Shares outstanding as of the date of the Rights Notice. For purposes
of this Section, all references to “pro rata” means, for any Purchaser electing to participate in
such Subsequent Financing, the percentage obtained by dividing (x) the total number of Preferred
Shares purchased by such Purchaser at the Closing by (y) the total number of Preferred Shares
purchased by all of the participating Purchasers at the Closing. Delivery of any Rights Notice
constitutes a representation and warranty by the Company that there are no other material terms and
conditions, arrangements, agreements or otherwise except for those disclosed in the Rights Notice,
to provide additional compensation to any party participating in any proposed Subsequent Financing,
including, but not limited to, additional compensation based on changes in the purchase price or
any type of reset or adjustment of a purchase or conversion price or to issue additional securities
at any time after the closing date of a Subsequent Financing. If the Company does not receive
notice of exercise of the Rights Option from the Purchasers within the Option Period, the Company
shall have the right to close the Subsequent Financing on the scheduled closing date with a third
party; provided that all of the material terms and conditions of the closing are the same
as those provided to the Purchasers in the Rights Notice. If the closing of the proposed
Subsequent Financing does not occur on that date, any closing of the contemplated Subsequent
Financing or any other Subsequent Financing shall be subject to all of

19

 

the provisions of this Section 3.12, including, without limitation, the delivery of a new
Rights Notice. The provisions of this Section 3.12(b) shall not apply to issuances of Financing
Securities in a Permitted Financing.

          Section 3.13 Reservation of Shares. So long as any of the Preferred Shares or
Warrants remain outstanding, the Company shall take all action necessary to at all times have
authorized, and reserved for the purpose of issuance, an amount equal to at least one hundred
twenty percent (120%) of the number of shares of Common Stock as shall from time to time be
sufficient to provide for the issuance of the Conversion Shares and the Warrant Shares.

          Section 3.14 Transfer Agent Instructions. The Company shall issue irrevocable
instructions to its transfer agent, and any subsequent transfer agent, to issue certificates,
registered in the name of each Purchaser or its respective nominee(s), for the Conversion Shares
and the Warrant Shares in such amounts as specified from time to time by each Purchaser to the
Company upon conversion of the Preferred Shares or exercise of the Warrants in the form of
Exhibit E attached hereto (the “Irrevocable Transfer Agent Instructions”). Prior to
registration of the Conversion Shares and the Warrant Shares under the Securities Act, all such
certificates shall bear the restrictive legend specified in Section 5.1 of this Agreement. The
Company warrants that no instruction other than the Irrevocable Transfer Agent Instructions
referred to in this Section 3.14 will be given by the Company to its transfer agent and that the
Shares shall otherwise be freely transferable on the books and records of the Company as and to the
extent provided in this Agreement and the Registration Rights Agreement. If a Purchaser provides
the Company with an opinion of counsel, in a generally acceptable form, to the effect that a public
sale, assignment or transfer of the Shares may be made without registration under the Securities
Act or the Purchaser provides the Company with reasonable assurances that the Shares can be sold
pursuant to Rule 144 without any restriction as to the number of securities acquired as of a
particular date that can then be immediately sold, the Company shall permit the transfer, and, in
the case of the Conversion Shares and the Warrant Shares, promptly instruct its transfer agent to
issue one or more certificates in such name and in such denominations as specified by such
Purchaser and without any restrictive legend. The Company acknowledges that a breach by it of its
obligations under this Section 3.14 will cause irreparable harm to the Purchasers by vitiating the
intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges
that the remedy at law for a breach of its obligations under this Section 3.14 will be inadequate
and agrees, in the event of a breach or threatened breach by the Company of the provisions of this
Section 3.14, that the Purchasers shall be entitled, in addition to all other available remedies,
to an order and/or injunction restraining any breach and requiring immediate issuance and transfer,
without the necessity of showing economic loss and without any bond or other security being
required.

          Section 3.15 Disposition of Assets. So long as the Preferred Shares remain
outstanding, neither the Company nor any Subsidiary shall sell, transfer or otherwise dispose of
any of its properties, assets and rights including, without limitation, its software and
intellectual property, to any person except for sales to customers in the ordinary course of
business or with the prior written consent of the holders of a majority of the Preferred Shares
then outstanding.

20

 

          Section 3.16 Reporting Status. So long as a Purchaser beneficially owns any of the
Securities, the Company shall timely file all reports required to be filed with the Commission
pursuant to the Exchange Act, and the Company shall not terminate its status as an issuer required
to file reports under the Exchange Act even if the Exchange Act or the rules and regulations
thereunder would permit such termination.

          Section 3.17 Disclosure of Transaction. The Company shall issue a press release
describing the material terms of the transactions contemplated hereby (the “Press Release”) as soon
as practicable after the Closing but in no event later than one hour after the Closing;
provided, however, that if the Closing occurs after 4:00 P.M. Eastern Time on any
Trading Day, the Company shall issue the Press Release no later than 9:00 A.M. Eastern Time on the
first Trading Day following the Closing Date. The Company shall also file with the Commission a
Current Report on Form 8-K (the “Form 8-K”) describing the material terms of the transactions
contemplated hereby (and attaching as exhibits thereto this Agreement, the Registration Rights
Agreement, the Certificate of Designation, the form of Warrant and the Press Release) as soon as
practicable following the Closing Date but in no event more than two (2) Trading Days following the
Closing Date, which Press Release and Form 8-K shall be subject to prior review and comment by the
Purchasers. “Trading Day” means any day during which the OTC Bulletin Board (or other principal
exchange on which the Common Stock is traded) shall be open for trading.

          Section 3.18 Disclosure of Material Information. The Company covenants and agrees
that neither it nor any other person acting on its behalf has provided or will provide any
Purchaser or its agents or counsel with any information that the Company believes constitutes
material non-public information, unless prior thereto such Purchaser shall have executed a written
agreement regarding the confidentiality and use of such information. The Company understands and
confirms that each Purchaser shall be relying on the foregoing representations in effecting
transactions in securities of the Company.

          Section 3.19 Pledge of Securities. The Company acknowledges and agrees that the
Securities may be pledged by a Purchaser in connection with a bona fide margin
agreement or other loan or financing arrangement that is secured by the Common Stock. The pledge
of Common Stock shall not be deemed to be a transfer, sale or assignment of the Common Stock
hereunder, and no Purchaser effecting a pledge of Common Stock shall be required to provide the
Company with any notice thereof or otherwise make any delivery to the Company pursuant to this
Agreement or any other Transaction Document; provided that a Purchaser and its pledgee shall be
required to comply with the provisions of Article V hereof in order to effect a sale, transfer or
assignment of Common Stock to such pledgee. At the Purchasers’ expense, the Company hereby agrees
to execute and deliver such documentation as a pledgee of the Common Stock may reasonably request
in connection with a pledge of the Common Stock to such pledgee by a Purchaser.

          Section 3.20 Restrictions on Certain Issuances of Securities. So long as any
Preferred Shares remain outstanding, the Company shall not issue any securities that rank pari
passu or senior to the Preferred Shares without the prior written consent of the holders of at
least eighty percent (80%) of the Preferred Shares outstanding at such time.

21

 

          Section 3.21 Independent Board Members. No later than September 30, 2006, the Company
shall provide evidence that its Board of Directors complies with the listing rules of The Nasdaq
Capital Market and the Sarbanes-Oxley Act and consists of five members which shall include three
current members and two additional members that are reasonably acceptable to the Purchasers.

          Section 3.22 Application for Nasdaq Listing. The Company shall use its best efforts
to file an initial listing application for its Common Stock to be listed on The Nasdaq Capital
Market no later than June 30, 2006 and the Company shall use its best efforts to cause its shares
of Common Stock to be listed on The Nasdaq Capital Market as soon as practicable, but in no event
later than October 31, 2006. In the event that the Company does not file the initial listing
application by June 30, 2006 or the Company’s shares of Common Stock, including the Conversion
Shares and the Warrant Shares, are not listed on The Nasdaq Capital Market by October 31, 2006, the
Company shall pay a penalty to each Purchaser on a monthly basis equal to one percent (1%) of each
Purchaser’s portion of the Purchase Price, but in no event shall such penalties exceed more than
ten percent (10%) of each Purchaser’s portion of the Purchase Price.

ARTICLE IV

CONDITIONS

          Section 4.1 Conditions Precedent to the Obligation of the Company to Sell the Shares.
The obligation hereunder of the Company to issue and sell the Preferred Shares and the Warrants to
the Purchasers is subject to the satisfaction or waiver, at or before the Closing, of each of the
conditions set forth below. These conditions are for the Company’s sole benefit and may be waived
by the Company at any time in its sole discretion.

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

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

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

          (d) Delivery of Purchase Price. The Purchase Price for the Preferred Shares

22

 

and Warrants has been delivered to the Company at the Closing Date.

     (e) Delivery of Transaction Documents. The Transaction Documents have been duly
executed and delivered by the Purchasers to the Company.

     Section 4.2 Conditions Precedent to the Obligation of the Purchasers to Purchase the
Shares. The obligation hereunder of each Purchaser to acquire and pay for the Preferred Shares
and the Warrants is subject to the satisfaction or waiver, at or before the Closing, of each of the
conditions set forth below. These conditions are for each Purchaser’s sole benefit and may be
waived by such Purchaser at any time in its sole discretion.

     (a) Accuracy of the Company’s Representations and Warranties. Each of the
representations and warranties of the Company in this Agreement and the Registration Rights
Agreement shall be true and correct in all material respects as of the date when made and as of the
Closing Date as though made at that time (except for representations and warranties that are
expressly made as of a particular date), which shall be true and correct in all material respects
as of such date.

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

     (c) No Suspension, Etc. Trading in the Company’s Common Stock shall not have been
suspended by the Commission or the OTC Bulletin Board (except for any suspension of trading of
limited duration agreed to by the Company, which suspension shall be terminated prior to the
applicable Closing), and, at any time prior to the Closing Date, trading in securities generally as
reported by Bloomberg Financial Markets (“Bloomberg”) shall not have been suspended or limited, or
minimum prices shall not have been established on securities whose trades are reported by
Bloomberg, or on the New York Stock Exchange, nor shall a banking moratorium have been declared
either by the United States or New York State authorities, nor shall there have occurred any
material outbreak or escalation of hostilities or other national or international calamity or
crisis of such magnitude in its effect on, or any material adverse change in any financial market
which, in each case, in the judgment of such Purchaser, makes it impracticable or inadvisable to
purchase the Preferred Shares.

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

     (e) No Proceedings or Litigation. No action, suit or proceeding before any arbitrator
or any governmental authority shall have been commenced, and no investigation by any governmental
authority shall have been threatened, against the Company or any subsidiary, or any of the
officers, directors or affiliates of the Company or any subsidiary seeking to restrain, prevent or
change the transactions contemplated by this Agreement, or seeking damages in

23

 

connection with such transactions.

          (f) Certificate of Designation of Rights and Preferences. Prior to the Closing, the
Certificate of Designation in the form of Exhibit C attached hereto shall have been filed
with the Secretary of State of Delaware.

          (g) Opinion of Counsel, Etc. At the Closing, the Purchasers shall have received an
opinion of counsel to the Company, dated the date of the Closing, in the form of Exhibit F
hereto, and such other certificates and documents as the Purchasers or its counsel shall reasonably
require incident to the Closing.

          (h) Registration Rights Agreement. At the Closing, the Company shall have executed
and delivered the Registration Rights Agreement to each Purchaser.

          (i) Certificates. The Company shall have executed and delivered to the Purchasers the
certificates (in such denominations as such Purchaser shall request) for the Preferred Shares and
the Warrants (in such denominations as such Purchaser shall request) being acquired by such
Purchaser at the Closing.

          (j) Resolutions. The Board of Directors of the Company shall have adopted resolutions
consistent with Section 2.1(b) hereof in a form reasonably acceptable to such Purchaser (the
“Resolutions”).

          (k) Reservation of Shares. As of the Closing Date, the Company shall have reserved
out of its authorized and unissued Common Stock, solely for the purpose of effecting the conversion
of the Preferred Shares and the exercise of the Warrants, a number of shares of Common Stock equal
to at least one hundred twenty percent (120%) of the number of shares of Common Stock as shall from
time to time be sufficient to effect the conversion of the Preferred Shares outstanding on the
Closing Date and the Warrant Shares issuable upon exercise of the Warrants as of the Closing Date,
in each case, without regard to any limitations on conversion or exercise.

          (l) Transfer Agent Instructions. The Irrevocable Transfer Agent Instructions, in the
form of Exhibit E attached hereto, shall have been delivered to and acknowledged in writing
by the Company’s transfer agent.

          (m) Secretary’s Certificate. The Company shall have delivered to such Purchaser a
secretary’s certificate, dated as of the Closing Date, as to (i) the Resolutions, (ii) the
Certificate, (iii) the Bylaws, (iv) the Certificate of Designation, each as in effect at the
Closing, and (iv) the authority and incumbency of the officers of the Company executing the
Transaction Documents and any other documents required to be executed or delivered in connection
therewith.

          (n) Officer’s Certificate. The Company shall have delivered to the Purchasers a
certificate of an executive officer of the Company, dated as of the Closing Date, confirming the

24

 

accuracy of the Company’s representations, warranties and covenants as of such Closing Date
and confirming the compliance by the Company with the conditions precedent set forth in this
Section 4.2 as of the Closing Date.

          (o) Material Adverse Effect. No Material Adverse Effect shall have occurred at or
before the Closing Date.

          (p) Lock-Up Agreements. Prior to or at the Closing, the Lock-Up Agreements entered
into between the Company and certain persons or entities, including Paul Kruger and/or his
affiliates, a form of which is attached hereto as Exhibit G, shall have been fully executed
and delivered to the Purchasers.

          (q) Resignation of Chief Executive Officer. At or before the Closing Date, Paul
Kruger shall have resigned as the Company’s Chief Executive Officer and Tom Deery shall have
assumed the position as Interim Chief Executive Officer.

          (r) Exchange of Boundless Investments, LLC Promissory Note. Prior to or at the
Closing, Boundless Investments, LLC shall have converted a promissory note issued in the aggregate
principal amount of $1,000,000 into shares of the Company’s Series B Convertible Preferred Stock
and Boundless Investments, LLC shall have exchanged such shares of Series B Convertible Preferred
Stock into Preferred Shares, pursuant to the terms and conditions set forth in the Boundless
Investments, LLC Exchange Agreement, a form of which is attached hereto as Exhibit H.

          (s) Exchange of Series B Convertible Preferred Stock. Prior to or at the Closing,
holders of the Company’s Series B Convertible Preferred Stock, as more fully set forth in
Schedule 4.2(t), shall have exchanged such shares of Series B Convertible Preferred Stock
for Preferred Shares, pursuant to the terms and conditions set forth in the Series B Convertible
Preferred Stock Exchange Agreement, a form of which is attached hereto as Exhibit I.

          (t) Exchange of Series C Convertible Preferred Stock. Prior to or at the Closing,
holders of the Company’s Series C Convertible Preferred Stock, as more fully set forth in
Schedule 4.2(u), shall have exchanged such shares of Series C Convertible Preferred Stock
for Preferred Shares, pursuant to the terms and conditions set forth in the Series C Convertible
Preferred Stock Exchange Agreement, a form of which is attached hereto as Exhibit J.

ARTICLE V

Stock Certificate Legend

          Section 5.1 Legend. Each certificate representing the Preferred Shares and the
Warrants, and, if appropriate, securities issued upon conversion thereof, shall be stamped or
otherwise imprinted with a legend substantially in the following form (in addition to any legend
required by applicable state securities or “blue sky” laws):

25

 

THESE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR DIRT MOTOR SPORTS, INC. SHALL HAVE
RECEIVED AN OPINION OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE
SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS
IS NOT REQUIRED.

          The Company agrees to reissue certificates representing any of the Conversion Shares and the
Warrant Shares, without the legend set forth above if at such time, prior to making any transfer of
any such securities, such holder thereof shall give written notice to the Company describing the
manner and terms of such transfer and removal as the Company may reasonably request. Such proposed
transfer and removal will not be effected until: (a) either (i) the Company has received an opinion
of counsel reasonably satisfactory to the Company, to the effect that the registration of the
Conversion Shares or the Warrant Shares under the Securities Act is not required in connection with
such proposed transfer, (ii) a registration statement under the Securities Act covering such
proposed disposition has been filed by the Company with the Commission and has become effective
under the Securities Act, (iii) the Company has received other evidence reasonably satisfactory to
the Company that such registration and qualification under the Securities Act and state securities
laws are not required, or (iv) the holder provides the Company with reasonable assurances that such
security can be sold pursuant to Rule 144 under the Securities Act; and (b) either (i) the Company
has received an opinion of counsel reasonably satisfactory to the Company, to the effect that
registration or qualification under the securities or “blue sky” laws of any state is not required
in connection with such proposed disposition, or (ii) compliance with applicable state securities
or “blue sky” laws has been effected or a valid exemption exists with respect thereto. The Company
will respond to any such notice from a holder within three (3) business days. In the case of any
proposed transfer under this Section 5.1, the Company will use reasonable efforts to comply with
any such applicable state securities or “blue sky” laws, but shall in no event be required, (x) to
qualify to do business in any state where it is not then qualified, (y) to take any action that
would subject it to tax or to the general service of process in any state where it is not then
subject, or (z) to comply with state securities or “blue sky” laws of any state for which
registration by coordination is unavailable to the Company. The restrictions on transfer contained
in this Section 5.1 shall be in addition to, and not by way of limitation of, any other
restrictions on transfer contained in any other section of this Agreement. Whenever a certificate
representing the Conversion Shares or Warrant Shares is required to be issued to a Purchaser
without a legend, in lieu of delivering physical certificates representing the Conversion Shares or
Warrant Shares (provided that a registration statement under the Securities Act providing for the
resale of the Warrant Shares and Conversion Shares is then in effect), the Company shall cause its
transfer agent to electronically transmit the Conversion Shares or Warrant Shares to a Purchaser by
crediting the account of such Purchaser’s Prime Broker with the Depository Trust Company through
its Deposit Withdrawal Agent Commission system (to the extent not inconsistent with any provisions
of this Agreement).

26

 

ARTICLE VI

Indemnification

          Section 6.1 General Indemnity. The Company agrees to indemnify and hold harmless the
Purchasers (and their respective directors, officers, affiliates, agents, successors and assigns)
from and against any and all losses, liabilities, deficiencies, costs, damages and expenses
(including, without limitation, reasonable attorneys’ fees, charges and disbursements) incurred by
the Purchasers as a result of any inaccuracy in or breach of the representations, warranties or
covenants made by the Company herein. Each Purchaser severally but not jointly agrees to indemnify
and hold harmless the Company and its directors, officers, affiliates, agents, successors and
assigns from and against any and all losses, liabilities, deficiencies, costs, damages and expenses
(including, without limitation, reasonable attorneys’ fees, charges and disbursements) incurred by
the Company as result of any inaccuracy in or breach of the representations, warranties or
covenants made by such Purchaser herein. The maximum aggregate liability of each Purchaser
pursuant to its indemnification obligations under this Article VI shall not exceed the portion of
the Purchase Price paid by such Purchaser hereunder.

          Section 6.2 Indemnification Procedure. Any party entitled to indemnification under
this Article VI (an “indemnified party”) will give written notice to the indemnifying party of any
matters giving rise to a claim for indemnification; provided, that the failure of any party
entitled to indemnification hereunder to give notice as provided herein shall not relieve the
indemnifying party of its obligations under this Article VI except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In case any action,
proceeding or claim is brought against an indemnified party in respect of which indemnification is
sought hereunder, the indemnifying party shall be entitled to participate in and, unless in the
reasonable judgment of the indemnified party a conflict of interest between it and the indemnifying
party may exist with respect of such action, proceeding or claim, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. In the event that the indemnifying
party advises an indemnified party that it will contest such a claim for indemnification hereunder,
or fails, within thirty (30) days of receipt of any indemnification notice to notify, in writing,
such person of its election to defend, settle or compromise, at its sole cost and expense, any
action, proceeding or claim (or discontinues its defense at any time after it commences such
defense), then the indemnified party may, at its option, defend, settle or otherwise compromise or
pay such action or claim. In any event, unless and until the indemnifying party elects in writing
to assume and does so assume the defense of any such claim, proceeding or action, the indemnified
party’s costs and expenses arising out of the defense, settlement or compromise of any such action,
claim or proceeding shall be losses subject to indemnification hereunder. The indemnified party
shall cooperate fully with the indemnifying party in connection with any negotiation or defense of
any such action or claim by the indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the indemnified party which relates to such action or claim.
The indemnifying party shall keep the indemnified party fully apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto. If the indemnifying
party elects to defend any such

27

 

action or claim, then the indemnified party shall be entitled to participate in such defense
with counsel of its choice at its sole cost and expense. The indemnifying party shall not be
liable for any settlement of any action, claim or proceeding effected without its prior written
consent. Notwithstanding anything in this Article VI to the contrary, the indemnifying party shall
not, without the indemnified party’s prior written consent, settle or compromise any claim or
consent to entry of any judgment in respect thereof which imposes any future obligation on the
indemnified party or which does not include, as an unconditional term thereof, the giving by the
claimant or the plaintiff to the indemnified party of a release from all liability in respect of
such claim. The indemnification required by this Article VI shall be made by periodic payments of
the amount thereof during the course of investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred, so long as the indemnified party irrevocably agrees
to refund such moneys if it is ultimately determined by a court of competent jurisdiction that such
party was not entitled to indemnification. The indemnity agreements contained herein shall be in
addition to (a) any cause of action or similar rights of the indemnified party against the
indemnifying party or others, and (b) any liabilities the indemnifying party may be subject to
pursuant to the law.

ARTICLE VII

Miscellaneous

          Section 7.1 Fees and Expenses. Except as otherwise set forth in this Agreement, the
Registration Rights Agreement or the Certificate of Designation, each party shall pay the fees and
expenses of its advisors, counsel, accountants and other experts, if any, and all other expenses,
incurred by such party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement, provided that the Company shall pay all actual attorneys’
fees and expenses (including disbursements and out-of-pocket expenses) incurred by the Purchasers
in connection with (i) the preparation, negotiation, execution and delivery of this Agreement, and
the other Transaction Documents and the transactions contemplated thereunder, which payment shall
be made at Closing, (ii) the filing and declaration of effectiveness by the Commission of the
Registration Statement (as defined in the Registration Rights Agreement) and (iii) any amendments,
modifications or waivers of this Agreement or any of the other Transaction Documents. In addition,
the Company shall pay all reasonable fees and expenses incurred by the Purchasers in connection
with the enforcement of this Agreement or any of the other Transaction Documents, including,
without limitation, all reasonable attorneys’ fees and expenses. The Company shall pay all stamp
or other similar taxes and duties levied in connection with issuance of the Preferred Shares
pursuant hereto.

          Section 7.2 Specific Enforcement, Consent to Jurisdiction. 

          (a) The Company and the Purchasers acknowledge and agree that irreparable damage would occur
in the event that any of the provisions of this Agreement, the Certificate of Designation or the
Registration Rights Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction
or injunctions to prevent or cure breaches of the provisions of this Agreement or the Registration
Rights Agreement and to enforce specifically the terms and provisions hereof or thereof, this being
in addition to any other remedy to which any of them

28

 

may be entitled by law or equity.

          (b) Each of the Company and the Purchasers (i) hereby irrevocably submits to the jurisdiction
of the United States District Court sitting in the Southern District of New York and the courts of
the State of New York located in New York county for the purposes of any suit, action or proceeding
arising out of or relating to this Agreement or any of the other Transaction Documents or the
transactions contemplated hereby or thereby and (ii) hereby waives, and agrees not to assert in any
such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of
such court, that the suit, action or proceeding is brought in an inconvenient forum or that the
venue of the suit, action or proceeding is improper. Each of the Company and the Purchasers
consents to process being served in any such suit, action or proceeding by mailing a copy thereof
to such party at the address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice thereof. Nothing in
this Section 7.2 shall affect or limit any right to serve process in any other manner permitted by
law.

          Section 7.3 Entire Agreement; Amendment. This Agreement and the Transaction Documents
contains the entire understanding and agreement of the parties with respect to the matters covered
hereby and, except as specifically set forth herein or in the Transaction Documents or the
Certificate of Designation, neither the Company nor any of the Purchasers makes any
representations, warranty, covenant or undertaking with respect to such matters and they supersede
all prior understandings and agreements with respect to said subject matter, all of which are
merged herein. No provision of this Agreement may be waived or amended other than by a written
instrument signed by the Company and the holders of at least seventy-five percent (75%) of the
Preferred Shares then outstanding, and no provision hereof may be waived other than by an a written
instrument signed by the party against whom enforcement of any such amendment or waiver is sought.
No such amendment shall be effective to the extent that it applies to less than all of the holders
of the Preferred Shares then outstanding. No consideration shall be offered or paid to any person
to amend or consent to a waiver or modification of any provision of any of the Transaction
Documents or the Certificate of Designation unless the same consideration is also offered to all of
the parties to the Transaction Documents or holders of Preferred Shares, as the case may be.

          Section 7.4 Notices. Any notice, demand, request, waiver or other communication
required or permitted to be given hereunder shall be in writing and shall be effective (a) upon
hand delivery by telex (with correct answer back received), telecopy or facsimile at the address or
number designated below (if delivered on a business day during normal business hours where such
notice is to be received), or the first business day following such delivery (if delivered other
than on a business day during normal business hours where such notice is to be received) or (b) on
the second business day following the date of mailing by express courier service, fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.
The addresses for such communications shall be:

	 	 	 	 	 
	 

	 	If to the Company:
	 	Dirt Motor Sports, Inc.
	 

	 	 	 	2500 McGee Drive, Suite 147
	 

	 	 	 	Norman, Oklahoma 73072

29

 

	 	 	 	 	 
	 

	 	 	 	Attention: Chief Executive Officer
	 

	 	 	 	Tel. No.: (405) 360-5047
	 

	 	 	 	Fax No.: (405) 360-5354
	 
	 	 	 	 
	 

	 	with copies to:
	 	Jackson Walker L.L.P.
	 

	 	 	 	2435 N. Central Expressway
	 

	 	 	 	Suite 600
	 

	 	 	 	Richardson, Texas, 75080
	 

	 	 	 	Attention: Richard F. Dahlson
	 

	 	 	 	Tel No.: (972) 744-2996
	 

	 	 	 	Fax No.: (972) 744-2990
	 
	 	 	 	 
	 

	 	If to any Purchaser:
	 	At the address of such Purchaser set forth on
Exhibit A to this Agreement, with copies to
Purchaser’s counsel as set forth on Exhibit A or as
specified in writing by such Purchaser with copies
to:
	 
	 	 	 	 
	 

	 	 	 	Kramer Levin Naftalis & Frankel LLP
	 

	 	 	 	1177 Avenue of the Americas
	 

	 	 	 	New York, New York 10036
	 

	 	 	 	Attention: Christopher S. Auguste
	 

	 	 	 	Tel No.: (212) 715-9100
	 

	 	 	 	Fax No.: (212) 715-8000
	 
	 	 	 	 
	 

	 	 	 	and, with respect to any notice to Magnetar Capital
Master Fund, Ltd., a copy to:
	 
	 	 	 	 
	 

	 	 	 	Schulte Roth & Zabel LLP
	 

	 	 	 	919 Third Avenue
	 

	 	 	 	New York, New York 10022
	 

	 	 	 	Attention: Eleazer N. Klein
	 

	 	 	 	Tel No.: (212) 756-2000
	 

	 	 	 	Fax No.: (212) 593-5955

     Any party hereto may from time to time change its address for notices by giving at least ten
(10) days written notice of such changed address to the other party hereto.

          Section 7.5 Waivers. No waiver by either party of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in
the future or a waiver of any other provisions, condition or requirement hereof, nor shall any
delay or omission of any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter.

30

 

          Section 7.6 Headings. The article, section and subsection headings in this Agreement
are for convenience only and shall not constitute a part of this Agreement for any other purpose
and shall not be deemed to limit or affect any of the provisions hereof.

          Section 7.7 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and assigns.

          Section 7.8 No Third Party Beneficiaries. This Agreement is intended for the benefit
of the parties hereto and their respective permitted successors and assigns and is not for the
benefit of, nor may any provision hereof be enforced by, any other person.

          Section 7.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving effect to any of the
conflicts of law principles which would result in the application of the substantive law of another
jurisdiction. This Agreement shall not be interpreted or construed with any presumption against
the party causing this Agreement to be drafted.

          Section 7.10 Survival. The representations, warranties, agreements and covenants of
the Company and the Purchasers shall survive the execution and delivery hereof and the Closing.

          Section 7.11 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same instrument and shall
become effective when counterparts have been signed by each party and delivered to the other
parties hereto, it being understood that all parties need not sign the same counterpart. In the
event any signature is delivered by facsimile transmission, the party using such means of delivery
shall cause four additional executed signature pages to be physically delivered to the other
parties within five days of the execution and delivery hereof.

          Section 7.12 Publicity. The Company agrees that it will not disclose, and will not
include in any public announcement, the name of the Purchasers without the consent of the
Purchasers unless and until such disclosure is required by law or applicable regulation, and then
only to the extent of such requirement.

          Section 7.13 Severability. The provisions of this Agreement, the Certificate of
Designation and the Registration Rights Agreement are severable and, in the event that any court of
competent jurisdiction shall determine that any one or more of the provisions or part of the
provisions contained in this Agreement, the Certificate of Designation or the Registration Rights
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other provision or part of a
provision of this Agreement, the Certificate of Designation or the Registration Rights Agreement
shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part
of such provision, had never been contained herein, so that such provisions would be valid, legal
and enforceable to the maximum extent possible.

          Section 7.14 Further Assurances. From and after the date of this Agreement, upon the
request of any Purchaser or the Company, each of the Company and the Purchasers

31

 

shall execute and deliver such instrument, documents and other writings as may be reasonably
necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of
this Agreement, the Preferred Shares, the Conversion Shares, the Warrants, the Warrant Shares, the
Certificate of Designation, and the Registration Rights Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

32

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officer as of the date first above written.

	 	 	 	 	 
	 	DIRT MOTOR SPORTS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	PURCHASER

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

EXHIBIT A to the

SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

DIRT MOTOR SPORTS, INC.

	 	 	 	 	 
	 	 	 	 	Number of $.01
	Names and Addresses	 	Number of Preferred Shares	 	Warrants Exchanged /
	of Purchasers	 	& Warrants Purchased	 	Series D Face Value
	 

	 	 
	 	 

 

 

EXHIBIT B to the

SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

DIRT MOTOR SPORTS, INC.

FORM OF SERIES D WARRANT

 

 

EXHIBIT C to the

SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

DIRT MOTOR SPORTS, INC.

FORM OF CERTIFICATE OF DESIGNATION

 

 

EXHIBIT D to the

SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

DIRT MOTOR SPORTS, INC.

FORM OF REGISTRATION RIGHTS AGREEMENT

 

 

EXHIBIT E to the

SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

DIRT MOTOR SPORTS, INC.

FORM OF IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

DIRT MOTOR SPORTS, INC.

as of May ____, 2006

[Name and address of Transfer Agent]

Attn:                                         

Ladies and Gentlemen:

     Reference is made to that certain Series D Convertible Preferred Stock Purchase Agreement (the
“Purchase Agreement”), dated as of May ___, 2006, by and among Dirt Motor Sports, Inc., a Delaware
corporation (the “Company”), and the purchasers named therein (collectively, the “Purchasers”)
pursuant to which the Company is issuing to the Purchasers shares of its Series D Convertible
Preferred Stock, par value $.01 per share, (the “Preferred Shares”) and warrants (the “Warrants”)
to purchase shares of the Company’s common stock, par value $.0001 per share (the “Common Stock”).
This letter shall serve as our irrevocable authorization and direction to you (subject to Section
3.1(a) of the Purchase Agreement and provided that you are the transfer agent of the Company at
such time) to issue shares of Common Stock upon conversion of the Preferred Shares (the “Conversion
Shares”) and exercise of the Warrants (the “Warrant Shares”) to or upon the order of a Purchaser
from time to time. So long as you have previously received (i) written confirmation from counsel
to the Company that a registration statement covering resales of the Conversion Shares or Warrant
Shares, as applicable, has been declared effective by the Securities and Exchange Commission (the
“SEC”) under the Securities Act of 1933, as amended (the “1933 Act”), and no subsequent notice by
the Company or its counsel of the suspension or termination of its effectiveness and (ii) a copy of
such registration statement (if such registration statement is not otherwise available on the SEC’s
EDGAR system), then certificates representing the Conversion Shares and the Warrant Shares, as the
case may be, shall not bear any legend restricting transfer of the Conversion Shares and the
Warrant Shares, as the case may be, thereby and should not be subject to any stop-transfer
restriction. Provided, however, that if you have not previously received those items, then the
certificates for the Conversion Shares and the Warrant Shares shall bear the following legend:

     “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE
SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS, OR DIRT MOTOR
SPORTS, INC. SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT
REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER
THE

 

 

PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.”

and, provided further, that the Company may from time to time notify you to place stop-transfer
restrictions on the certificates for the Conversion Shares and the Warrant Shares in the event a
registration statement covering the Conversion Shares and the Warrant Shares is subject to
amendment for events then current.

     A form of written confirmation from counsel to the Company that a registration statement
covering resales of the Conversion Shares and the Warrant Shares has been declared effective by the
SEC under the 1933 Act is attached hereto as Exhibit III.

     Please be advised that the Purchasers are relying upon this letter as an inducement to enter
into the Securities Purchase Agreement and, accordingly, each Purchaser is a third party
beneficiary to these instructions.

     Please execute this letter in the space indicated to acknowledge your agreement to act in
accordance with these instructions. Should you have any questions concerning this matter, please
contact me at                                         .

	 	 	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	DIRT MOTOR SPORTS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 

ACKNOWLEDGED AND AGREED:

[TRANSFER AGENT]

	 	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:

	 	 

	 	 
	Date:

	 	 

	 	 
	 

	 	 

	 	 

 

 

EXHIBIT I

DIRT MOTOR SPORTS, INC.

CONVERSION NOTICE

Reference is made to the Certificate of Designation of the Relative Rights and Preferences of the
Series D Preferred Stock of Dirt Motor Sports, Inc. (the “Certificate of Designation”). In
accordance with and pursuant to the Certificate of Designation, the undersigned hereby elects to
convert the number of shares of Series D Preferred Stock, par value $.01 per share (the “Preferred
Shares”), of Dirt Motor Sports, Inc., a Delaware corporation (the “Company”), indicated below into
shares of Common Stock, par value $.0001 per share (the “Common Stock”), of the Company, by
tendering the stock certificate(s) representing the share(s) of Preferred Shares specified below as
of the date specified below.

	 	 	 	 	 	 	 
	 

	 	Date of Conversion:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Number of Preferred Shares to be converted:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Stock certificate no(s). of Preferred Shares to be converted:	 	 	 	 
	 

	 	 	 	 

	 	 

     The Common Stock has been or will be sold pursuant to the Registration Statement (as defined
in the Registration Rights Agreement): YES                       NO                    

Please confirm the following information:

	 	 	 	 	 	 	 
	 

	 	Conversion Price:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Number of shares of Common Stock
to be issued:	 	 	 	 
	 

	 	 	 	 

	 	 

Please issue the Common Stock into which the Preferred Shares are being converted and, if
applicable, any check drawn on an account of the Company in the following name and to the following
address:

	 	 	 	 	 	 	 	 	 
	 

	 	Issue to:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Facsimile Number:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Authorization:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Dated:	 	 	 	 	 	 

 

 

EXHIBIT II

FORM OF EXERCISE NOTICE

EXERCISE FORM

DIRT MOTOR SPORTS, INC.

     The undersigned                                         , pursuant to the provisions of the within Warrant, hereby elects to
purchase
                     shares of Common Stock of Dirt Motor Sports, Inc. covered by the within Warrant.

	 	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	Signature	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	 
	 	 	 	 	 	Address	 	 	 	 
	 

	 	 	 	 	 	 
	 	 

	 	 
	 

	 	 	 	 	 	 	 	 

	 	 

ASSIGNMENT

     FOR
VALUE RECEIVED, ___ hereby sells, assigns and transfers unto ___
the within Warrant and all rights evidenced thereby and does irrevocably constitute and appoint
___, attorney, to transfer the said Warrant on the books of the within named corporation.

	 	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	Signature	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	 
	 	 	 	 	 	Address	 	 	 	 
	 

	 	 	 	 	 	 
	 	 

	 	 
	 

	 	 	 	 	 	 	 	 

	 	 

PARTIAL ASSIGNMENT

     FOR VALUE RECEIVED,                                          hereby sells, assigns and transfers unto                                         
the right to purchase
                     shares of Warrant Stock evidenced by the within Warrant together
with all rights therein, and does irrevocably constitute and appoint                                         , attorney,
to transfer that part of the said Warrant on the books of the within named corporation.

	 	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	Signature	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	 
	 	 	 	 	 	Address	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	 	 	 

	 	 

FOR USE BY THE ISSUER ONLY:

This Warrant No. W-                     canceled (or transferred or exchanged) this                      day of                                         ,
                    , shares of Common Stock issued therefor in the name of                                         , Warrant No. W-                    
issued for
                     shares of Common Stock in the name of                                         .

 

 

EXHIBIT III

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

[Name and address of Transfer Agent]

Attn: ___

          Re: Dirt Motor Sports, Inc. 

Ladies and Gentlemen:

     We are counsel to Dirt Motor Sports, Inc., a Delaware corporation (the “Company”), and have
represented the Company in connection with that certain Series D Convertible Preferred Stock
Purchase Agreement (the “Purchase Agreement”), dated as of May ___, 2006, by and among the Company
and the purchasers named therein (collectively, the “Purchasers”) pursuant to which the Company
issued to the Purchasers shares of its Series D Convertible Preferred Stock, par value $.01 per
share, (the “Preferred Shares”) and warrants (the “Warrants”) to purchase shares of the Company’s
common stock, par value $.0001 per share (the “Common Stock”). Pursuant to the Purchase Agreement,
the Company has also entered into a Registration Rights Agreement with the Purchasers (the
“Registration Rights Agreement”), dated as of May ___, 2006, pursuant to which the Company agreed,
among other things, to register the Registrable Securities (as defined in the Registration Rights
Agreement), including the shares of Common Stock issuable upon conversion of the Preferred Shares
and exercise of the Warrants, under the Securities Act of 1933, as amended (the “1933 Act”). In
connection with the Company’s obligations under the Registration Rights Agreement, on
                                    , 2006, the Company filed a Registration Statement on Form SB-2 (File No.
333-___) (the “Registration Statement”) with the Securities and Exchange Commission (the
“SEC”) relating to the resale of the Registrable Securities which names each of the present
Purchasers as a selling stockholder thereunder.

     In connection with the foregoing, we advise you that a member of the SEC’s staff has advised
us by telephone that the SEC has entered an order declaring the Registration Statement effective
under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no
knowledge, after telephonic inquiry of a member of the SEC’s staff, that any stop order suspending
its effectiveness has been issued or that any proceedings for that purpose are pending before, or
threatened by, the SEC and accordingly, the Registrable Securities are available for resale under
the 1933 Act pursuant to the Registration Statement.

	 	 	 	 	 
	 	Very truly yours,

[COMPANY COUNSEL]

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 
	 

cc: [LIST NAMES OF PURCHASERS]

 

 

EXHIBIT F to the

SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

DIRT MOTOR SPORTS, INC.

FORM OF OPINION OF COUNSEL

          1. The Company is a corporation duly incorporated, validly existing and in good standing under
the laws of the state of Delaware and has the requisite corporate power to own, lease and operate
its properties and assets, and to carry on its business as presently conducted. The Company is
duly qualified as a foreign corporation to do business and is in good standing in every
jurisdiction in which the nature of the business conducted or property owned by it makes such
qualification necessary.

          2. The Company has the requisite corporate power and authority to enter into and perform its
obligations under the Transaction Documents and to issue the Preferred Stock, the Warrants and the
Common Stock issuable upon conversion of the Preferred Stock and exercise of the Warrants. The
execution, delivery and performance of each of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated thereby have been duly and validly authorized
by all necessary corporate action and no further consent or authorization of the Company or its
Board of Directors or stockholders is required. Each of the Transaction Documents have been duly
executed and delivered, and the Preferred Stock and the Warrants have been duly executed, issued
and delivered by the Company and each of the Transaction Documents constitutes a legal, valid and
binding obligation of the Company enforceable against the Company in accordance with its respective
terms. The Common Stock issuable upon conversion of the Preferred Stock and exercise of the
Warrants are not subject to any preemptive rights under the Certificate of Incorporation or the
Bylaws.

          3. The Preferred Stock and the Warrants have been duly authorized and, when delivered against
payment in full as provided in the Purchase Agreement, will be validly issued, fully paid and
nonassessable. The shares of Common Stock issuable upon conversion of the Preferred Stock and
exercise of the Warrants, have been duly authorized and reserved for issuance, and, when delivered
upon conversion or against payment in full as provided in the Certificate of Designation and the
Warrants, as applicable, will be validly issued, fully paid and nonassessable.

          4. The execution, delivery and performance of and compliance with the terms of the Transaction
Documents and the issuance of the Preferred Stock, the Warrants and the Common Stock issuable upon
conversion of the Preferred Stock and exercise of the Warrants do not (i) violate any provision of
the Certificate of Incorporation or Bylaws, (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any material agreement,
mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation
to which the Company is a party, (iii) create or impose a lien, charge or encumbrance on any
property of the Company under any agreement or any commitment to which the Company is a party or by
which the Company is bound or by which any of its respective properties or assets are bound, or
(iv) result in a violation of any federal, state, local or foreign statute, rule, regulation,
order, judgment, injunction or decree (including Federal and state securities laws and regulations)
applicable to the Company or by which any property or asset of the Company is bound or affected,
except, in all cases other than violations pursuant to clause (i) above, for such conflicts,
default, terminations, amendments, acceleration, cancellations and violations as would not,
individually or in the aggregate, have a Material Adverse Effect.

          5. No consent, approval or authorization of or designation, declaration or filing with any
governmental authority on the part of the Company is required under Federal, state or local law,
rule

 

 

or regulation in connection with the valid execution and delivery of the Transaction
Documents, or the offer, sale or issuance of the Preferred Stock, the Warrants or the Common Stock
issuable upon conversion of the Preferred Stock and exercise of the Warrants other than the
Certificate of Designation and the Registration Statement.

     6. There is no action, suit, claim, investigation or proceeding pending or threatened against
the Company which questions the validity of this Agreement or the transactions contemplated hereby
or any action taken or to be taken pursuant hereto or thereto. There is no action, suit, claim,
investigation or proceeding pending, or to our knowledge, threatened, against or involving the
Company or any of its properties or assets and which, if adversely determined, is reasonably likely
to result in a Material Adverse Effect. There are no outstanding orders, judgments, injunctions,
awards or decrees of any court, arbitrator or governmental or regulatory body against the Company
or any officers or directors of the Company in their capacities as such.

     7. The offer, issuance and sale of the Preferred Stock and the Warrants and the offer,
issuance and sale of the shares of Common Stock issuable upon conversion of the Preferred Stock and
exercise of the Warrants pursuant to the Purchase Agreement, the Certificate of Designation and the
Warrants, as applicable, are exempt from the registration requirements of the Securities Act.

     8. The Company is not, and as a result of and immediately upon Closing will not be, an
“investment company” or a company “controlled” by an “investment company,” within the meaning of
the Investment Company Act of 1940, as amended.

	 	 	 	 	 
	 	Very truly yours,

 	 
	 	 	 
	 	 	 
	 	 	 

 

 

	 	 	 	 	 

EXHIBIT G to the

SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

DIRT MOTOR SPORTS, INC.

FORM OF LOCK-UP AGREEMENTS

 

 

EXHIBIT H to the

SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

DIRT MOTOR SPORTS, INC.

FORM OF BOUNDLESS INVESTMENTS, LLC EXCHANGE AGREEMENT

 

 

EXHIBIT I to the

SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

DIRT MOTOR SPORTS, INC.

FORM OF SERIES B CONVERTIBLE PREFERRED STOCK EXCHANGE AGREEMENT

 

 

EXHIBIT J to the

SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

DIRT MOTOR SPORTS, INC.

FORM OF SERIES C CONVERTIBLE PREFERRED STOCK EXCHANGE AGREEMENT

 

 

DISCLOSURE SCHEDULE

TO

SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

 

 

SCHEDULE 1.5

Promissory Note Exchanged into Series D

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Securities Rec'd in Note Roll	 
	 	 	110% of	 	 	 	 	 	 	 	 	 	 	 
	 	 	Principal + Int.	 	 	 	 	 	 	 	 	 	 	 
	 	 	Rolled into	 	 	 	 	 	 	Series D	 	 	Series D	 
	Name	 	Series D	 	 	Series D Shares	 	 	as Converted	 	 	Warrants	 
	Total
	 	$	13,201,777.52	 	 	 	4,400.593	 	 	 	4,400,593	 	 	 	1,320,178	 

 

SCHEDULE 2.1(a)

Subsidiaries:

     All wholly owned

Boundless Track Operations, Inc. – Nevada

Boundless Motor Sports Racing, Inc. – Texas (Dormant subsidiary, not in good standing)

GPX Partners, LLC – Texas (Dormant subsidiary, not in good standing)

GPX Acquisition, LLC – Texas

Carter & Miracle Concessions, LLC – Florida

Volusia Operations, LLC – Florida

Volusia Speedway Park Entertainment, LLC – Florida

Volusia Speedway Park, Inc. — Florida

Boundless Racing, Inc. – Texas

World of Outlaws, Inc. – Texas (Dormant subsidiary, not in good standing)

Federation Dirt International, Inc. — Delaware

Dirt Motorsports, Inc. – New York

United Midwestern Promoters Motorsports, LLC — Ohio

 

 

SCHEDULE 2.1(c)

Authorized Shares:

   100,000,000 Common Stock, $.001 par value per share

     10,000,000 Preferred Stock, $.01 par value per share of which 7,500 are designated
Series A Convertible Preferred Stock; 8,000 are         designated as Series B Convertible Preferred Stock
and 2,500 are designated as Series C Convertible Preferred

Issued and Outstanding

	 	 	 	 	 	 	 
	 

	 	Common:
	 	11,720,555 shares
	 	 
	 

	 	Series B Convertible Preferred:
	 	6,883* shares	 	 
	 

	 	Series C Convertible Preferred:
	 	2,500* shares	 	 

Shares issued with registration rights:

	 	 	 	 	 	 	 
	 

	 	 	6,882,819	*	 	shares to be issued upon conversion of the Series B Convertible Preferred Stock.
(Exchanged for Series D Convertible Preferred)
	 

	 	 	2,500,000	*	 	shares to be issued upon conversion of the Series C Convertible Preferred Stock
(Exchanged for Series D Convertible Preferred)
	 

	 	 	992,486	 	 	common shares to be issued upon exercise of the Series A Warrants to purchase
common stock.
	 
	 	 	 	 	 	 
	 

	 	 	833,334	 	 	common shares to be issued upon exercise of the Series B Warrants to purchase
common stock. (Exchanged for 208,334 common shares)
	 

	 	 	100,000	 	 	common shares to be issued upon exercise of the Series B Warrants to purchase
common stock
	 

	 	 	1,500,000	 	 	common shares to be issued upon exercise of the Series C Warrants to purchase
common stock. (Exchanged for 375,000 common shares)
	 

	 	 	700,000	 	 	common shares to be issued upon exercise of the Series C Warrants to purchase
common stock
	 

	 	 	352,932	 	 	common shares to be issued upon exercise of the Series B Warrants to purchase
common stock
	 

	 	 	2,761,106	 	 	common shares to be issued upon exercise of the Promissory Note Warrants

 

* — Such shares shall be exchanged for Series D Securities subject to the Series D Registration
Rights Agreement as required under

   Section 3.2 of the Agreement

Anticipated reserves for potential option pools:

     300,000 for racing teams under contract to the Company.

     3,200,000 for Company employees.

 

 

SCHEDULE 2.1(e)

- None -

 

 

SCHEDULE 2.1(g)

Subsidiaries:

     All wholly owned

Boundless Track Operations, Inc. – Nevada

Boundless Motor Sports Racing, Inc. – Texas (Dormant subsidiary, not in good standing)

GPX Partners, LLC – Texas (Dormant subsidiary, not in good standing)

GPX Acquisition, LLC – Texas

Carter & Miracle Concessions, LLC – Florida

Volusia Operations, LLC – Florida

Volusia Speedway Park Entertainment, LLC – Florida

Volusia Speedway Park, Inc. — Florida

Boundless Racing, Inc. – Texas

World of Outlaws, Inc. – Texas (Dormant subsidiary, not in good standing)

Federation Dirt International, Inc. — Delaware

Dirt Motorsports, Inc. – New York

United Midwestern Promoters Motorsports, LLC — Ohio

 

 

SCHEDULE 2.1(h)

- None -

 

 

SCHEDULE 2.1(i)

None.

 

 

SCHEDULE 2.1(j)

- None -

 

 

SCHEDULE 2.1(k)

Promissory Notes secured by two 2005 model Ford F-350 Supercrew trucks.

$220,000 note payable issued in connection with the purchase of Lernerville Speedway, which is due
in $110,000 installments on May 30, 2006 and May 30, 2007. This note is secured by a mortgage on
the Lernerville Speedway Facility.

$2,310,000 notes payable issued in connection with the purchase of Lernerville Speedway, bearing
interest at 7% payable annually. The balance is due upon maturity on March 15, 2009. This note is
secured by a mortgage on the Lernerville Speedway Facility.

$2,000,000 note payable issued in connection with the purchase of Volusia Speedway, bearing
interest at one percent over prime and payable in fifty-nine equal monthly installments commencing
at $24,000 per month and adjusted quarterly for changes in interest rates with the balance of the
outstanding principal and accrued interest due on June 30, 2010. The outstanding principle balance
on this note was $1,882,847 as of March 31, 2006. This note is secured by a mortgage on the real
property, and security agreement covering the other assets acquired from Volusia Speedway.

$450,000 note payable to an individual bearing interest at 8% and due on March 31, 2007

Defaults with respect to Indebtedness:

None.

 

 

SCHEDULE 2.1(l)

- None -

 

 

SCHEDULE 2.1(m)

On October 12, 2005, Advancestar Communications, Inc. filed a Complaint for Declaratory Judgment
against DIRT Motor Sports, Inc. stemming from a cease and desist letter sent by DIRT to Advanstar
for its use of certain marks owned by DIRT. DIRT and Advancestar have reached a settlement
regarding all claims and are in the process of finalizing a Settlement, Mutual Release of Claims,
and Co-Existence Agreement. The material terms of the Settlement, Mutual Release of Claims, and
Co-Existence provide: (1) Advancestar will cease use of its present “DIRTSPORTS” logo, agree to
include a space between “DIRT” and “SPORTS”, and will to use all caps in the logo where type size
of the letter “D” in DIRT will be at least 18.1 whereas “IRT” in DIRT will be no greater than 13.5;
(2) Any text use by Advancestar of “DIRT SPORTS” will be used as “Dirt” in lower case letters for
the “irt” portion of “Dirt”; (3) the parties will include mutual disclaimers on their respective
websites for a period of 18 months advising the viewers of the non-affiliation of the parties; (4)
provided that the terms of the Agreement are satisfied, neither party will object to the other’s
filings of marks with the United States Patent & Trademark Office; (5) the parties shall will
execute a Joint Stipulation of Dismissal with Prejudice for the current litigation; and (6) the
parties mutually release each other from any and all claims arising out of, or in any related to,
the current litigation.

 

 

SCHEDULE 2.1(p)

May 15, 2006

Dirt Motor Sports, Inc.

3600 W. Main Street, Ste. 150

Norman, OK 730772

Gentlemen:

This letter Agreement (the “Agreement”) confirms the engagement of Burnham Hill Partners (“BHP”), a
division of
Pali Capital, Inc., by Dirt Motor Sports, Inc, a Delaware Corporation, (the “Company”) to act as
its exclusive placement agent in connection with the sale and issuance of Series D Convertible
Preferred Stock and Series D Warrants, (the, Financing”) and future private financings during the
term of this Agreement. It is currently anticipated that the Company will generate approximately
$10-12 million in gross proceeds from the Financing. BHP will also assist the Company in
facilitating the sale of common stock by certain selling shareholders, including the Company’s
current Chief Executive Officer. It is currently anticipated that the sale of the common stock by
the selling shareholders will generate approximately $6 million in gross proceeds. The transaction
or transactions contemplated under this Agreement are exempt from registration under the Securities
Act of 1933, as amended. This Agreement shall replace any previous written or verbal agreements
entered into between the Company and BHP related to financing activity.

As compensation related to the Financing, BHP shall receive a cash placement fee equal to ten (10%)
percent of the gross proceeds received from the sale of Series D Convertible Preferred Stock. BHP
shall not receive a fee in connection with the sale of stock by the selling shareholders. In
connection with the cash exercise of warrants issued to investors in connection with the Financing
and previous financings (the “Investor Warrants”), BHP shall receive a cash fee equal to five (5%)
percent of the gross proceeds received by the Company upon the cash exercise of such Investor
Warrants. In connection with subsequent financing activity under this Agreement, the placement
agent fee shall be seven (7%) percent for amounts up to $10 million and five (5%) percent for
amounts in excess of $10 million.

BHP, or its registered assigns, shall be issued Placement Agent Warrants in an amount equal to ten
(10%) percent of the common stock issuable upon conversion of the Series D Preferred issued in
connection with the Financing, and the Series D issued upon conversion of outstanding promissory
notes, but excluding Series D Preferred issued upon exchange of the outstanding Series B and C
Preferred into the Series D Preferred. The Placement Agent Warrants shall be exercisable at the
conversion price of the underlying common stock of the Series D and shall have a term of five
years. The shares underlying the Placement Agent Warrants shall have standard piggyback
registration rights, and shall be exercisable pursuant to a cashless exercise provision, shall be
non-redeemable and shall be included in any registration statement covering the shares issued
pursuant to financing activity under this Agreement. In connection with subsequent financing
activity under this Agreement, the Placement Agent Warrant percentage shall be five (5%) percent.

The Company shall reimburse BHP for expenses incurred in connection with this Financing and
previous financing activity in the amount of $20,000. The Company will also pay the documented
legal costs incurred by BHP in connection with the completion of the Financing.

Notice given pursuant to any of the provisions of this Agreement shall be given in writing and
shall be sent by overnight courier or personally delivered (a) if to the Company, to the Company’s
Chief Executive Officer at the address listed above; and (b) if to BHP, to its offices at 570
Lexington Avenue, New York, NY 10022. Attention:                     , Managing Director.

No advice or opinion rendered by BHP, whether formal or informal, may be disclosed, in whole or in
part, or

 

 

summarized, excerpted from or otherwise referred to without our prior written consent. In
addition, BHP may not be otherwise referred to without its prior written consent. In connection
with its engagement hereunder and all previous activities and services provided to the Company, the
Company and BHP have entered into a separate letter Agreement, dated the date hereof, providing for
the indemnification by the Company of BHP and certain related persons, entities and agents.

BHP’s engagement hereunder shall expire eighteen (18) months from the date of this Agreement (the
“Authorization Period”). Provided however, that upon the expiration, BHP will continue to be
entitled to its full fees provided for herein in the event that at any time prior to the expiration
of twelve (12) months after such expiration or termination, a financing involving the Company
occurs that involves a party contacted by BHP on behalf of the Company. For a period of eighteen
(18) months following the Closing of the Financing, BHP shall have the right to act as an
underwriter in connection with the public offering of the Company’s securities, with BHP receiving
no less than twenty five (25%) percent of the deal economics payable to the underwriters. BHP shall
assist the Company in identifying and facilitating a larger bracket investment bank in pursuing an
underwritten public offering of the Company’s securities during the term of this Agreement.

Further, in connection with financial advisory services, including financial restructuring, merger
and acquisition advisory, strategic planning and assistance with business support services
previously provided to the Company by BHP and for future financial advisory services, the Company
and BHP shall enter into a separate agreement.

BHP is a division of Pali Capital Inc. The letter agreement shall remain in full force and effect
as to BHP and the Company in the event that BHP becomes an independent entity. Each of BHP and the
Company agrees that the other party has no fiduciary duty to it or its stockholders, officers and
directors as a result of the engagement described in this Agreement. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York without regard to
conflicts of law principles thereof. This Agreement may not be amended or modified except in
writing signed by each of the parties hereto.

The invalidity or unenforceability of any provision of this letter Agreement shall not affect the
validity or enforceability of any other provisions of this Agreement or the Indemnification
Agreement, which shall remain in full force and effect.

We are delighted to accept this engagement and look forward to working with you on this assignment.
Please confirm that the foregoing is in accordance with your understanding by signing and
returning to us the enclosed duplicate of this Agreement.

	 	 	 	 	 
	 	Very truly yours,

Burnham Hill Partners

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Accepted and Agreed to as of the date first written above:

	 	 	 	 	 
	 

	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 

 

 

	 	 	 	 	 	 	 
	TO:

	 	Burnham Hill Partners	 	 	 	 
	 

	 	A division of Pali Capital Inc.
	 	 	 	Date: May 12, 2006
	 

	 	570 Lexington Avenue	 	 	 	 
	 

	 	New York, NY 10022	 	 	 	 

In connection with your engagement pursuant to our letter Agreement of even date
herewith including all activities performed on behalf of the Company prior to the date
herewith (the “Engagement”), we agree to indemnify and hold harmless Burnham Hill Partners,
a division of Pali Capital Inc. (“BHP”) , its affiliates, their respective directors,
officers, partners, agents and employees, BHP and its affiliates, and each other person, if
any, controlling BHP or any of its affiliates (collectively, “Indemnified Persons”), from
and against, and we agree that no Indemnified Person shall have any liability to us or our
owners, parents, affiliates, security holders or creditors for, any losses, claims, damages
or liabilities (including actions or proceedings in respect thereof) (collectively
“Losses”) (A) related to or arising out of (i) our actions or failures to act (including
statements or omissions made, or information provided, by us or our agents) or (ii) actions
or failures to act by an Indemnified Person with our consent or in reliance on our actions
or failures to act, or (B) otherwise related to or arising out of the Engagement or your
performance thereof, except that this clause (B) shall not apply to any Losses that are
finally judicially determined to have resulted primarily from your bad faith or gross
negligence or breach of the letter Agreement. If such indemnification is for any reason not
available or insufficient to hold you harmless, we agree to contribute to the Losses
involved in such proportion as is appropriate to reflect the relative benefits received (or
anticipated to be received) by us and by you with respect to the Engagement or, if such
allocation is judicially determined unavailable, in such proportion as is appropriate to
reflect other equitable considerations such as the relative fault of us on the one hand and
of you on the other hand; provided, however, that, to the extent permitted by applicable
law, the Indemnified Persons shall not be responsible for amounts which in the aggregate
are in excess of the amount of all fees actually received by you from us in connection with
the Engagement. Relative benefits to us, on the one hand, and you, on the other hand, with
respect to the Engagement shall be deemed to be in the same proportion as (i) the total
value paid or proposed to be paid or received or proposed to be received by us or our
security holders, as the case may be, pursuant to the transaction(s), whether or not
consummated, contemplated by the Engagement bears to (ii) all fees paid or proposed to be
paid to you by us in connection with the Engagement.

We will reimburse each Indemnified Person for all expenses (including reasonable fees and
disbursements of counsel) as they are incurred by such Indemnified Person in connection with
investigating, preparing for or defending any action, claim, investigation, inquiry, arbitration or
other proceeding (“Action”) referred to above (or enforcing this Agreement or any related
engagement Agreement), whether or not in connection with pending or threatened litigation in which
any Indemnified Person is a party, and whether or not such Action is initiated or brought by you .
We further agree that we will not settle

 

 

or compromise or consent to the entry of any judgment in any pending or threatened Action in
respect of which indemnification may be sought hereunder (whether or not an Indemnified Person is a
party therein) unless we have given you reasonable prior written notice thereof and used all
reasonable efforts, after consultation with you, to obtain an unconditional release of each
Indemnified Person from all liability arising therefrom. In the event we are considering entering
into one or a series of transactions involving a merger or other business combination or a
dissolution or liquidation of all or a significant portion of our assets, we shall promptly notify
you in writing. If requested by BHP, we shall then establish alternative means of providing for our
obligations set forth herein on terms and conditions reasonably satisfactory to BHP.

If multiple claims are brought against you in any Action with respect to at least one of
which indemnification is permitted under applicable law and provided for under this
Agreement, we agree that any judgment, arbitration award or other monetary award shall be
conclusively deemed to be based on claims as to which indemnification is permitted and
provided for. In the event that you are called or subpoenaed to give testimony in a court
of law, we agree to pay your expenses related thereto and for every day or part thereof
that you are required to be there or in preparation thereof. Our obligations hereunder
shall be in addition to any rights that any Indemnified Person may have at common law or
otherwise. Solely for the purpose of enforcing this Agreement, we hereby consent to
personal jurisdiction and to service and venue in any court in which any claim which is
subject to this Agreement is brought by or against any Indemnified Person. We acknowledge
that in connection with the Engagement you are acting as an independent contractor with
duties owing solely to us. YOU HEREBY AGREE, AND WE HEREBY AGREE ON OUR OWN BEHALF AND, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF OUR SECURITY HOLDERS, TO WAIVE ANY
RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM, COUNTER-CLAIM OR ACTION ARISING OUT OF
THE ENGAGEMENT, YOUR PERFORMANCE THEREOF OR THIS AGREEMENT.

The provisions of this Agreement shall apply to the Engagement (including related
activities prior to the date hereof) and any modification thereof and shall remain in full
force and effect regardless of the completion or termination of the Engagement. This
Agreement and any other Agreements relating to the Engagement shall be governed by and
construed in accordance with the laws of the state of New York, without regard to conflicts
of law principles thereof.

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Very truly yours,
	 
	 	 	 	 	 	 	 	 
	Accepted and Agreed:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Burnham Hill Partners	 	 	 	Client:	 	Dirt Motor Sports, Inc.
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 	 	Name:
	 

	 	Title:
	 	 	 	 	 	Title:

 

 

SCHEDULE 2.1(r)

“World of Outlaws”

“WoO”

“DIRT MotorSports”

“DMS”

“DIRT”

“DIRT MotorSports Atlantic Coast Championships”

“DIRT MotorSports Nor’Easter”

“DIRTCar”

“DIRT Radio Network”

“DIRTVision”

“Elite 11”

“Mean 15”

“World of Outlaws Dirty Dozen”

“Get off your Assphalt”

“Super DIRT Week”

“Think DIRT”

“This Week on DIRT”

“United Midwestern Promoters”

“UMP”

“Summer Nationals”

 

 

SCHEDULE 2.1(u)

- None -

 

 

SCHEDULE 2.1(v)

1. Lease Agreement for concessions with Carter & Miracle Concessions, LLP for Volusia Speedway
Park: Volusia Operations, LLC entered into a Lease Agreement with Carter & Miracle Concessions, LLP
expiring on December 31, 2007 with subsequent one year renewal terms whereby Miracle & Carter
Concessions will provide for and operate the beer booth stand at Volusia Speedway for the term of
this Agreement.

Employment agreements with officers of the Company:

DIRT MotorSports has entered into the following Employment Agreements:

	 	(1)	 	Rob Butcher: Effective February 20, 2006 for a three year term, Mr. Butcher shall
serve as the Company’s Executive Vice President and Chief Marketing Officer whereby he
shall receive an annual salary of $180,000, formulaic incentive compensation,
discretionary incentive compensation, 300,000 options of the Company’s common stock at at
exercise price of $3.75 per share, and 150,000 shares of restricted common stock. All
terms and conditions of the Employment Agreement can be viewed in the Company’s 8k filing
on 3/2/06.
	 
	 	(2)	 	Ben Geisler: Effective February 20, 2006 for a three year term, Mr. Geisler shall
serve as the Company’s Executive Vice President of Operations whereby he shall receive an
annual salary of $180,000, formulaic incentive compensation, discretionary incentive
compensation, 300,000 options of the Company’s common stock at at exercise price of $3.75
per share, and 150,000 shares of restricted common stock. All terms and conditions of the
Employment Agreement can be viewed in the Company’s 8k filing on 3/2/06.
	 
	 	(3)	 	Brian Carter: Effective February 1, 2005 for a term of three years, Mr. Carter shall
serve as the Company’s Chief Financial Officer whereby he shall receive an annual salary
of $180,000, and 300,000 options of the Company’s common stock. All terms and conditions
of the Employment Agreement can be viewed in the Company’s 8k filing on 7/28/05.
	 
	 	(4)	 	Joe Dickey: Effective February 1, 2005 for a term of three years, Mr. Dickey shall
serve as the Company’s Chief Administrative Officer whereby he shall receive an annual
salary of $150,000, and 300,000 options of the Company’s common stock. All terms and
conditions of the Employment Agreement can be viewed in the Company’s 8k filing on
7/28/05.
	 
	 	(5)	 	Daniel Malasky: Effective October 18, 2004 for a term of two years, Mr. Malasky shall
receive an annual salary of $120,000, and 10,000 shares of common stock.

Consultant Agreement with Tom Deery

     The Company entered into a Consulting Agreement with Tom Deery, effective February 20, 2006
for a six month period with subsequent three month renewal periods, to serve as the Company’s
Interim President, at a monthly rate of $15,000, 50,000 options of the Company’s common stock at a
price of $4.00 per share, and 50,000 common shares of the Company’s restricted common stock.

 

 

SCHEDULE 2.1(y)

Employment agreements with Officers of the Company

Refer to Schedule 2.1(v).

 

 

SCHEDULE 2.1(z)

Common Stock Issued:

     Restricted shares issued to officers of the Company in connection with Employment and
Consulting agreements as disclosed in the Company’s current report on Form 8k dated March 2, 2006.

Options Issued:

     Options to purchase common stock to officers and directors of the Company in connection with
Employment and Consulting agreements as disclosed in the Company’s current report on Form 8k dated
March 2, 2006.

Borrowings:

     None except for promissory notes payable which shall be exchanged under Section 2.1 (gg) of
the Purchase Agreement.

 

 

SCHEDULE 2.1(ff)

Sarbanes Oxley Disclosures

     Not applicable.

 

 

SCHEDULE 2.1(gg)

Promissory Notes Payable Which Shall Remain Outstanding

$220,000 note payable issued in connection with the purchase of Lernerville Speedway, which is due
in $110,000 installments on May 30, 2006 and May 30, 2007. This note is secured by a mortgage on
the Lernerville Speedway Facility.

$2,310,000 notes payable issued in connection with the purchase of Lernerville Speedway, bearing
interest at 7% payable annually. The balance is due upon maturity on March 15, 2009. This note is
secured by a mortgage on the Lernerville Speedway Facility.

$2,000,000 note payable issued in connection with the purchase of Volusia Speedway, bearing
interest at one percent over prime and payable in fifty-nine equal monthly installments commencing
at $24,000 per month and adjusted quarterly for changes in interest rates with the balance of the
outstanding principal and accrued interest due on June 30, 2010. The outstanding principle balance
on this note was $1,882,847 as of March 31, 2006. This note is secured by a mortgage on the real
property, and security agreement covering the other assets acquired from Volusia Speedway.

$450,000 note payable to an individual bearing interest at 8% and due on March 31, 2007

 

 

SCHEDULE 4.2(s)

Series B Exchanged into Series D

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Securities Issued Upon Exchange
	Series B	 	Common Share	 	Series D	 	Common Share
	Shares	 	Equivalents	 	Shares	 	Equivalents
	 	 	 
	7,343.270

	 	 	7,343,270	 	 	 	7,343.270	 	 	 	7,343,270	 

 

 

SCHEDULE 4.2(t)

Series C Exchanged into Series D

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Securities Issued Upon Exchange
	Series C	 	Common Share	 	Series D	 	Common Share
	Shares	 	Equivalents	 	Shares	 	Equivalents
	 	 	 
	2,500.000

	 	 	2,500,000	 	 	 	2,500.000	 	 	 	2,500,000exv10w2

 

Exhibit 10.2

Published CUSIP Number: 15231JAE7

FIRST AMENDMENT TO CREDIT AGREEMENT

Dated as of May 25, 2006

among

CENTEX CORPORATION,

Borrower

BANK OF AMERICA, N.A.,

Administrative Agent

and

THE LENDERS NAMED HEREIN,

Lenders

$2,025,000,000

JPMORGAN CHASE BANK, N.A.

and

THE ROYAL BANK OF SCOTLAND PLC,

Co-Syndication Agents

CITICORP NORTH AMERICA, INC.,

Documentation Agent

BNP PARIBAS,

CALYON NEW YORK BRANCH,

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,

and

BARCLAYS BANK PLC

Senior Managing Agents

SUNTRUST BANK,

WACHOVIA BANK, NATIONAL ASSOCIATION,

and

LLOYDS TSB BANK PLC,

Managing Agents

BANC OF AMERICA SECURITIES LLC,

Sole Lead Arranger and Sole Book Manager

 

 

FIRST AMENDMENT TO CREDIT AGREEMENT

     THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Agreement”) is entered into as of May 25,
2006, by and among CENTEX CORPORATION, a Nevada corporation (“Borrower”), each Lender (defined
below) party hereto, and BANK OF AMERICA, N.A., as Administrative Agent.

R E C I T A L S

     A. Reference is hereby made to that certain Credit Agreement dated as of July 1, 2005,
executed by Borrower, the Lenders party thereto (“Existing Lenders”), and Administrative Agent (as
amended, the “Credit Agreement”).

     B. Capitalized terms used herein shall, unless otherwise indicated, have the respective
meanings set forth in the Credit Agreement.

     C. Borrower, Administrative Agent, and Lenders desire to (a) increase the amount of the Total
Commitment by (i) adding the new Lenders set forth on Schedule 2.1 hereto (“New Lenders;” Existing
Lenders and New Lenders are collectively called “Lenders”) as Lenders in accordance with Section
2.2 of the Credit Agreement, and (ii) having certain Existing Lenders increase their Commitment in
accordance with Section 2.2 of the Credit Agreement, and (b) otherwise modify certain provisions
contained in the Credit Agreement, in each case subject to the terms and conditions set forth
herein.

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

     1. Amendments to the Credit Agreement.

     (a) Recital A. is hereby deleted in its entirety and replaced with the following:

     A. Borrower has requested that Lenders extend credit to Borrower in the form of this
Agreement, providing for, among other things, a revolving credit facility in the aggregate
principal amount of up to $2,025,000,000 (subject to increases as further provided herein).

     (b) Section 1.1 is hereby amended to delete the definitions of “Applicable Lending Office,”
“Debt,” “Excluded Subsidiary,” “Fee Letter,” “Letter of Credit Sublimit,” “Performance Letter of
Credit,” and “Total Commitment” in their entirety and replace such definitions with the following:

     “Applicable Lending Office” means (a) as to Administrative Agent, Administrative
Agent’s address and, as appropriate, account as set forth on Schedule 2.2, or such other
address or account as Administrative Agent may from time to time notify to Borrower, each
L/C Issuer, and the Lenders, and (b) as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other office or
offices as a Lender may from time to time notify Borrower and Administrative Agent.

     Debt means (without duplication), for any Person, the sum of the following: (a) all
liabilities, obligations, and indebtedness of such Person for money borrowed; (b) all
liabilities, obligations, and indebtedness of such Person which is evidenced by bonds,
notes, debentures, or other similar instruments; (c) all Capitalized Lease Obligations of
such Person; (d) all obligations of such Person issued or assumed as the deferred purchase
price of property, all conditional sale obligations of such Person, and obligations of such
Person under any title retention agreement

 

 

(but excluding trade accounts payable arising in the ordinary course of business that
are not past-due for more than ninety (90) days); (e) all Contingent Obligations of such
Person; (f) all obligations of the type referred to in clauses (a) and (b) preceding of
other Persons secured by any Lien on any property or asset of such Person (whether or not
such obligation is assumed by such Person); (g) the face amount of all letters of credit and
banker’s acceptances issued for the account of such Person, and without duplication, all
drafts drawn and unpaid thereunder; (h) all Stock of such Person subject to repurchase or
redemption by such Person other than at the sole option of such Person; (i) all obligations
of such Person to purchase Stock (or other property) which arise out of or in connection
with the sale by such Person of the same or substantially similar Stock (or property); (j)
net obligations of such Person arising under Financial Hedges entered into by such Person as
determined in accordance with GAAP; and (k) to the extent not otherwise included in clauses
(a) through (j) preceding, such Person’s pro rata share of the “Debt” (i.e., the obligations
and liabilities under clauses (a) through (j) preceding) of any Homebuilding Joint Venture
(based on such Person’s ownership interest in such Homebuilding Joint Venture).

     Excluded Subsidiary means any Unrestricted Subsidiary that has a continuing default or
event of default under any Debt in excess of the Threshold Amount at any time.

     Fee Letter means that certain letter agreement dated April 3, 2006, among
Administrative Agent, Arranger, and Borrower, as amended.

     Letter of Credit Sublimit means an amount equal to $775,000,000, unless the Letter of
Credit Sublimit is increased pursuant to Section 2.5(k). The Letter of Credit Sublimit is
part of, and not in addition to, the Commitment.

     Performance Letter of Credit means any letter of credit issued: (a) on behalf of a
Person in favor of a Governmental Authority, including, without limitation, any utility,
water, or sewer authority, or other similar entity, for the purpose of assuring such
Governmental Authority that such Person or an Affiliate of such Person will properly and
timely complete work it has agreed to perform for the benefit of such Governmental
Authority; (b) in lieu of cash deposits to obtain a license, in place of a utility deposit,
or for land option contracts; (c) in lieu of other contract performance, to secure
performance warranties payable upon breach, and to secure the performance of labor and
materials, including, without limitation, construction, bid, and performance bonds; or (d)
to secure refund or advance payments on contractual obligations where default of a
performance-related contract has occurred; provided that, for purposes of Section 5.5, a
Letter of Credit issued hereunder shall not be deemed to be a Performance Letter of Credit
if the applicable L/C Issuer would not be permitted to characterize such Letter of Credit as
a “performance letter of credit” for regulatory or capital requirement purposes.

     Total Commitment means, on any date of determination, the sum of all Commitments for
all Lenders (as the same may have been reduced, increased, or canceled in accordance with
this Agreement) then in effect, which sum shall not exceed $2,025,000,000 unless the Total
Commitment is increased pursuant to Section 2.2(b).

     (c) Section 1.1 is hereby amended to add the following definitions of “Administrative
Questionnaire,” “Homebuilding Joint Venture,” and “Threshold Amount” in the appropriate
alphabetical order:

     Administrative Questionnaire means an Administrative Questionnaire in a form supplied
by Administrative Agent.

 

 

     “Homebuilding Joint Venture” means any Person (a) that was formed for and is engaged in
the acquisition and development of real property for residential homebuilding purposes, as a
joint venture, partnership, or similar enterprise, involving a Restricted Company and one or
more third parties, (b) in which any Restricted Company holds an ownership interest, and (c)
that is not a Subsidiary of such Restricted Company.

     Threshold Amount means $30,000,000.

     (d) Section 2.2(b) is hereby deleted in its entirety and replaced with the following:

     (b) At any time after the Closing Date through the date that is one (1) year prior to
the Termination Date, Administrative Agent may, from time to time at the request of
Borrower, increase the Total Commitment by (i) admitting additional Lenders hereunder (each
a “Subsequent Lender”), or (ii) increasing the Commitment of any Lender (each an “Increasing
Lender”), subject to the following conditions:

     (A) each Subsequent Lender is an Eligible Assignee;

     (B) Borrower executes (i) a new Note payable to the order of a Subsequent Lender, if
requested, or (ii) a replacement Note payable to the order of an Increasing Lender if such
Increasing Lender previously received a Note;

     (C) each Subsequent Lender executes and delivers to Administrative Agent a Joinder
Agreement in the form of Exhibit F;

     (D) each Increasing Lender executes and delivers to Administrative Agent an increase
certificate substantially in the form of Exhibit G;

     (E) after giving effect to the admission of any Subsequent Lender or the increase in
the Commitment of any Increasing Lender, the Total Commitment does not exceed $2,750,000,000
less the amount of any previous reductions pursuant to Section 2.3;

     (F) each increase in the Total Commitment shall be in the amount of $10,000,000 or a
greater integral multiple of $500,000;

     (G) no admission of any Subsequent Lender shall increase the Commitment of any existing
Lender without the written consent of such Lender;

     (H) no Potential Default or Event of Default exists or would occur after giving effect
to such increase;

     (I) no Lender shall be an Increasing Lender without the written consent of such Lender;
and

     (J) the amount of all increases in the Total Commitment pursuant to this Section 2.2
shall not exceed $725,000,000 in the aggregate.

     After the admission of any Subsequent Lender or the increase in the Commitment of any
Increasing Lender, Administrative Agent shall promptly provide to each Lender and to
Borrower a new Schedule 2.1 to this Agreement. In the event that there are any Borrowings
outstanding

 

 

after giving effect to an increase in the Total Commitment pursuant to this Section
2.2, upon notice from Administrative Agent to each Lender, the amount of such Borrowings
owing to each Lender shall be appropriately adjusted to reflect the new Pro Rata Parts of
Lenders, and Borrower shall pay any Consequential Losses associated therewith pursuant to
Section 4.5.

     (e) Section 2.5(j) is hereby deleted in its entirety and replaced with the following:

     (j) L/C Issuer Reporting Requirements. Each L/C Issuer shall, no later than the third
(3rd) Business Day following the last day of each month, provide to Administrative Agent a
schedule of the Letters of Credit issued by it, in form and substance reasonably
satisfactory to Administrative Agent, showing the date of issuance of each Letter of Credit,
the account party, the original face amount (if any), the expiration date, and the reference
number of any Letter of Credit outstanding at any time during such month, indicating whether
any such Letter of Credit is a Performance Letter of Credit and showing the aggregate amount
(if any) payable by Borrower to such L/C Issuer during such month pursuant to Section 5.5.
Promptly after the receipt of such schedule from each L/C Issuer, Administrative Agent shall
provide to Lenders a summary of such schedules.

     (f) Section 5.5 is hereby deleted in its entirety and replaced with the following:

     5.5. Letter of Credit Fees. Borrower shall pay to Administrative Agent for the ratable
account of Lenders a Letter of Credit fee for each outstanding Letter of Credit equal to a
rate per annum equal to the product of (a) either (i) with respect to a Letter of Credit
that is not a Performance Letter of Credit, the Applicable Margin for Eurodollar Borrowings
minus 0.10%, or (ii) with respect to a Letter of Credit that is a Performance Letter of
Credit, (A) the product of the Applicable Margin for Eurodollar Borrowings times
seventy-five percent (75%), minus (B) 0.10%, times (b) the daily maximum amount available to
be drawn under such Letter of Credit (whether or not such maximum amount is then in effect
under such Letter of Credit). Such Letter of Credit fees shall accrue and be computed on a
quarterly basis in arrears, and shall be due and payable (a) on the fifteenth
(15th) day after the last day of each March, June, September, and December for
fees accrued through the last day of the preceding quarter, (b) on the Letter of Credit
Expiration Date, and (c) thereafter on demand. If there is any change in the Applicable
Margin during any quarter, the daily maximum amount of each Letter of Credit shall be
computed and multiplied by the Applicable Margin separately for each period during such
quarter that such Applicable Margin was in effect.

     (g) Section 7.7 is hereby deleted in its entirety and replaced with the following:

     7.7 Litigation, Claims, Investigations. No Company is subject to, or aware of the
threat of, any Litigation which is reasonably likely to be determined adversely to any
Company, and, if so adversely determined, could (individually or collectively with other
Litigation) be a Material Adverse Event. There are no outstanding orders or judgments for
the payment of money in excess of the Threshold Amount (individually or collectively) or any
warrant of attachment, sequestration, or similar proceeding against the assets of any
Company having a value (individually or collectively) of the Threshold Amount or more which
is not either (a) stayed on appeal, or (b) being contested in good faith by appropriate
proceedings diligently conducted, and against which reserves or other provisions required by
GAAP have been made. There are no formal complaints, suits, claims, investigations, or
proceedings initiated at or by any Governmental Authority pending or, to the best knowledge
of Borrower, threatened against any Company which is reasonably likely to be determined
adversely and, if so adversely determined,

 

 

could be a Material Adverse Event, nor any judgments, decrees, or orders of any
Governmental Authority outstanding against any Company that could be a Material Adverse
Event.

     (h) Section 7.10 is hereby deleted in its entirety and replaced with the following:

     7.10 Employee Benefit Plans. (a) No Employee Plan has incurred an accumulated funding
deficiency, as defined in Section 302 of ERISA and Section 412 of the Tax Code, (b) neither
Borrower nor any ERISA Affiliate has incurred a liability which is currently due and remains
unpaid under Title IV of ERISA to the PBGC or to an Employee Plan in connection with any
such Employee Plan, (c) neither Borrower nor any ERISA Affiliate has withdrawn in whole or
in part from participation in a Multiemployer Plan, (d) Borrower has not engaged in any
“prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Tax
Code), and (e) no Reportable Event has occurred which is reasonably likely to result in the
termination of an Employee Plan, if such accumulated funding deficiency, liability,
withdrawal, prohibited transaction, or Reportable Event is reasonably likely to result
individually or in the aggregate in liability on the part of Borrower in excess of the
Threshold Amount. The present value of all benefit liabilities within the meaning of Title
IV of ERISA under each Employee Plan (based on those actuarial assumptions used to fund such
Employee Plan) did not, as of the last annual valuation date for the most recent plan year
of such Employee Plan, exceed the value of the assets of such Employee Plan, and the total
present values of all benefit liabilities within the meaning of Title IV of ERISA of all
Employee Plans (based on the actuarial assumptions used to fund each such Employee Plan) did
not, as of the respective annual valuation dates for the most recent plan year of each such
Plan, exceed the value of the assets of all such Employee Plans.

     (i) Section 8.3(d) is hereby deleted in its entirety and replaced with the following:

     (d) Notices of Litigation, Defaults, Etc. Notice, promptly after Borrower knows or has
reason to know of (i) the existence and status of any Litigation which is reasonably likely
to be determined adversely and, if so adversely determined, could be a Material Adverse
Event, or of any order or judgment for the payment of money which (individually or
collectively) is in excess of the Threshold Amount, or any warrant of attachment,
sequestration, or similar proceeding against the assets of any Company having a value
(individually or collectively) of the Threshold Amount or more, (ii) any material change in
any material fact or circumstance represented or warranted in any Loan Document, (iii) a
Potential Default or Event of Default specifying the nature thereof and what action Borrower
or any other Company has taken, is taking, or proposes to take with respect thereto;
provided, however, that Borrower shall have no obligation to notify Administrative Agent or
Lenders of a Potential Default under Section 9.12 unless Borrower has actual knowledge of
such Potential Default and such Potential Default has continued, or Borrower reasonably
expects such Potential Default to continue, for a period of five (5) consecutive days, (iv)
the receipt by any Company of any notice from any Governmental Authority of the expiration
without renewal, termination, material modification or suspension of, or institution of any
proceedings to terminate, materially modify, or suspend, any Authorization which any Company
is required to hold in order to operate its business in compliance with all Legal
Requirements, other than such expirations, terminations, suspensions, or modifications which
individually or in the aggregate would not be a Material Adverse Event, (v) any federal,
state, or local statute, regulation, or ordinance or judicial or administrative order
limiting or controlling the operations of any Company which has been issued or adopted
hereafter and which is of material adverse importance or effect in relation to the
operations of the Companies taken as a whole, (vi) the receipt by any Company of notice of
any violation or alleged violation of any Environmental Law, which violation or alleged
violation could, individually or collectively with other such violations or allegations,
reasonably be expected to be a Material Adverse Event, or

 

 

     (vii) (A) the occurrence of a Reportable Event that, alone or together with any other
Reportable Event, could reasonably be expected to result in liability of any Company to the
PBGC in an aggregate amount exceeding the Threshold Amount; (B) any expressed statement in
writing on the part of the PBGC of its intention to terminate any Employee Plan or Plans;
(C) Borrower’s or an ERISA Affiliate’s becoming obligated to file with the PBGC a notice of
failure to make a required installment or other payment with respect to an Employee Plan; or
(D) the receipt by Borrower or an ERISA Affiliate from the sponsor of a Multiemployer Plan
of either a notice concerning the imposition of withdrawal liability in an aggregate amount
exceeding the Threshold Amount or of the impending termination or reorganization of such
Multiemployer Plan.

     (j) Section 8.3(f) is hereby deleted in its entirety and replaced with the following:

     (f) SEC Filings. Promptly after the filing thereof, a true, correct, and complete copy
of each Form 10-K and Form 10-Q filed by or on behalf of Borrower with the Securities and
Exchange Commission.

     (k) Section 8.12 is hereby deleted in its entirety and replaced with the following:

     8.12 Designation of Unrestricted Subsidiaries

     (a) Borrower shall have the option of designating any Restricted Subsidiary as an
Unrestricted Subsidiary by giving prior written notice to the Administrative Agent and
Lenders (as provided in the next sentence), provided that (i) such designation does not
result in an Event of Default or a Potential Default, and (ii) the aggregate of (x) the
Recourse Debt of such Restricted Subsidiary (determined as at the date of such designation),
and (y) the aggregate Recourse Debt of all other Subsidiaries of Borrower, if any, which
Borrower has previously designated as Unrestricted Subsidiaries (determined for each such
other Subsidiary as at the date of designation of the new Unrestricted Subsidiary and
determined for all such Subsidiaries (including the new Unrestricted Subsidiary) on a
consolidated basis in accordance with GAAP) does not exceed the greater of (a) twenty-five
percent (25%) of Consolidated Debt (determined as at the date of such designation) excluding
the Restricted Subsidiary to be so designated, or (b) $500,000,000. Each notice of
designation delivered pursuant to the preceding sentence shall be accompanied by the
following documents, each certified by a Responsible Officer of Borrower and setting forth
the relevant financial information as at a specified date not earlier than ten (10) days
before the effective date of such designation: (X) a statement showing, in reasonable
detail, the Tangible Net Worth, the total Debt, and the total assets of each Restricted
Subsidiary the subject of such notice of designation; and (Y) a Compliance Certificate
showing comparative figures for Borrower and the Restricted Subsidiaries before and after
giving effect to such notice of designation and a statement demonstrating, in reasonable
detail, compliance with clause (ii) of the first sentence of this Section 8.12(a). Any
attempted designation by Borrower of a Restricted Subsidiary as an Unrestricted Subsidiary
other than in compliance with the limitations contained in this Section 8.12(a) shall be
ineffective as fully as if such attempted designation had never occurred.

     (b) Borrower shall have the option of designating any newly formed or acquired
Subsidiary as an Unrestricted Subsidiary so long as such designation complies with the
requirements of the proviso in the first sentence of Section 8.12(a) and Administrative
Agent receives a list of newly formed or acquired Unrestricted Subsidiaries in connection
with the delivery of each Compliance Certificate delivered to Administrative Agent pursuant
to Section 8.3, which Compliance Certificate shall contain a statement that Borrower is in

 

 

compliance with clause (ii) of the first sentence of Section 8.12(a) (for such purpose
the reference to “Restricted Subsidiary” in clause (ii) of the first sentence of Section
8.12(a) shall be deemed to read “newly formed or acquired Subsidiary”).

     (c) If, as of any date, the aggregate Recourse Debt of the Unrestricted Subsidiaries
(determined on a consolidated basis in accordance with GAAP) exceeds the greater of (a)
twenty-five percent (25%) of Consolidated Debt as of such date or (b) $500,000,000, then
Borrower shall designate an Unrestricted Subsidiary or Subsidiaries to be a Restricted
Subsidiary such that the aggregate Recourse Debt of the remaining Unrestricted Subsidiaries
does not exceed the greater of (a) twenty-five percent (25%) of Consolidated Debt (including
the newly designated Restricted Subsidiary), or (b) $500,000,000. Borrower shall notify
Administrative Agent and Lenders of any such designation not later than ten (10) days after
the requirement to make such designation arises pursuant to the preceding sentence,
accompanied by the following documents, each certified by a Responsible Officer of Borrower
and setting forth the relevant financial information as at a specified date not earlier than
ten (10) days before the effective date of such designation: (X) a statement showing, in
reasonable detail, the Tangible Net Worth, the total Debt, and the total assets of the
Subsidiary to be designated a Restricted Subsidiary, and (Y) a Compliance Certificate
showing comparative figures for Borrower and the Restricted Subsidiaries before and after
giving effect to such notice of designation and a statement demonstrating, in reasonable
detail, compliance with this Section 8.12(c).

     (l) Section 9.1 is hereby deleted in its entirety and replaced with the following:

     9.1 Employee Benefit Plans. Borrower shall not, and shall not permit any ERISA
Affiliate to, directly or indirectly, engage in any “prohibited transaction” (as defined in
Section 406 of ERISA or Section 4975 of the Tax Code), and the Companies and their
respective ERISA Affiliates shall not, directly or indirectly, (a) incur any “accumulated
funding deficiency” as such term is defined in Section 302 of ERISA with respect to any
Employee Plan, (b) permit any Employee Plan to be subject to involuntary termination
proceedings pursuant to Title IV of ERISA, or (c) fully or partially withdraw from any
Multiemployer Plan, if such prohibited transaction, accumulated funding deficiency,
termination proceeding, or withdrawal would result individually or in the aggregate in
liability on the part of Borrower in excess of the Threshold Amount.

     (m) Section 9.2(b)(ii) is hereby deleted in its entirety and replaced with the following:

     (ii) good-faith Liens (including deposits) made to secure performance of bids,
tenders, insurance or other contracts (other than for the repayment of borrowed
money), or leases, or to secure statutory obligations, surety or appeal bonds, or
indemnity, performance, or other similar bonds as all such Liens or deposits arise
in the ordinary course of business of the Restricted Companies;

     (n) Section 9.2(b)(xii) is hereby deleted in its entirety and replaced with the following:

     (xii) other Liens securing Debt or other obligations not to exceed in the aggregate for
all such Liens the sum of $200,000,000; and

     (o) Section 9.12(a) is hereby deleted in its entirety and replaced with the following:

 

 

     (a) Leverage Ratio. Borrower shall not permit the Leverage Ratio (expressed as a
percent), as of the last day of any fiscal quarter of Borrower, to be greater than sixty
percent (60%).

     (p) Section 10.4 is hereby deleted in its entirety and replaced with the following:

     10.4 Judgments and Attachments. Any Restricted Company fails, within sixty (60) days
after entry, to pay, bond, or otherwise discharge any judgment or order for the payment of
money in excess of the Threshold Amount (individually or collectively) or any warrant of
attachment, sequestration, or similar proceeding against any Restricted Company’s assets
having a value (individually or collectively) of the Threshold Amount, in each case, which
is not stayed on appeal.

     (q) Section 10.5 is hereby deleted in its entirety and replaced with the following:

     10.5 Government Action.

               (a) A final non-appealable order is issued by any Governmental Authority, including,
but not limited to, the United States Justice Department, seeking to cause any Restricted
Company to divest assets with a fair market value in excess of the Threshold Amount,
pursuant to any antitrust, restraint of trade, unfair competition, industry regulation, or
similar Legal Requirements; or

               (b) Any Governmental Authority shall condemn, seize, or otherwise appropriate, or take
custody or control of, the assets of any Restricted Company with a fair market value in
excess of the Threshold Amount.

     (r) Section 10.8 is hereby deleted in its entirety and replaced with the following:

     10.8 Default Under Other Debt and Agreements.

     (a) Any Restricted Company fails to make any payments when due (after lapse of any
applicable grace periods) with respect to any Debt of such Restricted Company (other than
the Obligation) in excess (individually or collectively) of the Threshold Amount; and

     (b) Any default exists under any agreement (other than the Loan Documents) to which any
Restricted Company is a party, which has not been waived by the parties thereto, the effect
of which has been to cause, or to permit any Person to cause, an amount of Debt of such
Restricted Company in excess (individually or collectively) of the Threshold Amount to
become due and payable by such Restricted Company (whether by acceleration or by its terms).

     (s) Section 10.9 is hereby deleted in its entirety and replaced with the following:

     10.9 Employee Benefit Plans.

     (a) A “Reportable Event” or “Reportable Events,” or a failure to make a required
installment or other payment (within the meaning of Section 412(n)(1) of the Tax Code),
shall have occurred with respect to any Employee Plan or Plans that is reasonably expected
to result in liability of Borrower to the PBGC or to an Employee Plan in an aggregate amount
exceeding the Threshold Amount; or

 

 

     (b) Borrower or any ERISA Affiliate has provided to any affected party a sixty (60) day
notice of intent to terminate an Employee Plan pursuant to a distress termination in
accordance with Section 4041(c) of ERISA if the liability reasonably expected to be incurred
as a result of such termination will exceed the Threshold Amount; or

     (c) A trustee shall be appointed by a United States district court to administer any
such Employee Plan pursuant to Section 4042(b) of ERISA; or

     (d) The PBGC shall institute proceedings (including giving notice of intent thereof) to
terminate any such Employee Plan if such termination proceeding is reasonably expected to
result in liability on the part of Borrower in excess of the Threshold Amount; or

     (e) (i) Borrower or any ERISA Affiliate shall have been notified by the sponsor of a
Multiemployer Plan that it has incurred withdrawal liability (within the meaning of Section
4201 of ERISA) to such Multiemployer Plan, (ii) Borrower or such ERISA Affiliate does not
have reasonable grounds for contesting such withdrawal liability or is not contesting such
withdrawal liability in a timely and appropriate manner and (iii) the amount of such
withdrawal liability specified in such notice, when aggregated with all other amounts
required to be paid to Multiemployer Plans in connection with withdrawal liabilities
(determined as of the date or dates of such notification), exceeds the Threshold Amount; or

     (f) Borrower or any ERISA Affiliate shall have been notified by the sponsor of a
Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated,
within the meaning of Title IV of ERISA, if solely as a result of such reorganization or
termination the aggregate annual contributions of Borrower and its ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or have been or are being terminated
have been or will be increased over the amounts required to be contributed to such
Multiemployer Plans for their most recently completed plan years by an amount exceeding the
Threshold Amount.

     (t) Section 13.3 is hereby deleted in its entirety and replaced with the following:

     13.3 Notices; Effectiveness; Electronic Communication.

     (a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in subsection (b)
below), all notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or registered
mail or sent by telecopier as follows, and all notices and other communications expressly
permitted hereunder to be given by telephone shall be made to the applicable telephone
number, as follows:

     (i) if to Borrower, Administrative Agent, or Bank of America, N.A., as an L/C Issuer,
to the address, telecopier number, electronic mail address or telephone number specified for
such Person on Schedule 2.2; and

     (ii) if to any other L/C Issuer or Lender, to the address, telecopier number,
electronic mail address or telephone number specified in its Administrative Questionnaire.

     Notices sent by hand or overnight courier service, or mailed by certified or registered
mail, shall be deemed to have been given when received; notices sent by telecopier shall be
deemed to have been given when sent (except that, if not given during normal business hours
for

 

 

the recipient, shall be deemed to have been given at the opening of business on the
next business day for the recipient). Notices delivered through electronic communications
to the extent provided in subsection (b) below, shall be effective as provided in such
subsection (b).

     (b) Electronic Communications. Notices and other communications to the Lenders and L/C
Issuers hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by Administrative
Agent, provided that the foregoing shall not apply to notices to any Lender or any L/C
Issuer pursuant to Section 2 if such Lender or L/C Issuer, as applicable, has notified
Administrative Agent that it is incapable of receiving notices under such Section by
electronic communication. Administrative Agent or Borrower may, in its discretion, agree to
accept notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.

     Unless Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of an
acknowledgement from the intended recipient (such as by the “return receipt requested”
function, as available, return e-mail or other written acknowledgement), provided that if
such notice or other communication is not sent during the normal business hours of the
recipient, such notice or communication shall be deemed to have been sent at the opening of
business on the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the deemed receipt
by the intended recipient at its e-mail address as described in the foregoing clause (i) of
notification that such notice or communication is available and identifying the website
address therefor.

     (c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER
MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR
OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NON-INFRINGEMENT OF THIRD-PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS
MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no
event shall Administrative Agent or any Agent Related Person (collectively, the “Agent
Parties”) have any liability to Borrower, any Lender, any L/C Issuer or any other Person for
losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or
otherwise) arising out of Borrower’s or Administrative Agent’s transmission of Borrower
Materials through the Internet, except to the extent that such losses, claims, damages,
liabilities or expenses are determined by a court of competent jurisdiction by a final and
nonappealable judgment to have resulted from the gross negligence or willful misconduct of
such Agent Party; provided, however, that in no event shall any Agent Party
have any liability to Borrower, any Lender, any L/C Issuer or any other Person for indirect,
special, incidental, consequential or punitive damages (as opposed to direct or actual
damages).

     (d) Change of Address, Etc. Each of Borrower, Administrative Agent, and any L/C Issuer
may change its address, telecopier or telephone number for notices and other communications
hereunder by notice to the other parties hereto. Each other Lender may change its address,
telecopier or telephone number for notices and other communications hereunder by notice to
Borrower, Administrative Agent, and each L/C Issuer. In addition, each Lender agrees

 

 

to notify Administrative Agent from time to time to ensure that Administrative Agent
has on record (i) an effective address, contact name, telephone number, telecopier number
and electronic mail address to which notices and other communications may be sent and (ii)
accurate wire instructions for such Lender.

     (e) Reliance by Administrative Agent, L/C Issuer and Lenders. Administrative Agent,
each L/C Issuer and Lenders shall be entitled to rely and act upon any notices (including
telephonic Notices of Borrowing) purportedly given by or on behalf of Borrower even if (i)
such notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation thereof. Borrower
shall indemnify Administrative Agent, each L/C Issuer, each Lender and each Agent Related
Person of each of them from all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on behalf of Borrower. All
telephonic notices to and other telephonic communications with Administrative Agent may be
recorded by Administrative Agent, and each of the parties hereto hereby consents to such
recording.

     (u) The Credit Agreement is hereby amended to add the following new Section 13.18:

     13.18 No Advisory or Fiduciary Responsibility. In connection with all aspects
of each transaction contemplated hereby, Borrower acknowledges and agrees that: (i)
the credit facility provided for hereunder and any related arranging or other
services in connection therewith (including in connection with any amendment, waiver
or other modification hereof or of any other Loan Document) are an arm’s-length
commercial transaction between Borrower and its Affiliates, on the one hand, and the
Administrative Agent and the Arranger, on the other hand, and Borrower is capable of
evaluating and understanding and understands and accepts the terms, risks and
conditions of the transactions contemplated hereby and by the other Loan Documents
(including any amendment, waiver or other modification hereof or thereof); (ii) in
connection with the process leading to such transaction, the Administrative Agent
and the Arranger each is and has been acting solely as a principal and is not the
financial advisor, agent or fiduciary, for Borrower or any of its Affiliates,
stockholders, creditors or employees or any other Person; (iii) neither the
Administrative Agent nor the Arranger has assumed or will assume an advisory, agency
or fiduciary responsibility in favor of Borrower with respect to any of the
transactions contemplated hereby or the process leading thereto, including with
respect to any amendment, waiver or other modification hereof or of any other Loan
Document (irrespective of whether the Administrative Agent or the Arranger has
advised or is currently advising Borrower or any of its Affiliates on other matters)
and neither the Administrative Agent nor the Arranger has any obligation to Borrower
or any of its Affiliates with respect to the transactions contemplated hereby except
those obligations expressly set forth herein and in the other Loan Documents; (iv)
the Administrative Agent and the Arranger and their respective Affiliates may be
engaged in a broad range of transactions that involve interests that differ from
those of Borrower and its Affiliates, and neither the Administrative Agent nor the
Arranger has any obligation to disclose any of such interests by virtue of any
advisory, agency or fiduciary relationship; and (v) the Administrative Agent and the
Arranger have not provided and will not provide any legal, accounting, regulatory or
tax advice with respect to any of the transactions contemplated hereby (including
any amendment, waiver or other modification hereof or of any other Loan Document)
and Borrower has consulted its own legal, accounting, regulatory and tax advisors to
the extent it has deemed appropriate. Borrower hereby waives and releases, to the
fullest extent permitted by law, any claims

 

 

that it may have against Administrative Agent and the Arranger with respect to
any breach or alleged breach of agency or fiduciary duty.

     (v) Schedule 2.1 is hereby deleted in its entirety and replaced with Schedule 2.1 attached
hereto.

     (w) Schedule 2.2 is hereby added in the form of Schedule 2.2 attached hereto.

     (x) Exhibit F is hereby added in the form of Exhibit F attached hereto.

     (y) Exhibit G is hereby added in the form of Exhibit G attached hereto.

     2. Lenders and Commitments.

     (a) The Lenders hereby agree that, as of the date hereof, each Lender’s Commitment is as set
forth on Schedule 2.1 attached hereto.

     (b) By their execution of this Amendment, each New Lender is hereby admitted as a Lender
pursuant to Section 2.2 of the Credit Agreement and each New Lender’s signature page to this
Amendment shall be deemed to be its signature page to the Credit Agreement.

     (c) By their execution of this Amendment, each Existing Lender that is an Increasing Lender
pursuant to Section 2.2 hereby acknowledges and agrees to the increase in its Commitment set forth
on Schedule 2.1 attached hereto.

     3. Amendments to Credit Agreement and Other Loan Documents.

     (a) All references in the Loan Documents to the Credit Agreement shall henceforth include
references to the Credit Agreement as modified and amended by this Agreement, and as may, from time
to time, be further modified, amended, restated, extended, renewed, and/or increased.

     (b) Any and all of the terms and provisions of the Loan Documents are hereby amended and
modified wherever necessary, even though not specifically addressed herein, so as to conform to the
amendments and modifications set forth herein.

     4. Ratifications. Borrower (a) ratifies and confirms all provisions of the Loan Documents as
amended by this Agreement, (b) ratifies and confirms that all guaranties and assurances, granted,
conveyed, or assigned to the Credit Parties under the Loan Documents are not released, reduced, or
otherwise adversely affected by this Agreement and continue to guarantee and assure full payment
and performance of the present and future Obligation, and (c) agrees to perform such acts and duly
authorize, execute, acknowledge, deliver, file, and record such additional documents and
certificates as Administrative Agent may reasonably request in order to create, preserve and
protect those guaranties and assurances.

     5. Representations. Borrower represents and warrants to Lenders that as of the date of this
Agreement: (a) this Agreement has been duly authorized, executed, and delivered by Borrower; (b) no
action of, or filing with, any Governmental Authority is required to authorize, or is otherwise
required in connection with, the execution, delivery, and performance of this Agreement other than
the reporting and filing of this Agreement pursuant to Legal Requirements regarding securities; (c)
the Loan Documents, as amended by this Agreement, are valid and binding upon Borrower and are
enforceable against Borrower in accordance with their respective terms, except as limited by Debtor
Relief Laws and general principles

 

 

of equity; (d) the execution, delivery, and performance of this Agreement does not require the
consent of any other Person and do not and will not constitute a violation of any Legal
Requirements, order of any Governmental Authority, or material agreements to which Borrower or any
of its Subsidiaries is a party or by which Borrower or any of its Subsidiaries is bound; (e) all
representations and warranties in the Loan Documents are true and correct in all material respects
on and as of the date of this Agreement, except to the extent that (i) any of them speak to a
different specific date, or (ii) the facts on which any of them were based have been changed by
transactions contemplated or permitted by the Credit Agreement; and (f) both before and after
giving effect to this Agreement, no Potential Default or Event of Default exists.

     6. Conditions. This Agreement shall not be effective unless and until:

     (a) this Agreement is executed by Borrower, Administrative Agent, and Required Lenders;
provided that the amendment to the definition of “Performance Letter of Credit” and the amendment
set forth in Section 1(f) above shall not be effective unless and until this Amendment is executed
by Borrower, Administrative Agent, and each Lender under the Credit Agreement;

     (b) the representations and warranties in this Agreement are true and correct in all material
respects on and as of the date of this Agreement, except to the extent that (i) any of them speak
to a different specific date, or (ii) the facts on which any of them were based have been changed
by transactions contemplated or permitted by the Credit Agreement; and

     (c) both before and after giving effect to this Agreement, no Default or Event of Default
exists;

     (d) Administrative Agent shall have received a Note payable to the order of each New Lender
that requests a Note, executed by Borrower in the amount of such New Lender’s respective Commitment
as set forth on Schedule 2.1 attached hereto;

     (e) Administrative Agent shall have received a replacement Note payable to each Increasing
Lender, executed by Borrower in the amount of such Increasing Lender’s respective Commitment as set
forth on Schedule 2.1 attached hereto;

     (f) Administrative Agent receives a certificate executed by Responsible Officer of Borrower
certifying (i) the name of each of its officers who are authorized to sign this Amendment and the
other documents executed in connection herewith, (ii) a true and correct copy of the Resolutions of
Borrower that authorize the execution, delivery, and performance of this Amendment and the other
documents executed in connection herewith, and (iii) that the articles or certificate of
incorporation, bylaws, and other Constituent Documents of Borrower have not been amended since July
1, 2005, and that the same are still in effect;

     (g) Administrative Agent receives an opinion of counsel of Borrower in form and substance
acceptable to Administrative Agent; and

     (h) Borrower shall have paid Administrative Agent all fees required to be paid by Borrower
under the Loan Documents (including the Fee Letter).

     7. Continued Effect. Except to the extent amended hereby or by any documents executed in
connection herewith, all terms, provisions, and conditions of the Credit Agreement and the other
Loan Documents, and all documents executed in connection therewith, shall continue in full force
and effect and shall remain enforceable and binding in accordance with their respective terms.

 

 

     8. Miscellaneous. Unless stated otherwise (a) the singular number includes the plural and
vice versa and words of any gender include each other gender, in each case, as appropriate, (b)
headings and captions may not be construed in interpreting provisions, (c) this Agreement shall be
construed — and its performance enforced — under Texas law, (d) if any part of this Agreement is
for any reason found to be unenforceable, all other portions of it nevertheless remain enforceable,
and (e) this Agreement may be executed in any number of counterparts with the same effect as if all
signatories had signed the same document, and all of those counterparts must be construed together
to constitute the same document.

     9. Parties. This Agreement binds and inures to each of the parties hereto and their
respective successors and permitted assigns.

     10. Entireties. The Credit Agreement and the other Loan Documents, as amended by this
Agreement, represent the final agreement between the parties about the subject matter of the Credit
Agreement and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the parties. There are no unwritten oral agreements between the parties.

[Remainder of Page Intentionally Left Blank; Signature Pages to Follow.]

 

 

     EXECUTED as of the first date written above.

	 	 	 	 	 	 	 	 	 
	 	 	CENTEX CORPORATION,	 	 
	 	 	as Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/S/ Gail M. Peck	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	Gail M. Peck	 	 
	 

	 	 	 	Title:
	 	VP & Treasurer	 	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.,	 	 
	 	 	as Administrative Agent	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/S/ Mark W. Lariviere	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Mark W. Lariviere	 	 
	 

	 	 	 	Title:
	 	Senior Vice President	 	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.,	 	 
	 	 	as an L/C Issuer and as a Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/S/ Mark W. Lariviere	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Mark W. Lariviere	 	 
	 

	 	 	 	Title:
	 	Senior Vice President	 	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.	 	 
	 	 	as Co-Syndication Agent, as an L/C Issuer, and as a
	 	 	Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/S/ David L. Howard	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	David L. Howard	 	 
	 

	 	 	 	Title:
	 	Vice President	 	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 	 	 	 	 
	 	 	THE ROYAL BANK OF SCOTLAND PLC,	 	 
	 	 	as Co-Syndication Agent and as a Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/S/ David Apps	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	David Apps	 	 
	 

	 	 	 	Title:
	 	Managing Director	 	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 	 	 	 	 
	 	 	CITICORP NORTH AMERICA, INC.,	 	 
	 	 	as Co-Documentation Agent and as a Lender
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/S/ Niraj R. Shah	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Niraj R. Shah	 	 
	 

	 	 	 	Title:
	 	Vice President	 	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 	 	 	 	 
	 	 	BNP PARIBAS,	 	 
	 	 	as a Senior Managing Agent, as an L/C Issuer, and as
	 	 	a Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/S/ Shayn March	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Shayn March	 	 
	 

	 	 	 	Title:
	 	Director	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/S/ Angela B. Arnold	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Angela B. Arnold	 	 
	 

	 	 	 	Title:
	 	Director	 	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 
	 	CALYON NEW YORK BRANCH,

as a Senior Managing Agent and as a Lender

 	 
	 	By:  	/S/ Samuel L. Hill
 	 
	 	 	Name:  	Samuel L. Hill 	 
	 	 	Title:  	Managing Director 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                     /S/ David Cagle
 	 
	 	 	Name:  	David Cagle 	 
	 	 	Title:  	Managing Director 	 
	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 
	 	SUNTRUST BANK,

as a Managing Agent, as an L/C Issuer, and as a Lender

 	 
	 	By:  	/S/ W. John Wendler
 	 
	 	 	Name:  	W. John Wendler 	 
	 	 	Title:  	Senior Vice President 	 
	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 
	 	THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,

as a Senior Managing Agent and as a Lender

 	 
	 	By:  	/S/ D. Barnell 
 	 
	 	 	Name:  	D. Barnell 	 
	 	 	Title:  	V.P. & Manager 	 
	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 
	 	LLOYDS TSB BANK PLC,

as a Managing Agent and as a Lender

 	 
	 	By:  	/S/ Candi Obrentz 
 	 
	 	 	Name:  	Candi Obrentz 	 
	 	 	Title:  	AVP-Financial Institutions 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                /S/ Matthew Tuck 
 	 
	 	 	Name:  	Matthew Tuck 	 
	 	 	Title:  	VP – Financial Institutions 	 
	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 
	 	WACHOVIA BANK, NATIONAL ASSOCIATION,

as Managing Agent and a Lender

 	 
	 	By:  	/S/ Timothy S. Blake
 	 
	 	 	Name:  	Timothy S. Blake 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 
	 	COMERICA BANK,

as an L/C Issuer and as a Lender

 	 
	 	By:  	/S/ Casey L. Ostrander
 	 
	 	 	Name:  	Casey L. Ostrander 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 
	 	WASHINGTON MUTUAL BANK, FA,

as a Lender

 	 
	 	By:  	/S/ Brad Johnson
 	 
	 	 	Name:  	Brad Johnson 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 
	 	BARCLAYS BANK PLC,

as Senior Managing Agent and a Lender

 	 
	 	By:  	/S/ David Barton 
 	 
	 	 	Name:  	David Barton 	 
	 	 	Title:  	Associate Director 	 
	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 
	 	PNC BANK, NATIONAL ASSOCIATION,

as a Lender

 	 
	 	By:  	/S/ Douglas G. Paul 
 	 
	 	 	Name:  	Douglas G. Paul 	 
	 	 	Title:  	Senior Vice President 	 
	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 
	 	UBS LOAN FINANCE LLC,

as a Lender

 	 
	 	By:  	/S/ Richard L. Tavrow 
 	 
	 	 	Name:  	Richard L. Tavrow 	 
	 	 	Title:  	Director Banking Products Services, US 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	            /S/ Iris R. Otsa 
 	 
	 	 	Name:  	Iris R. Otsa 	 
	 	 	Title:  	Associate Director Banking Products 
Services, US 	 
	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 
	 	CITY NATIONAL BANK, a national banking association,

as a Lender

 
	 	By:  	/S/ Xavier Barrera 
 	 
	 	 	Name:  	Xavier Barrera 	 
	 	 	Title:  	VP 	 
	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 
	 	THE NORTHERN TRUST COMPANY,

as a Lender

 	 
	 	By:  	/S/ Paul H. Theiss 
 	 
	 	 	Name:  	Paul H. Theiss 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 
	 	US BANK NATIONAL ASSOCIATION,

as a Lender

 	 
	 	By:  	/S/ Christopher W. Rupp 
 	 
	 	 	Name:  	Christopher W. Rupp 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 
	 	BANCA DI ROMA – NEW YORK BRANCH,

as a Lender

 	 
	 	By:  	/S/ Guido Lanzoni 
 	 
	 	 	Name:  	Guido Lanzoni 	 
	 	 	Title:  	Assistant Treasurer 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	               /S/ Luea Balestra 
 	 
	 	 	Name:  	Luea Balestra 	 
	 	 	Title:  	Executive Vice President 	 
	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 
	 	COMPASS BANK,

as a Lender

 	 
	 	By:  	/S/ Key Coker 
 	 
	 	 	Name:  	Key Coker 	 
	 	 	Title:  	Executive Vice President 	 
	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 
	 	MERRILL LYNCH BANK USA,

as a Lender

 	 
	 	By:  	/S/ Louis Alder 
 	 
	 	 	Name:  	Louis Alder 	 
	 	 	Title:  	Director 	 
	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 
	 	NATEXIS BANQUES POPULAIRES, as a Lender

 	 
	 	By:  	/S/ Marie-Edith Dugeny 
 	 
	 	 	Name:  	Marie-Edith Dugeny 	 
	 	 	Title:  	VP Real Estate Assis. Manager 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	               /S/ Guillaume de Parscau 
 	 
	 	 	Name:  	Guillaume de Parscau 	 
	 	 	Title:  	First VP Business Development 	 
	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 
	 	FIRST HAWAIIN BANK,

as a Lender

 	 
	 	By:  	/S/ Stephen M. Franklin 
 	 
	 	 	Name:  	Stephen M. Franklin 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 
	 	FIFTH THIRD BANK,

as a Lender

 	 
	 	By:  	/S/ Christopher C. Motley 
 	 
	 	 	Name:  	Christopher C. Motley 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

	 	 	 	 	 
	 	SOCIETE GENERALE,

as a Lender

 	 
	 	By:  	/S/ Kimberly Metzger 
 	 
	 	 	Name:  	Kimberly Metzger 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to First Amendment to Credit Agreement Between

Centex Corporation,

Bank of America, N.A., as Administrative Agent,

and the Lenders Defined Therein

 

 

SCHEDULE 2.1

COMMITMENTS

AND APPLICABLE PERCENTAGES

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Applicable
	Lender	 	Commitment	 	Percentage
	A. Existing Lenders:
	 	 	 	 	 	 	 	 
	Bank of America, N.A.
	 	$	195,000,000	 	 	 	9.629629630	%
	JPMorgan Chase Bank, N.A.
	 	$	185,000,000	 	 	 	9.135802469	%
	Royal Bank of Scotland plc
	 	$	185,000,000	 	 	 	9.135802469	%
	Citicorp North America, Inc.
	 	$	185,000,000	 	 	 	9.135802469	%
	BNP Paribas
	 	$	107,500,000	 	 	 	5.308641975	%
	Calyon New York Branch
	 	$	122,500,000	 	 	 	6.049382716	%
	The Bank of Tokyo-Mitsubishi, Ltd.
	 	$	122,500,000	 	 	 	6.049382716	%
	Barclays Bank plc
	 	$	122,500,000	 	 	 	6.049382716	%
	Suntrust Bank
	 	$	90,000,000	 	 	 	4.444444444	%
	Lloyds TSB Bank, plc
	 	$	90,000,000	 	 	 	4.444444444	%
	Wachovia Bank, National Association
	 	$	90,000,000	 	 	 	4.444444444	%
	Comerica Bank
	 	$	75,000,000	 	 	 	3.703703704	%
	Washington Mutual Bank, FA
	 	$	60,000,000	 	 	 	2.962962963	%
	PNC Bank, National Association
	 	$	50,000,000	 	 	 	2.469135802	%
	UBS Loan Finance LLC
	 	$	50,000,000	 	 	 	2.469135802	%
	Merrill Lynch Bank USA
	 	$	50,000,000	 	 	 	2.469135802	%
	City National Bank
	 	$	30,000,000	 	 	 	1.481481481	%
	The Northern Trust Company
	 	$	30,000,000	 	 	 	1.481481481	%
	US Bank National Association
	 	$	30,000,000	 	 	 	1.481481481	%
	Banca di Roma – New York Branch
	 	$	25,000,000	 	 	 	1.234567901	%
	Compass Bank
	 	$	30,000,000	 	 	 	1.481481481	%

 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Applicable
	Lender	 	Commitment	 	Percentage
	B. New Lenders:
	 	 	 	 	 	 	 	 
	Fifth Third Bank
	 	$	25,000,000	 	 	 	1.234567901	%
	Natexis Banques Populaires
	 	$	35,000,000	 	 	 	1.728395062	%
	Societe Generale
	 	$	25,000,000	 	 	 	1.234567901	%
	First Hawaiian Bank
	 	$	15,000,000	 	 	 	0.740740741	%
	Total
	 	$	2,025,000,000	 	 	 	100.000000000	%

 

 

SCHEDULE 2.2

ADMINISTRATIVE AGENT’S OFFICE;

CERTAIN ADDRESSES FOR NOTICES

BORROWER:

Centex Corporation

2728 North Harwood, 9th Floor

Dallas, Texas 75201

Attention: Ms. Gail M. Peck

Telephone: (214) 981-6473

Telecopier: (214) 981-6858

Electronic Mail: gpeck@centex.com

Website Address: www.centex.com

U.S. Taxpayer Identification Number: 75-0778259

ADMINISTRATIVE AGENT:

Administrative Agent’s Office

(for payments and Requests for Credit Extensions):

Bank of America, N.A.

901 Main Street

Mail Code: TX1-492-14-05

Dallas, Texas 75202-3714

Attention: Taelitha Harris

Telephone: (214) 209-3645

Telecopier: (214) 290-9644

Electronic Mail: Taelitha.m.harris@bankofamerica.com

Account No.: 1292000883

Account Name: Corporate Credit Services

Ref: Centex Corporation

ABA# 026009593

Other Notices as Administrative Agent:

Bank of America, N.A.

Agency Management

101 North Tryon Street, 15th Floor

Mail Code: NC1-001-15-14

Charlotte, North Carolina 28255

Attention: Kimberly Crane

Telephone: (704) 387-5451

Telecopier: (704) 409-0901

Electronic Mail: kimberly.crane@bankofamerica.com

 

 

BANK OF AMERICA, AS L/C ISSUER:

Bank of America, N.A.

Trade Operations-Los Angeles #22621

1000 West Temple Street

Mail Code: CA9-705-07-05

Los Angeles, California 90012-1514

Attention: Hermann J. Schutterle

Telephone: (213) 481-7826

Facsimile: (213) 580-8441

Electronic Mail: hermann.schutterle@bankofamerica.com

 

 

EXHIBIT F

JOINDER AGREEMENT

			
	Re:	 	Credit Agreement dated July 1, 2005 (as amended from time to time, the “Credit Agreement”),
by and among CENTEX CORPORATION, a Nevada corporation (“Borrower”), each Lender from time to
time party thereto, and BANK OF AMERICA, N.A., as Administrative Agent (“Administrative
Agent”). Capitalized terms used and not defined herein shall have the meaning ascribed to
such terms in the Credit Agreement.

Pursuant to Section 2.2 of the Credit Agreement, the undersigned hereby (a) agrees to become a
“Lender” under the Credit Agreement; and (b) joins in, becomes a party to, and agrees to comply
with and be bound by the terms and conditions of the Credit Agreement, to the same extent as if the
undersigned were an original signatory thereto.

The undersigned (a) represents and warrants that (i) it has full power and authority, and has taken
all action necessary, to execute and deliver this Joinder Agreement and to consummate the
transactions contemplated hereby and to become a Subsequent Lender under the Credit Agreement, (ii)
it meets all requirements of a Lender under the Credit Agreement (subject to receipt of such
consents as may be required under the Credit Agreement), (iii) it has received a copy of the Credit
Agreement, together with copies of the most-recent financial statements delivered pursuant to
Section 8.3 thereof, as applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this Joinder Agreement on
the basis of which it has made such analysis and decision independently and without reliance on
Administrative Agent or any other Lender, and (iv) if it is a foreign Lender, attached hereto is
any documentation required to be delivered by it pursuant to the terms of the Credit Agreement,
duly completed and executed by the undersigned; and (b) agrees that it will (i) independently and
without reliance on Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents, and (ii) perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are required to be performed
by it as a Lender.

This Joinder Agreement shall be binding upon, and inure to the benefit of, the parties hereto and
their respective successors and assigns. This Joinder Agreement may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an executed counterpart
of a signature page of this Joinder Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Joinder Agreement. This Joinder Agreement shall be governed
by, and construed in accordance with, the laws of the State of Texas.

 

 

IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement as of the ___day of
___, 20___.

LENDER:

___________________, a ______________

	 	 	 	 	 	 	 
	By:	 	 	 	 
	 	 	 	 	 
	 

	 	Name:
	 	 
 

	 	 
	 

	 	Title:
	 	 
 

	 	 

 

 

EXHIBIT G

INCREASE CERTIFICATE

			
	Re:	 	Credit Agreement dated July 1, 2005 (as amended from time to time, the “Credit Agreement”),
by and among CENTEX CORPORATION, a Nevada corporation (“Borrower”), each Lender from time to
time party thereto, and BANK OF AMERICA, N.A., as Administrative Agent. Capitalized terms
used and not defined herein shall have the meaning ascribed to such terms in the Credit
Agreement.

Pursuant to Section 2.2 of the Credit Agreement, the undersigned hereby agrees and consents to an
increase in its Commitment. After giving effect to such increase, the Commitment of the
undersigned will equal $_________.

IN
WITNESS WHEREOF, the undersigned has executed this consent as of the ___ day of
___, 20___.

LENDER:

___________________, a ______________

	 	 	 	 	 	 	 
	By:	 	 	 	 
	 	 	 	 	 
	 

	 	Name:
	 	 
 

	 	 
	 

	 	Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00104-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00104-of-00352.parquet"}]]