AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 4, 2000
REGISTRATION NO. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
INTERNATIONAL SPEEDWAY CORPORATION
(Exact name of Registrant as Specified in its Charter)
---------------
<TABLE>
<CAPTION>
<S> <C> <C>
FLORIDA 7948 59-0709342
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or Organization) Classification Code Number) Identification No.)
</TABLE>
(FOR CO-REGISTRANTS, PLEASE SEE "TABLE OF CO-REGISTRANTS" ON THE FOLLOWING
PAGE)*
1801 WEST INTERNATIONAL SPEEDWAY BOULEVARD
DAYTONA BEACH, FLORIDA 32114
(904) 254-2700
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
---------------
W. GARRETT CROTTY
VICE PRESIDENT AND GENERAL COUNSEL
1801 WEST INTERNATIONAL SPEEDWAY BOULEVARD
DAYTONA BEACH, FLORIDA 32114
TELEPHONE NO.: (904) 254-2700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES OF COMMUNICATIONS TO:
ANDREW E. BALOG, ESQ.
GREENBERG TRAURIG, P.A.
1221 BRICKELL AVENUE
MIAMI, FLORIDA 33131
TELEPHONE NO.: (305) 579-0500
FACSIMILE NO.: (305) 579-0717
---------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box.[ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering.[ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.[ ]
---------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================
PROPOSED PROPOSED
TITLE OF EACH CLASS AMOUNT MAXIMUM MAXIMUM AMOUNT OF
OF SECURITIES TO BE REGISTERED TO BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED PER UNIT(1) OFFERING PRICE(1) FEE(2)
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
7.875% Senior Notes due 2004................. 225,000,000 99.845% $224,651,250 $60,502
- --------------------------------------------------------------------------------------------------------------------
Guarantees of 7.875% Senior Notes due 2004(3) 225,000,000 -- -- --
- --------------------------------------------------------------------------------------------------------------------
Total..................................... $60,502
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457 of the Securities Act of 1933.
(2) Calculated pursuant to Rule 457(f)(2) of the Securities Act of 1933.
(3) Pursuant to Rule 457(n) of the Securities Act of 1933, no additional
registration fee is being paid in respect of the guarantees. The guarantees
will not be traded separately.
THE CO-REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE CO-REGISTRANTS
SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
================================================================================
*The Co-Registrants named in the "Table of Co-Registrants" on the following page
are direct and indirect subsidiaries of the Registrant that may guarantee the
notes to be registered hereby.
================================================================================
<PAGE>
TABLE OF CO-REGISTRANTS
<TABLE>
<CAPTION>
<S> <C> <C>
(State or Other Jurisdiction
(Exact name of Co-Registrant of Incorporation or (I.R.S. Employer
as Specified in its Charter) Organization) Identification No.)
- ------------------------------------------------- -------------------------- ---------------------
AMERICROWN SERVICE CORPORATION SOUTH CAROLINA 57-0883984
COMPETITION TIRE SOUTH, INC. DELAWARE 65-0291388
COMPETITION TIRE WEST, INC. MICHIGAN 38-2338877
ISC PROPERTIES, INC. FLORIDA 59-3474678
MOTORSPORTS INTERNATIONAL CORP. PENNSYLVANIA 23-1987125
NORTH CAROLINA SPEEDWAY, INC. NORTH CAROLINA 38-3348816
PENNSYLVANIA INTERNATIONAL RACEWAY, INC. PENNSYLVANIA 52-1475334
REGIMENT, INC. NORTH CAROLINA NONE
CALIFORNIA SPEEDWAY CORPORATION DELAWARE 51-0356392
CHICAGO HOLDINGS, INC. NEVADA 88-0416418
EVENT EQUIPMENT LEASING, INC. FLORIDA 59-3427471
EVENT SUPPORT CORPORATION FLORIDA 59-3071610
GREAT WESTERN SPORTS, INC. ARIZONA 86-0645773
MIAMI SPEEDWAY CORP. NEVADA 59-3457913
MICHIGAN INTERNATIONAL SPEEDWAY, INC. MICHIGAN 38-2017433
NEW YORK INTERNATIONAL SPEEDWAY CORP. DELAWARE 22-3642636
NORTH AMERICAN TESTING COMPANY FLORIDA 59-1319218
PHOENIX SPEEDWAY CORP. DELAWARE 59-3452831
ROCKY MOUNTAIN SPEEDWAY CORPORATION COLORADO 91-1963093
SEASONAL SERVICES, INC. FLORIDA 59-3331895
SOUTH CAROLINA INTERNATIONAL SPEEDWAY CORPORATION SOUTH CAROLINA 57-0736394
WATKINS GLEN INTERNATIONAL, INC. DELAWARE 16-1209038
88 CORP. DELAWARE APPLIED FOR
</TABLE>
The address, including zip code and telephone number, including area
code, of each Co-Registrant's principal executive offices is 1801 West
International Speedway Boulevard, Daytona Beach, Florida 32114, (904) 254-2700.
The name, address, including zip code and telephone number, including
area code, of the agent for service for each Co-Registrant is W. Garrett Crotty,
Vice President and General Counsel of International Speedway Corporation, 1801
West International Speedway Boulevard, Daytona Beach, Florida 32114, (904)
254-2700.
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JANUARY 4, 2000
PROSPECTUS
$225,000,000
[LOGO]
INTERNATIONAL SPEEDWAY CORPORATION
OFFER TO EXCHANGE
ALL OUTSTANDING 7.875% SENIOR NOTES DUE 2004
FOR
REGISTERED 7.875% SENIOR NOTES DUE 2004
THE REGISTERED NOTES
The terms of the registered notes that we are offering in exchange for
the outstanding notes are substantially identical to the terms of the
outstanding notes, except that certain transfer restrictions and registration
rights relating to the outstanding notes will not apply to the registered notes.
MATERIAL TERMS OF THE EXCHANGE OFFER
/bullet/ The exchange offer will expire at 5:00 p.m., New York City
time, on ____________, 2000, unless extended.
/bullet/ The exchange offer is subject to customary conditions,
including the conditions that the exchange offer not violate
applicable law or any applicable interpretation of the staff
of the Securities and Exchange Commission.
/bullet/ You may withdraw tenders of outstanding notes at any time
before the exchange offer expires.
/bullet/ We will exchange all outstanding notes that are validly
tendered and not withdrawn before the exchange offer expires.
/bullet/ We will issue the registered notes promptly after the exchange
offer expires.
/bullet/ We believe that the exchange of outstanding notes will not be
a taxable event for federal income tax purposes, but you
should read "Certain United States Federal Income Tax
Consequences" on page 69 for more information.
/bullet/ We will not receive any proceeds from the exchange offer.
/bullet/ All broker-dealers must comply with the registration and
prospectus delivery requirements of the Securities Act of
1933. Each broker-dealer that receives registered notes for
its own account pursuant to the exchange offer must
acknowledge that it will deliver a prospectus in connection
with any resale of the registered notes. The letter of
transmittal accompanying this prospectus states that by so
acknowledging and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. This prospectus, as it may
be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of registered notes
received in exchange for outstanding notes where such
outstanding notes were acquired by the broker-dealer as a
result of market-making activities or other trading
activities. We have agreed that, starting on the expiration
date of the exchange offer and ending on the close of business
six months after that date, we will make this prospectus
available to any broker-dealer for use in connection with any
such resale.
/bullet/ No public market currently exists for the registered notes. We
do not intend to apply for listing of the registered notes on
any securities exchange or to arrange for them to be quoted on
any quotation system.
BEFORE PARTICIPATING IN THE EXCHANGE OFFER, PLEASE REFER TO THE SECTION
IN THIS PROSPECTUS ENTITLED "RISK FACTORS" BEGINNING ON PAGE 15.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE REGISTERED NOTES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS , 2000
<PAGE>
THE FOLLOWING TRADEMARKS AND SERVICE MARKS ARE OWNED BY US AND ARE
REGISTERED WITH THE U.S. PATENT AND TRADEMARK OFFICE: "DAYTONA USA/registered
mark/", "DAYTONA INTERNATIONAL SPEEDWAY/registered mark/", "TALLADEGA
SUPERSPEEDWAY/registered mark/", "DARLINGTON/registered mark/", "PHOENIX
INTERNATIONAL RACEWAY/registered mark/", "WATKINS GLEN INTERNATIONAL/registered
mark/", "WORLD CENTER OF RACING/registered mark/", "MICHIGAN SPEEDWAY/registered
mark/", "NAZARETH SPEEDWAY/registered mark/", "NORTH CAROLINA
SPEEDWAY/registered mark/" AND "CALIFORNIA SPEEDWAY/registered mark/".
"CART/registered mark/" IS A REGISTERED TRADEMARK AND SERVICEMARK OF
CHAMPIONSHIP AUTO RACING TEAMS, INC. ("CART"). "NASCAR/registered mark/" AND
"GRAND NATIONAL/registered mark/" ARE REGISTERED TRADEMARKS AND SERVICE MARKS OF
THE NATIONAL ASSOCIATION FOR STOCK CAR AUTO RACING, INC. ("NASCAR").
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference in this
prospectus contain certain "forward-looking statements" within the meaning of
federal securities laws about our financial condition, results of operations and
business.
You can find many of these statements by looking for words such as
"believes," "expects," "anticipates," "estimates," or similar expressions used
in this prospectus and in the documents incorporated by reference in this
prospectus.
These forward-looking statements are subject to numerous assumptions,
risks and uncertainties that may cause our actual results, performance or
achievements to be materially different from any future results, performance or
achievements expressed or implied by us in those statements. The risks and
uncertainties include those risks and uncertainties identified, among other
places, under the heading "Risk Factors" in this prospectus. These factors
include, but are not limited to, the following:
/bullet/ operating and financial risks relating to integrating Penske
Motorsports, Inc.'s businesses;
/bullet/ revenues or income following our recent acquisition of Penske
Motorsports, Inc. being lower than expected;
/bullet/ risks relating to our ability to maintain good working
relationships with NASCAR and CART;
/bullet/ uncertain prospects of acquiring or developing new motorsports
facilities;
/bullet/ changes in general economic conditions;
/bullet/ governmental laws and regulations affecting our business,
including, in particular, limitations on advertising by the
tobacco and alcoholic beverage industries and laws relating to
environmental, land-use planning and zoning matters; and
/bullet/ significant litigation adverse to our business.
Because forward-looking statements are subject to risks and
uncertainties, actual results may differ materially from those expressed or
implied by such statements. You are cautioned not to place undue reliance on
such statements, which speak only as of the date of this prospectus.
The cautionary statements contained or referred to in this section
should be considered in connection with any subsequent written or oral
forward-looking statements that we or persons acting on our behalf may issue. We
undertake no obligation to review or confirm analysts' expectations or estimates
or to release publicly any revisions to any forward-looking statements to
reflect events or circumstances after the date of this prospectus or to reflect
the occurrence of unanticipated events.
<PAGE>
PROSPECTUS SUMMARY
THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS PROSPECTUS AND
MAY NOT CONTAIN ALL INFORMATION THAT MAY BE IMPORTANT TO YOU. THIS PROSPECTUS
AND THE DOCUMENTS INCORPORATED BY REFERENCE IN THIS PROSPECTUS INCLUDE SPECIFIC
TERMS OF THE EXCHANGE OFFER, AS WELL AS INFORMATION REGARDING OUR BUSINESS AND
DETAILED FINANCIAL DATA. WE ENCOURAGE YOU TO READ THE DETAILED INFORMATION AND
FINANCIAL STATEMENTS APPEARING ELSEWHERE IN THIS PROSPECTUS OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS.
UNLESS OTHERWISE INDICATED OR THE CONTEXT OTHERWISE REQUIRES: (I) ALL
INFORMATION CONTAINED IN THIS PROSPECTUS GIVES EFFECT TO OUR ACQUISITION OF
PENSKE MOTORSPORTS, INC. ("PENSKE MOTORSPORTS"), CONSUMMATED ON JULY 26, 1999
(THE "PENSKE ACQUISITION"); AND (II) ALL REFERENCES TO THE "COMPANY",
"INTERNATIONAL SPEEDWAY", "WE", "US" AND "OUR" MEAN INTERNATIONAL SPEEDWAY
CORPORATION AND OUR CONSOLIDATED SUBSIDIARIES AFTER GIVING EFFECT TO THE PENSKE
ACQUISITION.
WHO WE ARE
International Speedway, a leading promoter of motorsports activities in
the United States, owns and/or operates ten of the nation's premier motorsports
facilities:
/bullet/ Daytona International Speedway in Florida;
/bullet/ Michigan Speedway in Michigan;
/bullet/ Talladega Superspeedway in Alabama;
/bullet/ California Speedway in California;
/bullet/ Phoenix International Raceway in Arizona;
/bullet/ North Carolina Speedway in North Carolina;
/bullet/ Darlington Raceway in South Carolina;
/bullet/ Homestead-Miami Speedway in Florida;
/bullet/ Nazareth Speedway in Pennsylvania; and
/bullet/ Watkins Glen International road course facility in New York.
We currently promote over 100 stock car, sports car, truck, motorcycle
and other racing events annually, including:
/bullet/ 16 NASCAR Winston Cup Series events;
/bullet/ 12 NASCAR Busch Series, Grand National Division ("Busch Grand
National Series") events;
/bullet/ 6 NASCAR Craftsman Truck Series events;
/bullet/ 4 CART FedEx Championship Series events;
/bullet/ the premier sports car endurance event in the United States
(the Rolex 24 at Daytona/registered mark/); and
/bullet/ a number of prestigious motorcycle races.
Our operations consist principally of racing events at our ten premier
motorsports facilities, which generate revenue primarily through sales of
admissions to our racing events, television broadcast rights fees, sponsorship
fees, hospitality rentals (including luxury suites, chalets and the hospitality
portion of club seating) and royalties from licenses of our trademarks. We also
provide catering, souvenir and food concession services at certain of our
1
<PAGE>
facilities, distribute and sell Goodyear brand racing tires, own and operate MRN
Radio and the DAYTONA USA entertainment complex and produce and market
collectibles and other motorsports merchandise.
We have experienced significant growth in recent years, with our
revenues and EBITDA increasing from approximately $68.9 million and
approximately $25.9 million, respectively, in the year ended August 31, 1994 to
approximately $189.0 million and approximately $74.1 million, respectively, in
the year ended November 30, 1998. Our EBITDA margin increased from 37.5% in
fiscal 1994 to 39.2% in fiscal 1998. Combined television rights revenues of
International Speedway and Penske Motorsports (exclusive of Homestead-Miami
Speedway) have increased from approximately $7.5 million in fiscal 1995 to
approximately $34.7 million in fiscal 1998 on a pro forma basis. On a pro forma
basis giving effect to our Penske Acquisition, during the year ended November
30, 1998 we had revenues and EBITDA of approximately $320.2 million and $118.0
million, respectively.
MOTORSPORTS INDUSTRY
Motorsports is among the most popular and fastest growing spectator
sports in the United States, with total 1998 attendance at all U.S. motorsports
events exceeding 17 million people. We derived approximately 72% of our pro
forma 1998 revenues from NASCAR-sanctioned racing events at our facilities.
NASCAR Winston Cup events have experienced the greatest increase in spectator
attendance, growing at a compound annual rate of 8.3% from 1990 to 1998.
Moreover, according to Nielsen Media Research, more than 258 million people
tuned to NASCAR's televised events in 1998. We believe that the demographic
profile of this growing base of spectators and viewers has considerable appeal
to sponsors and advertisers, including leading consumer product and
manufacturing companies which have expanded their participation in the
motorsports industry. According to industry reports, corporate sponsors spent
approximately $1.1 billion in U.S. motorsports marketing programs in 1998, of
which approximately $476 million was attributable to NASCAR-sanctioned races.
Sales of apparel, souvenirs and collectibles licensed by NASCAR, by track
operators and by drivers have climbed from approximately $80 million in 1990 to
approximately $950 million in 1998.
STRATEGY
Our objective is to be the recognized leader in motorsports
entertainment by continuing to emphasize the following key elements of our
strategy:
/bullet/ PROMOTE PREMIER MOTORSPORTS EVENTS. We plan our racing events and
operate our facilities to create an environment which maximizes the
spectators' entertainment experience. The most important component of
our fan satisfaction efforts is our emphasis on hosting some of the
nation's most prestigious auto races, which in 1999 included 16 NASCAR
Winston Cup Series races, 12 NASCAR Busch Grand National Series races,
six NASCAR Craftsman Truck Series races and four CART FedEx
Championship Series races.
/bullet/ INCREASE ADMISSIONS REVENUE. We believe that the spectator demand for
our largest events continues to exceed existing seating capacity.
Accordingly, we continue to add grandstand seating at each of our
superspeedways. During 1998, we increased our grandstand seating
capacity at Daytona, Talladega, Phoenix, Darlington and Watkins Glen by
a total of approximately 41,800 seats, or approximately 11% overall.
Similarly, in 1998, Penske Motorsports increased its grandstand seating
capacity at Michigan, California and North Carolina by a total of
approximately 30,800 seats, or approximately 11% overall.
/bullet/ MAXIMIZE MEDIA INCOME. Televised motorsports events are continuing to
experience significant growth in viewership. NASCAR Winston Cup Series
television rights revenues have grown at a compound annual rate of 40%
from $4.7 million in 1990 to $69.5 million in 1998. We have
participated in this significant increase in media rights revenues
based on our promotion of 16 NASCAR Winston Cup Series events,
including the Daytona 500. We expect media rights revenues to continue
2
<PAGE>
to increase as NASCAR begins handling negotiations for the entire
schedule of major NASCAR sanctioned events. In early fall of 1999,
NASCAR announced that it had reached an agreement with all of the
television broadcasters of its Winston Cup Series and Busch Grand
National Series events to release their contractual rights for all such
NASCAR events beginning with the 2001 racing season. In November 1999,
NASCAR announced that it had reached an agreement on a six-year
television contract with NBC Sports and Turner Sports, with the two
media companies combining to develop a joint venture. In addition,
NASCAR announced that it had reached an agreement on an eight-year
television contract with FOX and its FX cable network. Both agreements
relate solely to the domestic broadcast television rights to NASCAR's
Winston Cup Series and Busch Grand National Series events, and are
effective beginning with the 2001 racing season.
/bullet/ EMPHASIZE INTEGRATED MARKETING PARTNERSHIPS. We have developed and will
continue to develop long-term marketing partnerships with corporate
sponsors in which sponsors support us in several ways. First, sponsors
pay fees to us for the value received in being associated with our
facilities and/or events. Some contracts allow the sponsor to name a
particular racing event, as in the "DieHard 500" and the "Pepsi 400."
Other consideration ranges from official car or official corporate
sponsor designation to advertising and promotional rights in the
sponsor's product category. Sponsors also lease suites and hospitality
tents, purchase additional tickets for their promotions and buy on-site
advertising. Second, the promotional and advertising expenditures of
major sponsors provide us with access to the significant market
capabilities of these leading consumer products and manufacturing
companies without the need to invest heavily in our own marketing
infrastructure or programs. Third, our sponsors frequently advertise on
the television broadcasts of our races, thereby contributing to the
increased rights fees we receive from networks and cable companies.
/bullet/ DEVELOP AND ACQUIRE ADDITIONAL MOTORSPORTS FACILITIES. Our senior
management personnel regularly review acquisition and development
prospects that would augment or complement our existing operations or
otherwise offer significant growth opportunities. We believe that the
Penske Acquisition evidences our commitment to increasing our
motorsports presence through selected purchases of proven motorsports
businesses. Other current examples of our expansion efforts include our
pending development of a speedway near Kansas City, Kansas, our
development of a superspeedway contiguous to the existing Route 66
Raceway near Chicago, Illinois, and our continued exploratory efforts
with respect to possible facilities in Denver and the New York
metropolitan area.
THE PENSKE ACQUISITION
On July 26, 1999, we consummated the Penske Acquisition, in which we
acquired the approximately 88% of Penske Motorsports we did not already own for
approximately $129.8 million in cash and approximately 10.0 million shares of
our Class A common stock. Penske Motorsports, a leading promoter and marketer of
professional motorsports in the United States, owned and operated Michigan
Speedway, California Speedway, North Carolina Speedway and Nazareth Speedway.
Other motorsports interests included a 45% interest in the Homestead-Miami
Speedway near Miami, Florida. Through its subsidiaries, Penske Motorsports also
produced and marketed motorsports-related merchandise, including apparel,
souvenirs and collectibles, and distributed and sold Goodyear brand racing tires
in the midwestern and southern regions of the United States. For the year ended
December 31, 1998, Penske Motorsports and Homestead-Miami Speedway reported
combined revenues and EBITDA of approximately $131.2 million and approximately
$44.0 million, respectively. In connection with the Penske Acquisition, we
obtained a new $300 million senior credit facility to finance a portion of the
Penske Acquisition and refinance Penske Motorsports' debt. For additional
information regarding the Penske Acquisition, please see "Pro Forma Financial
Data" on page 24. We used approximately $176 million of the net proceeds from
the sale of the outstanding notes to repay outstanding borrowings under this
senior credit facility. As a result of our receipt of the net proceeds from the
sale of the outstanding notes on October 6, 1999, the maximum availability under
the senior
3
<PAGE>
credit facility automatically decreased to $200 million from $300 million. We
recently increased the maximum availability under the senior credit facility to
$250 million from $200 million. For a more detailed description of our senior
credit facility, please see "Description of the Senior Credit Facility" on page
35.
We believe that the Penske Acquisition represented a strategic
opportunity for us to combine similar business operations with the addition of
Penske Motorsports' high quality motorsports facilities to the list of our
existing premier motorsports facilities. The Penske Acquisition broadens our
geographic reach into new key television markets, including Los Angeles, Detroit
and Miami. We believe that our expanded geographic reach, larger base of
operations and presence in these additional key markets will permit us to pursue
national sponsorships and develop cross-marketing opportunities with a wider
array of partners. Further, we believe that with the addition of Penske
Motorsports' experienced management team we will be able to achieve greater
operational efficiencies and pursue expansion opportunities more rapidly.
RECENT DEVELOPMENTS
On December 1, 1999, we acquired Richmond International Raceway
("RIR"), a 3/4-mile intermediate speedway located approximately 10 miles from
downtown Richmond, Virginia, for approximately $215 million in cash. RIR seats
over 94,000 grandstand spectators and offers luxury accommodations in its 34
suites. RIR hosts several major NASCAR events annually, including two NASCAR
Winston Cup Series events, two NASCAR Busch Grand National Series events and one
NASCAR Craftsman Truck Series event. We financed the acquisition through
approximately $160 million in borrowings under our senior credit facility. For a
description of our senior credit facility, please see "Description of the Senior
Credit Facility" on page 35. We utilized our cash resources for the remaining
$55 million.
-----------------
We were incorporated in 1953 under the laws of the State of Florida
under the name "Bill France Racing, Inc." and changed our name to "International
Speedway Corporation" in 1968. Our principal executive offices are located at
1801 West International Speedway Boulevard, Daytona Beach, Florida 32114, and
our telephone number is (904) 254-2700.
4
<PAGE>
THE EXCHANGE OFFER
The following is a summary of the principal terms of the exchange
offer. A more detailed description is contained in this prospectus under the
section entitled "The Exchange Offer." The term "registered notes" refers to the
Registered 7.875% Senior Notes due 2004 being offered in the exchange offer. The
term "outstanding notes" refers to our currently outstanding 7.875% Senior Notes
due 2004 that are exchangeable for the registered notes. The term "indenture"
refers to the indenture that applies to both the outstanding notes and the
registered notes.
The Exchange Offer................ We are offering to exchange $100,000
principal amount of registered notes and
integral multiples of $1,000 in excess
thereof which have been registered under the
Securities Act for each $100,000 principal
amount of outstanding notes and integral
multiples of $1,000 in excess thereof. We
issued the outstanding notes on October 6,
1999 in a private offering. In order to be
exchanged, an outstanding note must be
properly tendered and accepted before
expiration of the exchange offer. All
outstanding notes that are validly tendered
and not validly withdrawn will be exchanged.
We will issue the registered notes promptly
after the expiration of the exchange offer.
As of the date of this prospectus, there is
outstanding $225 million principal amount of
outstanding notes. Outstanding notes may be
tendered for exchange in whole or in part
for minimum denominations of $100,000
principal amount and integral multiples of
$1,000 in excess thereof.
Registration Rights Agreement.... Simultaneously with the sale of the
outstanding notes on October 6, 1999, we
entered into a registration rights agreement
under which we committed to conduct the
exchange offer. You are entitled under the
registration rights agreement to exchange
your outstanding notes for registered notes
with substantially identical terms. The
exchange offer is intended to satisfy these
rights. After the exchange offer is
complete, except as set forth in the next
paragraph, you will no longer be entitled to
any exchange or registration rights with
respect to your outstanding notes.
The registration rights agreement requires
us to file a registration statement for a
continuous offering in accordance with Rule
415 under the Securities Act for your
benefit if:
/bullet/ the exchange offer is not
consummated within 180 days of the
issuance of the initial notes;
/bullet/ you would not receive freely
tradeable registered notes in the
exchange offer; or
5
<PAGE>
/bullet/ you are ineligible to participate
in the exchange offer and indicate
that you wish to have your
outstanding notes registered under
the Securities Act.
Resales of the registered notes... We believe that registered notes to be
issued in the exchange offer in exchange for
the outstanding notes may be offered for
resale, resold and otherwise transferred by
you without compliance with the registration
and prospectus delivery provisions of the
Securities Act if you meet the following
conditions:
(1) the registered notes are acquired
by you in the ordinary course of
your business;
(2) you are not engaging in and do not
intend to engage in a distribution
of the registered notes;
(3) you do not have an arrangement or
understanding with any person to
participate in the distribution of
the registered notes; and
(4) you are not an affiliate of ours,
as that term is defined in Rule 405
under the Securities Act.
However, the SEC has not considered this
exchange offer in the context of a no-action
letter and we cannot be sure that the staff
of the SEC would make the same determination
with respect to the exchange offer as in
other circumstances. Furthermore, if you do
not meet the above conditions, you may incur
liability under the Securities Act if you
transfer any registered note without
delivering a prospectus meeting the
requirements of the Securities Act. We do
not assume, or indemnify you against, that
liability.
Each broker-dealer that receives registered
notes for its own account in the exchange
offer in exchange for outstanding notes
which that broker-dealer acquired as a
result of market-making activities or other
trading activities must acknowledge that it
will comply with the prospectus delivery
requirements of the Securities Act in
connection with any resale of the registered
notes. Broker-dealers who acquired
outstanding notes directly from us and not
as a result of market-making activities or
other trading activities may not participate
in the exchange offer and must comply with
the prospectus delivery requirements of the
Securities Act in order to resell the
outstanding notes.
6
<PAGE>
Expiration Date................. The exchange offer will expire at 5:00 p.m.,
New York City time, on , 2000, unless we
decide to extend the exchange offer.
Withdrawal...................... You may withdraw the tender of your
outstanding notes at any time prior to 5:00
p.m., New York City time, on the expiration
date.
Conditions to the Exchange Offer... The only conditions to completing the
exchange offer are that the exchange offer
not violate applicable law or any applicable
interpretation of the staff of the SEC and
no injunction, order or decree has been
issued, or any action or proceeding has been
instituted or threatened that would
reasonably be expected to prohibit, prevent
or materially impair our ability to proceed
with the exchange offer.
If any of these conditions exist prior to
the expiration date, we may take the
following actions:
/bullet/ refuse to accept any outstanding
notes and return all previously
tendered outstanding notes;
/bullet/ extend the duration of the exchange
offer; or
/bullet/ waive such conditions to the extent
permissible under applicable law.
Procedures for Tendering
Outstanding Notes........... We issued the outstanding notes as global
securities in fully registered form without
coupons. Beneficial interests in the
outstanding notes which are held by direct
or indirect participants in The Depository
Trust Company through certificateless
depositary interests are shown on, and
transfers of the outstanding notes can be
made only through, records maintained in
book-entry form by DTC with respect to its
participants.
If you are a holder of an outstanding note
held in the form of a book-entry interest
and you wish to tender your outstanding
notes for exchange pursuant to the exchange
offer, you must transmit to First Union
National Bank, as exchange agent, on or
prior to the expiration of the exchange
offer either:
/bullet/ a written or facsimile copy of a
properly completed and executed
letter of transmittal and all other
required documents to the address
set forth on the cover page of the
letter of transmittal; or
7
<PAGE>
/bullet/ a computer-generated message
transmitted by means of DTC's
Automated Tender Offer Program
system and forming a part of a
confirmation of book-entry transfer
in which you acknowledge and agree
to be bound by the terms of the
letter of transmittal.
The exchange agent must also receive on or
prior to the expiration of the exchange
offer either:
/bullet/ a timely confirmation of book-entry
transfer of your outstanding notes
into the exchange agent's account
at DTC, in accordance with the
procedure for book-entry transfers
described in this prospectus under
the heading "The Exchange
Offer--Book-Entry Transfer," or
/bullet/ the documents necessary for
compliance with the guaranteed
delivery procedures described
below.
A letter of transmittal accompanies this
prospectus. By executing the letter of
transmittal or delivering a
computer-generated message through DTC's
Automated Tender Offer Program system, you
will represent to us that, among other
things:
(1) the registered notes to be acquired
by you in the exchange offer are
being acquired in the ordinary
course of your business;
(2) you do not have an arrangement or
understanding with any person to
participate in the distribution of
the registered notes; and
(3) you do not have an arrangement or
understanding with any person to
participate in the distribution of
the registered notes; and
(4) you are not an affiliate of ours.
8
<PAGE>
Procedures for Tendering
Certificated Outstanding
Notes.......................... If you are a holder of book-entry interests
in the outstanding notes, you are entitled
to receive, in limited circumstances, in
exchange for your book-entry interests,
certificated notes which are in equal
principal amounts to your book-entry
interests. See "The Exchange
Offer--Procedures for Tendering--Book-Entry
Interests." No certificated notes are issued
and outstanding as of the date of this
prospectus. If you acquire certificated
outstanding notes prior to the expiration of
the exchange offer, you must tender your
certificated outstanding notes in accordance
with the procedures described in this
prospectus under the heading "The Exchange
Offer-- Procedures for
Tendering--Certificated Outstanding Notes."
Special Procedures for
Beneficial Owners............. If you are the beneficial owner of
outstanding notes and they are registered in
the name of a broker, dealer, commercial
bank, trust company or other nominee, and
you wish to tender your outstanding notes,
you should promptly contact the person in
whose name your initial notes are registered
and instruct that person to tender on your
behalf. If you wish to tender on your own
behalf, you must, prior to completing and
executing the letter of transmittal and
delivering your outstanding notes, either
make appropriate arrangements to register
ownership of the outstanding notes in your
name or obtain a properly completed bond
power from the person in whose name your
outstanding notes are registered. The
transfer of registered ownership may take
considerable time and it may not be possible
to complete prior to the expiration date.
Guaranteed Delivery Procedures... If you wish to tender your outstanding notes
and your outstanding notes are not
immediately available or you cannot deliver
your outstanding notes, the letter of
transmittal or any other documents required
by the letter of transmittal to the exchange
agent, or you cannot complete the procedure
for book-entry transfer, then prior to the
expiration date you must tender your
outstanding notes according to the
guaranteed delivery procedures set forth in
"The Exchange Offer--Procedures for
Tendering--Guaranteed Delivery Procedures."
9
<PAGE>
Acceptance of Outstanding Notes
and Delivery of Registered Notes...Except under the circumstances described
above under "Conditions to the Exchange
Offer," we will accept for exchange any and
all outstanding notes which are properly
tendered in the exchange offer before 5:00
p.m., New York City time, on the expiration
date. We will deliver the registered notes
promptly following the expiration date. If
we do not accept any of your outstanding
notes for exchange we will return them to
you as promptly as practicable after the
expiration or termination of the exchange
offer without any expense to you.
Interest on the Registered Notes
and the Outstanding Notes....... Interest on your registered notes will
accrue from the date of the original
issuance of the outstanding notes or from
the date of the last periodic payment of
interest on the outstanding notes, whichever
is later. Interest will not be paid on
outstanding notes that are tendered and
accepted for exchange.
Exchange Agent.................... First Union National Bank is serving as the
exchange agent in connection with the
exchange offer.
Use of Proceeds.................... We will not receive any cash proceeds from
the issuance of the registered notes in the
exchange offer.
Consequences of Failure to
Exchange......................... Outstanding notes that are not tendered or
that are tendered but not accepted will
continue to be subject to the existing
restrictions on transfer provided in the
outstanding notes and in the indenture.
Federal Income Tax Consequences.... The exchange of the outstanding notes
generally will not be a taxable exchange for
federal income tax purposes.
10
<PAGE>
TERMS OF THE REGISTERED NOTES
Issuer............................ International Speedway Corporation.
Registered Notes Offered.......... $225,000,000 aggregate principal amount of
Registered 7.875% Senior Notes due 2004. The
registered notes will evidence the same debt
as the outstanding notes and will be issued
under, and entitled to the benefits of, the
same indenture. The terms of the registered
notes are the same as the terms of the
outstanding notes in all material respects
except that the registered notes:
/bullet/ have been registered under the
Securities Act;
/bullet/ do not include rights to
registration under the Securities
Act; and
/bullet/ do not contain transfer
restrictions applicable to the
outstanding notes.
Maturity Date..................... October 15, 2004.
Interest.......................... Interest on the registered notes will accrue
at a fixed annual rate of 7.875%, and will
be payable on April 15 and October 15 of
each year, commencing April 15, 2000.
Guarantees........................ The registered notes will be guaranteed on
an unsecured basis by all of our
subsidiaries that are guarantors in respect
of our senior revolving credit facility as
of the date of the indenture. In addition,
if any subsidiary of ours which is not
already a guarantor becomes a guarantor in
respect of our senior revolving credit
facility, we will cause such subsidiary to
enter into a supplemental indenture to the
indenture pursuant to which that subsidiary
shall agree to guarantee our obligations
under the registered notes.
Ranking........................... The registered notes will be senior
unsecured obligations and will rank equally
with all of our other senior unsecured and
unsubordinated indebtedness, including
borrowings under our senior credit facility.
Optional Redemption............... The registered notes will be redeemable in
whole or in part, at our option, at any
time. We will pay a redemption price which
is described under the heading "Description
of the Registered Notes--Optional
Redemption." We will also pay accrued and
unpaid interest to the redemption date.
11
<PAGE>
Certain Covenants................. The indenture for the registered notes
limits our ability and the ability of our
restricted subsidiaries to:
/bullet/ incur liens;
/bullet/ enter into sale and leaseback
transactions; or
/bullet/ consolidate with or merge into, or
convey, transfer or lease all or
substantially all of our and our
subsidiaries' assets to any person.
All of these limitations are subject to a
number of important qualifications described
under the headings "Description of the
Registered Notes--Restrictive Covenants
and--Consolidation, Merger and Sale of
Assets."
Registration Rights............... Holders of registered notes are not entitled
to any registration rights with respect to
the registered notes.
RISK FACTORS
We urge you to read carefully the risk factors beginning on page 15 for
a discussion of factors you should consider before exchanging your outstanding
notes for registered notes.
12
<PAGE>
SUMMARY FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PRO FORMA
PRO FORMA NINE MONTHS
YEAR ENDED YEAR ENDED NINE MONTHS ENDED
NOVEMBER 30, NOVEMBER 30, ENDED AUGUST 31, AUGUST 31,
-------------------------- ----------- -------------------------- -----------
1997 1998 1998(1) 1998 1999 1999(1)
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues:
Admissions, net $ 69,487 $ 86,946 $ 142,555 $ 54,432 $ 90,136 $ 124,460
Motorsports related 46,650 71,793 117,857 50,104 72,805 101,878
income(2)
Food, beverage and
merchandise income 23,408 28,597 58,168 18,666 29,913 50,601
Other income 1,829 1,632 1,632 1,095 1,243 1,243
----------- ----------- ----------- ----------- ----------- -----------
Total revenues 141,374 188,968 320,212 124,297 194,097 278,182
Expenses:
Direct expenses:
Prize and point fund
monies and NASCAR
sanction fees 20,567 28,767 44,287 19,727 28,252 39,535
Motorsports related
expenses 23,075 33,283 61,405 22,119 32,458 48,658
Food, beverage and
merchandise expenses 13,435 15,025 35,942 10,396 15,995 30,367
General and administrative
expenses 29,486 37,842 60,542 26,365 36,814 57,312
Depreciation and
amortization 9,910 13,137 38,671 9,593 13,936 31,778
----------- ----------- ----------- ----------- ----------- -----------
Total expenses 96,473 128,054 240,847 88,200 127,455 207,650
----------- ----------- ----------- ----------- ----------- -----------
Operating income 44,901 60,914 79,365 36,097 66,642 70,532
Interest income 3,196 4,414 2,260 2,531 6,783 5,311
Interest expense (509) (582) (13,261) (518) (2,511) (10,821)
Equity in net income (loss)
from equity investments 366 (905) (124) (111) (1,472) (389)
Minority interest -- -- 320 -- 77 398
Gain on sale of equity
investment -- 1,245 2,353 1,245 -- --
----------- ----------- ----------- ----------- ----------- -----------
Income before income taxes 47,954 65,086 70,913 39,244 69,519 65,031
Income taxes 18,158 24,894 32,779 14,993 27,101 28,253
----------- ----------- ----------- ----------- ----------- -----------
Net income $ 29,796 $ 40,192 $ 38,134 $ 24,251 $ 42,418 $ 36,778
=========== =========== =========== =========== =========== ===========
OTHER FINANCIAL DATA:
EBITDA(3) $ 54,811 $ 74,051 $ 118,036 $ 45,690 $ 80,578 $ 102,310
EBITDA margin 38.8% 39.2% 36.9% 36.8% 41.5% 36.8%
Capital expenditures $ 38,627 $ 71,858 $ 106,901 $ 37,667 $ 75,387 $ 104,798
Ratio of earnings to fixed
charges(4) 73.0x 86.3x 5.9x 60.9x 16.3x 5.7x
PRO FORMA RATIOS:
EBITDA to interest expense -- -- 8.9x -- -- --
Total debt to EBITDA -- -- 1.7x -- -- --
SELECTED OPERATING DATA:
Total admissions 1,416,618 1,730,533 3,104,074 N/A N/A N/A
Number of major events(5) 18 18 36 12 15 29
</TABLE>
AUGUST 31, 1999
---------------------------
ACTUAL AS ADJUSTED(6)
------ --------------
BALANCE SHEET DATA: (IN THOUSANDS)
Working capital (deficit)................... $ (42,955) $ 918
Total assets................................ 1,388,586 1,432,459
Total debt.................................. 285,725 334,725
Total shareholders' equity.................. 887,986 887,986
13
<PAGE>
- -----------------------
(1) Gives effect to the Penske Acquisition as if it had occurred as of the
beginning of the period presented. For additional information, see "Pro
Forma Financial Data."
(2) Primarily includes television and radio broadcast rights fees, promotion
and sponsorship fees, hospitality rentals (including luxury suites, chalets
and the hospitality portion of club seating), advertising revenues,
royalties from licenses of our trademarks, and track rentals.
(3) EBITDA means operating income before depreciation and amortization. EBITDA
is a measure commonly used by the financial community but is not prepared
in accordance with United States generally accepted accounting principles
("GAAP"). While many in the financial community consider EBITDA to be an
important measure of comparative operating performance, it should be
considered in addition to, but not as a substitute for, operating income,
net income, cash flows provided by operating activities and other measures
of financial performance prepared in accordance with generally accepted
accounting principles. Our calculation of EBITDA may not be comparable to
similarly titled measures reported by other companies since all companies
do not calculate this non-GAAP measure in the same fashion.
(4) For the purpose of computing this ratio, earnings consist of income before
income taxes and fixed charges (such fixed charges have been adjusted to
exclude capitalized interest). Fixed charges consist of interest expense,
including capitalized expense, amortization of loan expense related to
long-term debt and the estimated interest component of rent expense.
(5) Major events mean our NASCAR Winston Cup Series, NASCAR Busch Grand
National Series, NASCAR Craftsman Truck Series and CART FedEx Championship
Series events.
(6) Gives effect to the application of the net proceeds of the sale of the
outstanding notes as if it had occurred as of August 31, 1999.
14
<PAGE>
RISK FACTORS
You should carefully read this entire prospectus and the documents
incorporated by reference in this prospectus before participating in the
exchange offer. Among the factors that may adversely affect an investment in the
notes are the following:
WE HAVE A SIGNIFICANT AMOUNT OF DEBT, WHICH COULD ADVERSELY AFFECT OUR FINANCIAL
POSITION, RESULTS OF OPERATIONS AND PROSPECTS AND PREVENT US FROM FULFILLING OUR
DEBT OBLIGATIONS.
We have a significant amount of debt and leverage. On a pro forma basis
as of and for the nine months ended August 31, 1999, after giving effect to sale
of the outstanding notes, the Penske Acquisition and the acquisition of RIR:
/bullet/ our total debt outstanding was approximately $494.7 million;
/bullet/ our pro forma interest expense was approximately $25.5
million;
/bullet/ our total shareholders' equity was approximately $888.0
million; and
/bullet/ the sufficiency of our earnings available to cover fixed
charges was approximately 2.7 to 1.
As of January 4, 2000, we had approximately $90 million of current
availability for borrowings under our senior revolving credit facility.
SUBORDINATION OF THE NOTES AND GUARANTEES MAY LIMIT PAYMENTS ON THE NOTES.
The notes are our unsecured senior obligations, ranking equally with
all of our other unsecured and unsubordinated indebtedness which may be
outstanding from time to time, including borrowings under our senior credit
facility. The indenture does not limit the amount of additional indebtedness
that we or any of our subsidiaries may incur. The subsidiary guarantees for the
notes are unsecured obligations of each subsidiary guarantor and rank equally in
right of payment with all senior indebtedness of that subsidiary guarantor and
senior in right of payment to all subordinated indebtedness of that subsidiary
guarantor. Thus, the subsidiary guarantees are effectively subordinated to
secured indebtedness of the subsidiary guarantor with respect to the assets
securing that indebtedness.
OUR INABILITY TO INTEGRATE SUCCESSFULLY THE OPERATIONS OF PENSKE MOTORSPORTS
WITH OUR BUSINESS COULD NEGATIVELY IMPACT US.
There can be no assurance that we will integrate successfully the
operations of Penske Motorsports with our business. The full benefits of our
business combination with Penske Motorsports will require the integration of
administrative, finance, sales and marketing organizations, and the
implementation of appropriate operational, financial, and management systems and
controls. The integration of different businesses is a detailed and
time-consuming process and we have no experience in integrating an acquisition
on the scale of the Penske Acquisition. Our inability to achieve expected cost
savings and synergies or to otherwise integrate successfully the operations of
Penske Motorsports could have a material adverse effect on us. The Penske
Acquisition involves other special risks, including:
/bullet/ diversion of management attention;
/bullet/ the incurrence of significant non-recurring expenses related
to the transaction;
/bullet/ difficulties in improving the operations, technologies and
services of Penske Motorsports; and
15
<PAGE>
/bullet the risk of entering into markets or services where we have
limited direct prior experience.
OUR SUCCESS DEPENDS ON OUR RELATIONSHIPS WITH NASCAR AND CART.
Our success has been and will remain dependent on maintaining a good
working relationship with NASCAR, the sanctioning body for NASCAR's Winston Cup
Series, Busch Grand National Series and Craftsman Truck Series, and CART, the
sanctioning body for the FedEx Championship Series. For the 1999 racing season,
we had sanctioning agreements to promote and market:
/bullet/ 16 NASCAR Winston Cup Series events;
/bullet/ 12 NASCAR Busch Grand National Series events;
/bullet/ 6 NASCAR Craftsman Truck Series events; and
/bullet/ 4 CART FedEx Championship events.
Neither NASCAR nor CART is required to continue to enter into, renew or
extend sanctioning agreements with us to promote any existing event. Moreover,
although our general growth strategy includes the possible development and/or
acquisition of additional motorsports facilities, it cannot be assured that any
sanctioning body, including NASCAR or CART, will enter into sanctioning
agreements with us to promote races at our new facilities. Failure to obtain a
sanctioning agreement for a major NASCAR or CART event could negatively affect
us. Similarly, neither NASCAR nor CART is obligated to modify their race
schedules to allow us to more efficiently schedule our races. In addition, by
sanctioning an event, neither NASCAR nor CART warrants, either expressly or by
implication, nor are they responsible for, the financial or other success of the
sanctioned event or the number or identity of vehicles or competitors
participating in the event.
CERTAIN OF OUR SENIOR EXECUTIVES MAY HAVE POTENTIAL CONFLICTS OF INTEREST.
William C. France and James C. France own NASCAR, and each of them, as
well as our General Counsel, spend part of their time on NASCAR's business.
Similarly, Gregory W. Penske, our new Senior Vice President -- Western
Operations, will not devote all his time to our affairs. Each of these
individuals spends substantial time on our business and all of our other
executive officers are available to us on a substantially full-time basis. In
addition, we strive to ensure, and our management believes, that the terms of
our transactions with NASCAR are no less favorable to us than those which could
be obtained in arms-length negotiations. Nevertheless, certain potential
conflicts of interest between us and NASCAR exist with respect to, among other
things:
/bullet/ the terms of any sanctioning agreements that may be awarded to
us by NASCAR;
/bullet/ the amount of time devoted by the employees mentioned above
and certain other of our employees to NASCAR's affairs; and
/bullet/ the amounts charged or paid to NASCAR for office rental,
transportation costs, shared executives, administrative
expenses and similar items.
GOVERNMENT REGULATION MAY ADVERSELY AFFECT THE AVAILABILITY OF SPONSORSHIPS AND
ADVERTISING.
The motorsports industry generates significant recurring revenue from
the promotion, sponsorship and advertising of various companies and their
products. Actual or proposed government regulation can negatively impact the
availability to the motorsports industry of this promotion, sponsorship and
advertising revenue. Advertising by the tobacco and alcoholic beverage
industries is generally subject to greater governmental regulation than
advertising by other sponsors of our events. In the past few years there have
been several unsuccessful
16
<PAGE>
governmental attempts to impose restrictions on the advertising and promotion of
cigarettes and smokeless tobacco, including sponsorship of motorsports
activities. If successfully implemented, these regulatory efforts would have
prohibited the present practice of tobacco brand name sponsorship of, or
identification with, motorsports events, entries and teams. At this point, the
ultimate outcome of these or future government regulatory and legislative
efforts to regulate the advertising and promotion of cigarettes and smokeless
tobacco is uncertain and the impact, if any, on the motorsports industry or us
is unclear. Major United States companies in the tobacco industry have entered
into various agreements with the Attorneys General of all 50 states to settle
certain state-initiated litigation against the tobacco industry. These
settlement agreements will, among other things, place limits upon the
sponsorship of motorsports activities by the tobacco industry. The actual impact
of these settlement agreements upon us has not yet been determined. We are not
aware of any proposed governmental regulation which would materially limit the
availability to motorsports of promotion, sponsorship or advertising revenue
from the alcoholic beverage industry. The combined advertising and sponsorship
revenue from the tobacco and alcoholic beverage industries accounted for less
than 2% of our pro forma fiscal 1998 revenues. In addition, the tobacco and
alcoholic beverage industries provide financial support to the motorsports
industry through, among other things, their purchase of advertising time, their
sponsorship of racing teams and their sponsorship of racing series such as
NASCAR's Winston Cup and Busch Grand National Series.
WE ARE SUBJECT TO LEGAL PROCEEDINGS.
We and certain of our subsidiaries, including certain former Penske
Motorsports' subsidiaries, are parties to legal proceedings alleging
price-fixing activities in connection with the sale of souvenirs and
merchandise. While we dispute the allegations, neither the cost of defending the
suits nor the potential damages or other remedies for which we might be liable
is insured. Recently, the parties entered into confidential memoranda of
understanding to completely settle the legal proceedings, without any admission
of wrongdoing on our or our subsidiaries' part. Under the terms of these
memoranda of understanding (which have been filed under seal with the applicable
courts), we and our subsidiaries have agreed to pay approximately $4.6 million
in cash and to distribute souvenir merchandise discount coupons to settle with
classes which would encompass all purchasers of souvenirs and merchandise at
NASCAR Winston Cup Series events during the period from January 1, 1991 to the
present. The parties are in the process of attempting to agree on the terms of
formal settlement agreements, including the terms of the coupon program. These
settlement agreements will then be subject to review and approval by both the
state and federal courts. There is no assurance that the parties will enter into
a definitive settlement agreement or the courts will approve any such settlement
agreement. In the event the parties are not able to settle the suits, we intend
to resume vigorously defending against them. Our management is not presently
able to predict the outcome of these suits, and there can be no assurance that
the defense of the suits, or a possible negative resolution, will not require
material expenditures by us.
In connection with Penske Motorsports' acquisition of North Carolina
Speedway in 1997, certain of the North Carolina Speedway stockholders
(constituting more than 5% of the North Carolina Speedway shares outstanding
prior to the acquisition) exercised their right under North Carolina law to
dissent to the price paid for the common stock of North Carolina Speedway. These
dissenting stockholders were paid $16.77 per share. These dissenters have
requested $55.00 per share and have sued Penske Motorsports, Penske Acquisition,
Inc. and North Carolina Speedway in North Carolina Superior Court, Mecklenburg
County, North Carolina. Under Penske Motorsports' agreement with Mrs. DeWitt
(the former majority stockholder of North Carolina Speedway), if a dissenting
stockholder, which represents more than five percent of the North Carolina
Speedway stock, receives more consideration in a dissenters' action than Penske
Motorsports paid in connection with the acquisition of North Carolina Speedway,
all stockholders of North Carolina Speedway at the time of the acquisition,
other than Penske Motorsports and its affiliates, would receive a per share
amount equal to the award in dissenter's court less the per share amount paid in
the acquisition ($19.61 per share to stockholders other than dissenting
stockholders). Because Penske Motorsports acquired Mrs. DeWitt's shares prior to
the completion of this acquisition, Mrs. DeWitt would not be entitled to receive
additional consideration for her shares. A negative decision with respect to the
dissenters' proceeding could materially increase the purchase price paid for
North Carolina Speedway by Penske Motorsports, which we would have to pay. Our
management is not presently able to predict the outcome of this suit, and there
17
<PAGE>
can be no assurance that the defense of this suit, or a possible negative
resolution, will not require material expenditures by us.
BAD WEATHER COULD ADVERSELY AFFECT US.
We promote outdoor motorsports events. Weather conditions affect sales
of, among other things, tickets, food, drinks and souvenirs at these events.
Poor weather conditions could have a material negative effect on us.
WE MAY BE HELD LIABLE FOR PERSONAL INJURIES.
Motorsports can be dangerous to participants and to spectators. We
maintain insurance policies that provide coverage within limits that we believe
should generally be sufficient to protect us from a large financial loss due to
liability for personal injuries sustained by persons on our property in the
ordinary course of our business. There can be no assurance, however, that the
insurance will be adequate or available at all times and in all circumstances.
Our financial condition and results of operations could be negatively affected
to the extent claims and expenses in connection with these injuries are greater
than the amount of money that can be recovered from insurance.
WE OPERATE IN A HIGHLY COMPETITIVE ENVIRONMENT.
As an entertainment company, our racing events face competition from
other spectator-oriented sporting events and other leisure, entertainment and
recreational activities, including professional football, basketball and
baseball. As a result, our revenues will be affected by the general popularity
of motorsports, the availability of alternative forms of recreation and changing
consumer preferences. Management believes that the primary elements of
competition in attracting motorsports spectators and corporate sponsors to a
racing event and facility are the type and caliber of promoted racing events,
facility location, sight lines, pricing and customer conveniences that
contribute to a total entertainment experience. Many sports and entertainment
businesses have resources that exceed ours.
WE ARE SUBJECT TO ENVIRONMENTAL AND LAND USE LAWS.
We believe that our operations are in substantial compliance with all
applicable federal, state and local environmental laws and regulations.
Nonetheless, if damage to persons or property or contamination of the
environment is determined to have been caused or exacerbated by the conduct of
our business or by pollutants, substances, contaminants or wastes used,
generated or disposed of by us, we may be held liable for such damage and may be
required to pay the cost of investigation and/or remediation of such
contamination or any related damage. The amount of such liability as to which we
are self-insured could be material. State and local laws relating to the
protection of the environment can also include noise abatement laws that may be
applicable to our racing events. Changes in the provisions or application of
federal, state or local environmental laws, regulations or requirements, or the
discovery of theretofore unknown conditions, could also require additional
material expenditures by us.
WE COULD BE ADVERSELY AFFECTED BY YEAR 2000 ISSUES.
The Year 2000 issue is the result of computer programs and other
business systems being written using two digits rather than four to represent
the year. Many of our time sensitive applications and business systems and those
of our business partners may recognize a date using "00" as the year 1900 rather
than the year 2000, which could result in system failure or disruption of
operations. The Year 2000 problem will impact us and our business partners.
18
<PAGE>
An assessment of our Year 2000 exposure related to our information
technology systems has been made and the plans to resolve the related issues
have been implemented. All of our major information technology systems have been
updated or replaced with applications that are Year 2000 compliant in the normal
course of business.
We have performed an evaluation of our non-information technology
systems, such as elevators, heating and air-conditioning systems, etc., with
date sensitive software and embedded microprocessors that may be affected by the
Year 2000 issue. Current estimates of the costs of correcting or replacing
critical non-information technology systems indicate that these costs will not
be material to us.
We developed and implemented a plan of communication with significant
business partners in an attempt to identify and minimize disruptions to our
operations resulting from the Year 2000 issue. Although the responses of our
significant business partners have been favorable, there can be no certainty
that the computer programs and business systems of third parties on which we
rely will not have an adverse effect on our operations. However, because of the
nature of our business, we believe at this time that a failure of our vendors,
sponsors or customers to resolve issues involving the Year 2000 problem will not
be material to us.
We have completed all of our Year 2000 preparation and, at this time
believe that we have satisfactorily resolved all significant Year 2000 problems.
Total actual and estimated costs to correct the identified potential problems
related to the Year 2000 indicate that these costs will not exceed $600,000.
Estimates of Year 2000 related costs are based on numerous assumptions,
including the continued availability of certain resources, the ability to
correct all relevant information and non-information technology systems and
third party modification plans. There is no assurance that the estimates will be
achieved and actual costs could differ materially from those anticipated.
Although we have dedicated substantial resources towards attaining Year 2000
readiness, there is no assurance that we have been successful in identifying and
resolving all Year 2000 readiness issues.
FRAUDULENT CONVEYANCE CONSIDERATIONS COULD VOID THE GUARANTEES FOR THE NOTES.
Various fraudulent conveyance laws have been enacted for the protection
of creditors. A court may use those laws to subordinate or void the guarantees
of the notes issued by any of our subsidiaries. A court could void or
subordinate the guarantees by any of our subsidiaries in favor of that
subsidiary's other debts or liabilities to the extent that the court determined
either of the following were true at the time the subsidiary issued the
guarantee:
/bullet/ that the subsidiary issued the guarantee with the intent to
hinder, delay or defraud any of its present or future
creditors or the subsidiary contemplated insolvency with a
design to favor one or more creditors to the total or partial
exclusion of others; or
/bullet/ that the subsidiary did not receive fair consideration or
reasonably equivalent value for issuing the guarantee and, at
the time it issued the guarantee, the subsidiary:
/bullet/ was insolvent or rendered insolvent by reason of the
issuance of the guarantee;
/bullet/ was engaged or about to engage in a business or
transaction for which the remaining assets of the
subsidiary constituted unreasonably small capital; or
/bullet/ intended to incur, or believed it would incur, debts
beyond its ability to pay its debts as they matured.
Among other things, a legal challenge of a subsidiary's guarantee of the notes
on fraudulent conveyance grounds may focus on the benefits, if any, realized by
that subsidiary as a result of our issuance of the notes. To the extent a
subsidiary's guarantee of the notes is voided as a result of fraudulent
conveyance or held unenforceable for any other reason, you would cease to have
any claim in respect of that guarantee and would be creditors solely of us and
any subsidiaries whose guarantees were not voided.
19
<PAGE>
THERE IS NO ESTABLISHED TRADING MARKET FOR THE REGISTERED NOTES, AND WE CANNOT
ASSURE YOU THAT A MARKET FOR THE REGISTERED NOTES WILL DEVELOP IN THE FUTURE.
If such a market were to develop, the registered notes could trade at
prices that are higher or lower than the initial offering prices depending on
many factors, including:
/bullet/ the number of holders of the notes;
/bullet/ the overall market for similar securities;
/bullet/ our financial performance and prospects; and
/bullet/ prospects for companies in our industry generally.
The initial purchasers of the outstanding notes have informed us that they
currently intend to make a market in the registered notes. However, the initial
purchasers have no obligation to do so and may discontinue making a market at
any time without notice. Therefore, we cannot assure you as to the liquidity of
any trading market for the registered notes. We do not intend to apply (and are
not obligated to apply) for listing of the registered notes on any securities
exchange or any automated quotation system.
SOME PERSONS WHO PARTICIPATE IN THIS EXCHANGE OFFER MUST DELIVER A PROSPECTUS IN
CONNECTION WITH RESALES OF THE REGISTERED NOTES.
Based on no-action letters issued by the staff of the SEC to third
parties, we believe that you may offer for resale, resell or otherwise transfer
the registered notes without compliance with the registration and prospectus
delivery requirements of the Securities Act. However, in some instances
described in this prospectus under "The Exchange Offer," you will remain
obligated to comply with the prospectus delivery requirements of the Securities
Act to transfer your registered notes. In these instances, if you transfer any
registered note without delivering a prospectus meeting the requirements of the
Securities Act or without an exemption from registration of your registered
notes under the Securities Act, you may incur liability under this act. We do
not and will not assume, or indemnify you against, this liability.
USE OF PROCEEDS
We will not receive any proceeds from the exchange offer. In
consideration for issuing the registered notes as contemplated in this
prospectus, we will receive in exchange the outstanding notes in like principal
amount. The outstanding notes surrendered in exchange for the registered notes
will be retired and canceled and cannot be reissued. The issuance of the
registered notes will not result in any increase in our indebtedness.
20
<PAGE>
CAPITALIZATION
The following table sets forth as of August 31, 1999:
/bullet/ our historical capitalization which gives effect to
the Penske Acquisition; and
/bullet/ our pro forma capitalization, as adjusted to give
effect to the application of the net proceeds from
our issuance of the outstanding notes.
The table should be read in conjunction with "Selected Financial Data,"
"Pro Forma Financial Data" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included elsewhere and
incorporated by reference in this prospectus.
<TABLE>
<CAPTION>
<S> <C>
AUGUST 31, 1999
-------------------------
ACTUAL AS ADJUSTED
----------- -----------
(IN THOUSANDS)
Cash, cash equivalents and short-term investments ............. $ 59,791 $ 103,664
=========== ===========
Long-term debt(1):
Notes payable .............................................. $ 5,550 $ 5,550
Credit facilities .......................................... 180,500 4,500
TIF bond debt service funding commitment (net of discount of
$1,665) .................................................. 69,675 69,675
Term debt .................................................. 30,000 30,000
Senior notes due 2004 ...................................... -- 225,000
----------- -----------
Total long-term debt ..................................... $ 285,725 $ 334,725
----------- -----------
Shareholders' equity:
Class A Common Stock, $.01 par value, 80,000,000 shares
authorized; 22,774,872 shares issued and outstanding ..... $ 228 $ 228
Class B Common Stock, $.01 par value, 40,000,000 shares
authorized; 30,349,841 shares issued and outstanding ..... 303 303
Additional paid-in capital ................................. 687,321 687,321
Retained earnings .......................................... 202,237 202,237
Unearned compensation-restricted stock(2) .................. (2,103) (2,103)
----------- -----------
Total shareholders' equity ............................... 887,986 887,986
----------- -----------
Total capitalization ..................................... $ 1,173,711 $ 1,222,711
=========== ===========
</TABLE>
- ---------------
(1) Includes current maturities.
(2) See Note 11 to our Consolidated Financial Statements, which are
incorporated by reference in this prospectus from our Annual Report on Form
10-K for the fiscal year ended November 30, 1998 on file with the SEC. See
"Documents Incorporated By Reference" and "Where You Can Find More
Information" on page 74.
21
<PAGE>
SELECTED FINANCIAL DATA
The following selected financial data as of and for each of the fiscal
years ended August 31, 1994 through 1996, the three months ended November 30,
1996, and the fiscal years ended November 30, 1997 and 1998 have been derived
from our Consolidated Financial Statements, which are incorporated by reference
in this prospectus from our Annual Report on Form 10-K for the fiscal year ended
November 30, 1998 on file with the SEC. See "Documents Incorporated By
Reference" and "Where You Can Find More Information" on page 74. The selected
financial data for the twelve months ended November 30, 1996 and as of and for
the nine months ended August 31, 1998 and 1999 have been derived from our
unaudited financial statements which, in the opinion of management, include all
adjustments (consisting of only normal recurring adjustments) necessary for a
fair presentation of the information set forth therein. The results of
operations for the nine months ended August 31, 1999 are not necessarily
indicative of results for the full year.
<TABLE>
<CAPTION>
THREE TWELVE
MONTHS MONTHS
ENDED ENDED
YEAR ENDED AUGUST 31, (1) NOV. 30, NOV. 30,
--------------------------------------- ----------- -----------
1994 1995 1996 1996(1) 1996(1)
----------- ----------- ----------- ----------- -----------
(IN THOUSANDS)
INCOME STATEMENT DATA:
Revenues:
<S> <C> <C> <C> <C> <C>
Admissions, net ................. $ 36,935 $ 43,274 $ 50,140 $ 4,191 $ 50,705
Motorsports related income(2) ... 18,764 24,033 27,433 3,972 28,376
Food, beverage and merchandise
income......................... 12,291 14,442 17,505 1,943 17,723
Other income .................... 943 423 964 390 1,192
----------- ----------- ----------- ----------- -----------
Total revenues ............... 68,933 82,172 96,042 10,496 97,996
Expenses:
Direct expenses:
Prize and point fund monies
and NASCAR sanction fees ..... 9,412 11,765 13,865 1,301 13,724
Motorsports related expenses ... 11,470 11,604 15,336 2,814 16,384
Food, beverage and merchandise
expenses ..................... 7,867 8,107 10,278 1,536 10,559
General and administrative ...... 14,307 18,202 20,930 5,057 21,721
expenses
Depreciation and amortization ... 3,828 4,798 6,302 2,353 7,368
----------- ----------- ----------- ----------- -----------
Total expenses ............... 46,884 54,476 66,711 13,061 69,756
----------- ----------- ----------- ----------- -----------
Operating income (loss) ........... 22,049 27,696 29,331 (2,565) 28,240
Interest income ................... 972 1,436 872 330 912
Interest expense .................. -- -- -- (69) (69)
Equity in net income (loss) from
equity investments .............. 207 285 1,441 (304) 1,291
Minority interest ................. -- -- -- -- --
Gain on sale of equity investment . -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Income (loss) before income taxes . 23,228 29,417 31,644 (2,608) 30,374
Income taxes (benefit) ............ 8,662 11,054 11,963 (741) 11,540
----------- ----------- ----------- ----------- -----------
Net income (loss) ................. $ 14,566 $ 18,363 $ 19,681 $ (1,867) $ 18,834
=========== =========== =========== =========== ===========
OTHER FINANCIAL DATA:
EBITDA(3) ......................... $ 25,877 $ 32,494 $ 35,633 $ (212) $ 35,608
EBITDA margin ..................... 37.5% 39.5% 37.1% (2.0)% 36.3%
Capital expenditures .............. $ 19,729 $ 16,831 $ 34,784 $ 14,864 $ 41,622
Ratio of earnings to fixed ........ 325.2x 435.8x 432.5x (4) 213.3x
charges(4)
SELECTED OPERATING DATA:
Total admissions .................. 848,134 985,739 1,028,970 N/A N/A
Number of major events(5) ......... 12 12 13 1 12
BALANCE SHEET DATA (END OF PERIOD):
Working capital (deficit) ......... $ 11,839 $ 20,821 $ (6,751) $ 52,922 $ 52,922
Total assets ...................... 96,401 119,571 152,791 234,069 234,069
Total debt ........................ -- -- -- -- --
Total shareholders' equity ........ 68,277 85,247 106,667 179,289 179,289
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
NOVEMBER 30, AUGUST 31,
-------------------------- -------------------------
1997 1998 1998 1999
----------- ---------- ---------- ----------
INCOME STATEMENT DATA:
Revenues:
<S> <C> <C> <C> <C>
Admissions, net ................. $ 69,487 $ 86,946 $ 54,432 $ 90,136
Motorsports related income(2) ... 46,650 71,793 50,104 72,805
Food, beverage and merchandise
income......................... 23,408 28,597 18,666 29,913
Other income .................... 1,829 1,632 1,095 1,243
----------- ---------- ---------- ----------
Total revenues ............... 141,374 188,968 124,297 194,097
Expenses:
Direct expenses:
Prize and point fund monies
and NASCAR sanction fees ..... 20,567 28,767 19,727 28,252
Motorsports related expenses ... 23,075 33,283 22,119 32,458
Food, beverage and merchandise
expenses ..................... 13,435 15,025 10,396 15,995
General and administrative ...... 29,486 37,842 26,365 36,814
expenses
Depreciation and amortization ... 9,910 13,137 9,593 13,936
----------- ---------- ---------- ----------
Total expenses ............... 96,473 128,054 88,200 127,455
----------- ---------- ---------- ----------
Operating income (loss) ........... 44,901 60,914 36,097 66,642
Interest income ................... 3,196 4,414 2,531 6,783
Interest expense .................. (509) (582) (518) (2,511)
Equity in net income (loss) from
equity investments .............. 366 (905) (111) (1,472)
Minority interest ................. -- -- -- 77
Gain on sale of equity investment . -- 1,245 1,245 --
----------- ---------- ---------- ----------
Income (loss) before income taxes . 47,954 65,086 39,244 69,519
Income taxes (benefit) ............ 18,158 24,894 14,993 27,101
----------- ---------- ---------- ----------
Net income (loss) ................. $ 29,796 $ 40,192 24,251 $ 42,418
=========== ========== ========== ==========
OTHER FINANCIAL DATA:
EBITDA(3) ......................... $ 54,811 $ 74,051 $ 45,690 $ 80,578
EBITDA margin ..................... 38.8% 39.2% 36.8% 41.5%
Capital expenditures .............. $ 38,627 $ 71,858 $ 37,667 $ 75,387
Ratio of earnings to fixed ........ 73.0x 86.3x 60.9x 16.3x
charges(4)
SELECTED OPERATING DATA:
Total admissions .................. 1,416,618 1,730,533 N/A N/A
Number of major events(5) ......... 18 18 12 15
BALANCE SHEET DATA (END OF PERIOD):
Working capital (deficit) ......... $ (24,976) $ 27,490 $ 93,736 $ (42,955)
Total assets ...................... 302,823 476,818 471,380 1,388,586
Total debt ........................ 14,302 3,373 4,431 285,725
Total shareholders' equity ........ 209,907 366,855 350,741 887,986
</TABLE>
22
<PAGE>
(1) We changed our fiscal year end to November 30 effective December 1, 1996.
This resulted in a three-month transition period commencing September 1,
1996 and ending November 30, 1996. The unaudited results of the 12-month
period November 30, 1996 are presented for the purpose of comparison to the
fiscal year ended November 30, 1997.
(2) Primarily includes television and radio broadcast rights fees, promotion
and sponsorship fees, hospitality rentals (including luxury suites, chalets
and the hospitality portion of club seating), advertising revenues,
royalties from licenses of our trademarks, and track rentals.
(3) EBITDA means operating income before depreciation and amortization. EBITDA
is a measure commonly used by the financial community but is not prepared
in accordance with GAAP. While many in the financial community consider
EBITDA to be an important measure of comparative operating performance, it
should be considered in addition to, but not as a substitute for, operating
income, net income, cash flows provided by operating activities and other
measures of financial performance prepared in accordance with United States
generally accepted accounting principles. Our calculation of EBITDA may not
be comparable to similarly titled measures reported by other companies
since all companies do not calculate this non-GAAP measure in the same
fashion.
(4) For the purpose of computing this ratio, earnings consist of income before
income taxes and fixed charges (such fixed charges have been adjusted to
exclude capitalized interest). Fixed charges consist of interest expense,
including capitalized expense, amortization of loan expense related to
long-term debt and the estimated interest component of rent expense. The
deficiency of earnings available to cover fixed charges for the three
months ended November 30, 1996 was approximately $2.3 million.
(5) Major events mean our NASCAR Winston Cup Series, NASCAR Busch Grand
National Series and NASCAR Craftsman Truck Series events.
23
<PAGE>
PRO FORMA FINANCIAL DATA
The following unaudited pro forma condensed consolidated financial
statements reflect adjustments to the historical consolidated statements of
income of International Speedway and Penske Motorsports to give effect to the
Penske Acquisition, using the purchase method of accounting for a business
combination. Our unaudited pro forma condensed consolidated statements of income
for the nine months ended August 31, 1999 and for the year ended November 30,
1998 assume the Penske Acquisition was effected as of the beginning of each
period presented.
The fiscal year-ends of International Speedway and Penske Motorsports
occur at different dates. International Speedway's fiscal year-end is November
30 and Penske Motorsports' fiscal year-end was December 31. Our unaudited pro
forma condensed consolidated statements of income have been prepared by
combining the following periods of operations of International Speedway and
Penske Motorsports:
PRO FORMA PERIOD INTERNATIONAL SPEEDWAY PENSKE MOTORSPORTS
---------------- ---------------------- ------------------
Nine months ended Nine months ended Nine months ended
August 31, 1999 August 31, 1999 August 31, 1999
Year ended Year ended Year ended
November 30, 1998 November 30, 1998 December 31, 1998
Prior to consummation of the Penske Acquisition, each of International
Speedway and Penske Motorsports owned 45% of Homestead-Miami Speedway
("Homestead-Miami") and each entity recorded its respective investment using the
equity method of accounting. For purposes of pro forma presentations,
Homestead-Miami's historical statements of income for the nine months ended
August 31, 1999, and the year ended December 31, 1998, have been combined with
Penske Motorsports' historical financial information.
The following unaudited pro forma condensed consolidated financial
statements have been prepared from, and should be read in conjunction with, our
historical consolidated financial statements, which are incorporated by
reference in this prospectus from our Annual Report on Form 10-K for the fiscal
year ended November 30, 1998 on file with the SEC, as well as the historical
consolidated financial statements of Penske Motorsports, which are incorporated
by reference in this prospectus from its Annual Report on Form 10-K for the
fiscal year ended December 31, 1998 on file with the SEC. See "Documents
Incorporated by Reference" and "Where You Can Find More Information" on page 74.
The following unaudited pro forma condensed consolidated statements of income
are not necessarily indicative of the results of operations that would have
occurred had the Penske Acquisition occurred at the dates indicated, nor are
they necessarily indicative of our future operating results as a combined
company.
24
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED AUGUST 31, 1999
INTERNATIONAL PENSKE MOTORSPORTS PRO FORMA PRO FORMA
SPEEDWAY AND HOMESTEAD-MIAMI ADJUSTMENTS TOTAL
------------ ------------------- ----------- ------------
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C>
REVENUES
Admissions, net................................ $ 90,136 $ 34,324 $ 0 $ 124,460
Motorsports related income..................... 72,805 29,073 0 101,878
Food, beverage and merchandise income.......... 29,913 20,688 0 50,601
Other income................................... 1,243 0 0 1,243
------------ ------------ ------------ ------------
Total revenues............................... 194,097 84,085 0 278,182
EXPENSES
Direct expenses:
Prize and point fund monies and NASCAR
sanction fees................................ 28,252 11,283 0 39,535
Motorsports related expenses................... 32,458 16,200 0 48,658
Food, beverage and merchandise expenses........ 15,995 14,372 0 30,367
General and administrative expenses............ 36,814 20,498 0 57,312
Depreciation and amortization.................. 13,936 9,997 7,845(1)(2) 31,778
------------ ------------ ------------ ------------
Total expenses............................... 127,455 72,350 7,845 207,650
------------ ------------ ------------ ------------
Operating income (loss)........................... 66,642 11,735 (7,845) 70,532
Interest income................................... 6,783 128 (1,600)(3) 5,311
Interest expense.................................. (2,511) (3,934) (4,376)(4) (10,821)
Equity in net (loss) income from equity (1,472) (1,443) 2,526(5) (389)
investments....................................
Minority interest................................. 77 0 321(5) 398
------------ ------------ ------------ ------------
Income (loss) before income taxes................. 69,519 6,486 (10,974) 65,031
Income tax expense (benefit)...................... 27,101 2,566 (1,414)(6) 28,253
------------ ------------ ------------ ------------
Net income (loss)................................. $ 42,418 $ 3,920 $ (9,560) $ 36,778
============ ============ ============= ============
Basic earnings per share.......................... $0.96 $0.68
Diluted earnings per share........................ $0.96 $0.68
Basic weighted average shares..................... 44,229,684 10,029,861(7) 54,259,545
Diluted weighted average shares................... 44,355,217 10,029,861(7) 54,385,078
</TABLE>
See accompanying notes to unaudited pro forma financial statements.
25
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA STATEMENT OF INCOME
FOR THE YEAR ENDED NOVEMBER 30, 1998
INTERNATIONAL PENSKE MOTORSPORTS PRO FORMA PRO FORMA
SPEEDWAY AND HOMESTEAD-MIAMI ADJUSTMENTS TOTAL
------------ ------------------- ----------- ------------
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C>
REVENUES
Admissions, net................................ $ 86,946 $ 55,609 $ 0 $ 142,555
Motorsports related income..................... 71,793 46,064 0 117,857
Food, beverage and merchandise income.......... 28,597 29,571 0 58,168
Other income................................... 1,632 0 0 1,632
------------ ------------ ------------ ------------
Total revenues............................ 188,968 131,244 0 320,212
EXPENSES
Direct expenses:...............................
Prize and point fund monies and NASCAR sanction
fees........................................ 28,767 15,520 0 44,287
Motorsports related expenses................... 33,283 28,122 0 61,405
Food, beverage and merchandise expenses........ 15,025 20,917 0 35,942
General and administrative expenses............ 37,842 22,700 0 60,542
Depreciation and amortization.................. 13,137 13,766 11,768(1)(2) 38,671
------------ ------------ ------------ ------------
Total expenses................................. 128,054 101,025 11,768 240,847
------------ ------------ ------------ ------------
Operating income (loss)........................ 60,914 30,219 (11,768) 79,365
Interest income................................ 4,414 246 (2,400)(3) 2,260
Interest expense............................... (582) (6,111) (6,568)(4) (13,261)
Equity in net (loss) income from equity (905) (1,382) 2,163(5) (124)
investments.................................
Minority interest.............................. 0 0 320(5) 320
Gain on sale of equity investment.............. 1,245 1,108 0 2,353
------------ ------------ ------------ ------------
Income (loss) before income taxes.............. 65,086 24,080 (18,253) 70,913
Income tax expense (benefit)................... 24,894 10,697 (2,812)(6) 32,779
------------ ------------
Net income (loss).............................. $ 40,192 $ 13,383 $ (15,441) $ 38,134
============ ============ ============ ============
Basic earnings per share....................... $1.00 $0.76
Diluted earnings per share..................... $1.00 $0.76
Basic weighted average shares.................. 40,025,643 10,029,861(7) 50,055,504
Diluted weighted average shares................ 40,188,800 10,029,861(7) 50,218,661
</TABLE>
See accompanying notes to unaudited pro forma financial statements.
26
<PAGE>
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE AMOUNTS)
Under the terms of the Penske Acquisition, each outstanding share of Penske
Motorsports common stock, other than shares held directly or indirectly by
International Speedway, was converted into the right to receive at the election
of each Penske Motorsports stockholder, subject to the transaction's collar
provision, (a) $15.00 in cash and $35.00 worth of International Speedway's Class
A common stock (30% cash and 70% stock) or (b) $50.00 worth of International
Speedway's Class A common stock.
The volume-weighted average price for International Speedway's Class A common
stock during the 20-day trading period ending two trading days before the
closing of the Penske Acquisition was $47.98 per share, which resulted in an
exchange ratio, pursuant to the Penske Acquisition agreement, of 1.042 shares of
International Speedway's Class A common stock for each of the 12,222,477 shares
of Penske Motorsports common stock converted in the Penske Acquisition (total
shares outstanding of 14,208,898 less treasury shares of 377,400 less 1,609,021
shares of Penske Motorsports common stock owned directly or indirectly by
International Speedway).
Of such 12,222,477 shares of Penske Motorsports common stock:
/bullet/ 8,655,402 shares were converted into 30% cash and 70% stock; and
/bullet/ 3,567,075 shares were converted entirely into stock.
Accordingly, based on the exchange ratio, International Speedway issued
10,029,861 shares of Class A common stock and paid approximately $129.8 million
in cash consideration in the Penske Acquisition.
The actual costs of the Penske Acquisition are as follows:
Cash consideration................. $ 129,848
Stock consideration................ 481,272
Transaction costs.................. 6,305
-----------
Total acquisition cost............. $ 617,425
===========
Under purchase accounting, Penske Motorsports' assets and liabilities are
required to be adjusted to their estimated fair values. The estimated fair value
adjustments have been determined by International Speedway based upon a
preliminary valuation and are subject to adjustments based on a final valuation.
These estimated fair values may not be the fair values that will ultimately be
determined. The following are the pro forma adjustments made to reflect Penske
Motorsports' estimated fair values assuming the Penske Acquisition was completed
on August 31, 1999:
Net assets acquired................ $162,913
ADJUSTMENT
Track assets....................... $ 26,500
Intangibles - workforce............ 900
Deferred taxes..................... (10,412)
--------
16,988
Goodwill........................... 431,219
Transaction costs.................. 6,305
------
Total acquisition cost............. $617,425
========
27
<PAGE>
(1) Amortization expense of $7,412 and $11,118 for the nine months ended
August 31, 1999 and year ended November 30, 1998, respectively,
representing amortization of the excess purchase price over the fair
value of the net assets acquired (including transaction costs) of
$437,524, over a period of 40 years and amortization of workforce
intangibles of $900 over a period of 5 years.
(2) Depreciation expense of $433 and $650 for the nine months ended August
31, 1999, and the year ended November 30, 1998, respectively,
representing additional depreciation expense that would have been
recorded if the transaction had occurred as of the beginning of each
period presented assuming current fair value adjustments and an average
depreciable life of 30 years.
(3) Interest income foregone on the cash paid for the accelerated vesting
of 464,000 Penske Motorsports employee stock options and the
cancellation of those options in an amount equal to the excess of the
cash/stock consideration paid in connection with the Penske Acquisition
over the per share exercise price of the Penske Motorsports stock
options of $11,200 in cash, cash paid for a portion of the cash
consideration of $35,100, and cash paid of $1,700 for deferred
financing costs at an assumed rate of 5%.
(4) Interest expense recorded on the long term debt to be borrowed for a
portion of the cash consideration of $101,051, (cash consideration
$129,848, transaction costs of $6,305 and cash paid $35,100) at a
borrowing rate of 6.5%, inclusive of the amortization of deferred
financing costs. A change in the interest rate of one-eighth of one
percent (0.125%) would change interest expense by $87 for the nine
months ended August 31, 1999 and $126 for the year ended November 30,
1999.
(5) To reflect the elimination of equity losses and record minority
interest for those investments in the pro forma statements of income
for the nine months ended August 31, 1999, and the year ended November
30, 1998.
(6) Reduction in income taxes as a result of pro forma adjustments,
primarily interest expense and non-deductible amortization of
intangibles.
(7) Reflects our historical basic weighted average shares outstanding and
diluted weighted average shares outstanding plus the 10,029,861 shares
issued by us in the Penske Acquisition.
28
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
GENERAL
We derive revenues primarily from (i) admissions to racing events and
motorsports activities held at our facilities, (ii) revenue generated in
conjunction with or as a result of motorsports events conducted at our
facilities, and (iii) catering, concession and merchandise made during or as a
result of such events and activities.
"Admissions" revenue includes ticket sales from all of our events and
DAYTONA USA's Track Tours and Velocitorium. Admissions revenue for racing events
is recorded upon completion of the related motorsports event.
"Motorsports related income" primarily includes television and radio
broadcast rights fees, promotion and sponsorship fees, hospitality rentals
(including luxury suites, chalets and the hospitality portion of club seating),
advertising revenues, royalties from licenses of the Company's trademarks, and
track rentals. We currently negotiate directly with television and cable
networks for coverage of substantially all of our televised motorsports events.
NASCAR has announced it will retain these rights and negotiate television and
ancillary media rights contracts beginning with the 2001 racing season as a
result of its recent agreement with all of the television broadcasters of these
events to release their contractual rights beginning with such racing season. In
November 1999, NASCAR announced that it had reached an agreement on a six-year
television contract with NBC Sports and Turner Sports, with the two media
companies combining to develop a joint venture. In addition, NASCAR announced
that it had reached an agreement on an eight-year television contract with FOX
and its FX cable network. Both agreements relate solely to the domestic
broadcast television rights to NASCAR's Winston Cup Series and Busch Grand
National Series events, and are effective beginning with the 2001 racing season.
The percentage of television broadcast rights fees that we currently retain from
each contract will be the same under the future arrangement. Our revenues from
corporate sponsorships are paid in accordance with negotiated contracts, with
the identities of sponsors and the terms of sponsorship changing from time to
time.
"Food, beverage and merchandise income" includes revenues from
concession stands, hospitality catering and direct sales of souvenirs, programs
and other merchandise, fees paid by third party vendors for the right to sell
souvenirs and concessions at our facilities, and the wholesale and retail sale
of Good Year brand racing tires for various types of racing events.
Expenses include (i) prize and point fund monies and NASCAR sanction
fees, (ii) motorsports related expenses, which include costs of competition paid
to sanctioning bodies other than NASCAR, labor, advertising and other expenses
associated with the promotion of our racing events, and (iii) food, beverage and
merchandise expenses, consisting primarily of labor and costs of goods sold.
The following table sets forth, for each of the indicated periods,
certain selected income statement data as a percentage of total revenues:
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NINE MONTHS ENDED
AUGUST 31,
----------------------
1998 1999
(UNAUDITED) (UNAUDITED)
----------- ----------
Revenues:
Admissions, net ...................................... 43.8% 46.4%
Motorsports related income ........................... 40.3 37.5
Food, beverage and merchandise income ................ 15.0 15.4
Other income ......................................... 0.9 0.7
----------- ----------
Total revenues ..................................... 100.0% 100.0%
Expenses:
Direct expenses:
Prize and point fund monies and NASCAR sanction fees 15.9 14.6
Motorsports related expenses ....................... 17.8 16.7
Food, beverage and merchandise expenses ............ 8.4 8.2
General and administrative expenses .................. 21.2 19.0
Depreciation and amortization ........................ 7.7 7.2
----------- ----------
Total expenses ..................................... 71.0 65.7
----------- ----------
Operating income (loss) ................................. 29.0 34.3
Interest income ......................................... 2.1 3.5
Interest expense ........................................ (0.4) (1.3)
Equity in net loss from equity investments .............. (0.1) (0.8)
Gain on sale of equity investment ....................... 1.0 --
Minority interest ....................................... -- 0.1
----------- ----------
Income (loss) before income taxes ....................... 31.6 35.8
Income tax expense (benefit) ............................ 12.1 13.9
----------- ----------
Net income (loss) ....................................... 19.5% 21.9%
SEASONALITY AND QUARTERLY RESULTS
Our business has been, and is expected to remain, highly seasonal based
on the timing of major events. For example, one of Darlington Raceway's NASCAR
Winston Cup Series events is traditionally held on the Sunday preceding Labor
Day. Accordingly, the revenue and expenses for that race and/or the related
supporting events may be recognized in either the fiscal quarter ending August
31 or the fiscal quarter ending November 30. Further, in July 1998 we announced
the postponement of the NASCAR Winston Cup Series Pepsi 400 at Daytona from July
4, 1998 to October 17, 1998 as a result of the nationally publicized forest fire
emergency throughout the state of Florida. This event, historically conducted in
our third fiscal quarter, was held in July in 1999.
On July 26, 1999, we acquired the 88% interest we did not already own
in Penske Motorsports. As a result of the transaction, we acquired Michigan
Speedway in Brooklyn, Michigan; Nazareth Speedway in Nazareth, Pennsylvania;
California Speedway in San Bernardino County, California; and North Carolina
Speedway in Rockingham, North Carolina. We also acquired Penske Motorsports' 45%
interest in Homestead-Miami Speedway, LLC, bringing our ownership in that
facility to 90%, as well as other Penske Motorsports merchandising subsidiaries.
As a result of the acquisition, we now operate 10 major motorsports facilities
across the United States with more than 800,000 seats and 400 suites (See
"Acquisition"). We have recognized revenues and expenses associated with
acquired operations on a consolidated basis subsequent to July 26, 1999,
including a major event
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weekend consisting of a NASCAR Winston Cup Series event and NASCAR Busch Series,
Grand National Division event conducted at the Michigan Speedway in August of
1999.
As a result of the prior year postponement of the Pepsi 400 at Daytona
and the Penske Acquisition, we held three Winston Cup Series races and two Busch
Series, Grand National Division races during the third quarter of 1999 compared
to one Winston Cup Series race and one Busch Series, Grand National Division
race during the third quarter of 1998. Accordingly, our results of operations,
as well as the margins of certain expenses in relation to certain revenues, are
not necessarily comparable on a period-to- period basis.
COMPARISON OF THE RESULTS FOR THE NINE MONTHS ENDED AUGUST 31, 1999 TO THE
RESULTS FOR THE NINE MONTHS ENDED AUGUST 31, 1998
Admissions revenue increased approximately $35.7 million, or 65.6%, for
the nine months ended August 31, 1999, as compared to the nine months ended
August 31, 1998. This increase was primarily attributable to the Pepsi 400 at
Daytona and the NASCAR events held at the newly acquired Michigan facility, as
well as the increase in the weighted average price of tickets sold and increased
seating capacity and attendance at the Speedweeks events held at Daytona
International Speedway, and, to a lesser extent, events conducted at Talladega
Superspeedway.
Motorsports related income increased approximately $22.7 million, or
45.3%, for the nine months ended August 31, 1999 as compared to the nine months
ended August 31, 1998. Over one-half of this increase was attributable to the
timing of the Pepsi 400 at Daytona and NASCAR events in Michigan, with the
remaining increase primarily attributable to growth in television broadcast
rights fees, expanded luxury suite and hospitality facilities and increased
sponsorship revenues for the Speedweeks events at Daytona and, to a lesser
extent, events at our other facilities.
Food, beverage and merchandise income increased approximately $11.2
million, or 60.3%, for the nine months ended August 31, 1999 as compared to the
nine months ended August 31, 1998. The majority of the increase was attributable
to the timing of the Pepsi 400 at Daytona, the merchandising activities of
certain subsidiaries acquired from Penske Motorsports, which included sales of
Goodyear brand racing tires, and fees paid by third party vendors related to
souvenir, concessions and catering operations for the Michigan NASCAR events.
The remaining increase was primarily attributable to increased catering revenues
from expanded luxury suite and hospitality facilities at Daytona's Speedweeks
events, and, to a lesser extent, increased attendance and seating capacity for
NASCAR events conducted at our other facilities.
Prize and point fund monies and NASCAR sanction fees increased by
approximately $8.5 million, or 43.2%, for the nine months ended August 31, 1999,
as compared to the same period of the prior year, primarily as a result of the
timing of the Pepsi 400 at Daytona and the Michigan NASCAR events. Over
three-quarters of the increase for the nine months ended August 31,1999 was due
to increased prize and point fund monies paid by NASCAR to participants in
NASCAR events. Growth in television broadcast rights fees contributed
significantly to these increases as standard NASCAR sanctioning agreements
require that a specified percentage of broadcast rights fees be paid as part of
prize money.
Motorsports related expenses increased approximately $10.3 million, or
46.7%, for the nine months ended August 31, 1999, as compared to the same period
of the prior year. The increase was primarily related to the timing of operating
expenses for the Pepsi 400 at Daytona and the Michigan NASCAR events. The
remaining increase was primarily attributable to personnel costs, hospitality
services and supplies and a variety of other fan amenities and operating
expenses for Daytona's Speedweeks events and, to a lesser extent, events
conducted at our other facilities.
Food, beverage and merchandise expenses increased approximately $5.6
million, or 53.9%, for the nine months ended August 31, 1999, as compared to the
same period of the prior year primarily due to increased product and personnel
costs associated with increased revenues. The increases are primarily
attributable to costs associated with the sale of Goodyear brand racing tires
and the timing of costs associated with the Pepsi 400 at Daytona.
General and administrative expenses increased approximately $10.4
million, or 39.6%, for the nine months ended August 31, 1999 as compared to the
same period of the prior year. During the three months ended August
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31,1999, we recorded a charge of approximately $2.8 million related to the cash
portion of a proposed settlement in the Americrown souvenir litigation. Over
one-half of the increase was related to the proposed settlement and general and
administrative expenses associated with the operations acquired from Penske
Motorsports and the consolidation of Homestead-Miami. The remaining increase in
expenses was primarily attributable to personnel costs and a variety of other
expenses, as well as a bad debt reserve primarily related to a single customer
incurred during the first quarter of fiscal 1999.
Depreciation and amortization expense increased approximately $4.3
million, or 45.3%, for the nine months ended August 31, 1999, as compared to the
same period of the prior year. The depreciation of assets acquired and
amortization of goodwill recorded as a result of the Penske Acquisition
accounted for approximately one-half of the increase. The remaining increase was
a result of the ongoing expansion of our facilities.
Interest income for the nine months ended August 31, 1999 increased by
approximately $4.3 million, as compared to the same period of the prior year.
This increase was primarily due to the investment of the remaining proceeds of
our July 1998 Class A Common Stock Offering, including our investments
restricted to the funding of the speedway in Kansas, and investment of the
proceeds from the sale of taxable special obligation revenue ("TIF") bonds
issued in January 1999 by the Unified Government of Wyandotte County/Kansas
City, Kansas, to partially fund the Kansas project (See "Future Liquidity").
Interest expense for the nine months ended August 31, 1999 increased by
approximately $2.0 million, as compared to the same period of the prior year.
Interest expense in fiscal 1999 consists primarily of the interest on $176
million borrowed under our senior credit facility (See "Acquisition" and "Future
Liquidity"), incurred during the three months ended August 31,1999, and interest
expense on the TIF bond debt service funding commitment, net of capitalized
interest. Interest expense in fiscal 1998 was primarily related to the note
payable associated with the acquisition of our Phoenix facility.
Equity in net income (loss) from equity investments represents our pro
rata share of the current income and losses from our equity investments and the
amortization of our investment in excess of its share of the investee's
underlying net assets. During the nine months ended August 31, 1999, this
included our approximately 12% indirect investment in Penske Motorsports, our
45% investment in Homestead-Miami Speedway through July 26, 1999, and our 50%
investment in Motorsports Alliance, LLC, which is pursuing development of a
major motorsports facility in the Chicago area (See "Future Liquidity"). For the
nine months ended August 31, 1998, this included our approximately 11% indirect
investment in Penske Motorsports, our 40% investment in Homestead-Miami, which
increased to 45% in March of 1998, and our 7% investment in Grand Prix
Association of Long Beach, which was sold in March of 1998.
In March of 1998 we recorded an approximately $1.2 million gain on the
sale of our equity investment in Long Beach. We sold our investment in
conjunction with Dover Downs Entertainment, Inc.'s announced plans to merge with
Long Beach. The after tax impact of this transaction was approximately $850,000.
Income taxes increased $12.1 million for the nine months ended August
31, 1999. Our effective tax rate has, and is expected to continue to, increase
compared to its historical levels primarily due to the amortization of
non-deductible goodwill created in the Penske Acquisition.
As a result of the foregoing, our net income increased approximately
$18.2 million, or 74.9%, for the nine months ended August 31, 1999 as compared
to the same period in the prior year.
LIQUIDITY AND CAPITAL RESOURCES
GENERAL
We have historically generated sufficient cash flow from operations to
fund our working capital needs and capital expenditures at existing facilities,
as well as to pay an annual cash dividend. In addition, we have used the
proceeds from offerings of our Class A Common Stock and, most recently,
borrowings available under our Credit Facility to fund development projects and
acquisitions. We had borrowings of $176 million on our new $300
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million credit facility and a working capital deficit of $43.0 million at August
31, 1999, compared to working capital of $27.5 million at November 30, 1998,
primarily due to the Penske Acquisition. See "Acquisition" and "Future
Liquidity".
CASH FLOWS
Net cash provided by operating activities was approximately $68.6
million for the nine months ended August 31, 1999, compared to $56.3 million for
the nine months ended August 31, 1998. The difference between our net income of
$42.4 million and the $68.6 million of operating cash flow was primarily
attributable to depreciation and amortization of $13.9 million, an increase in
deferred revenue of $12.4 million, and an increase in deferred income taxes of
$5.1 million, partially offset by an increase in accounts receivable of $6.0
million.
Net cash used in investing activities was $209.8 million for the nine
months ended August 31, 1999, compared to $17.1 million for the nine months
ended August 31, 1998. Our use of cash for investing activities reflects $134.3
million for the cash portion of the purchase price of Penske Motorsports, $75.4
million in capital expenditures, the $42.7 million net increase in restricted
investments for the project in Kansas and $11.0 million for our investment year
to date in the Chicago project, partially offset by the net proceeds from the
sale of short-term investments of $53.9 million. See "Capital Expenditures".
Net cash provided by financing activities of $161.6 million for the
nine months ended August 31, 1999, compared to $102.1 million for the nine
months ended August 31, 1998, is related primarily to net proceeds from
borrowings under our new $300 million five-year revolving credit facility (See
"Acquisition") and the issuance of the TIF bonds, partially offset by the
payment of a portion of the long-term debt acquired in the Penske Acquisition.
CAPITAL EXPENDITURES
Capital expenditures totaled approximately $75.4 million for the nine
months ended August 31, 1999 as compared to $37.7 million for the nine months
ended August 31, 1998. Almost two-thirds of these expenditures were related to
expenditures at our existing facilities, including increased seating capacity at
Daytona, Talladega, Phoenix, Darlington, Michigan and Miami, land purchased for
expansion of parking capacity and a variety of other improvements to our
facilities. The remaining capital expenditures were primarily related to the
construction of the speedway in Kansas.
We expect to make approximately $66 million of additional capital
expenditures for approved projects at existing facilities within the next 24
months to increase grandstand seating capacity, acquire land for expansion of
parking capacity, construct luxury suites and for a variety of additional
improvements to our motorsports facilities. We also expect to spend an
additional $10.1 million for 36 additional luxury suites at the Kansas speedway,
which is currently under construction. The balance of our capital expenditures
related to the construction of the Kansas facility will be funded from
restricted investments, as discussed below.
ACQUISITION
On July 26, 1999, we consummated the Penske Acquisition, pursuant to
which we acquired the approximately 88%, or 12.2 million outstanding common
shares, of Penske Motorsports stock that we did not already own for
approximately $129.8 million and 10,029,861 shares of our Class A Common Stock.
Transaction costs, net of cash acquired in the transaction, totaled
approximately $4.5 million. The total cash and stock consideration issued in the
transaction was approximately $611.1 million.
The acquisition has been accounted for under the purchase method of
accounting and, accordingly, the results of operations of the former Penske
Motorsports, as well as Homestead-Miami, have been included in our consolidated
statements of income since the date of acquisition.
The transaction purchase price has been allocated to the assets and
liabilities of Penske Motorsports and Homestead-Miami based upon preliminary
estimates of their fair market value. We do not believe the final valuation will
differ materially from the preliminary valuation. The excess of the purchase
price over the fair value
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of the net assets acquired of approximately $105.9, has been allocated, based
upon the preliminary valuation, as goodwill of approximately $508.8 million and
assembled workforce of approximately $900,000 amortized on a straight line basis
over 40 years and five years, respectively. The amount amortized during the
three months and six months ended August 31, 1999 was approximately $1.1
million.
We financed a portion of the Penske Acquisition and refinanced Penske
Motorsports' outstanding indebtedness through our senior credit facility
syndicated to a select group of lenders. This credit facility replaced our
existing $100 million facility. Borrowings under the new credit facility bear
interest at the applicable LIBOR rate plus 50-100 basis points depending on
certain financial criteria. At August 31, 1999, our outstanding borrowings on
this credit facility were $176 million. In addition, at August 31, 1999, we had
a $20 million credit facility, with outstanding borrowings of $4.5 million, and
a $30 million term loan outstanding which are both collateralized by the assets
of our Miami subsidiary.
RECENT DEVELOPMENTS
On December 1, 1999, we acquired RIR, a 3/4-mile intermediate speedway
located approximately 10 miles from downtown Richmond, Virginia, for
approximately $215 million in cash. RIR seats over 94,000 grandstand spectators
and offers luxury accommodations in its 34 suites. RIR hosts several major
NASCAR events annually, including two NASCAR Winston Cup Series events, two
NASCAR Busch Grand National Series events and one NASCAR Craftsman Truck Series
event. We financed the acquisition through approximately $160 million in
borrowings under our senior credit facility. We utilized our cash resources for
the remaining $55 million.
FUTURE LIQUIDITY
On October 6, 1999, we sold $225 million principal amount of the notes
in a private placement. We used approximately $176 million of the net proceeds
from the transaction to repay the outstanding borrowings under senior credit
facility. We used a portion of the remaining net proceeds of approximately $47
million to partially fund our recent acquisition of RIR and we intend to use the
balance to partially fund the completion of certain additions and improvements
to our motorsports facilities and for working capital and other general
corporate purposes. Pending such uses, we intend to invest the remaining
proceeds in money market funds or other interest-bearing obligations. Pursuant
to the senior credit facility agreement, the size of the new credit facility
automatically reduced from $300 million to $200 million upon our receipt of the
proceeds from the sale of the notes. We recently increased the maximum
availability under our senior credit facility to $250 million from $200 million.
During the first quarter of 1999, the financing for the first phase of
the development of the Kansas facility, which is currently estimated to cost in
excess of $224 million, was substantially completed. In January 1999, the
Unified Government of Wyandotte County/Kansas City, Kansas issued approximately
$71.3 million in TIF bonds and approximately $24.3 million in sales tax special
obligation revenue ("STAR") bonds. The STAR bonds are retired with state and
local taxes generated within the project's boundaries, and are not an obligation
of ours. The TIF bonds will be serviced through payments by the Unified
Government escalating from an annual rate of approximately $4.8 million to $7.7
million, including interest at 6.15% to 6.75%, which are funded by payments made
by us to the Unified Government in lieu of property taxes. In addition, we have
committed equity of approximately $77.9 million of which $24.4 was funded during
fiscal 1998, with the remaining $53.5 million funded in the first quarter of
fiscal 1999. The net TIF and STAR bond proceeds and our equity contribution were
deposited into trustee administered accounts for the benefit of the construction
of the Kansas facility which will be owned and operated by us. At August 31,
1999, our $96.2 million of restricted investments includes the funds remaining
from our equity contribution and the TIF bond proceeds.
On May 5, 1999, the Motorsports Alliance, LLC (owned 50% by us and 50%
by Indianapolis Motor Speedway) and the owners of Route 66 Raceway, LLC, formed
a new company, Raceway Associates, LLC, which is owned 75% by the Motorsports
Alliance and 25% by the former owners of the Route 66 Raceway. As a result of
this transaction, Raceway Associates owns the 240 acre Route 66 Raceway
motorsports complex located in Joliet, Illinois, approximately 35 miles from
downtown Chicago. Raceway Associates has also purchased 930 acres adjacent to
the existing Route 66 complex for the proposed construction of a 1.5 mile oval
motor speedway, which will initially accommodate approximately 75,000
spectators. The current estimate for the proposed new
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superspeedway development is $125 to $130 million, $100 million of which will be
financed through equity of approximately $50 million from the Motorsports
Alliance and a borrowing of approximately $50 million by Raceway Associates. The
members of the Motorsports Alliance will guarantee up to $50 million in
borrowings of Raceway Associates on a pro rata basis until such time as the
operations of Raceway Associates meet certain financial criteria. Raceway
Associates, working with local government authorities, recently negotiated a
funding mechanism to partially fund anticipated project costs in excess of $100
million. In addition, we the Company (through the Motorsports Alliance) may
commit additional equity to fund a portion of these additional project costs.
During the nine months ended August 31, 1999, we contributed approximately $11
million to the Motorsports Alliance, approximately $9 million of which has been
applied towards the Company's portion of the capital commitment for the
acquisition of land and development of the new facility.
We believe that cash flow from operations, along with existing cash and
short-term investment balances and available borrowings under our credit
facilities, will be sufficient to fund i) operations and approved capital
projects at existing facilities for the foreseeable future, ii) payments
required in connection with the funding of the Unified Government's debt service
requirements related to the TIF bonds described above prior to commencement of
racing at the Speedway in Kansas, iii) payments related to other currently
existing debt service requirements, and iv) our expected equity funding
requirements for the Chicago project. We intend to pursue further developments
and/or acquisition opportunities (including the possible development of new
motorsports facilities in Denver and the New York metropolitan area) the timing,
size and success as well as associated potential capital commitments of which
are unpredictable. Accordingly, a material acceleration in our growth strategy
could require us to obtain additional capital through debt and/or equity
financings. Although there can be no assurance, we believe that adequate debt or
equity financing will be available on satisfactory terms.
INFLATION
We do not believe that inflation has had a material impact on our
operating costs and earnings.
DESCRIPTION OF THE SENIOR CREDIT FACILITY
Our senior credit facility provides for borrowings of up to $250.0
million, which may be used for our working capital and general corporate
purposes. We currently have borrowings outstanding under the senior credit
facility of approximately $160.0 million principal amount, all of which we
incurred in connection with our acquisition of RIR. The senior credit facility
matures on March 31, 2004, and accrues interest monthly at LIBOR plus 50 to 100
basis points. Each of our subsidiaries that is a guarantor of our obligations
under the notes is currently a guarantor of our obligations under the senior
credit facility. Should any subsidiary guarantor of the senior credit facility
be unconditionally released from its guarantee in respect thereof then that
subsidiary will be released from its guarantee of the notes upon written request
by us to the trustee. Furthermore, should any subsidiary of ours which is not
already a guarantor becomes a guarantor of our obligations under the senior
credit facility, we will cause that subsidiary to enter into a supplemental
indenture to the indenture pursuant to which that subsidiary shall become a
guarantor of our obligations under the notes. The senior credit facility
requires that we meet certain financial tests which include a maximum leverage
ratio and an interest coverage ratio. The senior credit facility also contains
covenants which, among other things, restrict our ability, subject to certain
exceptions, to do the following:
/bullet/ incur additional indebtedness;
/bullet/ incur liens;
/bullet/ make loans and investments;
/bullet/ engage in mergers, acquisitions, consolidations and asset
dispositions;
/bullet/ acquire assets, stock or debt securities of any person; and
/bullet/ engage in transactions with affiliates.
The senior credit facility also requires that we satisfy certain
customary affirmative covenants and make certain customary indemnifications to
our lenders and the administrative agent.
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The senior credit facility contains customary events of default,
including without limitation, payment defaults, breaches of representations and
warranties, covenant defaults, certain events of bankruptcy and insolvency,
judgment defaults, cross-defaults to certain other indebtedness and a change of
control.
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MOTORSPORTS INDUSTRY OVERVIEW
The motorsports industry consists of several distinct categories of
auto racing, each with its own organizing body and sanctioned racing events. The
Federation Internationale de l'Automobile, or FIA, based in Paris, France, is
the worldwide governing body for auto racing, with "national sporting authority"
members in more than 100 countries. The FIA's U.S. national sporting authority
is the Automobile Competition Committee of the United States, which in turn is
made up of the following seven member sanctioning organizations:
NASCAR............. National Association for Stock Car Auto Racing
CART............... Championship Auto Racing Teams
USAC............... United States Auto Club
NHRA............... National Hot Rod Association
SCCA............... Sports Car Club of America
IRL................ Indy Racing League
PSCR............... Professional Sports Car Racing
The Winston Cup, Busch Grand National and Craftsman Truck series events
sanctioned by NASCAR and open-wheel events sanctioned by CART and IRL are
generally the most well-attended motorsports events in the United States. We
derived approximately 72% of our pro forma 1998 revenues from NASCAR-sanctioned
racing events at our facilities, and approximately 10% from CART-sanctioned
events.
ECONOMICS OF AUTO RACING
Motorsports events generally are heavily promoted, with a number of
supporting events surrounding each main race event. Examples of supporting
events include secondary races, qualifying time trials, driver autograph
sessions, automobile and product expositions, catered parties and other related
events which are all designed to maximize the spectators' entertainment
experience and enhance the value to sponsors. The primary participants in the
business of auto racing are the sanctioning bodies, spectators, sponsors, track
operators, drivers, team owners and vendors of officially licensed merchandise.
/bullet/ SANCTIONING BODIES. Sanctioning bodies such as NASCAR and CART
sanction events at various race venues in exchange for fees from track
operators. Sanctioning bodies are responsible for all aspects of race management
necessary to conduct the race event. They are responsible for regulating racing
cars, drivers and teams and providing race officials to ensure fair competition,
as well as administering the race and series' purses and other prize payments.
/bullet/ SPECTATORS. After soccer, motorsports is the most watched
sport worldwide. Motorsports is among the fastest growing spectator sports in
the United States. Total attendance at all motorsports events in the United
States in 1998 exceeded 17.0 million people. We believe that the demographic
profile of the growing base of spectators has considerable appeal to track
operators, sponsors and advertisers.
/bullet/ SPONSORS. Drawn to the sport by its attractive demographics,
sponsors are active in all phases of auto racing. In addition to directly
supporting racing teams through the funding of certain costs of their
operations, sponsors support track operators by paying fees associated with
specific name events such as the "Pepsi 400 at Daytona," the "DieHard 500" or
the "Kmart 400." In addition, premier racing events such as the Daytona 500
frequently have multiple "official corporate sponsors." In return, sponsors
receive advertising exposure through television and radio coverage, newspapers,
race programs, brochures and advertising at the track on race day.
/bullet/ TRACK OPERATORS. Track operators such as International
Speedway market and promote events at their facilities. Their principal revenue
sources generally include admissions, television and radio broadcast rights
fees, sponsorship fees, the sale of merchandise, food and beverage concessions,
hospitality fees paid for catering receptions and private parties, luxury suite
and hospitality village rentals, parking, and advertising on track signage and
in souvenir racing programs. Sanction agreements require race track operators to
pay fees to the relevant sanctioning body for each sanctioned event conducted,
including sanction fees and prize and championship point money.
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/bullet/ DRIVERS. Although a majority of drivers contract independently
with team owners, some drivers own their own teams. Drivers receive income from
contracts with team owners, sponsorship fees and prize money. Successful drivers
may also receive income from personal endorsement and souvenir licensing fees.
The success and personality of a driver can be an important marketing advantage
for team owners because it can help attract corporate sponsorships and generate
sales for vendors of officially licensed merchandise such as International
Speedway. The efforts of each driver are supported by a number of other team
members, all of whom are supervised by a crew chief.
/bullet/ TEAM OWNERS. In most instances, team owners bear the financial
risk of placing their teams in competition. They contract with drivers, acquire
racing vehicles and support equipment, hire pit crews and mechanics, and arrange
sponsorship of their teams. Team owners generally receive income principally
from sponsorships and prize money won.
/bullet/ MERCHANDISE VENDORS. The growing popularity of motorsports
events, combined with the demographics of the spectators, has resulted in
substantial revenue growth for vendors of officially licensed racing-related
merchandise and souvenirs. For example, sales of apparel, souvenirs and
collectibles licensed by NASCAR and by drivers have climbed from approximately
$80 million in 1990 to approximately $950 million in 1998.
NASCAR
The largest auto racing category in the United States, in terms of
attendance, media exposure and sponsorships, is stock car racing. Stock car
racing utilizes equipment similar in appearance to standard passenger
automobiles and races are typically conducted on oval courses or superspeedways.
The most prominent organizing body in stock car racing is NASCAR.
Professional stock car racing developed in the Southeastern United
States in the 1930's. It began to mature in 1947, when William H.G. France (the
father of both our Chairman and President) organized NASCAR. The first
NASCAR-sanctioned race was held in 1948 in Daytona Beach, Florida. In 1959, we
completed construction of the Daytona International Speedway and promoted the
first "Daytona 500." The motorsports industry began to gather momentum in the
mid-1960's, when major North American automobile and tire manufacturers first
offered engineering and financial support. In the early 1970's, NASCAR created a
more elite circuit focused on the best drivers. This premier series is now known
as the Winston Cup Series and in 1999 consisted of 37 televised events,
including three non-championship point events, at 21 tracks operating in 17
states. No track currently promotes more than two Winston Cup Series
championship point events. The following table shows the 1999 Winston Cup Series
schedule (events held at facilities operated by us are noted in bold).
<TABLE>
<CAPTION>
1999 WINSTON CUP SERIES
DATE RACE TRACK LOCATION
- ---- ---- --------------
<S> <C> <C>
FEBRUARY 7 BUD SHOOTOUT AT DAYTONA* DAYTONA INTERNATIONAL SPEEDWAY
FEBRUARY 11 GATORADE 125S* DAYTONA INTERNATIONAL SPEEDWAY
FEBRUARY 14 DAYTONA 500 DAYTONA INTERNATIONAL SPEEDWAY
FEBRUARY 21 DURA-LUBE/BIG KMART 400 NORTH CAROLINA SPEEDWAY
March 7 Las Vegas 400 Las Vegas Motor Speedway
March 14 Cracker Barrel 500 Atlanta Motor Speedway
MARCH 21 TRANSOUTH FINANCIAL 400 DARLINGTON RACEWAY
March 28 PRIMESTAR 500 Texas Motor Speedway
April 11 Food City 500 Bristol Motor Speedway
April 18 Goody's Body Pain 500 Martinsville Speedway
APRIL 25 DIEHARD 500 TALLADEGA SUPERSPEEDWAY
MAY 2 CALIFORNIA 500 PRESENTED BY NAPA CALIFORNIA SPEEDWAY
May 15 Pontiac Excitement 400 Richmond International Raceway
May 22 The Winston* Charlotte Motor Speedway
May 30 Coca Cola 600 Charlotte Motor Speedway
June 6 MBNA Platinum 400 Dover Downs International Speedway
</TABLE>
38
<PAGE>
<TABLE>
<CAPTION>
DATE RACE TRACK LOCATION
- ---- ---- --------------
<S> <C> <C>
JUNE 13 KMART 400 PRESENTED BY CASTROL SUPER CLEAN MICHIGAN SPEEDWAY
June 20 Pocono 500 Pocono Raceway
June 27 Save Mart/Kragen 350 Sears Point Raceway
JULY 3 PEPSI 400 AT DAYTONA DAYTONA INTERNATIONAL SPEEDWAY
July 11 Jiffy Lube 300 New Hampshire International Speedway
July 25 Pennsylvania 500 Pocono Raceway
August 7 Brickyard 400 Indianapolis Motor Speedway
AUGUST 15 FRONTIER AT THE GLEN WATKINS GLEN INTERNATIONAL
AUGUST 22 PEPSI 400 MICHIGAN SPEEDWAY
August 28 Goody's Headache Powder 500 Bristol Motor Speedway
SEPTEMBER 5 PEPSI SOUTHERN 500 DARLINGTON RACEWAY
September 11 Exide NASCAR Select Batteries 400 Richmond International Raceway
September 19 New Hampshire 300 New Hampshire International Speedway
September 26 MBNA Gold 400 Dover Downs International Speedway
October 3 NAPA AutoCar 500 Martinsville Speedway
October 10 UAW-GM Quality 500 Charlotte Motor Speedway
OCTOBER 17 WINSTON 500 TALLADEGA SUPERSPEEDWAY
OCTOBER 24 POP SECRET MICROWAVE POPCORN 400 NORTH CAROLINA SPEEDWAY
NOVEMBER 7 CHECKER AUTO PARTS/DURA-LUBE 500 PHOENIX INTERNATIONAL RACEWAY
NOVEMBER 14 PENNZOIL 400 HOMESTEAD-MIAMI SPEEDWAY
November 21 NAPA 500 Atlanta Motor Speedway
</TABLE>
- -------------------------
* Non-championship point events.
NASCAR also sanctions various other stock car racing events and series,
including the Busch Grand National Series and the Craftsman Truck Series. In
1999, 32 Busch Grand National Series events were promoted at 26 tracks in 20
states. Many track operators, including International Speedway, host a Busch
Grand National or Craftsman Truck Series event in conjunction with a Winston Cup
Series event in order to boost overall attendance for a race weekend. We had
sanctioning agreements for 12 Busch Grand National Series events in 1999, all of
which were televised on NBC, CBS, ABC, ESPN, ESPN2 or TNN. In 1999, 25 Craftsman
Truck Series events were promoted at 24 tracks in 20 states. We had sanctioning
agreements for six Craftsman Truck Series races in 1999, all of which were
televised on ABC, CBS or ESPN.
CART/IRL
Internationally, the most recognized form of auto racing is open-wheel
racing, using aerodynamically designed chassis and technologically advanced
equipment. In the United States, the most established open-wheel racing series
are the series sanctioned by CART and IRL.
CART, formed by Indy team owners in 1978, owns, operates and sanctions
the FedEx CART Championship, which in 1999 consisted of 20 races staged in five
countries. CART events are staged on four different types of tracks -
superspeedways, ovals, temporary street courses and permanent road courses.
Racing on different types of tracks requires teams and drivers to master
different courses to compete for the CART Championship. CART also owns and
sanctions two developmental series for the CART Championship - the Indy Lights
Championship and the Atlantic Championship.
In 1999, we promoted a number of CART PPG Dayton Indy Lights races, as
well as the following four CART FedEx Championship races:
/bullet/ Marlboro Grand Prix of Miami, presented by Toyota at
Homestead-Miami Speedway;
/bullet/ Bosch Spark Plug Grand Prix, presented by Toyota at Nazareth
Speedway;
/bullet/ US 500, presented by Toyota at Michigan Speedway; and
/bullet/ Marlboro 500, presented by Toyota at California Speedway.
39
<PAGE>
The IRL was formed in 1995 to sanction a United States based open wheel
series on oval courses and began racing in 1996. The IRL's events include 11
races, including the Indianapolis 500, one of the world's most-prestigious
motorsports events. In fiscal 1999, we promoted the MCI Worldcom 200, an IRL
race at Phoenix International Raceway.
OTHER SANCTIONING BODIES
Although NASCAR is the most prominent sanctioning body, there are a
number of organizations that sanction stock car races, including ARCA - the
Automobile Racing Club of America. In 1999, we promoted three ARCA races. We
also promoted three of the four races in the International Race of Champions
("IROC") series, in which a select field of drivers from different motorsports
disciplines compete in equally prepared vehicles.
Other examples of motorsports events and their sanctioning bodies include:
/bullet/ Formula One open-wheel races held on road courses in Europe,
South America, Canada, Australia, South Africa and Japan
sanctioned by the FIA;
/bullet/ sports car races held on road courses and temporary street
circuits throughout the country sanctioned in the United
States by SCCA;
/bullet/ motorcycle races sanctioned by the American Motorcyclists
Association; o drag strip races sanctioned in the United
States by NHRA; and
/bullet/ go-kart races sanctioned by the World Karting Association.
40
<PAGE>
BUSINESS
International Speedway, a leading promoter of motorsports activities in
the United States, owns and/or operates ten of the nation's premier motorsports
facilities:
/bullet/ Daytona International Speedway in Florida;
/bullet/ Michigan Speedway in Michigan;
/bullet/ Talladega Superspeedway in Alabama;
/bullet/ California Speedway in California;
/bullet/ Phoenix International Raceway in Arizona;
/bullet/ North Carolina Speedway in North Carolina;
/bullet/ Darlington Raceway in South Carolina;
/bullet/ Homestead-Miami Speedway in Florida;
/bullet/ Nazareth Speedway in Pennsylvania; and
/bullet/ Watkins Glen International road course facility in New
York.
We currently promote over 100 stock car, sports car, truck, motorcycle
and other racing events annually, including:
/bullet/ 16 NASCAR Winston Cup Series events;
/bullet/ 12 NASCAR Busch Grand National Series events;
/bullet/ 6 NASCAR Craftsman Truck Series events;
/bullet/ 4 CART FedEx Championship Series events;
/bullet/ the premier sports car endurance event in the United States
(the Rolex 24 at Daytona/registered mark/); and
/bullet/ a number of prestigious motorcycle races.
Our operations consist principally of racing events at our ten premier
motorsports facilities, which generate revenue primarily through sales of
admissions to our racing events, television broadcast rights fees, sponsorship
fees, hospitality rentals (including luxury suites, chalets and the hospitality
portion of club seating) and royalties from licenses of our trademarks. We also
provide catering, souvenir and food concession services at certain of our
facilities, distribute and sell Goodyear brand racing tires, own and operate MRN
Radio and the DAYTONA USA entertainment complex and produce and market
collectibles and other motorsports merchandise.
We have experienced significant growth in recent years, with our
revenues and EBITDA increasing from approximately $68.9 million and
approximately $25.9 million, respectively, in the year ended August 31, 1994 to
approximately $189.0 million and approximately $74.1 million, respectively, in
the year ended November 30, 1998. Our EBITDA margin increased from 37.5% in
fiscal 1994 to 39.2% in fiscal 1998. Combined television rights revenues of
International Speedway and Penske Motorsports (exclusive of Homestead-Miami
Speedway) have increased from approximately $7.5 million in fiscal 1995 to
approximately $34.7 million in fiscal 1998 on a pro forma basis. On a pro forma
basis giving effect to our Penske Acquisition, during the year ended November
30, 1998 we had revenues and EBITDA of approximately $320.2 million and $118.0
million, respectively.
RECENT DEVELOPMENTS
On December 1, 1999, we acquired RIR, a 3/4-mile intermediate speedway
located approximately 10 miles from downtown Richmond, Virginia, for
approximately $215 million in cash. RIR seats over 94,000 grandstand spectators
and offers luxury accommodations in its 34 suites. RIR hosts several major
NASCAR events annually, including two NASCAR Winston Cup Series events, two
NASCAR Busch Grand National Series events and one NASCAR Craftsman Truck Series
event. We financed the acquisition through approximately $160 million in
borrowings under our senior credit facility. We utilized our cash resources for
the remaining $55 million.
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<PAGE>
STRATEGY
Our objective is to be the recognized leader in motorsports
entertainment by continuing to emphasize the following key elements of our
strategy:
/bullet/ PROMOTE PREMIER MOTORSPORTS EVENTS. We plan our racing events
and operate our facilities to create an environment which maximizes the
spectators' entertainment experience. The most important component of our fan
satisfaction efforts is our emphasis on hosting some of the nation's most
prestigious auto races, which in 1999 included 16 NASCAR Winston Cup Series
races, 12 Busch Grand National Series races, six Craftsman Truck Series races
and four CART FedEx Championship Series races. Moreover, we frequently host a
supporting motorsports event in conjunction with our premier events in order to
boost overall attendance for a race weekend. For example, we host the Winn Dixie
300, an ARCA-sanctioned race, on the Saturday preceding the Winston 500, which
is a Winston Cup event.
As part of our emphasis on enhancing race spectators' total
entertainment experience, we also continually strive to increase the comfort,
view and amenities offered to race spectators. We have in recent years engaged
in a series of facility improvements, including new luxury suites, Jumbotron
television screens, premium seating sections, innovative corporate entertainment
facilities and a number of aesthetic and other improvements to food and beverage
concession, restroom and other customer convenience facilities.
In addition, we seek to develop and maintain a unique brand identity
for each of our motorsports facilities, as well as a distinctive environment for
each of our premier races. We attempt to differentiate our tracks through unique
racing configurations, distinct logos, aesthetic environments and marketing
themes that seek to capture the particular diverse characteristics of the
facility or locale, extensive marketing materials and promotional campaigns that
emphasize the history and attributes of that speedway, as well as integrated
advertising and promotional activities that focus on both the facility and the
featured racing event.
/bullet/ INCREASE ADMISSIONS REVENUE. We believe that the spectator
demand for our largest events continues to exceed existing seating capacity.
Accordingly, we continue to add grandstand seating at each of our
superspeedways. During 1998, we increased our grandstand seating capacity at
Daytona, Talladega, Phoenix, Darlington and Watkins Glen by a total of
approximately 41,800 seats, or approximately 11% overall. Similarly, in 1998,
Penske Motorsports increased seating capacity at Michigan, California and North
Carolina by a total of approximately 30,800 seats, or approximately 11% overall.
In the long term, we intend to continue to expand our facilities based upon
customer demand and available capital. For example, in 1999 we added
approximately 26,000 grandstand seats at Homestead-Miami, approximately 14,500
seats at Daytona, approximately 13,500 grandstand seats at Michigan Speedway,
approximately 12,500 seats at Talladega, approximately 6,000 seats at Phoenix,
and approximately 4,500 seats at Darlington.
Although spectator demand for most of our NASCAR Winston Cup Series
events continues to exceed existing capacity, there is unused capacity for
certain events which provides opportunities for increased utilization. For
example, attendance at the NASCAR Winston Cup Series event at Talladega,
historically held in the summer, was below capacity. As a result of NASCAR's
schedule expansion in 1997, we capitalized on the opportunity to move this event
to a cooler Fall date. The sell-out crowd for this rescheduled event represented
more than a 50% increase in attendance over the prior year and the largest crowd
in Talladega history. Similarly, our completion in fiscal 1998 of a $5.8 million
lighting project at Daytona enabled us to hold the Pepsi 400 at night, thereby
increasing ticket sales for that race, providing a prime time television
audience and increasing attendance at both the qualifying events and our DAYTONA
USA facility. We believe that the significant increase in our portfolio of
premier motorsports events as a result of our recent Penske Acquisition will
permit us to take advantage of comparable opportunities to more efficiently
schedule races and thereby maximize attendance. Other elements of our efforts to
increase our admissions revenue include periodic ticket price increases,
substantial advance ticket sales and the sale of multi-event ticket packages.
/bullet/ MAXIMIZE MEDIA INCOME. Televised motorsports events are
continuing to experience significant growth in viewership. CBS's live coverage
of the Pepsi 400 at Daytona on July 3, 1999 marked the first prime time network
television broadcast of a NASCAR Winston Cup Series event. According to Nielsen,
an estimated 5.4
42
<PAGE>
million households tuned to CBS, a 57% increase over TNN's broadcast of last
year's race. NASCAR Winston Cup Series television rights revenues have grown at
a compounded annual rate of 40% from $4.7 million in 1990 to $69.5 million in
1998 and are expected to continue to grow. This significant growth in
viewership, together with unique market conditions that favor prestigious
content providers, has resulted in higher broadcast rights fees from television
networks in recent periods. For example, the $12.0 million CBS broadcast rights
for the 1998 Daytona 500 represented the most lucrative television contract in
the history of stock car racing at that time. We have also expanded our
television coverage to include more races, and in 1999 all of our NASCAR Winston
Cup Series, Busch Grand National Series and Craftsman Truck Series races were
televised. Moreover, in 1999 NBC joined the six existing networks carrying
NASCAR races with its first live coverage of a NASCAR event - the 1999 Pennzoil
400 at the Homestead-Miami Speedway. As a result of the higher broadcast rights
fees and expanded coverage, combined television rights revenues of International
Speedway and Penske Motorsports (exclusive of Homestead-Miami Speedway) have
increased, on a pro forma basis, from approximately $7.5 million in fiscal 1995
to $34.7 million in fiscal 1998.
We currently negotiate directly with network and cable television
companies for live and rebroadcast coverage of all of our televised
NASCAR-sanctioned races except for the Craftsman Truck Series events, which are
negotiated by NASCAR. However, NASCAR has announced that it will handle
negotiation of television and ancillary media rights for all NASCAR Winston Cup
and Busch Grand National series races beginning with the 2001 racing season as a
result of its recent agreement with all of the television broadcasters of these
events to release their contractual rights beginning with such racing season. In
November 1999, NASCAR announced that it had reached an agreement on a six-year
television contract with NBC Sports and Turner Sports, with the two media
companies combining to develop a joint venture. In addition, NASCAR announced
that it had reached an agreement on an eight-year television contract with FOX
and its FX cable network. Both agreements relate solely to the domestic
broadcast television rights to NASCAR's Winston Cup Series and Busch Grand
National Series events, and are effective beginning with the 2001 racing season.
The existing NASCAR revenue-splitting formula will not change - 65% for the
track operator, 25% for the drivers/teams in the form of prize and point fund
monies and 10% for NASCAR. We believe that NASCAR's ability to negotiate for the
entire schedule of major NASCAR sanctioned events will provide a significant
opportunity to further increase broadcast rights fees.
/bullet/ EMPHASIZE INTEGRATED MARKETING PARTNERSHIPS. Corporate
sponsors support us in several ways. First, sponsors pay fees to us for the
value received in being associated with our facilities and/or events. Some
contracts allow the sponsor to name a particular racing event, as in the
"DieHard 500" and the "Pepsi 400." Other consideration ranges from official car
or official corporate sponsor designation to advertising and promotional rights
in the sponsor's product category. Sponsors also lease suites and hospitality
tents, purchase additional tickets for their promotions and buy on-site
advertising. Second, the promotional and advertising expenditures of major
sponsors provide us with access to the significant market capabilities of these
leading consumer products and manufacturing companies without the need to invest
heavily in our own marketing infrastructure or programs. Third, our sponsors
frequently advertise on the television broadcasts of our races, thereby
contributing to the increased rights fees we receive from networks and cable
companies. Accordingly, we pursue a fully integrated marketing strategy which
combines on-track corporate involvement, such as hospitality and signage, with
off-track promotional campaigns such as in-store displays, retailer incentives
and consumer promotions. Although the identities of sponsors and the terms of
sponsorships change from time to time, some of our principal sponsors currently
include:
/bullet/ Pepsi /bullet/ Pontiac /bullet/ Goodyear
/bullet/ Coca-Cola /bullet/ Ford /bullet/ TranSouth Financial
/bullet/ Kmart /bullet/ Chevrolet /bullet/ First Union
/bullet/ Sears /bullet/ Toyota /bullet/ NAPA Auto Parts
/bullet/ General Mills /bullet/ Dura-Lube /bullet/ Bosch
/bullet/ Anheuser Busch /bullet/ DuPont /bullet/ Gatorade
/bullet/ Rolex /bullet/ Circuit City /bullet/ Frontier Cellular
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<PAGE>
We believe that the Penske Acquisition will enhance our sponsorship
opportunities by enhancing our ability to offer access to additional key
markets, a broader geographic reach and an expanded marketing season to sponsors
seeking a broader involvement with the motorsports industry.
/bullet/ DEVELOP AND ACQUIRE ADDITIONAL MOTORSPORTS FACILITIES. Our
senior management personnel regularly review acquisition and development
prospects that would augment or complement our existing operations or otherwise
offer significant growth opportunities. We believe that the Penske Acquisition
evidences our commitment to increasing our motorsports presence through selected
purchases of proven motorsports businesses. Other current examples of our
expansion efforts include our development of a speedway near Kansas City,
Kansas, our development of a superspeedway contiguous to the existing Route 66
Raceway near Chicago, Illinois, and our continued exploratory efforts with
respect to possible facilities in Denver and the New York metropolitan area. We
also believe that our recently completed financing arrangements for Kansas City,
as well as the financing for the Homestead-Miami Speedway, reflect our ability
to successfully pursue public-private partnerships that are based on widespread
community support for our business. In addition, our new facilities provide a
number of significant additional profit opportunities, including naming rights
to the venues, "Founding Fan" arrangements similar to the permanent seat
licenses used to finance a number of NFL stadiums and NBA arenas, and the
economies of scale and increased diversification resulting from geographic
expansion.
KANSAS CITY. We are currently developing a 1.5 mile oval speedway near
Kansas City, Kansas. The aggregate cost of acquiring and developing the first
phase of the Kansas speedway land and facility (which will accommodate
approximately 75,000 spectators) is expected to be over $224 million. Financing
for the first phase of our Kansas facility was substantially completed during
the first quarter of 1999. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Liquidity and Capital
Resources." Construction is underway and expected to be completed in 2001,
providing us with a key Midwest market located more than 400 miles from the
nearest facility hosting a Winston Cup Series event. Moreover, in order to meet
initial fan demand prior to construction, we have increased the number of luxury
suites to be built at the Kansas speedway from 32 to 68.
CHICAGO. We are currently participating in the development of a
motorsports facility in the Chicago area through the Motorsports Alliance, LLC,
which is equally owned by us and Indianapolis Motor Speedway. In May 1999, the
Motorsports Alliance and the owners of the Route 66 Raceway (one of the nation's
preeminent drag strips) formed a new company, Raceway Associates, LLC, which is
owned 75% by the Motorsports Alliance and 25% by the former owners of the Route
66 Raceway. As a result of this transaction, we now own a 37.5% interest in
Raceway Associates, which in turn owns the 240 acre Route 66 Raceway motorsports
complex located in Joliet, Illinois, approximately 35 miles from downtown
Chicago. Raceway Associates has also purchased 930 acres adjacent to the
existing Route 66 complex for the construction of a 1.5 mile oval motor
speedway, which is being designed to initially accommodate approximately 75,000
spectators. The drag strip and this additional land was annexed into the city of
Joliet, which we believe again demonstrates the strength of local and
governmental support for our projects. We completed our preliminary engineering
work and broke ground in the fourth quarter of fiscal 1999. NASCAR and the IRL
have conditionally committed to enter into negotiations with Raceway Associates
for events to be conducted at the Chicago facility upon its expected completion
in 2001.
There can be no assurance that suitable acquisition candidates or sites
to develop new facilities will be available or, because of competition from
other purchasers or other business reasons or the absence of cooperation of
local government officials, that we will be able to acquire additional
motorsports facilities or develop new facilities on satisfactory terms.
44
<PAGE>
MOTORSPORTS FACILITIES
The following table sets forth certain information relating to each of
our principal speedway facilities as of August 31, 1999:
<TABLE>
<CAPTION>
APPROXIMATE
NUMBER OF
GRANDSTAND APPROXIMATE
TRACK NAME LOCATION SEATS ACREAGE TRACK LENGTH
- ------------------------------ ---------------------- ------- ----------- ------------
<S> <C> <C> <C> <C>
Daytona International Speedway Daytona Beach, Florida 157,000 440 2.5 miles
Michigan Speedway Brooklyn, Michigan 125,400 1,000 2.0 miles
Talladega Superspeedway Talladega, Alabama 124,500 1,365 2.6 miles
California Speedway Fontana, California 86,400 529 2.0 miles
Phoenix International Raceway Phoenix, Arizona 70,800 598 1.0 miles
North Carolina Speedway Rockingham, North Carolina 60,100 300 1.0 miles
Darlington Raceway Darlington, South Carolina 54,400 230 1.3 miles
Homestead-Miami Speedway Homestead, Florida 50,700 344 1.5 miles
Nazareth Speedway Nazareth, Pennsylvania 44,000 230 1.0 miles
Watkins Glen International Watkins Glen, New York 38,200 1,377 3.4 miles
</TABLE>
OPERATIONS
Our operations consist principally of racing events at our 10 major
speedways. We also provide catering, souvenir and food concession services at
certain of our facilities, distribute and sell Goodyear brand racing tires, own
and operate MRN Radio and the DAYTONA USA entertainment complex and produce and
market collectibles and other motorsports merchandise.
AMERICROWN SERVICE CORPORATION. Our Americrown subsidiary conducts the
food and beverage concession operations at Daytona, Talladega and Darlington.
Americrown also provides souvenir merchandising operations and catering services
to corporate customers both in suites and hospitality chalets at these
facilities and at the Homestead-Miami Speedway. Americrown was formed in 1989 to
conduct souvenir merchandising and concessions operations as part of our ongoing
efforts to enhance race spectators' total entertainment experience. We intend
that Americrown will eventually conduct the souvenir merchandising, concession
and catering operations at each of our major motorsports facilities.
COMPETITION TIRE. As a result of the Penske Acquisition, we are engaged
in the wholesale and retail sale and distribution of Goodyear brand racing tires
for various types of racing events.
MRN RADIO. MRN Radio produces and syndicates NASCAR Winston Cup Series,
Busch Grand National Series, Craftsman Truck Series and other races promoted by
us and others. MRN Radio also produces daily and weekly NASCAR racing programs.
Network radio programs are currently carried by over 600 radio stations. We
derive revenue from the sale of advertising on the networks and rights fees paid
by broadcast affiliates.
DAYTONA USA. DAYTONA USA-The Ultimate Motorsports Attraction is a
motorsports-themed entertainment complex, located adjacent to the Daytona
International Speedway. DAYTONA USA includes:
/bullet/ the Velocitorium, which covers approximately 50,000 square
feet, stands nearly four stories high and contains numerous
highly interactive motorsports exhibits, many of which are
sponsored by leading consumer brands;
45
<PAGE>
/bullet/ Advanced Auto Parts' Tours, a tram tour of the Daytona
International Speedway's garage area, pit road and high banked
track;
/bullet/ the Richard Petty Riding Experience at Daytona; and
/bullet/ for groups of 15 or more, the VIP Tour, which includes a tour
of the Winston Tower.
Adjoining DAYTONA USA are (i) a high tech arcade using state of the art video
technology and computerized, "virtual" racing simulators, (ii) the Pit Shop,
which sells DAYTONA USA, Daytona International Speedway, NASCAR and race team
clothing, books, collectibles and other officially licensed merchandise and
(iii) the Fourth Turn Grill concessions facility.
MOTORSPORTS MERCHANDISE. We sell a variety of motorsports-related
merchandise, including apparel, souvenirs and collectibles, directly to
spectators at our facilities, to retail customers through catalogue sales and
through direct sales to dealers. We are also exploring additional distribution
channels such as the Internet.
OTHER ACTIVITIES. From time to time we use our track facilities for car
shows, auto fairs, vehicle testing and settings for television commercials,
print advertisements and motion pictures. For example, Harley Davidson uses
Talladega Superspeedway as a test facility for its motorcycles. We also rent
"show cars" for promotional events. Other motorsports interests include the
operation of Tucson Raceway Park in Arizona.
46
<PAGE>
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
As a condition to the sale of the outstanding notes, we and the initial
purchasers of the outstanding notes entered into the registration rights
agreement. Under the registration rights agreement, we agreed to:
/bullet/ file with the SEC a registration statement under the
Securities Act with respect to the registered notes no later
than February 3, 2000;
/bullet/ use our best efforts to cause the registration statement to
declared effective under the Securities Act no later than
April 3, 2000; and
/bullet/ keep the exchange offer open for not less than 30 days and not
later than 45 days (or, in each case, longer if required by
applicable law) after the date notice of the exchange offer is
mailed to holders of the outstanding notes.
The exchange offer being made by this prospectus is intended to satisfy
our obligations under the registration rights agreement. You may be entitled to
"shelf" registration rights. In accordance with the registration rights
agreement, we are required to file a shelf registration covering your
outstanding notes for a continuous offering in accordance with Rule 415 of the
Securities Act if:
/bullet/ we are not permitted to conduct the exchange offer because of
a change in SEC rules or policy;
/bullet/ we have not completed the exchange offer by April 3, 2000; or
/bullet/ the registered notes are not freely tradeable (other than
because the holder is an affiliate of ours or is a person that
must deliver a prospectus in connection with the resale).
In the event that we are obligated to file a shelf registration
statement, we will be required to keep the shelf registration statement
effective until the earlier of two years from the date the shelf registration is
declared effective by the SEC or the time all of the outstanding notes have been
sold thereunder.
If we fail to fulfill such obligations, the holders of outstanding
notes are entitled to receive "Additional Interest" until we have fulfilled such
obligations, at the rate of 0.25% per year. All amounts of accrued Additional
Interest will be payable in cash on the same interest payment dates as the
outstanding notes. We have filed a copy of the registration rights agreement as
an exhibit to the registration statement of which this prospectus is a part. Our
discussion of the registration rights agreement is qualified in its entirety by
reference to the terms of the agreement.
EFFECT OF THE EXCHANGE OFFER
Based on no-action letters issued by the staff of the SEC to third
parties, we believe that you may offer for resale, resell and otherwise transfer
the registered notes issued to you under the exchange offer without further
compliance with the registration and prospectus delivery provisions of the
Securities Act, provided that you can represent that:
/bullet/ you are acquiring the registered notes in the ordinary course
of your business;
/bullet/ you are not engaging in and do not intend to engage in a
distribution of the registered notes;
/bullet/ you have no arrangements or understandings with any person to
participate in the exchange offer for the purpose of
distributing the registered notes; and
/bullet/ you are not an "affiliate" (as defined in Rule 405 of the
Securities Act) of ours.
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<PAGE>
If you are not able to make these representations, you are a
"Restricted Holder." As a Restricted Holder, you will not be able to participate
in the exchange offer, may not rely on the SEC staff positions set forth in the
Exxon Capital Holdings Corporation no-action letter and similar no-action
letters and may only sell your outstanding notes as part of a registration
statement containing the selling security holder information required by Item
507 of SEC Regulation S-K, or under an exemption from the registration
requirements of the Securities Act.
In addition, each broker-dealer, other than a Restricted Holder, that
receives registered notes for its own account in exchange for outstanding notes
which were acquired by such broker-dealer as a result of market-making or other
trading activities (a "Participating Broker-Dealer") may be a statutory
underwriter and must acknowledge in the letter of transmittal that it will
deliver a prospectus meeting the requirements of the Securities Act upon any
resale of such registered notes. The letter of transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
Based upon interpretations by the SEC staff, we believe that a Participating
Broker-Dealer may offer for resale, resell and otherwise transfer registered
notes issued under the exchange offer upon compliance with the prospectus
delivery requirements, but without compliance with the registration
requirements, of the Securities Act. This prospectus, as it may be amended or
supplemented from time to time, may be used by a Participating Broker-Dealer as
part of their resales. We have agreed that, for a period of six months after the
completion of the exchange offer, we will make this prospectus available to any
broker-dealer for use by the broker-dealer in any resale. For more information,
please see the section in this prospectus entitled "Plan of Distribution."
CONSEQUENCES OF FAILURE TO EXCHANGE
To the extent outstanding notes are tendered and accepted in the
exchange offer, the principal amount of outstanding notes will decrease with a
resulting decrease in the liquidity in the market for the outstanding notes. In
addition, following completion of the exchange offer, except as provided in the
registration rights agreement, you will not have any further registration rights
and your outstanding notes will continue to be subject to certain restrictions
on transfer. Accordingly, if you do not participate in the exchange offer, your
ability to sell your outstanding notes could be adversely affected. You may
suffer adverse consequences if you fail to exchange your outstanding notes.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions contained in this
prospectus and in the letter of transmittal, we will accept for exchange any and
all outstanding notes that are validly tendered and not withdrawn prior to 5:00
p.m., New York City time, on the expiration date. We will issue $1,000 principal
amount at maturity of registered notes in exchange for each $1,000 principal
amount at maturity of outstanding notes accepted in the exchange offer. You may
tender some or all of your outstanding notes under the exchange offer. However,
outstanding notes may be tendered only in minimum denominations of $100,000
principal amount and integral multiples of $1,000 in excess thereof. As of the
date of this prospectus, an aggregate of $225,000,000 in principal amount at
maturity of the outstanding notes is outstanding. This prospectus, together with
the accompanying letter of transmittal, is first being sent on or about
__________, 2000, to the nominee of The Depository Trust Company ("DTC" or the
"Depository") and to others believed to have beneficial ownership in the
outstanding notes.
The form and terms of the registered notes will be substantially
identical to the form and terms of the outstanding notes, except that:
/bullet/ the offering of the registered notes has been registered under
the Securities Act;
/bullet/ the registered notes will not be subject to transfer
restrictions; and
/bullet/ the registered notes will be issued free of any covenants
regarding registration rights and free of any provision for
Additional Interest.
The registered notes will evidence the same debt as the outstanding
notes and will be issued under the same indenture.
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You do not have any appraisal or dissenters rights under law or the
indenture in the exchange offer. We intend to conduct the exchange offer in
accordance with the applicable requirements of the Exchange Act. Outstanding
notes which are not tendered for, or are tendered but not accepted in connection
with, the exchange offer will remain outstanding.
We will be deemed to have accepted validly tendered outstanding notes
when, as and if we have given oral notice, promptly confirmed in writing, or
written notice of the acceptance to the exchange agent. The exchange agent will
act as agent for the tendering holders for the purpose of receiving the
registered notes from us.
If we do not accept for exchange any tendered outstanding notes because
of an invalid tender, the occurrence of other events described in this
prospectus or otherwise, certificates for any such unaccepted outstanding notes
will be returned to you, without expense, as promptly as practicable after the
expiration date.
If you tender outstanding notes in the exchange offer, you will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the letter of transmittal, transfer taxes relating to the exchange of
outstanding notes under the exchange offer. We will pay all charges and
expenses, other than underwriting discounts and commissions and transfer taxes,
as part of the exchange offer. See "--Fees and Expenses."
EXPIRATION DATE, EXTENSIONS, TERMINATION
The term "expiration date" means 5:00 p.m., New York City time, on
___________, 2000, unless we, in our sole discretion, extend the exchange offer,
in which case the term "expiration date" shall mean the latest date and time to
which the exchange offer is extended.
We have the right, subject to applicable law, in our reasonable
discretion, at any time and from time to time, (1) to extend the exchange offer
or (2) to terminate the exchange offer, if any of the conditions set forth below
under "--Conditions" shall not have been satisfied by giving oral or written
notice of such extension or termination to the exchange agent. Any such
extension or termination will be followed as promptly as practicable by a public
announcement.
Any such termination or extension will be followed promptly by oral or
written notice to the exchange agent (any such oral notice to be promptly
confirmed in writing) and by making a public announcement, and such announcement
in the case of an extension will be made no later than 9:00 a.m., New York City
time, on the next business day after the previously scheduled expiration date.
Without limiting the manner in which we may choose to make any public
announcement, and subject to applicable laws, we shall have no obligation to
publish, advertise or otherwise communicate any such public announcement, other
than by issuing a timely release to an appropriate news agency.
PROCEDURES FOR TENDERING
BOOK-ENTRY INTERESTS
The outstanding notes were issued as global securities in fully
registered form without interest coupons. Beneficial interests in the global
securities, held by direct or indirect participants in DTC, are shown on, and
transfers of these interests are effected only through, records maintained in
book-entry form by DTC with respect to its participants.
If you hold your outstanding notes in the form of book-entry interests
and you wish to tender your outstanding notes for exchange pursuant to the
exchange offer, you must transmit to the exchange agent on or prior to the
expiration date either:
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(1) a written or facsimile copy of a properly completed and duly
executed letter of transmittal, including all other documents
required by such letter of transmittal, to the exchange agent
at the address set forth on the cover page of the letter of
transmittal; or
(2) a computer-generated message transmitted by means of DTC's
Automated Tender Offer Program system and received by the
exchange agent and forming a part of a confirmation of
book-entry transfer, in which you acknowledge and agree to be
bound by the terms of the letter of transmittal.
In addition, in order to deliver outstanding notes held in the form of
book-entry interests:
(A) a timely confirmation of book-entry transfer of such notes
into the exchange agent's account at DTC pursuant to the
procedure for book-entry transfers described below under
"--Book-Entry Transfer" must be received by the exchange agent
prior to the expiration date; or
(B) you must comply with the guaranteed delivery procedures
described below.
THE METHOD OF DELIVERY OF OUTSTANDING NOTES AND THE LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT YOUR
ELECTION AND RISK. INSTEAD OF DELIVERY BY MAIL, WE RECOMMEND THAT YOU USE AN
OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. YOU
SHOULD NOT SEND THE LETTER OF TRANSMITTAL OR OUTSTANDING NOTES TO US. YOU MAY
REQUEST YOUR BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY, OR NOMINEE TO
EFFECT THE ABOVE TRANSACTIONS FOR YOU.
CERTIFICATED OUTSTANDING NOTES
Only registered holders of certificated outstanding notes may tender
those notes in the exchange offer. If your outstanding notes are certificated
notes and you wish to tender those notes for exchange pursuant to the exchange
offer, you must transmit to the exchange agent on or prior to the expiration
date, a written or facsimile copy of a properly completed and duly executed
letter of transmittal, including all other required documents, to the address
set forth below under "-- Exchange Agent." In addition, in order to validly
tender your certificated outstanding notes:
(1) the certificates representing your outstanding notes must be
received by the exchange agent prior to the expiration date,
or
(2) you must comply with the guaranteed delivery procedures
described below.
PROCEDURES APPLICABLE TO ALL HOLDERS
If you validly tender outstanding notes and you do not withdraw the
tender prior to the expiration date, you will have made an agreement with us in
accordance with the terms and subject to the conditions set forth in this
prospectus and in the letter of transmittal.
If your outstanding notes are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee and you wish to tender
your notes, you should contact the registered holder promptly and instruct the
registered holder to tender on your behalf. If you wish to tender on your own
behalf, you must, prior to completing and executing the letter of transmittal
and delivering your outstanding notes, either make appropriate arrangements to
register ownership of the outstanding notes in your name or obtain a properly
completed bond power from the registered holder. The transfer of registered
ownership may take considerable time.
Signatures on a letter of transmittal or a notice of withdrawal must be
guaranteed by an eligible institution unless:
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(A) outstanding notes tendered in the exchange offer are tendered
either:
(1) "Special Delivery Instructions" on the letter of
transmittal; or
(2) for the account of an eligible institution; and
(B) the box entitled "Special Registration Instructions" on the
letter of transmittal has not been completed.
If signatures on a letter of transmittal or a notice of withdrawal are
required to be guaranteed, the guarantee must be by a financial institution,
which includes most banks, savings and loan associations and brokerage houses,
that is a participant in the Securities Transfer Agents Medallion Program, the
New York Stock Exchange Medallion Program or the Stock Exchanges Medallion
Program.
If the letter of transmittal is signed by a person other than you, your
outstanding notes must be endorsed or accompanied by a properly completed bond
power and signed by you as your name appears on those outstanding notes.
If the letter of transmittal or any outstanding notes or bond powers
are signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations, or others acting in a fiduciary or representative
capacity, those persons should so indicate when signing. Unless we waive this
requirement, in this instance you must submit with the letter of transmittal
proper evidence satisfactory to us of their authority to act on your behalf.
We will determine, in our sole discretion, all questions regarding the
validity, form, eligibility, including time of receipt, acceptance and
withdrawal of tendered outstanding notes. This determination will be final and
binding. We reserve the absolute right to reject any and all outstanding notes
not properly tendered or any outstanding notes our acceptance of which would, in
the opinion of our counsel, be unlawful. We also reserve the right to waive any
defects, irregularities or conditions of tender as to particular outstanding
notes. Our interpretation of the terms and conditions of the exchange offer,
including the instructions in the letter of transmittal, will be final and
binding on all parties.
You must cure any defects or irregularities in connection with tenders
of your outstanding notes within the time period we will determine unless we
waive that defect or irregularity. Although we intend to notify you of defects
or irregularities with respect to your tender of outstanding notes, neither we,
the exchange agent nor any other person will incur any liability for failure to
give this notification. Your tender will not be deemed to have been made and
your notes will be returned to you if:
(1) you improperly tender your outstanding notes;
(2) you have not cured any defects or irregularities in your
tender; and
(3) we have not waived those defects, irregularities or improper
tender.
The exchange agent will return your outstanding notes, unless otherwise
provided in the letter of transmittal, as soon as practicable following the
expiration of the exchange offer.
By tendering, you will represent to us that, among other things:
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(1) the registered notes to be acquired by you in the exchange
offer are being acquired in the ordinary course of your
business;
(2) you are not engaging in and do not intend to engage in a
distribution of the registered notes to be acquired by you in
the exchange offer;
(3) you do not have an arrangement or understanding with any
person to participate in the distribution of the registered
notes to be acquired by you in the exchange offer; and
(4) you are not an "affiliate" of ours, as defined under Rule 405
of the Securities Act.
In all cases, issuance of registered notes for outstanding notes that
are accepted for exchange in the exchange offer will be made only after timely
receipt by the exchange agent of certificates for your outstanding notes or a
timely book-entry confirmation of your outstanding notes into the exchange
agent's account at DTC, a properly completed and duly executed letter of
transmittal, or a computer-generated message instead of the letter of
transmittal, and all other required documents. If any tendered outstanding notes
are not accepted for any reason set forth in the terms and conditions of the
exchange offer or if outstanding notes are submitted for a greater principal
amount than you desire to exchange, the unaccepted or non-exchanged outstanding
notes, or outstanding notes in substitution therefor, will be returned without
expense to you. In addition, in the case of outstanding notes tendered by
book-entry transfer into the exchange agent's account at DTC pursuant to the
book-entry transfer procedures described below, the non-exchanged outstanding
notes will be credited to your account maintained with DTC, as promptly as
practicable after the expiration or termination of the exchange offer.
GUARANTEED DELIVERY PROCEDURES
If you desire to tender your outstanding notes and your outstanding
notes are not immediately available or one of the situations described in the
immediately preceding paragraph occurs, you may tender if:
(1) you tender through an eligible financial institution;
(2) on or prior to 5:00 p.m., New York City time, on the
expiration date, the exchange agent receives from an eligible
institution, a written or facsimile copy of a properly
completed and duly executed letter of transmittal and notice
of guaranteed delivery, substantially in the form provided by
us; and
(3) the certificates for all certificated outstanding notes, in
proper form for transfer, or a book-entry confirmation, and
all other documents required by the letter of transmittal, are
received by the exchange agent within three NYSE trading days
after the date of execution of the notice of guaranteed
delivery.
The notice of guaranteed delivery may be sent by facsimile
transmission, mail or hand delivery. The notice of guaranteed delivery must set
forth:
(1) your name and address;
(2) the amount of outstanding notes you are tendering; and
(3) a statement that your tender is being made by the notice of
guaranteed delivery and that you guarantee that within three
New York Stock Exchange trading days after the execution of
the notice of guaranteed delivery, the eligible institution
will deliver the following documents to the exchange agent:
(A) the certificates for all certificated outstanding
notes being tendered, in proper form for transfer or
a book-entry confirmation of tender;
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(B) a written or facsimile copy of the letter of
transmittal, or a book-entry confirmation instead of
the letter of transmittal; and
(C) any other documents required by the letter of
transmittal.
BOOK-ENTRY TRANSFER
The exchange agent will establish an account with respect to the
book-entry interests at DTC for purposes of the exchange offer promptly after
the date of this prospectus. You must deliver your book-entry interest by
book-entry transfer to the account maintained by the exchange agent at DTC. Any
financial institution that is a participant in DTC's systems may make book-entry
delivery of book-entry interests by causing DTC to transfer the book-entry
interests into the exchange agent's account at DTC in accordance with DTC's
procedures for transfer.
If one of the following situations occur:
(1) you cannot deliver a book-entry confirmation of book-entry
delivery of your book-entry interests into the exchange
agent's account at DTC; or
(2) you cannot deliver all other documents required by the letter
of transmittal to the exchange agent prior to the expiration
date.
then you must tender your book-entry interests according to the guaranteed
delivery procedures discussed above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of outstanding notes may
be withdrawn at any time prior to 5:00 p.m., New York City time, on the
expiration date.
To withdraw a tender of outstanding notes in the exchange offer, a
written or facsimile transmission notice of withdrawal must be received by the
exchange agent at its address listed in this prospectus prior to 5:00 p.m., New
York City time, on the expiration date. Any notice of withdrawal must:
/bullet/ specify the name of the person having deposited the
outstanding notes to be withdrawn;
/bullet/ identify the outstanding notes to be withdrawn, including the
certificate number or numbers and principal amount of such
outstanding notes;
/bullet/ be signed by the holder in the same manner as the original
signature on the letter of transmittal by which the
outstanding notes were tendered, including any required
signature guarantees, or be accompanied by documents of
transfer sufficient to have the trustee with respect to the
outstanding notes register the transfer of the outstanding
notes into the name of the person withdrawing the tender; and
/bullet/ specify the name in which any outstanding notes are to be
registered if different from that of the person that deposited
the outstanding notes to be withdrawn.
If the outstanding notes have been delivered under the book-entry
procedure set forth above under "--Procedures for Tendering," any notice of
withdrawal must specify the name and number of the participant's account at DTC
to be credited with the withdrawn outstanding notes.
We will determine, in our sole discretion, all questions as to the
validity, form and eligibility, including time of receipt, of withdrawal
notices. Our determination shall be final and binding on all parties. Any
outstanding notes withdrawn will be deemed not to have been validly tendered for
purposes of the exchange offer and registered notes will not be issued in
exchange for such withdrawn outstanding notes unless the withdrawn outstanding
notes
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are validly retendered. Properly withdrawn outstanding notes may be retendered
by following one of the procedures described above under "--Procedures for
Tendering" at any time prior to the expiration date.
Any outstanding notes that are tendered but not accepted due to
withdrawal, rejection of tender or termination of the exchange offer will be
returned as soon as practicable to the holder without cost to the holder (or, in
the case of outstanding notes tendered by book-entry transfer into the exchange
agent's account at the book-entry transfer facility under the book-entry
transfer procedures described above, these outstanding notes will be credited to
an account maintained with such book-entry transfer facility for the outstanding
notes).
CONDITIONS
Notwithstanding any other term of the exchange offer, we are not
required to accept for exchange any outstanding notes, and may terminate the
exchange offer as provided in this prospectus before the acceptance of any
outstanding notes, if:
/bullet/ the exchange offer will violate applicable law or any
applicable interpretation of the SEC staff;
/bullet/ the outstanding notes are not tendered in accordance with the
exchange offer;
/bullet/ you do not represent that you are acquiring the registered
notes in the ordinary course of your business, that you are
not engaging in and do not intend to engage in a distribution
of the registered notes, and that you have no arrangement or
understanding with any person to participate in a distribution
of the registered notes; or
/bullet/ any action or proceeding is instituted or threatened by any
governmental agency with respect to the exchange offer which
would reasonably be expected to impair our ability to proceed
with the exchange offer.
These conditions are for our sole benefit and we may assert them
regardless of the circumstances giving rise to any condition or we may waive
them in whole or in part at any time and from time to time in our reasonable
discretion. Our failure at any time to exercise any of the foregoing rights
shall not be deemed a waiver of the right and each right shall be deemed an
ongoing right which may be asserted at any time and from time to time.
If we determine in our reasonable judgment that any of the conditions
are not satisfied, we may (1) refuse to accept any outstanding notes and return
all tendered outstanding notes to the tendering holders (or, in the case of
outstanding notes delivered by book-entry transfer within DTC, credit any
outstanding notes to the account maintained within DTC by the participant in DTC
which delivered the notes), (2) extend the exchange offer and retain all
outstanding notes tendered prior to the expiration of the exchange offer,
subject, however, to the rights of holders to withdraw the tenders of
outstanding notes (see "Withdrawal of Tenders" above) or (3) waive the
unsatisfied conditions with respect to the exchange offer and accept all
properly tendered outstanding notes which have not been withdrawn. If a waiver
constitutes a material change to the exchange offer, we will promptly disclose
the waiver by means of a prospectus supplement that will be distributed to the
registered holders, and we will extend the exchange offer for a period of five
to ten business days, depending upon the significance of the waiver and the
manner of disclosure to the registered holders, if the exchange offer would
otherwise expire during such five to ten business day period.
EXCHANGE AGENT
First Union National Bank has been appointed as exchange agent for the
exchange offer. Delivery of letters of transmittal and any other required
documents, questions, requests for assistance, and requests for additional
copies of this prospectus or of the letter of transmittal should be directed to
the exchange agent as follows:
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BY REGISTERED OR CERTIFIED MAIL, BY FACSIMILE (ELIGIBLE INSTITUTIONS ONLY):
OVERNIGHT COURIER OR HAND DELIVERY:
704-590-7628
Attention: Exchange Department
Confirmed by Telephone: 1-800-665-9343
First Union National Bank
Corporate Trust Operations (Originals of all documents submitted by
1525 West W.T. Harris Blvd. facsimile
Building 3C3 should be sent promptly by hand, overnight
Charlotte, North Carolina 28288-1153 courier or registered or certified mail.)
Attention: Exchange Department
Delivery to other than the above address or facsimile number will not
constitute a valid delivery of your outstanding notes.
FEES AND EXPENSES
We will pay expenses of soliciting tenders. The principal solicitation
is being made by mail; however, additional solicitation may be made by
facsimile, telephone or in person by our officers and regular employees.
We have not retained any dealer-manager as part of the exchange offer
and will not make any payments to brokers, dealers or others soliciting
acceptance of the exchange offer. We will, however, pay the exchange agent
reasonable and customary fees for services and will reimburse it for its
reasonable out-of-pocket expenses under the exchange offer. We will also pay the
reasonable fees and expenses of one firm acting as counsel for the outstanding
purchasers. Expenses include fees and expenses of the exchange agent and
trustee, accounting and legal fees and printing costs, among others.
TRANSFER TAXES
You must pay all transfer taxes, if any, applicable to the exchange of
outstanding notes under the exchange offer. If satisfactory evidence of payment
of the taxes or exemption therefrom is not submitted with the letter of
transmittal, the amount of the transfer taxes will be billed directly to you.
ACCOUNTING TREATMENT
The registered notes will be recorded at the same carrying value as the
outstanding notes on the date of the exchange. Accordingly, we will recognize no
gain or loss for accounting purposes. The expenses of the exchange offer and the
unamortized expenses relating to the issuance of the outstanding notes will be
amortized over the term of the registered notes.
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DESCRIPTION OF THE REGISTERED NOTES
We will issue the registered notes under the indenture for the
outstanding notes dated as of October 6, 1999 between us, the Guarantors and
First Union National Bank, as trustee. The following discussion summarizes
selected provisions of the indenture. Because this is only a summary, it is not
complete and does not describe every aspect of the notes and the indenture.
Whenever there is a reference to particular sections or defined terms of the
indenture, the sections or defined terms are incorporated by reference, and the
statement is qualified in its entirety by that reference. There are references
to section numbers of the indenture so that you can easily locate these
provisions. Capitalized terms are terms that are defined in the indenture. You
can find the definitions of certain of these terms in this summary under the
heading "--Certain Definitions." In this description, the words "International
Speedway," "we," "us" and "our" refer to International Speedway Corporation and
not any of its subsidiaries. We urge you to read the indenture because it, and
not this description, defines your rights as a holder of these notes. A copy of
the indenture is available upon request to International Speedway at the address
set forth under "Where You Can Find More Information."
GENERAL
The indenture provided for the initial issuance of up to $225,000,000
principal amount of notes of which $225,000,000 are currently outstanding. Any
outstanding notes that remain outstanding after the completion of the exchange
offer, together with the registered notes issued in exchange for the outstanding
notes will be treated as a single class of debt securities under the indenture.
The outstanding notes and the registered notes to be issued in the exchange
offer are collectively referred to as the "notes" in this summary description of
the notes.
The notes will mature on October 15, 2004 (referred to as the "Maturity
Date").
Interest on the notes will accrue at a rate of 7.875% per year from and
including October 6, 1999 or from and including the most recent Interest Payment
Date to which interest has been paid or provided for, payable on April 15 and
October 15 of each year, beginning April 15, 2000 (each, referred to as an
"Interest Payment Date").
We will pay interest to the person in whose name the notes are
registered, referred to as the "Holder," at the close of business on the date
fifteen days prior to such Interest Payment Date, referred to as the "Regular
Record Date." Interest on the notes will be computed on the basis of a 360-day
year of twelve 30-day months.
The notes will be issued only in fully registered form without coupons,
in minimum denominations of $100,000 and integral multiples of $1,000 in excess
thereof. The notes are not entitled to the benefit of any mandatory redemption
or sinking fund.
The notes will be our unsecured senior obligations, ranking equally
with all of our other unsecured and unsubordinated indebtedness which may be
outstanding from time to time. Under certain circumstances, our Subsidiaries
which are created or acquired after the date of the indenture will not be
required to guaranty the notes. The indenture does not limit the amount of
additional indebtedness that we or any of our Subsidiaries may incur. The
indenture and the form of the notes do not contain provisions designed to afford
holders of the notes protection in the event of a takeover, recapitalization, or
similar restructuring involving us that may adversely affect holders of the
notes.
The notes will not be listed on any national securities exchange or
automated quotation system.
SUBSIDIARY GUARANTEES OF NOTES
All of our Subsidiaries that were guarantors in respect of our senior
revolving credit facility as of the date of the indenture have, jointly and
severally, fully and unconditionally guaranteed our obligations under the notes
on an equal and ratable basis subject to the limitation described in the next to
last paragraph of this description of the subsidiary guarantees. In addition, if
any Subsidiary of ours which is not already a guarantor becomes a guarantor in
respect of our senior revolving credit facility, we will cause such Subsidiary
to enter into a supplemental
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indenture to the indenture pursuant to which such Subsidiary shall agree to
guarantee our obligations under the notes.
Under its subsidiary guarantee, each subsidiary guarantor will
guarantee, jointly and severally, to each holder of notes and the trustee, the
full and prompt performance of our obligations under the indenture and the
notes, including the payment of principal of (or premium, if any, on) and
interest on the notes.
The subsidiary guarantees are unsecured obligations of each subsidiary
guarantor and rank equally in right of payment with all senior indebtedness of
that subsidiary guarantor and senior in right of payment to all subordinated
indebtedness of that subsidiary guarantor. The subsidiary guarantees are
effectively subordinated to secured indebtedness of the subsidiary guarantor
with respect to the assets securing that indebtedness.
The obligations of each subsidiary guarantor are limited to the maximum
amount that will result in the obligations of that subsidiary guarantor under
its subsidiary guarantee not constituting a fraudulent conveyance or fraudulent
transfer under federal or state law, after giving effect to the following: (i)
all other contingent and fixed liabilities of that subsidiary guarantor; and
(ii) any collections from or payments made by or on behalf of any other
subsidiary guarantor for the obligations of that other subsidiary guarantor
under its subsidiary guarantee or under its contribution obligations contained
in the indenture. Each subsidiary guarantor that makes a payment or distribution
under a subsidiary guarantee will be entitled to a contribution from each other
subsidiary guarantor in a pro rata amount based on the amount by which the fair
value of the properties and assets of each subsidiary guarantor exceeds the
total amount of liabilities, including contingent liabilities, but excluding
liabilities under such guarantor's subsidiary guarantee.
Notwithstanding the foregoing, but subject to the requirements
described below under "--Consolidation, Merger and Sale of Assets," any
guarantee by a subsidiary guarantor shall be automatically and unconditionally
released and discharged (i) upon any sale, exchange or transfer to any person
other than us or another subsidiary guarantor (whether or not affiliated with
the subsidiary guarantor) of all of the Capital Stock of such subsidiary
guarantor, or all or substantially all of the assets of such subsidiary
guarantor, pursuant to a transaction which is in compliance with the indenture
or (ii) at our request, in the event that the lenders under the revolving credit
facility unconditionally release such subsidiary guarantor from its guarantee
obligations under such facility.
OPTIONAL REDEMPTION
The notes will be redeemable, as a whole or in part, at our option, at
any time or from time to time. We will provide the holders at least 30 days but
not more than 60 days' notice of our intent to redeem. The redemption prices
will be equal to the greater of:
(1) 100% of the principal amount of the notes to be redeemed, or
(2) the sum of the present values of the Remaining Scheduled Payments (as
defined below) on those securities discounted, on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months), at a rate
equal to the sum of the applicable Treasury Rate (as defined below)
plus 30 basis points.
Accrued interest and Liquidated Damages, if any, will be paid to the date of
redemption.
"Treasury Rate" means, with respect to any redemption date, the rate
per annum equal to the semiannual equivalent yield to maturity (computed as of
the second business day immediately preceding that redemption date) of the
Comparable Treasury Issue (as defined below), assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price (as defined below) for that redemption
date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the notes that would be utilized, at the time of selection
and in accordance with customary financial practice, in pricing new issues of
corporate debt
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securities of comparable maturity to the remaining term of the notes.
"Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by the trustee after consultation with us.
"Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations (as defined below) for such
redemption date, after excluding the highest and lowest such Reference Treasury
Dealer Quotations, or (B) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such quotations.
"Reference Treasury Dealers" means Salomon Smith Barney Inc., First
Union Capital Markets Corp., Banc One Capital Markets, Inc., Raymond James &
Associates, Inc. and SunTrust Equitable Securities and their successors. If any
Reference Treasury Dealer shall cease to be a primary U.S. Government securities
dealer, we will substitute another nationally recognized investment banking firm
that is a primary U.S. Government securities dealer.
"Reference Treasury Dealer Quotations" means, with respect to the
Reference Treasury Dealers and any redemption date, the average, as determined
by the trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the trustee by the Reference Treasury Dealers, at 5:00 p.m., New York
City time, on the third business day preceding that redemption date.
"Remaining Scheduled Payments" means, with respect to the notes to be
redeemed, the remaining scheduled payments of principal of and interest on those
notes that would be due after the related redemption date but for that
redemption; provided, however, that if such redemption date is not an interest
payment date with respect to the notes to be redeemed, the amount of the next
succeeding scheduled interest payment on those notes will be reduced by the
amount of interest accrued on such notes to such redemption date.
On and after the redemption date, interest will cease to accrue on the
notes or any portion of the notes called for redemption (unless we default in
the payment of the redemption price and accrued interest). On or before the
redemption date, we will deposit with a paying agent (or the trustee) money
sufficient to pay the redemption price of and accrued interest on the notes to
be redeemed on that date. If less than all of the notes of any series are to be
redeemed, the notes to be redeemed shall be selected by the trustee by a method
the trustee deems to be fair and appropriate.
BOOK-ENTRY SYSTEM, FORM AND DELIVERY
The notes will be represented by one or more Global Securities
registered in the name of Cede & Co., the nominee of The Depository Trust
Company, as Depositary, and the provisions set forth under "Description of
Notes--Global Securities" below will apply.
The Depositary is a limited-purpose trust company organized under the
New York Banking Law, a "banking organization" within the meaning of the New
York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. The Depositary holds securities that its participants (the
"Participants") deposit with the Depositary. The Depositary also facilitates the
settlement among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants, referred to as the
"Direct Participants," include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. The Depositary
is owned by a number of its Direct Participants and by The New York Stock
Exchange, Inc., the American Stock Exchange, Inc., and the National Association
of Securities Dealers, Inc. Access to the Depositary's system is also
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available to others such as securities brokers and dealers, banks and trust
companies that clear through, or maintain a custodial relationship with a Direct
Participant, either directly or indirectly, referred to as the "Indirect
Participants." The rules applicable to the Depositary and its Participants are
on file with the Commission.
Purchases of the notes under the Depositary's system must be made by or
through Direct Participants, who receive a credit for the notes on the
Depositary's records. The ownership interest of each actual purchaser of each
note, referred to as "Beneficial Owner," is recorded on the Direct and Indirect
Participants' respective records. Beneficial Owners will not receive written
confirmation from the Depositary of their purchase, but Beneficial Owners are
expected to receive written confirmations providing details of the transaction,
as well as periodic statements of their Holdings, from the Direct or Indirect
Participant through which the Beneficial Owner entered into the transaction.
Transfers of ownership interest in the notes are to be accomplished by entries
made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interest in the notes except in the event that use of the book-entry system for
the notes is discontinued.
To facilitate subsequent transfers, all notes deposited by Participants
with the Depositary will be registered in the name of Cede & Co. The deposit of
the notes with the Depositary and their registration in the name of Cede & Co.
effect no change in beneficial ownership. The Depositary has no knowledge of the
actual Beneficial Owners of the notes; the Depositary's records reflect only the
identify of the Direct Participants to whose accounts such notes are credited,
which may or may not be the Beneficial Owners. The Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
Delivery of notices and other communications by the Depositary to
Direct Participants, by Direct Participants to Indirect Participants, and by
Direct Participants and Indirect Participants to Beneficial Owners will be
governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Neither the Depositary nor Cede & Co. will consent or vote with respect
to the notes. Under its usual procedures, the Depositary mails an omnibus proxy,
referred to as an "Omnibus Proxy," to us as soon as possible after the record
date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to
those Direct Participants to whose accounts the notes are credited on the record
date (identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the notes will be made to Cede & Co.
The Depositary's practice is to credit Direct Participants' accounts on the
relevant payment date in accordance with their respective holdings shown on the
Depositary's records unless the Depositary has reason to believe that it will
not receive payment on such payment date. Payments by Participants to Beneficial
Owners will be governed by standing instructions and customary practices, as is
the case with securities for the accounts of customers in bearer form or
registered in "street-name," and will be the responsibility of such Participant
and will not be our responsibility, nor the responsibility of the Depositary or
the Underwriters, subject to any statutory or regulatory requirements as may be
in effect from time to time. Payment of principal and interest to Cede & Co. is
our responsibility or the responsibility of the trustee. Disbursement of such
payments to Direct Participants is the responsibility of the Depositary, and
disbursement of such payments to the Beneficial Owners is the responsibility of
Direct and Indirect Participants.
The Depositary may discontinue providing its services as securities
depository with respect to the notes at any time by giving us reasonable notice.
Under such circumstances and in the event that a successor securities depository
is not obtained, certificates for the notes are required to be printed and
delivered. In addition, we may decide to discontinue use of the system of
book-entry transfers through the Depositary (or a successor securities
depository). In that event, certificates will be printed and delivered.
We will not have any responsibility or obligation to Participants or
the persons for whom they act as nominees with respect to the accuracy of the
records of the Depositary, its nominee or any Direct or Indirect Participant
with respect to any ownership interest in the notes, or with respect to payments
to or providing of notice for the Direct Participants, the Indirect Participants
or the Beneficial Owners.
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The Depositary's management is aware that some computer applications,
systems and the like for processing data, referred to as "Systems," that are
dependent upon calendar dates, including dates before, on, and after January 1,
2000, may encounter "Year 2000 problems." The Depositary has informed its
participants and other members of the financial community, referred to as the
"Industry," that it has developed and is implementing a program so that its
Systems, as the same relate to the timely payment of distributions (including
principal and income payments) to security holders, book-entry deliveries, and
settlement of trades with in the Depositary, referred to as "DTC Services,"
continue to function appropriately. This program includes a technical assessment
and a remediation plan, each of which is complete. Additionally, the
Depositary's plan includes a testing phase, which is expected to be completed
within appropriate time frames.
However, the Depositary's ability to perform properly its services is
also dependent upon other parties, including but not limited to issuers and
their agents, as well as third party vendors from whom the Depositary licenses
software and hardware, and third party vendors on whom the Depositary relies for
information or the provision of services, including telecommunications and
electrical utility service providers, among others. The Depositary has informed
the Industry that it is contacting (and will continue to contact) third party
vendors from whom the Depositary acquires services to: (i) impress upon them the
importance of such services being Year 2000 compliant; and (ii) determine the
extent of their efforts for Year 2000 remediation (and, as appropriate, testing)
of their services. In addition, the Depositary is in the process of developing
such contingency plans as it deems appropriate.
According to the Depositary, the foregoing information with respect to
the Depositary has been provided to the Industry for informational purposes only
and is not intended to serve as a representation, warranty or contract
modification of any kind.
The information contained above under the caption "Description of
Notes-Book-Entry System, Form and Delivery" concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that we believe to
be reliable. We do not, nor does the trustee, the underwriters, dealers or
agents take responsibility for the accuracy or completeness thereof.
FORM, EXCHANGE AND TRANSFER
The notes will be issuable only in fully registered form, without
coupons, and only in minimum denominations of $100,000 and integral multiples of
$1,000 in excess thereof (Section 302). We shall deliver the notes, duly
executed by us to the trustee for authentication, together with an order for the
authentication and delivery of the notes. The trustee, in accordance with such
order, shall authenticate and deliver such notes. No notes shall be entitled to
any benefit under the indenture or be valid or obligatory for any purpose unless
there appears thereon a certificate of authentication substantially in the form
provided for in the indenture and manually executed by the trustee or an
authenticating agent duly appointed by the trustee. Such certificate shall be
conclusive evidence, and the only evidence, that the notes have been duly
authenticated and delivered under, and are entitled to the benefits of, the
indenture.
At the option of the holder, subject to the terms of the indenture and
the limitations applicable to Global Securities, the notes will be exchangeable
for other notes of the same series of any authorized denomination and of a like
tenor and aggregate principal amount (Section 305).
Subject to the terms of the indenture and the limitations applicable to
Global Securities, the notes may be presented for exchange as provided above or
for registration of transfer (duly endorsed or with the form of transfer
endorsed thereon duly executed) at the office of the Registrar or at the office
of any transfer agent designated by us for such purpose. No service charge will
be made for any registration of transfer or exchange of the notes but we may
require payment of any taxes or other governmental charges as described in the
indenture. Such transfer or exchange will be effected upon the Registrar or such
transfer agent, as the case may be, being satisfied with the documents of title
and identity of the person making the request. We have appointed the trustee as
Registrar. We may at any time designate additional transfer agents or rescind
the designation of any transfer agent. We may also approve a change in the
office through which any transfer agent acts, except that we will be required to
maintain a transfer agent in each Place of Payment for the notes (section 1002).
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In the event of a redemption in part, we will not be required to (i)
issue, register the transfer of or exchange any notes during a period beginning
at the opening of business 15 days before the day of mailing of a notice of
redemption of any such notes that may be selected for redemption and ending at
the close of business on the day of such mailing or (ii) register the transfer
of or exchange any notes, in whole or in part, called for redemption, except the
unredeemed portion of any such notes being redeemed in part (Section 305).
GLOBAL SECURITIES
The Global Securities will have an aggregate principal amount equal to
that of the notes that they represent. The Global Securities will have a legend
regarding their restrictions on exchanges and registration of transfer referred
to below and any such other matters as may be provided for pursuant to the
indenture.
No Global Security may be exchanged, in whole or in part, for notes
registered, and no transfer of a Global Security, in whole or in part, may be
registered, in the name of any Person other than the Depositary for such Global
Security or any nominee of such Depositary unless: (i) the Depositary has
notified us that it is unwilling or unable to continue as Depositary for such
Global Security or has ceased to be qualified to act as such as required by the
indenture, and we do not appoint a successor depository within 90 days of
receipt of such notice; or (ii) there shall have occurred and be continuing an
Event of Default with respect to the notes represented by such Global Security.
All securities issued in exchange for a Global Security or any portion of a
Global Security will be registered in such names as the Depositary may direct.
(Section 305).
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or Holder of the notes
represented by such Global Security for all purposes under the notes and the
indenture. Except as provided above, owners of beneficial interests in a Global
Security will not be entitled to have such Global Security or any notes that it
represents registered in their names, will not receive or be entitled to receive
physical delivery of certificated notes in exchange therefor and will not be
considered to be the owners or Holders of such Global Security or any notes
represented thereby for any purpose under the notes or the indenture. All
payments of principal of, and any premium and interest on, a Global Security
will be made to the Depositary or its nominee, as the case may be, as the Holder
of such Global Security. The laws of some jurisdictions require that certain
purchasers (for example, certain insurance companies) of securities take
physical delivery of such securities in definitive form. These laws may impair
your ability to transfer your beneficial interests in a Global Security to these
types of purchasers.
Ownership of beneficial interests in a Global Security will be limited
to institutions that have accounts with the Depositary or its nominee, referred
to as "participants," and to persons that may hold beneficial interests through
participants. In connection with the issuance of any Global Security, the
Depositary will credit, on its book-entry registration and transfer system, the
respective principal amounts of notes represented by the Global Security to the
accounts of its participants. Ownership of beneficial interests in a Global
Security will be shown only on, and the transfer of those ownership interests
will be effected only through, records maintained by the Depositary (with
respect to participants' interests) or any such participant (with respect to
interests of persons held by such participants on their behalf). Payments,
transfers, exchanges and other matters relating to beneficial interests in a
Global Security may be subject to various policies and procedures adopted by the
Depositary from time to time. None of the Company, the trustee or any agent of
the Company or the trustee will have any responsibility or liability for any
aspect of the Depositary's or any participant's records relating to, or for
payments made on account of, beneficial interests in a Global Security, or for
maintaining, supervising or reviewing any records relating to such beneficial
interests.
PAYMENT AND PAYING AGENTS
Payment of interest on a note on any Interest Payment Date will be made
to the Person in whose name such note is registered at the close of business on
the Regular Record Date for such interest (Section 307).
Principal of, and any premium and interest on, the notes will be
payable at the office of such paying agent or paying agents as we may designate
for such purpose from time to time. However, at our option, payment of any
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interest may be made by check mailed to the address of the Person entitled
thereto as such address appears in the Note Register.
The corporate trust office of the trustee in Charlotte, North Carolina
will be designated as our sole paying agent for payments with respect to notes.
We may at any time designate additional paying agents or rescind the designation
of any paying agent or approve a change in the office through which any paying
agent acts, except that we will be required to maintain a paying agent in each
Place of Payment for the notes (Section 1002).
All monies paid by us to a paying agent for the payment of principal
of, premium, if any, or interest on any notes that remain unclaimed at the end
of two years after such principal, premium or interest has become due and
payable will be repaid to us. After such time, the Holder of such note will look
only to us for payment of such amounts (Section 1003).
RESTRICTIVE COVENANTS
LIMITATION ON LIENS. The indenture provides that, except as otherwise
provided in the next succeeding paragraph, neither we nor any Restricted
Subsidiary (as defined below) of ours will issue, assume or guarantee any
indebtedness for borrowed money, referred to as "Debt," secured by any mortgage,
pledge, security interest, lien or other encumbrance, referred to as a "Lien,"
upon any Principal Property of ours or of any Restricted Subsidiary or upon any
shares of stock or Debt of any Restricted Subsidiary (whether such Principal
Property, shares of stock or Debt are now owned or hereafter acquired) unless we
secure or cause such Restricted Subsidiary to secure the notes equally and
ratably with, or prior to, such secured Debt, for so long as such Debt will be
so secured. The restriction will not apply to Debt secured by:
(A) Liens on property, shares of stock or indebtedness of any corporation
existing at the time such corporation becomes a Restricted Subsidiary
or arising thereafter (i) otherwise than in connection with the
borrowing of money arranged thereafter and (ii) pursuant to contractual
commitments entered into prior to and not in contemplation of such
corporation's becoming a Restricted Subsidiary;
(B) Liens on any property (including shares of stock or Debt) existing at
the time of acquisition thereof (including acquisition through merger
or consolidation) or securing the payment of all or any part of the
purchase price or construction cost thereof or securing any Debt
incurred prior to, at the time of or within 180 days after, the
acquisition of such property, shares of stock or Debt or the completion
of any such construction, whichever is later, for the purpose of
financing all or any part of the purchase price or construction costs
thereof (provided such Liens are limited to such property, improvements
thereon and the land upon which such property and improvements are
located and any other property not then constituting a Principal
Property);
(C) Liens on any property to secure all or any part of the cost of
development, operations, construction, alteration, repair or
improvement of all or any part of such property, or to secure Debt
incurred prior to, at the time of or within 180 days after, the
completion of such development, operation, construction, alteration,
repair or improvement, whichever is later, for the purpose of financing
all or any part of such cost (provided such Liens are limited to such
property, improvements thereon and the land upon which such property
and improvements are located and any other property not then
constituting a Principal Property);
(D) Liens which secure Debt owing by a Restricted Subsidiary to us or to
another Restricted Subsidiary or by us to a Restricted Subsidiary;
(E) Liens securing indebtedness of a corporation which becomes our
successor in accordance with the provisions described under the heading
"--Consolidation, Merger and Sale of Assets" below;
(F) Liens on our property or the property of a Restricted Subsidiary in
favor of the United States of America or any State thereof, or any
department agency or instrumentality or political subdivision of the
United States of America or any State thereof, or in favor of any other
country or any political subdivision thereof, to
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secure partial, progress, advance or other payments pursuant to any
contract or statute or to secure any indebtedness incurred for the
purpose of financing all or any part of the purchase price or the cost
of construction of the property subject to such Liens, or in favor of
any trustee or mortgagee for the benefit of holders of indebtedness of
any such entity incurred for any such purpose;
(G) Liens existing as of the date of the indenture; and
(H) any extension, renewal or replacement (or successive extension,
renewals or replacements), in whole or in part, of any Lien referred to
in the foregoing clauses (A) to (G), inclusive, or of any Debt secured
thereby; provided that such extension, renewal or replacement Lien
shall be limited to all or any part of the same property that secured
the Lien extended, renewed or replaced (plus any improvements on such
property) and shall secure no larger amount of Debt than that existing
at the time of such extension, renewal or replacement.
Notwithstanding the foregoing restrictions, we and any one or more
Restricted Subsidiaries may issue, assume or guarantee Debt secured by a Lien
which would otherwise be subject to the foregoing restrictions if at the time it
does so, referred to as the "Incurrence Time," the aggregate amount of such Debt
plus all of our and our Restricted Subsidiaries' other Debt secured by a Lien
which would otherwise be subject to the foregoing restrictions (not including
Debt permitted to be secured under clauses (A) through (H) referred to above),
plus the aggregate Attributable Debt (determined as of the Incurrence Time) of
Sale and Leaseback Transactions (other than Sale and Leaseback Transactions
permitted by clause (1) under the heading "--Limitations on Sale and Leaseback
Transactions" below) entered into after the date of the indenture and in
existence at the Incurrence Time (less the aggregate amount of proceeds of such
Sale and Leaseback Transactions which shall have been applied in accordance with
clause (3) under "--Limitations on Sale and Leaseback Transactions"), does not
exceed 15% of Consolidated Net Tangible Assets.
LIMITATIONS ON SALE AND LEASEBACK TRANSACTIONS. The indenture provides
that neither we nor any of our Restricted Subsidiaries will enter into any Sale
and Lease-Back Transaction with respect to any Principal Property unless either:
(1) we or such Restricted Subsidiary would (at the time of
entering into such arrangement) be entitled pursuant to the
foregoing covenant relating to "--Limitation on Liens,"
without equally and ratably securing the notes, to issue,
assume or guarantee indebtedness secured by a Lien on such
Principal Property; or
(2) our Attributable Debt and the Attributable Debt of our
Restricted Subsidiaries in respect of such Sale and Leaseback
Transaction and all other Sale and Leaseback Transactions
entered into after the date of the indenture (other than such
Sale and Leaseback Transactions as are permitted by clause (1)
or clause (3) of this paragraph), plus the aggregate principal
amount of Debt secured by Liens on Principal Properties then
outstanding (excluding any such Debt secured by Liens covered
in subdivisions (A) through (H) under the heading
"--Limitation on Liens" above) which do not equally and
ratably secure the notes, would not exceed 15 % of
Consolidated Net Tangible Assets; or
(3) we, within 180 days after the sale or transfer: (A) apply or
cause a Restricted Subsidiary to apply an amount equal to the
greater of the net proceeds of such sale or transfer or the
fair market value of the Principal Property so sold and leased
back at the time of entering into such Sale and Leaseback
Transaction (in either case as determined by the Board of
Directors) to the retirement of the notes or other of our
indebtedness (other than indebtedness subordinated to the
notes) or indebtedness of a Restricted Subsidiary, for money
borrowed, having a stated maturity more than 12 months from
the date of such application or which is extendible at the
option of the obligor thereon to a date more than 12 months
from the date of such application, provided that the amount to
be so applied shall be reduced by (i) the principal amount of
notes delivered within 180 days after such sale or transfer to
the trustee for retirement and cancellation, and (ii) the
principal amount of any such indebtedness of us or a
Restricted Subsidiary other than notes voluntarily
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retired by us or a Restricted Subsidiary within 180 days after
such sale or transfer; or (B) invest an equal amount, or the
amount not so applied pursuant to clause (A), in Additional
Assets (including investments in Additional Assets by a
Restricted Subsidiary); provided, further, that
notwithstanding the foregoing, no retirement referred to in
this clause (3) may be affected by payment at Maturity; or
(4) the lease period for such Sale and Leaseback Transaction,
including renewals, is for not more than three years.
Notwithstanding the foregoing, where we are, or any Restricted
Subsidiary is, the lessee in any Sale and Leaseback Transaction, Attributable
Debt shall not include any Debt resulting from the guarantee by us or any other
Restricted Subsidiary of the lessee's obligation thereunder.
CERTAIN DEFINITIONS
The term "Additional Assets" means (i) any property or assets (other
than indebtedness and Capital Stock) in a Related Business, including
improvements to existing assets, used by us or a Restricted Subsidiary in a
Related Business; (ii) Capital Stock of a person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by us or another
Restricted Subsidiary; provided, however, that any such Restricted Subsidiary is
primarily engaged in a Related Business; (iii) Capital Stock constituting an
additional equity interest in any person that at such time is a Restricted
Subsidiary that is not a wholly-owned subsidiary; or (iv) the costs of improving
or developing any property owned by us or a Restricted Subsidiary that is used
in a Related Business.
The term "Attributable Debt" means, in respect of a Sale and Leaseback
Transaction and as of any particular time, the present value (discounted at the
rate of interest implicit in the terms of the lease involved in such Sale and
Leaseback Transaction, as determined in good faith by us) of the obligation of
the lessee thereunder for net rental payments (excluding, however, any amounts
required to be paid by such lessee, whether or not designated as rent or
additional rent, on account of maintenance and repairs, services, insurance,
taxes, assessments, water rates or similar charges or any amounts required to be
paid by such lessee thereunder contingent upon monetary inflation or the amount
of sales, maintenance and repairs, insurance, taxes, assessments, water rates or
similar charges) during the remaining term of such lease (including any period
for which such lease has been extended or may, at the option of the lessor, be
extended).
The term "Capital Stock" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) equity of such Person,
including any preferred stock, but excluding any debt securities convertible
into such equity.
The term "Consolidated Net Tangible Assets" means the aggregate amount
of assets (less applicable reserves and other properly deductible items) after
deducting therefrom (a) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, and (b) all
current liabilities, all as shown on our most recent consolidated financial
statements filed with the SEC prior to the time as of which "Consolidated Net
Tangible Assets" shall be determined.
The term "Maturity," when used with respect to any security, means the
date on which the principal of such security or an installment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.
The term "Principal Property" means any single racetrack facility or
business unit located within the United States of America (other than its
territories and possessions) and owned or operated by, or leased to, us or any
Subsidiary, the book value of the property and equipment of which (as shown, net
of depreciation, on the books of the owner or owners thereof) is not less than
4% of the Consolidated Net Tangible Assets as shown on our most recent
consolidated financial statements filed with the SEC, except (a) any such
facility (i) owned or operated or leased jointly or in common with one or more
Persons other than by us or our Subsidiaries, in which our interest and the
interest of our Subsidiaries does not exceed 50%, or (ii) which the Board of
Directors determines by Board Resolution in good faith is not of material
importance to the total business conducted, or assets owned, by us and
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our Subsidiaries as an entirety, or (b) any portion of any such facility which
the Board of Directors determines by Board Resolution in good faith not to be of
material importance to the use or operation of such facility.
The term "Related Business" means any business related, ancillary or
complementary (as determined in good faith by the Board of Directors) to our
business and the Restricted Subsidiaries on the issue date.
The term "Restricted Subsidiary" means any of our Subsidiaries
substantially all the property of which is located, or substantially all of the
business of which is carried on, within the United States of America (other than
its territories and possessions) which shall at the time, directly or indirectly
through one or more Subsidiaries or in combination with one or more other
Subsidiaries, own, operate or be a lessee of a Principal Property.
The term "Subsidiary" shall mean, as to any person, a corporation,
partnership, limited liability company or other entity of which the shares of
stock or other ownership interests having ordinary voting power (other than
stock or such other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors or
other managers of such corporation, partnership or other entity are at the time
owned, or management of which is otherwise controlled, directly or indirectly,
through one or more intermediaries, or both, by such person. For purposes of the
indenture, all Subsidiaries are also our affiliates.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The indenture provides that we may not consolidate with or merge into,
or convey, transfer or lease our and our Subsidiaries properties and assets
substantially as an entirety to, any Person, referred to as a "successor
Person," and may not permit any Person to merge into, or convey, transfer or
lease our properties and assets substantially as an entirety to, us, unless:
(i) the successor Person (if any) is a corporation, partnership,
trust or other entity organized and validly existing under the
laws of any domestic jurisdiction and assumes our obligations
on the notes and under the indenture;
(ii) immediately after giving effect to the transaction, no Event
of Default, and no event that, after notice or lapse of time
or both, would become an Event of Default, has occurred and is
continuing;
(iii) if, as a result of the transaction, our property or the
property of any of our Restricted Subsidiaries becomes subject
to a Lien that would not be permitted under the provisions
described under the heading "Restrictive
Covenants--Limitations on Liens" above, we take such steps as
shall be necessary to secure the notes, if any, equally and
ratably with (or prior to) the indebtedness secured by such
Lien; and
(iv) certain other conditions are met (Section 801).
EVENTS OF DEFAULT
The following are Events of Default under the indenture with respect to
the notes:
/bullet/ failure to pay principal of or premium, if any, on any notes
when due;
/bullet/ failure to pay any interest on any notes when due, continued
for 30 days;
/bullet/ failure to perform any of our covenants in the indenture,
continued for 60 days after written notice has been given by
the trustee, or the holders of at least 25% in principal
amount of the outstanding notes, as provided in the indenture;
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/bullet/ if any guarantee of the notes shall be deemed to be
unenforceable or invalid in any judicial proceeding or shall
cease to be in full force and effect, or any guarantor or any
person acting on behalf of any guarantor shall deny or
disaffirm its obligations under its guarantee; and
/bullet/ certain events in bankruptcy, insolvency or reorganization.
If an Event of Default (other than an Event of Default relating to
bankruptcy, insolvency or reorganization as described above) with respect to the
notes occurs and is continuing, either the trustee or the holders of at least
25% in aggregate principal amount of the outstanding notes may declare the
principal amount of the notes to be due and payable immediately. If an Event of
Default relating to bankruptcy, insolvency or reorganization as described above
with respect to the notes occurs, the principal amount of all the notes will
automatically, and without any action by the trustee or any holder, become
immediately due and payable. After any such acceleration, but before a judgment
or decree for the payment of money based on such acceleration has been obtained
by the trustee, the holders of a majority in aggregate principal amount of the
notes, may under certain circumstances, rescind and annul such acceleration if
all Events of Default, other than the nonpayment of accelerated principal (or
other specified amount), have been cured or waived as provided in the indenture
(Section 502). For information as to waiver of defaults, see "Modification and
Waiver" below.
Subject to the provisions of the indenture relating to the duties of
the trustee, in case an Event of Default occurs and is continuing, the trustee
will be under no obligation to exercise any of its rights or powers under the
indenture at the request or direction of any of the holders, unless such holders
shall have offered to the trustee reasonable indemnity (Section 603). Subject to
such provisions for the indemnification of the trustee, the holders of a
majority in aggregate principal amount of the notes will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the trustee or exercising any trust or power conferred on the
trustee with respect to the notes (Section 512).
Holders of notes do not have any right to institute any proceeding with
respect to the indenture, or for the appointment of a receiver or a trustee, or
for any other remedy thereunder, unless:
(i) such holder has previously given to the trustee written notice
of a continuing Event of Default with respect to the notes;
(ii) the holders of at least 25% in aggregate principal amount of
the notes have made written request, and such holder or
holders have offered reasonable indemnity, to the trustee to
institute such proceeding as trustee; and
(iii) the trustee has failed to institute such proceeding, and has
not received from the holders of a majority in aggregate
principal amount of the notes a direction inconsistent with
such request, within 60 days after such notice, request and
offer (Section 507).
However, such limitations do not apply to a suit instituted by a holder
of notes for the enforcement of payment of the principal of or any premium or
interest on such notes on or after the due date of such notes (Section 508).
We will be required to furnish to the trustee annually a statement as
to our performance of our covenants and agreements under the indenture. We must
also specify all such known defaults under the indentures (Section 1004).
MODIFICATION AND WAIVER
Modifications or amendments of the indenture may be made by us and the
trustee with the consent of the holders of a majority in aggregate principal
amount of the notes, except that no such modification or amendment may, without
the consent of the holders of all the notes to:
(a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, the
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notes;
(b) reduce the principal amount of, or any premium or interest on,
the notes;
(c) reduce the amount of principal payable upon acceleration of
the Maturity of the notes;
(d) change the place or currency of payment of principal of, or
any premium or interest on, the notes;
(e) impair the right to institute suit for the enforcement of any
payment on or with respect to the notes;
(f) reduce the percentage in principal amount of notes, the
consent of whose holders is required for modification or
amendment of the indenture;
(g) reduce the percentage in principal amount of notes necessary
for waiver of compliance with certain provisions of the
indenture or for waiver of certain defaults; or
(h) modify the provisions of the indenture with respect to
modification and waiver (Section 902).
The holders of a majority in principal amount of the notes may waive
our compliance with certain restrictive provisions of the indenture (Sections
1010 and 1008). The holders of a majority in principal amount of the notes may
waive any past default under the indenture, except a default in the payment of
principal, premium or interest and certain covenants and provisions of the
indenture which cannot be amended without the consent of the holder of each
outstanding note (Section 513).
We will be entitled to set any day as a record date for the purpose of
determining the holders of outstanding notes entitled to give or take any
direction, notice, consent, waiver or other action under the indenture, in the
manner and subject to the limitations provided in the indenture, except in
limited circumstances. In certain limited circumstances, the trustee will be
entitled to set a record date for action by holders. If a record date is set for
any action to be taken by holders of notes, such action may be taken only by
persons who are holders of outstanding notes on the record date. To be
effective, such action must be taken by holders of the requisite principal
amount of such notes within a specified period following the record date. For
any particular record date, this period will be 180 days or such shorter period
as we may specify (or the trustee, if it set the record date), and may be
shortened or lengthened (but not beyond 180 days) from time to time (Section
104).
DEFEASANCE AND COVENANT DEFEASANCE
We may elect at any time to have the provisions of Section 1302,
relating to defeasance and discharge of indebtedness, or Section 1303, relating
to defeasance of certain restrictive covenants in the indenture, applied to the
notes or to any specified part of the notes.
/bullet/ DEFEASANCE AND DISCHARGE. The indenture provides that we will
be discharged from all of our obligations with respect to such
notes (except for certain obligations to exchange or register
the transfer of notes, to replace stolen, lost or mutilated
notes, to maintain paying agencies and to hold moneys for
payment in trust) upon the deposit in trust for the benefit of
the holders of such notes of money or U.S. Government
Obligations, or both, that, through the payment of principal
and interest in respect thereof in accordance with their
terms, will provide money in an amount sufficient to pay the
principal of, and any premium and interest on, the notes on
the Stated Maturity in accordance with the terms of the
indenture and the notes. Such defeasance or discharge may
occur only if, among other things, we have delivered to the
trustee an Opinion of Counsel to the effect that we have
received from, or there has been published by, the United
States Internal Revenue Service a ruling, or there has been a
change in tax law, in either case to the effect that holders
of the notes will not recognize gain or loss for federal
income tax purposes as a result of such deposit, defeasance
and discharge and will be subject to federal income tax on the
same amount, in the same manner and at
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the same times as would have been the case if such deposit,
defeasance and discharge were not to occur (Sections 1302 and
1304).
/bullet/ DEFEASANCE OF CERTAIN COVENANTS. The indenture provides that
we may omit to comply with certain restrictive covenants,
including those described under "--Restrictive Covenants" and
in the last sentence under "--Consolidation, Merger and Sale
of Assets," and the occurrence of certain Events of Default
will be deemed not to be or result in an Event of Default, in
each case with respect to the notes. In order to do so, we
will be required to deposit, in trust for the benefit of the
holders of the notes, money or U.S. Government Obligations, or
both, that, through the payment of principal and interest in
respect thereof in accordance with their terms, will provide
money in an amount sufficient to pay the principal of, and any
premium and interest, on the notes on the Stated Maturity in
accordance with the terms of the indenture and the notes. We
will also be required, among other things, to deliver to the
trustee an Opinion of Counsel to the effect that holders of
the notes will not recognize gain or loss for federal income
tax purposes as a result of such deposit and defeasance of
certain obligations and will be subject to federal income tax
on the same amount, in the same manner and at the same times
as would have been the case if such deposit and defeasance
were not to occur. In the event we exercise this option with
respect to any notes and such notes are declared due and
payable because of the occurrence of any Event of Default, the
amount of money and U.S. Government Obligations so deposited
in trust would be sufficient to pay amounts due on the notes
at the time of their Stated Maturity but may not be sufficient
to pay amounts due on the notes upon any acceleration
resulting from such Event of Default. In such case, we would
remain liable for such payments (Sections 1303 and 1304).
NOTICES
Notices to Holders of notes will be given by mail to the addresses of
such holders as they appear in the Register of notes (Sections 101 and 106).
TITLE
We, the trustee and any of our or the trustee's agents may treat the
Person in whose name any note is registered as the absolute owner of the note
(whether or not the note may be overdue) for the purpose of making payment and
for all other purposes (Section 308).
GOVERNING LAW
The indenture is and the registered notes will be governed by, and
construed in accordance with, the law of the State of New York (Section 112).
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of the material U.S. federal
income and estate tax considerations we expect to apply to a holder's
acquisition, holding and disposition of a registered note. This discussion is
based on the Internal Revenue Code of 1986, Treasury regulations promulgated
hereunder, administrative positions of the Internal Revenue Service (the "IRS")
and judicial decisions now in effect, all of which are subject to change,
possibly with retroactive effect, or to different interpretations. There can be
no assurance that the IRS will not challenge one or more of the conclusions
described herein. We have not obtained, and do not intend to obtain, a ruling
from the IRS with respect to the U.S. federal income tax consequences of
acquiring, holding or disposing of a registered note. This discussion does not
purport to deal with all aspects of U.S. federal income taxation that may be
relevant to a particular holder in light of the holder's circumstances (for
example, a person subject to the alternative minimum tax provisions of the
Code). In addition, it is not intended to be wholly applicable to all categories
of investors, some of which (like dealers in securities, banks, insurance
companies, tax-exempt organizations, persons holding a registered note as part
of a "straddle," "hedge," "conversion transaction" or other risk reduction
transaction and persons who have a "functional currency" other than the U.S.
dollar) may be subject to special rules. The discussion also does not address
any aspect of state, local or foreign law, or U.S. federal estate and gift tax
law other than U.S. federal estate tax law as applicable to a "Non-U.S. Holder"
(as defined below). In addition, this discussion is limited to an original
holder of a registered note who acquired an outstanding note exchanged for the
registered note on its original issue date and at its original issue price
within the meaning of Section 1273 of the Code and who will hold the registered
note as a "capital asset" within the meaning of Section 1221 of the Code.
HOLDERS OF OUTSTANDING NOTES ARE ADVISED TO CONSULT THEIR TAX ADVISERS
REGARDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE
ACQUISITION, OWNERSHIP AND DISPOSITION OF THE REGISTERED NOTES.
EXCHANGE OF NOTES
The exchange of an outstanding note for a registered note pursuant to
the exchange offer should not be a taxable exchange for U.S. Federal income tax
purposes. Accordingly, a registered note acquired in exchange for an outstanding
note should have the same adjusted basis, holding period, issue price, adjusted
issue price, stated redemption price at maturity, yield and accrual periods as
the outstanding note had in the hands of its beneficial owner immediately before
the exchange. The tax consequences of ownership and disposition of a registered
note should be the same as the tax consequences of the ownership and disposition
of the outstanding note surrendered in exchange for it.
Accordingly, in the following discussion, the U.S. Federal income tax
consequences with respect to a registered note assume that the registered note
is treated, for U.S. Federal income tax purposes, as the same note as the
outstanding note for which it was issued and that the registered note has the
same adjusted basis, holding period, issue price, adjusted issue price, stated
redemption price at maturity, yield and accrual periods as the outstanding note
had in the hands of its beneficial owner immediately before the exchange, and
that any amounts that accrue or are paid or payable on an outstanding note are
treated as accruing or as paid or payable on the registered note.
U.S. HOLDERS
The following discussion is limited to a holder of a registered note
that is a "U.S. Holder." For purposes of this discussion, a "U.S. Holder" is a
beneficial owner of a registered note that for U.S. federal income tax purposes
is (i) a citizen or resident (as defined in Section 7701(b) of the Code) of the
United States, (ii) a corporation or partnership (or an entity treated as a
corporation or partnership) created or organized in the United States or under
the law of the United States, any state or the District of Columbia, (iii) an
estate the income of which is subject to U.S. federal income taxation regardless
of source or (iv) a trust if a U.S. court is able to exercise primary
supervision over the administration of the trust and one or more U.S. persons
have the authority to control all substantial decisions of the trust.
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TAXATION OF STATED INTEREST ON THE REGISTERED NOTES. Generally,
payments of "qualified stated interest" will be includible in a U.S. Holder's
gross income and taxable as ordinary income for U.S. federal income tax purposes
at the time they are paid or accrue in accordance with the U.S. Holder's regular
method of tax accounting. Generally, "qualified stated interest" payments
include stated interest payments that are unconditionally payable in cash or
property (other than debt instruments of the issuer) at least annually at a
single fixed rate that appropriately takes into account the length of intervals
between payments.
ORIGINAL ISSUE DISCOUNT ON THE REGISTERED NOTES. The outstanding notes
were issued with a DE MINIMIS amount of original issue discount or "OID," and
each registered note therefore should have the same DE MINIMIS OID as the
outstanding note exchanged therefor. A U.S. Holder is not required to include DE
MINIMIS OID on a registered note in income in advance of the receipt of the
corresponding cash payments on the registered note. The amount of DE MINIMIS OID
with respect to each registered note will be equal to the excess of (i) the
"stated redemption price at maturity" of the registered note (100% of its
principal amount) over (ii) the "issue price" of the registered note (99.845% of
its principal amount).
A U.S. Holder may elect (the "Accrual Election") to include in gross
income, on the constant yield method specified in the Treasury regulations, all
income on a registered note (including stated interest, OID, DE MINIMIS OID,
market discount, acquisition discount, DE MINIMIS market discount and unstated
interest), as adjusted by any amortizable bond premium or acquisition premium.
In applying the constant yield method to a registered note with respect to which
the Accrual Election has been made, the issue price of the registered note will
equal the electing U.S. Holder's adjusted basis in the registered note
immediately after its acquisition, the issue date of the registered note will be
the date of its acquisition by the electing U.S. Holder, and no payments on the
registered note will be treated as payments of qualified stated interest. An
Accrual Election will generally apply only to the registered note with respect
to which it is made and may not be revoked without the consent of the IRS. Any
Accrual Election made with respect to an outstanding note or a registered note
should be treated as an Accrual Election made with respect to the corresponding
registered note or outstanding note, respectively.
ADJUSTED TAX BASIS. A U.S. Holder's tax basis in a registered note for
which an Accrual Election has been made will be increased by the amount of OID
that the U.S. Holder includes in income pursuant to the rules described in the
preceding paragraph through the day preceding the day of disposition and will be
decreased by the amount of any cash payments received on the registered note. In
other cases, a U.S. Holder's tax basis in a registered note generally will be
the U.S. Holder's purchase price for the registered note.
SALE, EXCHANGE OR RETIREMENT OF A REGISTERED NOTE. Each U.S. Holder
generally will recognize capital gain or loss upon a sale, exchange or
retirement of a registered note measured by the difference, if any, between (i)
the amount of cash and the fair market value of any property received (except to
the extent that the cash or other property received in respect of a registered
note is attributable to the payment of accrued interest on the registered note
not previously included in income, which amount will be taxable as ordinary
income) and (ii) the holder's adjusted tax basis in the instrument. In each
case, the gain or loss will be long-term capital gain or loss if the registered
note has been held for more than one year at the time of the sale, exchange or
retirement. Long-term capital gain recognized on a sale, exchange or retirement
of a registered note by certain noncorporate U.S. Holders is subject to tax at a
maximum tax rate of 20%.
Prospective acquirors of registered notes should be aware that the
resale of a registered note may be affected by the "market discount" rules of
the Code, under which a portion of any gain realized on the retirement or other
disposition of a registered note by a subsequent holder that acquires the
registered note at a market discount generally would be treated as ordinary
income to the extent of the market discount that accrues while that holder holds
the registered note.
INFORMATION REPORTING AND BACKUP WITHHOLDING. A U.S. Holder of a
registered note may be subject, under certain circumstances, to information
reporting and "backup withholding" at a rate of 31% with respect to certain
"reportable payments," including interest on or principal (and premium, if any)
of a note and the gross proceeds from a disposition of a registered note. The
backup withholding rules apply if the holder, among other things, (i) fails to
furnish a social security number or other taxpayer identification number ("TIN")
certified under penalties of perjury within a reasonable time after the request
therefor, (ii) furnishes an incorrect TIN, (iii) fails to
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properly report the receipt of interest or dividends or (iv) under certain
circumstances, fails to provide a certified statement, signed under penalties of
perjury, that the TIN furnished is the correct number and that the holder is not
subject to backup withholding. A U.S. Holder who does not provide us with its
correct TIN also may be subject to penalties imposed by the IRS. Backup
withholding will not apply with respect to payments made to certain holders,
including corporations and tax-exempt organizations, provided their exemptions
from backup withholding are properly established. We will report annually to the
IRS and to each U.S. Holder of a registered note the amount of any "reportable
payments" and the amount of tax withheld, if any, with respect to those
payments.
Any amounts withheld under the backup withholding rules from a payment
to a U.S. Holder will be allowed as a refund or as a credit against that U.S.
Holder's U.S. federal income tax liability, provided the requisite procedures
are followed.
NON-U.S. HOLDERS
The following discussion is limited to U.S. federal income and estate
tax consequences relevant to a Non-U.S. Holder. As used herein, a "Non-U.S.
Holder" is a beneficial owner of a registered note, that, for U.S. federal
income tax purposes, is (a) a nonresident alien individual, (b) a corporation or
partnership (or an entity treated as a corporation or partnership) created or
organized in or under the law of a country (or a political subdivision thereof)
other than the United States or (c) a foreign estate or trust, which generally
is an estate or trust that is not a U.S. Holder. For purposes of the withholding
tax discussed below (other than backup withholding), a Non-U.S. Holder includes
a nonresident fiduciary of an estate or trust. This discussion does not address
tax consequences relevant to an expatriate or former long-term resident of the
United States or to a person who holds a registered note through a partnership.
A person who holds a registered note through a hybrid entity (that is, an entity
that is fiscally transparent for U.S. federal income tax purposes but not for
foreign tax purposes) may not be entitled to the benefits of a tax treaty. For
example, a person who is a partner in a foreign partnership or beneficiary of a
foreign trust or estate and who is subject to U.S. federal income tax because of
his own status, for example, as a U.S. resident or a foreign person engaged in
trade or business in the United States, may be subject to U.S. federal income
tax even though the foreign partnership, trust or estate is not itself subject
to U.S. federal income tax. For purposes of the following discussion, "U.S.
trade or business income" of a Non-U.S. Holder generally means interest or gain
on a sale, exchange or retirement of a registered note if that interest or gain
is (i) effectively connected with trade or business conducted by the Non-U.S.
Holder within the United States or (ii) in most cases of a resident of a country
with which the United States has an income tax treaty, attributable to a
permanent establishment (or fixed base) of the Non-U.S. Holder in the United
States.
STATED INTEREST AND OID ON THE REGISTERED NOTES. In general, interest
(and premium, if any) paid to (and, if an Accrual Election has been made, OID
paid to or accrued by) a Non-U.S. Holder of a registered note will not be
subject to U.S. withholding tax if it qualifies for the portfolio interest
exemption, and it will not otherwise be subject to U.S. federal income tax if it
is not U.S. trade or business income of the Non-U.S. Holder. Interest (and such
OID) on a registered note qualifies for the portfolio interest exemption if (i)
the Non-U.S. Holder of the registered note (a) does not own, actually and
constructively, 10% or more of the total combined voting power of all classes of
our stock entitled to vote, (b) is not a controlled foreign corporation related,
directly or indirectly, to us through stock ownership and (c) is not a bank
receiving interest on an extension of credit made pursuant to a loan agreement
made in the ordinary course of its trade or business and (ii) either (a) the
Non-U.S. Holder certifies, under penalties of perjury, to us or the paying
agent, as the case may be, that it is a Non-U.S. Holder and provides its name
and address or (b) a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course of its trade
or business (a "Financial Institution") and holds the registered note on behalf
of the Non-U.S. Holder certifies, under penalties of perjury, that it or a
Financial Institution between it and the Non-U.S. Holder has received such a
certificate and furnishes the payor with a copy thereof. Recently adopted
Treasury regulations that generally will be effective for payments made on or
after January 1, 2001 provide alternative methods for satisfying the
certification requirement described in (ii) above. The new regulations generally
will require, in the case of a registered note held by a foreign partnership,
that the certificate described in (ii) above must be provided by the partners
rather than by the foreign partnership and that the partnership must provide
certain information, including a U.S. TIN.
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Interest and premium, if any (and, if an Accrual Election has been
made, OID) paid to or accrued by a Non-U.S. Holder that constitutes U.S. trade
or business income will be subject to U.S. federal income tax on a net income
basis at graduated rates in the same manner that a U.S. taxpayer is subject to
tax and will be exempt from the withholding tax described above. In the case of
a Non-U.S. Holder that is a corporation, U.S. trade or business income under
certain circumstances also will be subject to an additional branch profits tax
at a 30% rate (or, if applicable, a lower treaty rate). The gross amount of
interest (and premium, if any, and, if an Accrual Election has been made, OID)
paid to a Non-U.S. Holder that does not qualify for the portfolio interest
exemption and that is not U.S. trade or business income will be subject to
withholding of U.S. federal income tax at the rate of 30%, unless a U.S. income
tax treaty reduces or eliminates withholding. To claim the benefit of a tax
treaty or to claim an exemption from withholding because income is U.S. trade or
business income, a Non-U.S. Holder must provide a properly executed Form 1001 or
4224 (or a successor form), as applicable, prior to the payment of the income.
These forms generally must be updated periodically. Under the new regulations, a
Non-U.S. Holder claiming either of those exemptions will be required to provide
an IRS Form W-8. In addition, under the new regulations, a Non-U.S. Holder who
is claiming the benefits of a tax treaty may be required to obtain a U.S. TIN
and to provide certain documentary evidence issued by a foreign governmental
authority to prove residence in the foreign country. Special procedures are
provided in the new regulations for payments through qualified intermediaries. A
holder of an outstanding note should consult its own tax adviser regarding the
effect, if any, of the new regulations on it.
SALE, EXCHANGE OR RETIREMENT OF A REGISTERED NOTE. Subject to the
discussion below of backup withholding, gain recognized by a Non-U.S. Holder on
a sale, exchange or retirement of a registered note generally will not be
subject to U.S. federal income tax unless (i) the gain is U.S. trade or business
income of the Non-U.S. Holder or (ii) subject to certain exceptions, the
Non-U.S. Holder is an individual who holds the registered note as a capital
asset and is present in the United States for 183 days or more in the taxable
year of the disposition.
Prospective acquirors of registered notes should be aware that the
resale of a registered note to a U.S. Holder may be affected by the "market
discount" rules of the Code, under which a portion of any gain realized on
retirement or other disposition of a registered note by a subsequent holder that
is a U.S. Holder that acquires the registered note at a market discount
generally would be treated as ordinary income to the extent of the market
discount that accrued while the U.S. Holder holds the registered note.
FEDERAL ESTATE TAX. A registered note that is owned, or treated as
owned, by an individual who is not a citizen of the United States and who is not
domiciled in the United States at the time of death will not be subject to U.S.
federal estate tax, provided the individual did not own, actually and
constructively, 10% or more of the total combined voting power of all classes of
our stock entitled to vote and provided the income on the registered note was
not U.S. trade or business income. A registered note that is owned, or is
treated as owned, by an individual who is domiciled in the United States at the
time of death will be subject to U.S. federal estate tax regardless of whether
such holder is neither a citizen nor a resident of the United States.
INFORMATION REPORTING AND BACKUP WITHHOLDING. We must report annually
to the IRS and to each Non-U.S. Holder any interest (or OID) that is subject to
U.S. withholding tax or that is exempt from withholding pursuant to a tax treaty
or the portfolio interest exception. Copies of these information returns also
may be made available under the provisions of a specific treaty or agreement to
the tax authorities of the country in which the Non-U.S. Holder resides.
Information reporting and backup withholding (at a rate of 31%) do not apply to
interest (or OID) paid to a Non-U.S. Holder if the holder makes the requisite
certification or otherwise establishes an exemption provided that neither we nor
our paying agent has actual knowledge that the holder is not a Non-U.S. Holder
or that the conditions of any other exemption are not, in fact, satisfied.
Backup withholding and information reporting do not apply to our
payments of principal of a registered note to a Non-U.S. Holder if the holder
certifies under penalties of perjury that it is not a U.S. Holder or otherwise
establishes an exemption provided that neither we nor our paying agent has
actual knowledge that the holder is not a Non-U.S. Holder or that the conditions
of any other exemption are not, in fact, satisfied.
The payment of the proceeds from the disposition of a registered note
to or through the U.S. office of any broker, U.S. or foreign, is subject to
information reporting and possible backup withholding unless the owner certifies
under penalties of perjury that it is not a U.S. Holder or otherwise establishes
an exemption provided that
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the broker does not have actual knowledge that the holder is not a Non-U.S.
Holder or that the conditions of any other exemption are not, in fact,
satisfied.
The proceeds of a disposition of a registered note by a Non-U.S. Holder
to or through a foreign office of a broker will not be subject to backup
withholding. However, information reporting will apply in the case of a "U.S.
related broker" unless the broker has documentary evidence in its files of the
Non-U.S. Holder's foreign status and has no actual knowledge to the contrary or
unless the Non-U.S. Holder otherwise establishes an exemption. A broker is a
"U.S. related broker" if the broker is a United States person, a controlled
foreign corporation for U.S. federal income tax purposes, a foreign person 50%
or more of whose income from all sources for a designated period is from or,
with respect to payments made on or after January 1, 2001, a foreign partnership
that, at any time during its taxable year, is owned 50% or more (by income or
capital interest) by United States persons or is engaged in the conduct of trade
or business in the United States. The new regulations provide certain
presumptions under which a Non-U.S. Holder will be subject to backup withholding
and information reporting unless the Non-U.S. Holder provides a certification as
to its status as a Non-U.S. Holder.
Any amounts withheld under the backup withholding rules from a payment
to a Non-U.S. Holder will be allowed as a refund or as a credit against the
Non-U.S. Holder's U.S. federal income tax liability, provided the requisite
procedures are followed.
PLAN OF DISTRIBUTION
Each broker-dealer that receives registered notes in exchange for
outstanding notes for its own account pursuant to the exchange offer must
acknowledge that it will deliver a prospectus in connection with any resale of
such registered notes. This prospectus, as it may be amended or supplemented
from time to time, may be used by a broker-dealer in connection with resales of
registered notes received in exchange for outstanding notes where such
outstanding notes were acquired as a result of market-making activities or other
trading activities. We have agreed that we will make this prospectus, as amended
or supplemented, available to any broker-dealer for use in connection with any
such resale for a period of six months after consummation of the exchange offer.
In addition, until _________, 2000, all dealers effecting transactions in the
registered noted may be required to deliver a prospectus.
We will not receive any proceeds from any sale of registered notes by
broker-dealers. Registered notes received by broker-dealers for their own
account pursuant to the exchange offer may be sold from time to time in one or
more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the registered notes or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or negotiated prices. Any such resale
may be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such registered notes. Any
broker-dealer that effects any resale of registered notes that were received by
it for its own account pursuant to the exchange offer and any broker or dealer
that participates in a distribution of such registered notes may be deemed to be
an "underwriter" within the meaning of the Securities Act and any profit on any
such resale of registered notes and any commissions or concessions received by
any such persons may be deemed to be underwriting compensation under the
Securities Act. The Letter of Transmittal states that by acknowledging that it
will deliver and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of six months after consummation of the exchange offer, we
will promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests such documents
in the letter of transmittal. We have agreed to pay all expenses incident to the
exchange offer (including the expenses of one counsel for the holders of the
outstanding notes) other than commissions or concessions of any brokers or
dealers and will indemnify the holders of the outstanding notes (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
73
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, information statements
and other information with the SEC. Prior to the Penske Acquisition, Penske
Motorsports also filed annual, quarterly and special reports, information
statements and other information with the SEC. You may read and copy any
reports, statements and other information we file or that Penske Motorsports
filed prior to the Penske Acquisition at the SEC's public reference rooms in
Washington, D.C., New York, New York, and Chicago, Illinois. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. Ours as
well as Penske Motorsports' SEC filings are also available to the public from
commercial document retrieval services and at the web site maintained by the SEC
at "http://www.sec.gov." We have filed a registration statement on Form S-4 with
the SEC to register under the Securities Act the registered notes. This
prospectus is part of that registration statement. As allowed by the SEC's
rules, this prospectus does not contain all of the information you can find in
the registration statement or the exhibits to the registration statement.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" information in this
prospectus. This means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is considered to be part of this prospectus, except
for any information that is superseded by information that is included directly
in this prospectus or in any other subsequently filed document which we also
incorporated by reference. We incorporate by reference the documents listed
below and any future filings we will make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and
prior to the termination of the exchange offer:
/bullet/ Our Annual Report on Form 10-K for the fiscal year ended
November 30, 1998;
/bullet/ Our Quarterly Reports on Form 10-Q for the fiscal quarters
ended February 28, 1999, May 31, 1999 and August 31, 1999;
/bullet/ Our Current Reports on Form 8-K filed May 6, 1999, May 12,
1999, June 3, 1999, July 1, 1999, July 6, 1999, July 28, 1999,
September 27, 1999, October 6, 1999, October 8, 1999 and
January 4, 2000; and
/bullet/ Penske Motorsports' Annual Report on Form 10-K for the fiscal
year ended December 31, 1998.
You can obtain copies of any of the documents incorporated by reference
in this document without charge, excluding any exhibits to those documents
unless the exhibit is specifically incorporated by reference as an exhibit to
this prospectus, by requesting them in writing or by telephone to:
International Speedway Corporation
1801 West International Speedway Boulevard
Daytona Beach, Florida 32114
Attention: Wes Harris, Director of Investor Relations
(904) 254-2700
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We may not make an offer
of the registered notes in any state where the offer is not permitted. The
delivery of this prospectus does not, under any circumstances, mean that there
has not been a change in our affairs since the date of this prospectus. It also
does not mean that the information in this prospectus or in the documents we
incorporate in this prospectus by reference is correct after this date.
74
<PAGE>
LEGAL MATTERS
The validity of the registered notes offered hereby will be passed upon
by Greenberg Traurig, P.A., Miami, Florida
EXPERTS
The consolidated financial statements (including the schedule
incorporated by reference) of International Speedway as of November 30, 1997 and
1998, and for the year ended August 31, 1996, the three-month period ended
November 30, 1996, and the fiscal years ended November 30, 1997 and 1998,
incorporated by reference in this prospectus and the registration statement have
been audited by Ernst & Young LLP, independent certified public accountants, as
set forth in their report thereon incorporated by reference elsewhere herein,
and are included in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.
The consolidated financial statements of Penske Motorsports as of
December 31, 1997 and 1998, and for each of the three years in the period ended
December 31, 1998, incorporated by reference in this prospectus and the
registration statement have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their reports thereon incorporated by reference elsewhere
herein, and have been so included in reliance upon the reports of such firm
given upon their authority as experts in accounting and auditing.
75
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
============================================================= =============================================================
We have not authorized any dealer, sales
representative or any other person to give any
information or to make any representations not
contained in this prospectus or the
accompanying letter of transmittal. This prospectus and the
accompanying letter of transmittal do not offer to sell or buy
any securities in any jurisdiction where it is unlawful.
[ISC LOGO]
INTERNATIONAL SPEEDWAY
CORPORATION
OFFER TO EXCHANGE
$225,000,000
ALL OUTSTANDING 7.875% SENIOR NOTES DUE 2004
FOR
REGISTERED 7.875% SENIOR NOTES DUE 2004
---------------
TABLE OF CONTENTS
PAGE
----
Cautionary Statement Regarding Forward-Looking Statements...i
Prospectus Summary..........................................1
Risk Factors...............................................15
Use of Proceeds............................................20
Capitalization.............................................21
Selected Financial Data....................................22 -----------------------------------------
Pro Forma Financial Data...................................24 PROSPECTUS
Management's Discussion and Analysis of Financial Condition -----------------------------------------
and Results of Operations...............................29
Description of the Senior Credit Facility..................35
Motorsports Industry Overview..............................37
Business...................................................41
The Exchange Offer.........................................47
Description of the Registered Notes........................56
Certain United States Federal Income Tax Consequences......69
Plan of Distribution.......................................73
Where You Can Find More Information........................74
Documents Incorporated By Reference........................74
Legal Matters..............................................75
Experts....................................................75
, 2000
============================================================= =============================================================
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The registrant has authority under the Florida Business Corporation Act
to indemnify its directors and officers to the extent provided in that statute.
The registrant's Amended and Restated Articles of Incorporation provide that the
registrant shall indemnify its executive officers and directors to the fullest
extent permitted by law either now or hereafter. In general, Florida law permits
a Florida corporation to indemnify its directors, officers, employees and
agents, and person serving at the corporation's request in such capacities for
another enterprise against liabilities arising from conduct that such persons
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal action or proceeding, had not
reasonable cause to believe their conduct was unlawful.
The provisions of the Florida Business Corporation Act that authorize
indemnification do not eliminate the duty of care of a director and, in
appropriate circumstances, equitable remedies such as injunctive or other forms
of nonmonetary relief will remain available under Florida law. In addition, each
director will continue to be subject to liability for (a) violations of the
criminal law, unless the director had reasonable cause to believe his conduct
was lawful or had no reasonable cause to believe his conduct was unlawful, (b)
deriving an improper personal benefit from a transaction, (c) voting for or
assenting to an unlawful distribution, and (d) willful misconduct or a conscious
disregard for the best interests of the registrant in a proceeding by or in the
right of the registrant to procure a judgment in its favor or in a proceeding by
or in the right of a shareholder. The statute does not affect a director's
responsibilities under any other law, such as the federal securities laws or
state or federal environmental laws.
The registrant maintains a policy of director's and officers' liability
insurance that insures, subject to certain exclusions, the registrant's
directors and officers against the cost of defense, settlement, or payment of a
judgment in connection with a proceeding to which any such person may be made a
party by reason of the fact that such person is or was a director or officer of
the registrant.
At present, there is no pending litigation or proceeding involving a
director or officer of the Registrant as to which indemnification is being
sought from the Registrant, nor is the Registrant aware of any threatened
litigation that may result in claims for indemnification from the Registrant by
any officer or director.
II-1
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
EXHIBIT
NUMBER DESCRIPTION
- ------------ -----------------------------------------------------------------
1.1 Purchase Agreement dated October 1, 1999, between the Registrant
and the initial purchasers named therein.*
3.1 Registrant's Amended and Restated Articles of Incorporation (1)***
3.2 Registrant's Bylaws. (2)***
4.1 Indenture, dated October 6, 1999, between the Registrant, the
Co-Registrants and First Union National Bank, as trustee. (2)****
4.3 Registration Rights Agreement, dated October 6, 1999, among
Salomon Smith Barney and First Union
Securities, Inc. (as representatives of the initial purchasers)
and the Registrant.*
4.4 Form of Registered Note (included in Exhibit 4.1).(2)****
4.5 $300,000,000 Credit Agreement, dated as of July 21, 1999, as
amended, among the Registrant, the
Co-Registrants and the lenders parties thereto.(1)****
5.1 Opinion of Greenberg Traurig, P.A.*
10.1 Daytona Property Lease.(3)***
10.2 1994 Long-Term Incentive Plan.(4)***
10.3 1996 Long-Term Incentive Plan.(5)***
10.4 Split Dollar Agreement.(6)***
10.5 Split Dollar Agreement.(7)***
12.1 Statement of Computation of Ratio of Earnings to Fixed Charges.*
21.1 Subsidiaries of the Registrant.*
23.1 Consent of Ernst & Young LLP.*
23.2 Consent of Deloitte & Touche LLP.*
23.3 Consent of Greenberg Traurig, P.A. (included in Exhibit 5.1).*
24.1 Powers of Attorney (included on signature pages).*
25.1 Statement of Eligibility of Trustee.**
99.1 Form of Letter of Transmittal with respect to Exchange Offer.**
99.2 Form of Notice of Guaranteed Delivery.**
99.3 Form of Exchange Agent Agreement.**
99.4 Forms of Tender Instruction Letters.**
- ------------------------
* Filed herewith.
** To be filed by amendment.
*** Incorporated by reference to the exhibit shown in parentheses and filed
with the Registrant's Annual Report on Form 10-K for the fiscal year
ended November 30, 1998.
**** Incorporated by reference to the exhibit shown in parentheses and filed
with the Registrant's Quarterly Report on Form 10-Q for the quarter
ended August 31, 1999.
(b) Financial Statement Schedules.
Schedules not listed above have been omitted because the information to
be set forth therein is not applicable or is shown in the financial statements
or notes thereto.
ITEM 22. UNDERTAKINGS
1. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE>
2. The undersigned registrant hereby undertakes as follows: that prior
to any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
The registrant undertakes that every prospectus (i) that is filed
pursuant to the immediately preceding paragraph, or (ii) that purports to meet
the requirements of section 10(a)(3) of the Securities Act and is used in
connection with an offering of securities subject to Rule 415, will be filed as
a part of an amendment to the registration statement and will not be used until
such amendment is effective, and that, for purposes of determining any liability
under the Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
3. The undersigned registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
files subsequent to the effective date of the registration statement through the
date of responding to the request.
4. The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in this registration statement when it became effective.
II-3
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- -------- -----------
1.1 Purchase Agreement dated October 1, 1999, between the Registrant
and the initial purchasers named therein.
4.3 Registration Rights Agreement, dated October 6, 1999, among
Salomon Smith Barney and First Union Securities, Inc. (as
representatives of the initial purchasers) and the Registrant.
5.1 Opinion of Greenberg Traurig, P.A.
12.1 Statement of Computation of Ratio of Earnings to Fixed Charges.
21.1 Subsidiaries of the Registrant.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Greenberg Traurig, P.A. (included in Exhibit 5.1).
24.1 Powers of Attorney (included in signature pages).
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Daytona
Beach, State of Florida, on January 4, 2000.
INTERNATIONAL SPEEDWAY CORPORATION
By:/S/ JAMES C. FRANCE
-------------------------------
James C. France
President and Chief Operating Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE DATE
--------- ----
<S> <C> <C>
/S/ WILLIAM C. FRANCE Chairman of the Board and Chief January 4, 2000
- ------------------------------------------------- Executive Officer (Principal
William C. France Executive Officer)
/S/ SUSAN G. SCHANDEL Vice President, Chief Financial January 4, 2000
- ------------------------------------------------- Officer and Treasurer (Principal
Susan G. Schandel Financial Officer)
/S/ DANIEL W. HOUSER Controller (Principal Accounting January 4, 2000
- ------------------------------------------------- Officer)
Daniel W. Houser
/S/ JAMES C. FRANCE President, Chief Operating Officer January 4, 2000
- ------------------------------------------------- and Director
James C. France
/S/ LESA D. KENNEDY Executive Vice President and Director January 4, 2000
- -------------------------------------------------
Lesa D. Kennedy
/S/ H. LEE COMBS Senior Vice President-- Operations January 4, 2000
- ------------------------------------------------- and Director
H. Lee Combs
/S/ J. HYATT BROWN Director January 4, 2000
- -------------------------------------------------
J. Hyatt Brown
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE DATE
--------- ----
<S> <C> <C>
/S/ JOHN R. COOPER Director January 4, 2000
- -------------------------------------------------
John R. Cooper
/S/ WALTER P. CZARNECKI Director January 4, 2000
- -------------------------------------------------
Walter P. Czarnecki
/S/ ROBERT R. DYSON Director January 4, 2000
- -------------------------------------------------
Robert R. Dyson
/S/ JAMES H. FOSTER Director January 4, 2000
- -------------------------------------------------
James H. Foster
/S/ BRIAN Z. FRANCE Director January 4, 2000
- -------------------------------------------------
Brian Z. France
/S/ CHRISTY F. HARRIS Director January 4, 2000
- -------------------------------------------------
Christy F. Harris
/S/ RAYMOND K. MASON, JR. Director January 4, 2000
- -------------------------------------------------
Raymond K. Mason, Jr.
/S/ GREGORY W. PENSKE Director January 4, 2000
- -------------------------------------------------
Gregory W. Penske
/S/ ROGER S. PENSKE Director January 4, 2000
- -------------------------------------------------
Roger S. Penske
/S/ EDWARD H. RENSI Director January 4, 2000
- -------------------------------------------------
Edward H. Rensi
/S/ LLOYD E. REUSS Director January 4, 2000
- -------------------------------------------------
Lloyd E. Reuss
/S/ CHAPMAN J. ROOT Director January 4, 2000
- -------------------------------------------------
Chapman J. Root
/S/ THOMAS W. STAED Director January 4, 2000
- -------------------------------------------------
Thomas W. Staed
II-6
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Daytona
Beach, State of Florida, on January 4, 2000.
AMERICROWN SERVICE CORPORATION
By:/S/ MICHAEL G. GENTRY
---------------------
Michael G. Gentry
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ MICHAEL G. GENTRY President and Director (Principal January 4, 2000
- ------------------------------------------------------- Executive Officer)
Michael G. Gentry
/S/ DANIEL W. HOUSER Treasurer (Principal Financial and January 4, 2000
- ------------------------------------------------------- Accounting Officer)
Daniel W. Houser
</TABLE>
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Fontana,
State of California, on January 4, 2000.
CALIFORNIA SPEEDWAY CORPORATION
By: /S/ SCOTT ATHERTON
----------------------------
Scott Atherton
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ SCOTT ATHERTON President and Director (Principal January 4, 2000
- ------------------------------------------------------- Executive Officer)
Scott Atherton
/S/ SUSAN G. SCHANDEL Treasurer (Principal Financial January 4, 2000
- ------------------------------------------------------- Officer)
Susan G. Schandel
/S/ DANIEL W. HOUSER Assistant Treasurer (Principal January 4, 2000
- ------------------------------------------------------- Accounting Officer)
Daniel W. Houser
/S/ GREGORY W. PENSKE Director January 4, 2000
- -------------------------------------------------------
Gregory W. Penske
/S/ LESA D. KENNEDY Director January 4, 2000
- -------------------------------------------------------
Lesa D. Kennedy
/S/ H. LEE COMBS Director January 4, 2000
- -------------------------------------------------------
H. Lee Combs
</TABLE>
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Daytona
Beach, State of Florida, on January 4, 2000.
CHICAGO HOLDINGS, INC.
By:/S/ JAMES C. FRANCE
___________________
James C. France
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ JAMES C. FRANCE President and Director (Principal January 4, 2000
- ------------------------------------------------------- Executive Officer)
James C. France
/S/ SUSAN G. SCHANDEL Treasurer (Principal Financial January 4, 2000
- ------------------------------------------------------- Officer)
Susan G. Schandel
/S/ DANIEL W. HOUSER Vice President and Assistant January 4, 2000
- ------------------------------------------------------- Treasurer (Principal Accounting
Daniel W. Houser Officer)
/S/ H. LEE COMBS Vice President and Director January 4, 2000
- -------------------------------------------------------
H. Lee Combs
/S/ WILLIAM C. FRANCE Director January 4, 2000
- -------------------------------------------------------
William C. France
/S/ LESA D. KENNEDY Director January 4, 2000
- -------------------------------------------------------
Lesa D. Kennedy
</TABLE>
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the Village of
Brooklyn, State of Michigan, on January 4, 2000.
COMPETITION TIRE SOUTH, INC.
By: /S/ JOHN W.A. WOODY, JR.
-------------------------
John W.A. Woody, Jr.
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ JOHN W.A. WOODY, JR. President and Director (Principal January 4, 2000
- ------------------------------------------------------- Executive Officer)
John W.A. Woody, Jr.
/S/ DANIEL W. HOUSER Treasurer and Director (Principal January 4, 2000
- ------------------------------------------------------- Financial and Accounting Officer)
Daniel W. Houser
/S/ GREGORY W. PENSKE Director January 4, 2000
- -------------------------------------------------------
Gregory W. Penske
/S/ MICHAEL G. GENTRY Director January 4, 2000
- -------------------------------------------------------
Michael G. Gentry
</TABLE>
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the Village of
Brooklyn, State of Michigan, on January 4, 2000.
COMPETITION TIRE WEST, INC.
By: /S/ JOHN W.A. WOODY, JR.
------------------------
John W.A. Woody, Jr.
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ JOHN W.A. WOODY, JR. President and Director (Principal January 4, 2000
- ------------------------------------------------------- Executive Officer)
John W.A. Woody, Jr.
/S/ DANIEL W. HOUSER Treasurer and Director (Principal January 4, 2000
- ------------------------------------------------------- Financial and Accounting Officer)
Daniel W. Houser
/S/ GREGORY W. PENSKE Director January 4, 2000
- -------------------------------------------------------
Gregory W. Penske
/S/ MICHAEL G. GENTRY Director January 4, 2000
- -------------------------------------------------------
Michael G. Gentry
</TABLE>
II-11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Daytona
Beach, State of Florida, on January 4, 2000.
EVENT EQUIPMENT LEASING, INC.
By: /S/ JOHN R. SAUNDERS
--------------------------
John R. Saunders
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ JAMES C. FRANCE Chairman of the Board of Directors January 4, 2000
- -------------------------------------------------------
James C. France
/S/ JOHN R. SAUNDERS President (Principal Executive January 4, 2000
- ------------------------------------------------------- Officer)
John R. Saunders
/S/ SUSAN G. SCHANDEL Treasurer and Director (Principal January 4, 2000
- ------------------------------------------------------- Financial Officer)
Susan G. Schandel
/S/ DANIEL W. HOUSER Assistant Treasurer (Principal January 4, 2000
- ------------------------------------------------------- Accounting Officer)
Daniel W. Houser
/S/ H. LEE COMBS Vice President and Director January 4, 2000
- -------------------------------------------------------
H. Lee Combs
/S/ LESA D. KENNEDY Director January 4, 2000
- -------------------------------------------------------
Lesa D. Kennedy
II-12
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Daytona
Beach, State of Florida, on January 4, 2000.
EVENT SUPPORT CORPORATION
By: /S/ JOHN R. SAUNDERS
----------------------
John R. Saunders
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ LESA D. KENNEDY Chairman of the Board of Directors January 4, 2000
- -------------------------------------------------------
Lesa D. Kennedy
/S/ JOHN R. SAUNDERS President (Principal Executive January 4, 2000
- ------------------------------------------------------- Officer)
John R. Saunders
/S/ SUSAN G. SCHANDEL Treasurer (Principal Financial January 4, 2000
- ------------------------------------------------------- Officer)
Susan G. Schandel
/S/ DANIEL W. HOUSER Assistant Treasurer (Principal January 4, 2000
- ------------------------------------------------------- Accounting Officer)
Daniel W. Houser
/S/ H. LEE COMBS Director January 4, 2000
- -------------------------------------------------------
H. Lee Combs
/S/ JAMES C. FRANCE Director January 4, 2000
- -------------------------------------------------------
James C. France
</TABLE>
II-13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Tucson,
State of Arizona, on January 4, 2000.
GREAT WESTERN SPORTS, INC.
By: /S/ LEE K. BAUMGARTEN
----------------------
Lee K. Baumgarten
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ H. LEE COMBS Chairman of the Board of Directors January 4, 2000
- -------------------------------------------------------
H. Lee Combs
/S/ LEE K. BAUMGARTEN President and Director (Principal January 4, 2000
- ------------------------------------------------------- Executive Officer)
Lee K. Baumgarten
/S/ SUSAN G. SCHANDEL Treasurer (Principal Financial January 4, 2000
- ------------------------------------------------------- Officer)
Susan G. Schandel
/S/ DANIEL W. HOUSER Assistant Treasurer (Principal January 4, 2000
- ------------------------------------------------------- Accounting Officer)
Daniel W. Houser
/S/ LESA D. KENNEDY Director January 4, 2000
- -------------------------------------------------------
Lesa D. Kennedy
</TABLE>
II-14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Daytona
Beach, State of Florida, on January 4, 2000.
ISC PROPERTIES, INC.
By: /S/ GREGORY J. SULLIVAN
------------------------
Gregory J. Sullivan
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ LESA D. KENNEDY Chairman of the Board of Directors January 4, 2000
- -------------------------------------------------------
Lesa D. Kennedy
/S/ GREGORY J. SULLIVAN President and Director (Principal January 4, 2000
- ------------------------------------------------------- Executive Officer)
Gregory J. Sullivan
/S/ DANIEL W. HOUSER Treasurer (Principal Financial and January 4, 2000
- ------------------------------------------------------- Accounting Officer)
Daniel W. Houser
/S/ JOHN R. SAUNDERS Director January 4, 2000
- -------------------------------------------------------
John R. Saunders
</TABLE>
II-15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Daytona
Beach, State of Florida, on January 4, 2000.
MIAMI SPEEDWAY CORP.
By: /S/ JOHN R. SAUNDERS
---------------------
John R. Saunders
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ JOHN R. SAUNDERS President and Director (Principal January 4, 2000
- ------------------------------------------------------- Executive Officer)
John R. Saunders
/S/ DANIEL W. HOUSER Vice President and Assistant January 4, 2000
- ------------------------------------------------------- Treasurer (Principal Accounting
Daniel W. Houser Officer)
/S/ SUSAN G. SCHANDEL Treasurer (Principal Financial January 4, 2000
- ------------------------------------------------------- Officer)
Susan G. Schandel
/S/ WILLIAM C. FRANCE Director January 4, 2000
- -------------------------------------------------------
William C. France
/S/ LESA D. KENNEDY Director January 4, 2000
- -------------------------------------------------------
Lesa D. Kennedy
/S/ H. LEE COMBS Director January 4, 2000
- -------------------------------------------------------
H. Lee Combs
</TABLE>
II-16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the Village of
Brooklyn, State of Michigan, on January 4, 2000.
MICHIGAN INTERNATIONAL SPEEDWAY, INC.
By: /S/ GENE HASKETT
----------------------
Gene Haskett
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ GENE HASKETT President and Director (Principal January 4, 2000
- ------------------------------------------------------- Executive Officer)
Gene Haskett
/S/ SUSAN G. SCHANDEL Treasurer (Principal Financial January 4, 2000
- ------------------------------------------------------- Officer)
Susan G. Schandel
/S/ DANIEL W. HOUSER Assistant Treasurer (Principal January 4, 2000
- ------------------------------------------------------- Accounting Officer)
Daniel W. Houser
/S/ GREGORY W. PENSKE Director January 4, 2000
- -------------------------------------------------------
Gregory W. Penske
/S/ H. LEE COMBS Director January 4, 2000
- -------------------------------------------------------
H. Lee Combs
/S/ JOHN R. SAUNDERS Director January 4, 2000
- -------------------------------------------------------
John R. Saunders
</TABLE>
II-17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Daytona
Beach, State of Florida, on January 4, 2000.
MOTORSPORTS INTERNATIONAL CORP.
By: /S/ MICHAEL G. GENTRY
--------------------------------
Michael G. Gentry
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ MICHAEL G. GENTRY President and Director (Principal January 4, 2000
- ------------------------------------------------------- Executive Officer)
Michael G. Gentry
/S/ DANIEL W. HOUSER Treasurer (Principal Financial and January 4, 2000
- ------------------------------------------------------- Accounting Officer)
Daniel W. Houser
/S/ GREGORY W. PENSKE Director January 4, 2000
- -------------------------------------------------------
Gregory W. Penske
/S/ JOHN R. SAUNDERS Director January 4, 2000
- -------------------------------------------------------
John R. Saunders
</TABLE>
II-18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Daytona
Beach, State of Florida, on January 4, 2000.
NEW YORK INTERNATIONAL SPEEDWAY CORP.
By: /S/ LESA D. KENNEDY
----------------------------------------
Lesa D. Kennedy
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ LESA D. KENNEDY President and Director (Principal January 4, 2000
- ------------------------------------------------------- Executive Officer)
Lesa D. Kennedy
/S/ SUSAN G. SCHANDEL Treasurer (Principal Financial January 4, 2000
- ------------------------------------------------------- Officer)
Susan G. Schandel
/S/ DANIEL W. HOUSER Assistant Treasurer (Principal January 4, 2000
- ------------------------------------------------------- Accounting Officer)
Daniel W. Houser
/S/ BRIAN Z. FRANCE Director January 4, 2000
- -------------------------------------------------------
Brian Z. France
/S/ JOHN R. SAUNDERS Director January 4, 2000
- -------------------------------------------------------
John R. Saunders
</TABLE>
II-19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Daytona
Beach, State of Florida, on January 4, 2000.
NORTH AMERICAN TESTING COMPANY
By: /S/ STAN ALEXANDER
--------------------------------
Stan Alexander
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ H. LEE COMBS Chairman of the Board of Directors January 4, 2000
- -------------------------------------------------------
H. Lee Combs
/S/ STAN ALEXANDER President (Principal Executive January 4, 2000
- ------------------------------------------------------- Officer)
Stan Alexander
/S/ SUSAN G. SCHANDEL Treasurer (Principal Financial January 4, 2000
- ------------------------------------------------------- Officer)
Susan G. Schandel
/S/ DANIEL W. HOUSER Assistant Treasurer (Principal January 4, 2000
- ------------------------------------------------------- Accounting Officer)
Daniel W. Houser
/S/ JAMES C. FRANCE Director January 4, 2000
- -------------------------------------------------------
James C. France
/S/ LESA D. KENNEDY Director January 4, 2000
- -------------------------------------------------------
Lesa D. Kennedy
</TABLE>
II-20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Rockingham,
State of North Carolina, on January 4, 2000.
NORTH CAROLINA SPEEDWAY, INC.
By: /s/ JO DEWITT WILSON
--------------------------------------
Jo DeWitt Wilson
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ CARRIE B. DEWITT Chairman of the Board of Directors January 4, 2000
- -------------------------------------------------------
Carrie B. DeWitt
/S/ JO DEWITT WILSON President, Chief Executive Officer January 4, 2000
- ------------------------------------------------------- and Director (Principal Executive
Jo DeWitt Wilson Officer)
/S/ DANIEL W. HOUSER Treasurer (Principal Financial and January 4, 2000
- ------------------------------------------------------- Accounting Officer)
Daniel W. Houser
/S/ JAMES H. HUNTER Director January 4, 2000
- -------------------------------------------------------
James H. Hunter
/S/ JOHN R. SAUNDERS Director January 4, 2000
- -------------------------------------------------------
John R. Saunders
</TABLE>
II-21
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the Borough of
Nazareth, Commonwealth of Pennsylvania, on January 4, 2000.
PENNSYLVANIA INTERNATIONAL RACEWAY, INC.
By: /S/ WILLIAM G. MILLER
-----------------------------------------
William G. Miller
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ WILLIAM G. MILLER President and Director (Principal January 4, 2000
- ------------------------------------------------------- Executive Officer)
William G. Miller
/S/ DANIEL W. HOUSER Treasurer (Principal Financial and January 4, 2000
- ------------------------------------------------------- Accounting Officer)
Daniel W. Houser
/S/ GENE HASKETT Director January 4, 2000
- -------------------------------------------------------
Gene Haskett
/S/ GREGORY W. PENSKE Director January 4, 2000
- -------------------------------------------------------
Gregory W. Penske
/S/ JOHN R. SAUNDERS Director January 4, 2000
- -------------------------------------------------------
John R. Saunders
</TABLE>
II-22
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Daytona
Beach, State of Florida, on January 4, 2000.
PHOENIX SPEEDWAY CORP.
By: /S/ H. LEE COMBS
--------------------------------
H. Lee Combs
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ H. LEE COMBS Chairman of the Board of Directors January 4, 2000
- ------------------------------------------------------- and Chief Executive Officer
H. Lee Combs (Principal Executive Officer)
/S/ SUSAN G. SCHANDEL Treasurer (Principal Financial January 4, 2000
- ------------------------------------------------------- Officer)
Susan G. Schandel
/S/ DANIEL W. HOUSER Assistant Treasurer (Principal January 4, 2000
- ------------------------------------------------------- Accounting Officer)
Daniel W. Houser
/S/ WILLIAM C. FRANCE Director January 4, 2000
- -------------------------------------------------------
William C. France
/S/ JAMES C. FRANCE Director January 4, 2000
- -------------------------------------------------------
James C. France
/S/ LESA D. KENNEDY Director January 4, 2000
- -------------------------------------------------------
Lesa D. Kennedy
</TABLE>
II-23
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Daytona
Beach, State of Florida, on January 4, 2000.
REGIMENT, INC.
By: /S/ MICHAEL GENTRY
-------------------------------------------
Michael Gentry
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ MICHAEL GENTRY President (Principal Executive January 4, 2000
- ------------------------------------------------------- Officer)
Michael Gentry
/S/ VICKIE COX Treasurer and Director (Principal January 4, 2000
- ------------------------------------------------------- Financial and Accounting Officer)
Vickie Cox
/S/ JO DEWITT WILSON Director January 4, 2000
- -------------------------------------------------------
Jo DeWitt Wilson
/S/ CHRIS BROWNING Director January 4, 2000
- -------------------------------------------------------
Chris Browning
</TABLE>
II-24
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of El Monte,
State of California, on January 4, 2000.
ROCKY MOUNTAIN SPEEDWAY CORPORATION
By: /S/ GREGORY W. PENSKE
---------------------------------
Gregory W. Penske
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ GREGORY W. PENSKE President and Director (Principal January 4, 2000
- ------------------------------------------------------- Executive Officer)
Gregory W. Penske
/S/ SUSAN G. SCHANDEL Treasurer (Principal Financial January 4, 2000
- ------------------------------------------------------- Officer)
Susan G. Schandel
/S/ DANIEL W. HOUSER Assistant Treasurer (Principal January 4, 2000
- ------------------------------------------------------- Accounting Officer)
Daniel W. Houser
/S/ WALTER P. CZARNECKI Director January 4, 2000
- -------------------------------------------------------
Walter P. Czarnecki
/S/ LESA D. KENNEDY Director January 4, 2000
- -------------------------------------------------------
Lesa D. Kennedy
/S/ H. LEE COMBS Director January 4, 2000
- -------------------------------------------------------
H. Lee Combs
</TABLE>
II-25
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Daytona
Beach, State of Florida, on January 4, 2000.
SEASONAL SERVICES, INC.
By: /S/ MICHAEL GENTRY
--------------------------------------
Michael Gentry
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ MICHAEL GENTRY President and Director (Principal January 4, 2000
- ------------------------------------------------------- Executive Officer)
Michael Gentry
/S/ SUSAN G. SCHANDEL Treasurer (Principal Financial January 4, 2000
- ------------------------------------------------------- Officer)
Susan G. Schandel
/S/ DANIEL W. HOUSER Assistant Treasurer (Principal January 4, 2000
- ------------------------------------------------------- Accounting Officer)
Daniel W. Houser
/S/ JOHN R. SAUNDERS Director January 4, 2000
- -------------------------------------------------------
John R. Saunders
</TABLE>
II-26
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Darlington,
State of South Carolina, on January 4, 2000.
SOUTH CAROLINA INTERNATIONAL SPEEDWAY CORPORATION
By: /S/ JAMES HUNTER
--------------------------------------------------
James Hunter
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ WOODROW MCKAY Chairman of the Board of Directors January 4, 2000
- -------------------------------------------------------
Woodrow McKay
/S/ JAMES HUNTER President and Director (Principal January 4, 2000
- ------------------------------------------------------- Executive Officer)
James Hunter
/S/ SUSAN G. SCHANDEL Treasurer (Principal Financial January 4, 2000
- ------------------------------------------------------- Officer)
Susan G. Schandel
/S/ DANIEL W. HOUSER Assistant Treasurer (Principal January 4, 2000
- ------------------------------------------------------- Accounting Officer)
Daniel W. Houser
/S/ JAMES H. FOSTER Vice President and Director January 4, 2000
- -------------------------------------------------------
James H. Foster
/S/ LOOMIS COLVIN Director January 4, 2000
- -------------------------------------------------------
Loomis Colvin
/S/ H. LEE COMBS Director January 4, 2000
- -------------------------------------------------------
H. Lee Combs
/S/ JAMES C. FRANCE Director January 4, 2000
- -------------------------------------------------------
James C. France
/S/ LESA D. KENNEDY Director January 4, 2000
- -------------------------------------------------------
Lesa D. Kennedy
</TABLE>
II-27
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the Village of Watkins
Glen, State of New York, on January 4, 2000.
WATKINS GLEN INTERNATIONAL, INC.
By: /S/ BRYAN R. SPERBER
----------------------------------------
Bryan R. Sperber
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ JOHN SAUNDERS Chairman of the Board of Directors January 4, 2000
- -------------------------------------------------------
John Saunders
/S/ BRYAN S. SPERBER President (Principal Executive January 4, 2000
- ------------------------------------------------------- Officer)
Bryan S. Sperber
/S/ DANIEL J. WILLS Treasurer (Principal Financial January 4, 2000
- ------------------------------------------------------- Officer)
Daniel J. Wills
/S/ DANIEL W. HOUSER Assistant Treasurer (Principal January 4, 2000
- ------------------------------------------------------- Accounting Officer)
Daniel W. Houser
/S/ JAMES C. FRANCE Director January 4, 2000
- -------------------------------------------------------
James C. France
/S/ H. LEE COMBS Director January 4, 2000
- -------------------------------------------------------
H. Lee Combs
</TABLE>
II-28
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Daytona
Beach, State of Florida, on January 4, 2000.
88 CORP.
By: /S/ JAMES C. FRANCE
---------------------------------------
James C. France
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints W. Garrett Crotty and Glenn R.
Padgett his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement and any filings made
pursuant to Rule 462 under the Securities Act of 1933, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ WILLIAM C. FRANCE Chairman of the Board of Directors January 4, 2000
- ------------------------------------------------------- and Chief Executive Officer
William C. France
/S/ JAMES C. FRANCE President and Director (Principal January 4, 2000
- ------------------------------------------------------- Executive Officer)
James C. France
/S/ SUSAN G. SCHANDEL Treasurer (Principal Financial January 4, 2000
- ------------------------------------------------------- Officer)
Susan G. Schandel
/S/ DANIEL W. HOUSER Assistant Treasurer (Principal January 4, 2000
- ------------------------------------------------------- Accounting Officer)
Daniel W. Houser
/S/ LESA D. KENNEDY Director January 4, 2000
- -------------------------------------------------------
Lesa D. Kennedy
</TABLE>
II-29
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------- -----------------------------------------------------------------
1.1 Purchase Agreement dated October 1, 1999, between the Registrant
and the initial purchasers named therein.
4.3 Registration Rights Agreement, dated October 6, 1999, among
Salomon Smith Barney and First Union
Securities, Inc. (as representatives of the initial purchasers)
and the Registrant.
5.1 Opinion of Greenberg Traurig, P.A.
12.1 Statement of Computation of Ratio of Earnings to Fixed Charges.
21.1 Subsidiaries of the Registrant.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Deloitte & Touche LLP.
EXHIBIT 1.1
INTERNATIONAL SPEEDWAY CORPORATION
7-7/8% Senior Notes due 2004
REGISTRATION RIGHTS AGREEMENT
New York, New York
October 6, 1999
Salomon Smith Barney
First Union Securities, Inc.
As Representatives of the Initial Purchasers
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
International Speedway Corporation, a corporation organized under the
laws of Florida (the "Company"), proposes to issue and sell to certain
purchasers (the "Initial Purchasers"), upon the terms set forth in a purchase
agreement dated October 1, 1999 (the "Purchase Agreement"), its 7-7/8% Senior
Notes due 2004 (the "Securities") relating to the initial placement of the
Securities (the "Initial Placement"). To induce the Initial Purchasers to enter
into the Purchase Agreement and to satisfy a condition of your obligations
thereunder, the Company agrees with you for your benefit and the benefit of the
holders from time to time of the Securities (including the Initial Purchasers)
(each a "Holder" and, together, the "Holders"), as follows:
1. DEFINITIONS. Capitalized terms used herein without definition shall
have their respective meanings set forth in the Purchase Agreement. As used in
this Agreement, the following capitalized defined terms shall have the following
meanings:
"Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Affiliate" of any specified Person shall mean any other Person
that, directly or indirectly, is in control of, is controlled by, or is
under common control with, such
<PAGE>
specified Person. For purposes of this definition, control of a Person
shall mean the power, direct or indirect, to direct or cause the
direction of the management and policies of such Person whether by
contract or otherwise; and the terms "controlling" and "controlled"
shall have meanings correlative to the foregoing.
"Broker-Dealer" shall mean any broker or dealer registered as such
under the Exchange Act.
"Business Day" shall mean any day other than a Saturday, a Sunday or
a legal holiday or a day on which banking institutions or trust
companies are authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Exchange Offer Registration Period" shall mean the six month period
following the consummation of the Registered Exchange Offer, exclusive
of any period during which any stop order shall be in effect suspending
the effectiveness of the Exchange Offer Registration Statement.
"Exchange Offer Registration Statement" shall mean a registration
statement of the Company on an appropriate form under the Act with
respect to the Registered Exchange Offer, all amendments and
supplements to such registration statement, including post-effective
amendments thereto, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by
reference therein.
"Exchanging Dealer" shall mean any Holder (which may include any
Initial Purchaser) that is a Broker-Dealer and elects to exchange for
New Securities any Securities that it acquired for its own account as a
result of market-making activities or other trading activities (but not
directly from the Company or any Affiliate of the Company).
"Final Memorandum" shall have the meaning set forth in the Purchase
Agreement.
"Holder" shall have the meaning set forth in the preamble hereto.
"Indenture" shall mean the Indenture relating to the Securities,
dated as of October 6, 1999, between the Company and First Union
National Bank, as trustee, as the same may be amended from time to time
in accordance with the terms thereof.
-2-
<PAGE>
"Initial Placement" shall have the meaning set forth in the preamble
hereto.
"Initial Purchaser" shall have the meaning set forth in the preamble
hereto.
"Losses" shall have the meaning set forth in Section 7(d) hereof.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of Securities registered under a
Registration Statement.
"Managing Underwriters" shall mean the investment banker or
investment bankers and manager or managers that shall administer an
underwritten offering.
"New Securities" shall mean debt securities of the Company identical
in all material respects to the Securities (except that the cash
interest and interest rate step-up provisions and the transfer
restrictions shall be modified or eliminated, as appropriate) and to be
issued under the Indenture or the New Securities Indenture.
"New Securities Indenture" shall mean an indenture between the
Company and the New Securities Trustee, identical in all material
respects to the Indenture (except that the cash interest and interest
rate step-up provisions will be modified or eliminated, as
appropriate).
"New Securities Trustee" shall mean a bank or trust company
reasonably satisfactory to the Initial Purchasers, as trustee with
respect to the New Securities under the New Securities Indenture.
"Prospectus" shall mean the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A under the
Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Securities
or the New Securities covered by such Registration Statement, and all
amendments and supplements thereto and all material incorporated by
reference therein.
"Purchase Agreement" shall have the meaning set forth in the
preamble hereto.
"Registered Exchange Offer" shall mean the proposed offer of the
Company to issue and deliver to the Holders of the Securities that are
not prohibited by any law or policy of the Commission from
participating in such offer, in exchange for the Securities, a like
aggregate principal amount of the New Securities.
"Registration Statement" shall mean any Exchange Offer Registration
Statement or Shelf Registration Statement that covers any of the
Securities or the New Securities
-3-
<PAGE>
pursuant to the provisions of this Agreement, any amendments and
supplements to such registration statement, including post-effective
amendments (in each case including the Prospectus contained therein),
all exhibits thereto and all material incorporated by reference
therein.
"Securities" shall have the meaning set forth in the preamble
hereto.
"Shelf Registration" shall mean a registration effected pursuant to
Section 3 hereof.
"Shelf Registration Period" has the meaning set forth in Section
3(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 3 hereof
which covers some or all of the Securities or New Securities, as
applicable, on an appropriate form under Rule 415 under the Act, or any
similar rule that may be adopted by the Commission, amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein,
all exhibits thereto and all material incorporated by reference
therein.
"Trustee" shall mean the trustee with respect to the Securities
under the Indenture.
"Underwriter" shall mean any underwriter of Securities in connection
with an offering thereof under a Shelf Registration Statement.
2. REGISTERED EXCHANGE OFFER.
(a) The Company shall prepare and, not later than 120 days following
the date of the original issuance of the Securities (or if such 120th day is not
a Business Day, the next succeeding Business Day), shall file with the
Commission the Exchange Offer Registration Statement with respect to the
Registered Exchange Offer. The Company shall use its best efforts to cause the
Exchange Offer Registration Statement to become effective under the Act within
180 days of the date of the original issuance of the Securities (or if such
180th day is not a Business Day, the next succeeding Business Day).
(b) Upon the effectiveness of the Exchange Offer Registration
Statement, the Company shall promptly commence the Registered Exchange Offer, it
being the objective of such Registered Exchange Offer to enable each Holder
electing to exchange Securities for New Securities (assuming that such Holder is
not an Affiliate of the Company, acquires the New Securities in the ordinary
course of such Holder's business, has no arrangements with any Person to
participate in the distribution of the New Securities and is not prohibited by
any law or policy of the Commission from participating in the Registered
Exchange Offer) to trade such New Securities from and after their receipt
without any limitations or restrictions under the Act and
-4-
<PAGE>
without material restrictions under the securities laws of a substantial
proportion of the several states of the United States.
(c) In connection with the Registered Exchange Offer, the Company
shall:
(i) mail to each Holder a copy of the Prospectus
forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal and related
documents;
(ii) keep the Registered Exchange Offer open for not
less than 30 days and not more than 45 days after the date
notice thereof is mailed to the Holders (or, in each case,
longer if required by applicable law);
(iii) use its best efforts to keep the Exchange Offer
Registration Statement continuously effective under the Act,
supplemented and amended as required, under the Act to ensure
that it is available for sales of New Securities by Exchanging
Dealers during the Exchange Offer Registration Period;
(iv) utilize the services of a depositary for the
Registered Exchange Offer with an address in the Borough of
Manhattan in New York City, which may be the Trustee, the New
Securities Trustee or an Affiliate of either of them;
(v) permit Holders to withdraw tendered Securities at
any time prior to the close of business, New York time, on the
last Business Day on which the Registered Exchange Offer is
open;
(vi) prior to effectiveness of the Exchange Offer
Registration Statement, provide a supplemental letter to the
Commission (A) stating that the Company is conducting the
Registered Exchange Offer in reliance on the position of the
Commission in EXXON CAPITAL HOLDINGS CORPORATION (pub. avail.
May 13, 1988), MORGAN STANLEY AND CO., INC. (pub. avail. June
5, 1991); and (B) including a representation that the Company
has not entered into any arrangement or understanding with any
Person to distribute the New Securities to be received in the
Registered Exchange Offer and that, to the best of the
Company's information and belief, each Holder participating in
the Registered Exchange Offer is acquiring the New Securities
in the ordinary course of business and has no arrangement or
understanding with any Person to participate in the
distribution of the New Securities; and
(vii) comply in all respects with all applicable
laws.
(d) As soon as practicable after the close of the Registered
Exchange Offer, the Company shall:
-5-
<PAGE>
(i) accept for exchange all Securities tendered and
not validly withdrawn pursuant to the Registered Exchange
Offer;
(ii) deliver to the Trustee for cancellation in
accordance with Section 4(s) all Securities so accepted for
exchange; and
(iii) cause the New Securities Trustee promptly to
authenticate and deliver to each Holder of Securities a
principal amount of New Securities equal to the principal
amount of the Securities of such Holder so accepted for
exchange.
(e) Each Holder hereby acknowledges and agrees that any
Broker-Dealer and any such Holder using the Registered Exchange Offer to
participate in a distribution of the New Securities (x) could not under
Commission policy as in effect on the date of this Agreement rely on the
position of the Commission in MORGAN STANLEY AND CO., INC. (pub. avail. June 5,
1991) and EXXON CAPITAL HOLDINGS CORPORATION (pub. avail. May 13, 1988), as
interpreted in the Commission's letter to Shearman & Sterling dated July 2, 1993
and similar no-action letters; and (y) must comply with the registration and
prospectus delivery requirements of the Act in connection with any secondary
resale transaction must be covered by an effective registration statement
containing the selling security holder information required by Item 507 or 508,
as applicable, of Regulation S-K under the Act if the resales are of New
Securities obtained by such Holder in exchange for Securities acquired by such
Holder directly from the Company or one of its Affiliates. Accordingly, each
Holder participating in the Registered Exchange Offer shall be required to
represent to the Company that, at the time of the consummation of the Registered
Exchange Offer:
(i) any New Securities received by such Holder will
be acquired in the ordinary course of business;
(ii) such Holder will have no arrangement or
understanding with any Person to participate in the
distribution of the Securities or the New Securities within
the meaning of the Act; and
(iii) such Holder is not an Affiliate of the Company.
(f) If any Initial Purchaser determines that it is not eligible to
participate in the Registered Exchange Offer with respect to the exchange of
Securities constituting any portion of an unsold allotment, at the request of
such Initial Purchaser, the Company shall issue and deliver to such Initial
Purchaser or the Person purchasing New Securities registered under a Shelf
Registration Statement as contemplated by Section 3 hereof from such Initial
Purchaser, in exchange for such Securities, a like principal amount of New
Securities. The Company shall use its best efforts to cause the CUSIP Service
Bureau to issue the same CUSIP number for such New Securities as for New
Securities issued pursuant to the Registered Exchange Offer.
-6-
<PAGE>
3. SHELF REGISTRATION.
(a) If (i) due to any change in law or applicable interpretations
thereof by the Commission's staff, the Company determines upon advice of its
outside counsel that it is not permitted to effect the Registered Exchange Offer
as contemplated by Section 2 hereof; (ii) for any other reason the Registered
Exchange Offer is not consummated within 180 days of the date of the original
issuance of the Securities; (iii) any Initial Purchaser so requests with respect
to Securities that are not eligible to be exchanged for New Securities in the
Registered Exchange Offer and that are held by it following consummation of the
Registered Exchange Offer; (iv) any Holder (other than an Initial Purchaser) is
not eligible to participate in the Registered Exchange Offer; or (v) in the case
of any Initial Purchaser that participates in the Registered Exchange Offer or
acquires New Securities pursuant to Section 2(f) hereof, such Initial Purchaser
does not receive freely tradeable New Securities in exchange for Securities
constituting any portion of an unsold allotment (it being understood that (x)
the requirement that an Initial Purchaser deliver a Prospectus containing the
information required by Item 507 or 508 of Regulation S-K under the Act in
connection with sales of New Securities acquired in exchange for such Securities
shall result in such New Securities being not "freely tradeable"; and (y) the
requirement that an Exchanging Dealer deliver a Prospectus in connection with
sales of New Securities acquired in the Registered Exchange Offer in exchange
for Securities acquired as a result of market-making activities or other trading
activities shall not result in such New Securities being not "freely
tradeable"), the Company shall effect a Shelf Registration Statement in
accordance with subsection (b) below.
(b) (i) The Company shall as promptly as practicable (but in no
event more than 30 days after so required or requested pursuant to this Section
3), file with the Commission and thereafter shall use its best efforts to cause
to be declared effective under the Act a Shelf Registration Statement relating
to the offer and sale of the Securities or the New Securities, as applicable, by
the Holders thereof from time to time in accordance with the methods of
distribution elected by such Holders and set forth in such Shelf Registration
Statement; PROVIDED, HOWEVER, that no Holder (other than an Initial Purchaser)
shall be entitled to have the Securities held by it covered by such Shelf
Registration Statement unless such Holder agrees in writing to be bound by all
of the provisions of this Agreement applicable to such Holder; and PROVIDED
FURTHER, that with respect to New Securities received by an Initial Purchaser in
exchange for Securities constituting any portion of an unsold allotment, the
Company may, if permitted by current interpretations by the Commission's staff,
file a post-effective amendment to the Exchange Offer Registration Statement
containing the information required by Item 507 or 508 of Regulation S-K, as
applicable, in satisfaction of its obligations under this subsection with
respect thereto, and any such Exchange Offer Registration Statement, as so
amended, shall be referred to herein as, and governed by the provisions herein
applicable to, a Shelf
-7-
<PAGE>
Registration Statement.
(ii) The Company shall use its best efforts to keep
the Shelf Registration Statement continuously effective,
supplemented and amended as required by the Act, in order to
permit the Prospectus forming part thereof to be usable by
Holders for a period of two years from the date the Shelf
Registration Statement is declared effective by the Commission
or such shorter period that will terminate when all the
Securities or New Securities, as applicable, covered by the
Shelf Registration Statement have been sold pursuant to the
Shelf Registration Statement (in any such case, such period
being called the "Shelf Registration Period"). The Company
shall be deemed not to have used its best efforts to keep the
Shelf Registration Statement effective during the requisite
period if it voluntarily takes any action that would result in
Holders of Securities covered thereby not being able to offer
and sell such Securities during that period, unless (A) such
action is required by applicable law; or (B) such action is
taken by the Company in good faith and for valid business
reasons (not including avoidance of the Company's obligations
hereunder), including the acquisition or divestiture of
assets, so long as the Company promptly thereafter complies
with the requirements of Section 5(k) hereof, if applicable.
(iii) The Company shall cause the Shelf Registration
Statement and the related Prospectus and any amendment or
supplement thereto, as of the effective date of the Shelf
Registration Statement or such amendment or supplement, (A) to
comply in all material respects with the applicable
requirements of the Securities Act and the rules and
regulations of the Commission; and (B) not to contain any
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
4. ADDITIONAL INTEREST. (a) The parties hereto agree that the Holders
of Securities or New Securities, as the case may be, will suffer damages if the
Company fails to perform its obligations under Section 2 or 3 hereof and that it
would not be feasible to ascertain the extent of such damages. Accordingly, in
the event that (i) on or prior to the 120th day following the date of original
issuance of the Securities, the Exchange Offer Registration Statement has not
been filed with the Commission, (ii) on or prior to the 180th day following the
date of the original issuance of the Securities, the Exchange Offer Registration
Statement has not been declared effective, (iii) on or prior to the 225th day
following the date of the original issuance of the Securities, neither the
Registered Exchange Offer has been consummated nor the Shelf Registration
Statement has been declared effective, or (iv) after the Shelf Registration
Statement has been declared effective, such Shelf Registration Statement ceases
to be effective or usable in connection with resales of Securities or New
Securities during a period in which it is required to be effective hereunder,
and such failure to be effective or so usable continues for more than 60 days
(whether or not consecutive) in any 12-month period (each such event referred to
in clauses
-8-
<PAGE>
(i) through (iv), a "Registration Default"), then additional interest
("Additional Interest") will accrue at a rate of 0.25% per annum on the
principal amount of the Securities and the New Securities, respectively (in
addition to the stated interest on the Securities and the New Securities), from
and including the date immediately following the date on which any Registration
Default first occurs and while any Registration Default has occurred and is
continuing, to but excluding the date on which all filings, declarations of
effectiveness and consummations, as the case may be, have been achieved which,
if achieved on a timely basis, would have prevented the occurrence of all of the
then-existing Registration Defaults. Notwithstanding the foregoing, in the event
of a Registration Default of the type described under clause (iv) of the
preceding sentence, Additional Interest will cease to accrue as a result of such
Registration Default upon the earlier of the two year anniversary of the date of
the original issuance of the Securities (or, if Rule 144(k) under the Act is
amended to provide a shorter restrictive period, the shorter period) or the date
as of which all of the applicable Securities are sold pursuant to the Shelf
Registration Statement. Notwithstanding the foregoing, the Company shall not be
deemed to have failed to perform its obligations under Section 2 or 3 by reason
of the failure of any Holder to provide information regarding itself reasonably
requested by the Company or any regulatory agency having jurisdiction over any
of the Holders at least ten business days prior to such Registration Default.
(b) The Company shall notify the Trustee and paying agent under the
Indenture (or the New Trustee and paying agent under any New Securities
Indenture) immediately upon the happening of each and every Registration Default
and, to the extent the Company is obligated to pay any Additional Interest,
shall provide to the Trustee and paying agent, at the applicable Record Date (as
defined in the Indenture), a computation of the Additional Interest due under
Section 4(a) above. The Company shall pay the Additional Interest due on the
Securities or New Securities, as the case may be, by depositing with the paying
agent (which shall not be the Company for these purposes) for the Securities or
the New Securities, as the case may be, in trust, for the benefit of the Holders
thereof, prior to 11:00 A.M. on the next interest payment date specified in the
Indenture (or such New Securities Indenture), sums sufficient to pay the
Additional Interest then due. The Additional Interest shall be payable on each
interest payment date specified by the Indenture (or such New Securities
Indenture) to the record holders entitled to receive the interest payment to be
made on such date.
(c) The parties hereto agree that the Additional Interest provided
for in this Section 4 constitutes a reasonable estimate of the damages that will
be suffered by Holders of Securities or New Securities by reason of the
happening of any Registration Default.
5. ADDITIONAL REGISTRATION PROCEDURES. In connection with any Shelf
Registration Statement and, to the extent applicable, any Exchange Offer
Registration Statement, the following provisions shall apply.
(a) The Company shall:
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(i) furnish to you, as Representatives of the Initial
Purchasers, not less than five Business Days prior to the
filing thereof with the Commission, a copy of any Exchange
Offer Registration Statement and any Shelf Registration
Statement, and each amendment thereof and each amendment or
supplement, if any, to the Prospectus included therein
(including all documents incorporated by reference therein
after the initial filing) and shall use its best efforts to
reflect in each such document, when so filed with the
Commission, such comments as you reasonably propose;
(ii) include the information set forth in Annex A
hereto on the facing page of the Exchange Offer Registration
Statement, in Annex B hereto in the forepart of the Exchange
Offer Registration Statement in a section setting forth
details of the Exchange Offer, in Annex C hereto in the
underwriting or plan of distribution section of the Prospectus
contained in the Exchange Offer Registration Statement, and in
Annex D hereto in the letter of transmittal delivered pursuant
to the Registered Exchange Offer;
(iii) if requested by an Initial Purchaser, include
the information required by Item 507 or 508 of Regulation S-K,
as applicable, in the Prospectus contained in the Exchange
Offer Registration Statement; and
(iv) in the case of a Shelf Registration Statement,
include the names of the Holders that propose to sell
Securities pursuant to the Shelf Registration Statement as
selling security holders.
(b) The Company shall ensure that:
(i) any Registration Statement and any amendment
thereto and any Prospectus forming part thereof and any
amendment or supplement thereto complies in all material
respects with the Act and the rules and regulations
thereunder; and
(ii) any Registration Statement and any amendment
thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading.
(c) The Company shall advise you, the Holders of Securities
covered by any Shelf Registration Statement and any Exchanging Dealer under any
Exchange Offer Registration Statement that has provided in writing to the
Company a telephone or facsimile number and address for notices, and, if
requested by you or any such Holder or Exchanging Dealer, shall confirm such
advice in writing (which notice pursuant to clauses (ii)-(v) hereof shall be
accompanied by an instruction to suspend the use of the Prospectus until the
Company shall have
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remedied the basis for such suspension):
(i) when a Registration Statement and any amendment
thereto has been filed with the Commission and when the
Registration Statement or any post-effective amendment thereto
has become effective;
(ii) of any request by the Commission for any
amendment or supplement to the Registration Statement or the
Prospectus or for additional information;
(iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that
purpose;
(iv) of the receipt by the Company of any
notification with respect to the suspension of the
qualification of the securities included therein for sale in
any jurisdiction or the initiation of any proceeding for such
purpose; and
(v) of the happening of any event that requires any
change in the Registration Statement or the Prospectus so
that, as of such date, the statements therein are not
misleading and do not omit to state a material fact required
to be stated therein or necessary to make the statements
therein (in the case of the Prospectus, in the light of the
circumstances under which they were made) not misleading.
(d) The Company shall use its best efforts to obtain the
withdrawal of any order suspending the effectiveness of any Registration
Statement or the qualification of the securities therein for sale in any
jurisdiction at the earliest possible time.
(e) The Company shall furnish to each Holder of Securities
covered by any Shelf Registration Statement, without charge, at least one copy
of such Shelf Registration Statement and any post-effective amendment thereto,
including all material incorporated therein by reference, and, if the Holder so
requests in writing, all exhibits thereto (including exhibits incorporated by
reference therein).
(f) The Company shall, during the Shelf Registration Period,
deliver to each Holder of Securities covered by any Shelf Registration
Statement, without charge, as many copies of the Prospectus (including each
preliminary Prospectus) included in such Shelf Registration Statement and any
amendment or supplement thereto as such Holder may reasonably request. The
Company consents to the use of the Prospectus or any amendment or supplement
thereto by each of the selling Holders of securities in connection with the
offering and sale of the securities covered by the Prospectus, or any amendment
or supplement thereto, included in the Shelf Registration Statement.
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(g) The Company shall furnish to each Exchanging Dealer which
so requests, without charge, at least one copy of the Exchange Offer
Registration Statement and any post-effective amendment thereto, including all
material incorporated by reference therein, and, if the Exchanging Dealer so
requests in writing, all exhibits thereto (including exhibits incorporated by
reference therein).
(h) The Company shall promptly deliver to each Initial
Purchaser, each Exchanging Dealer and each other Person required to deliver a
Prospectus during the Exchange Offer Registration Period, without charge, as
many copies of the Prospectus included in such Exchange Offer Registration
Statement and any amendment or supplement thereto as any such Person may
reasonably request. The Company consents to the use of the Prospectus or any
amendment or supplement thereto by any Initial Purchaser, any Exchanging Dealer
and any such other Person that may be required to deliver a Prospectus following
the Registered Exchange Offer in connection with the offering and sale of the
New Securities covered by the Prospectus, or any amendment or supplement
thereto, included in the Exchange Offer Registration Statement.
(i) Prior to the Registered Exchange Offer or any other
offering of Securities pursuant to any Registration Statement, the Company shall
arrange, if necessary, for the qualification of the Securities or the New
Securities for sale under the laws of such jurisdictions as any Holder shall
reasonably request and will maintain such qualification in effect so long as
required; PROVIDED that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not then so qualified or to take any
action that would subject it to service of process in suits, other than those
arising out of the Initial Placement, the Registered Exchange Offer or any
offering pursuant to a Shelf Registration Statement, in any such jurisdiction
where it is not then so subject.
(j) The Company shall cooperate with the Holders of Securities
to facilitate the timely preparation and delivery of certificates representing
New Securities or Securities to be issued or sold pursuant to any Registration
Statement free of any restrictive legends and in such denominations and
registered in such names as Holders may request.
(k) Upon the occurrence of any event contemplated by
subsections (c)(ii) through (v) above, the Company shall promptly prepare a
post-effective amendment to the applicable Registration Statement or an
amendment or supplement to the related Prospectus or file any other required
document so that, as thereafter delivered to Initial Purchasers of the
securities included therein, the Prospectus will not include an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. In such circumstances, the period of effectiveness of the
Exchange Offer Registration Statement provided for in Section 2 and the Shelf
Registration Statement provided for in Section 3(b) shall each be extended by
the number of days from and including the date of the giving of a notice of
suspension pursuant to Section
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5(c) to and including the date when the Initial Purchasers, the Holders of the
Securities and any known Exchanging Dealer shall have received such amended or
supplemented Prospectus pursuant to this Section.
(l) Not later than the effective date of any Registration
Statement, the Company shall provide a CUSIP number for the Securities or the
New Securities, as the case may be, registered under such Registration Statement
and provide the Trustee with printed certificates for such Securities or New
Securities, in a form eligible for deposit with The Depository Trust Company.
(m) The Company shall comply with all applicable rules and
regulations of the Commission and shall make generally available to its security
holders as soon as practicable after the effective date of the applicable
Registration Statement an earnings statement satisfying the provisions of
Section 11(a) of the Act.
(n) The Company shall cause the Indenture or the New
Securities Indenture, as the case may be, to be qualified under the Trust
Indenture Act in a timely manner.
(o) The Company may require each Holder of Securities to be
sold pursuant to any Shelf Registration Statement to furnish to the Company such
information regarding the Holder and the distribution of such securities as the
Company may from time to time reasonably require for inclusion in such
Registration Statement. The Company may exclude from such Shelf Registration
Statement the Securities of any Holder that unreasonably fails to furnish such
information within a reasonable time after receiving such request.
(p) In the case of any Shelf Registration Statement, the
Company shall enter into such and take all other appropriate actions (including
if requested an underwriting agreement in customary form) in order to expedite
or facilitate the registration or the disposition of the Securities, and in
connection therewith, if an underwriting agreement is entered into, cause the
same to contain indemnification provisions and procedures no less favorable than
those set forth in Section 6 (or such other provisions and procedures acceptable
to the Majority Holders and the Managing Underwriters, if any, with respect to
all parties to be indemnified pursuant to Section 7.
(q) In the case of any Shelf Registration Statement, the
Company shall:
(i) make reasonably available for inspection by the
Holders of Securities to be registered thereunder, any
underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney, accountant or other
agent retained by the Holders or any such underwriter all
relevant financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries;
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(ii) cause the Company's officers, directors and
employees to supply all relevant information reasonably
requested by the Holders or any such underwriter, attorney,
accountant or agent in connection with any such Registration
Statement as is customary for similar due diligence
examinations; PROVIDED, HOWEVER, that any information that is
designated in writing by the Company, in good faith, as
confidential at the time of delivery of such information shall
be kept confidential by the Holders or any such underwriter,
attorney, accountant or agent, unless such disclosure is made
in connection with a court proceeding or required by law, or
such information becomes available to the public generally or
through a third party without an accompanying obligation of
confidentiality;
(iii) make such representations and warranties to the
Holders of Securities registered thereunder and the
underwriters, if any, in form, substance and scope as are
customarily made by issuers to underwriters in primary
underwritten offerings and covering matters including, but not
limited to, those set forth in the Purchase Agreement;
(iv) obtain opinions of counsel to the Company and
updates thereof (which counsel and opinions (in form, scope
and substance) shall be reasonably satisfactory to the
Managing Underwriters, if any) addressed to each selling
Holder and the underwriters, if any, covering such matters as
are customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably
requested by such Holders and underwriters;
(v) obtain "cold comfort" letters and updates thereof
from the independent certified public accountants of the
Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any
business acquired by the Company for which financial
statements and financial data are, or are required to be,
included in the Registration Statement), addressed to each
selling Holder of Securities registered thereunder and the
underwriters, if any, in customary form and covering matters
of the type customarily covered in "cold comfort" letters in
connection with primary underwritten offerings; and
(vi) deliver such documents and certificates as may
be reasonably requested by the Majority Holders and the
Managing Underwriters, if any, including those to evidence
compliance with Section 5(k) and with any customary conditions
contained in the underwriting agreement or other agreement
entered into by the Company.
The actions set forth in clauses (iii), (iv), (v) and (vi) of this
Section shall be performed at (A) the effectiveness of such Registration
Statement and each post-effective amendment thereto;
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and (B) each closing under any underwriting or similar agreement as and to the
extent required thereunder.
(r) In the case of any Exchange Offer Registration Statement,
the Company shall:
(i) make reasonably available for inspection by such
Initial Purchaser, and any attorney, accountant or other agent
retained by such Initial Purchaser, all relevant financial and
other records, pertinent corporate documents and properties of
the Company and its subsidiaries;
(ii) cause the Company's officers, directors and
employees to supply all relevant information reasonably
requested by such Initial Purchaser or any such attorney,
accountant or agent in connection with any such Registration
Statement as is customary for similar due diligence
examinations; PROVIDED, HOWEVER, that any information that is
designated in writing by the Company, in good faith, as
confidential at the time of delivery of such information shall
be kept confidential by such Initial Purchaser or any such
attorney, accountant or agent, unless such disclosure is made
in connection with a court proceeding or required by law, or
such information becomes available to the public generally or
through a third party without an accompanying obligation of
confidentiality;
(iii) make such representations and warranties to
such Initial Purchaser, in form, substance and scope as are
customarily made by issuers to underwriters in primary
underwritten offerings and covering matters including, but not
limited to, those set forth in the Purchase Agreement;
(iv) obtain opinions of counsel to the Company and
updates thereof (which counsel and opinions (in form, scope
and substance) shall be reasonably satisfactory to such
Initial Purchaser and its counsel, addressed to such Initial
Purchaser, covering such matters as are customarily covered in
opinions requested in underwritten offerings and such other
matters as may be reasonably requested by such Initial
Purchaser or its counsel;
(v) obtain "cold comfort" letters and updates thereof
from the independent certified public accountants of the
Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any
business acquired by the Company for which financial
statements and financial data are, or are required to be,
included in the Registration Statement), addressed to such
Initial Purchaser, in customary form and covering matters of
the type customarily covered in "cold comfort" letters in
connection with primary underwritten offerings, or if
requested by such Initial Purchaser or its counsel in lieu of
a "cold comfort" letter, an agreed-upon procedures letter
under Statement
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on Auditing Standards No. 35, covering matters requested by
such Initial Purchaser or its counsel; and
(vi) deliver such documents and certificates as may
be reasonably requested by such Initial Purchaser or its
counsel, including those to evidence compliance with Section
5(k) and with conditions customarily contained in underwriting
agreements.
The foregoing actions set forth in clauses (iii), (iv), (v), and (vi)
of this Section shall be performed at the close of the Registered Exchange Offer
and the effective date of any post-effective amendment to the Exchange Offer
Registration Statement.
(s) If a Registered Exchange Offer is to be consummated, upon
delivery of the Securities by Holders to the Company (or to such other Person as
directed by the Company) in exchange for the New Securities, the Company shall
mark, or caused to be marked, on the Securities so exchanged that such
Securities are being canceled in exchange for the New Securities. In no event
shall the Securities be marked as paid or otherwise satisfied.
(t) The Company will use its best efforts (i) if the
Securities have been rated prior to the initial sale of such Securities, to
confirm such ratings will apply to the Securities or the New Securities, as the
case may be, covered by a Registration Statement; or (ii) if the Securities were
not previously rated, to cause the Securities covered by a Registration
Statement to be rated with at least one nationally recognized statistical rating
agency, if so requested by Majority Holders with respect to the related
Registration Statement or by any Managing Underwriters.
(u) In the event that any Broker-Dealer shall underwrite any
Securities or participate as a member of an underwriting syndicate or selling
group or "assist in the distribution" (within the meaning of the Rules of Fair
Practice and the By-Laws of the National Association of Securities Dealers,
Inc.) thereof, whether as a Holder of such Securities or as an underwriter, a
placement or sales agent or a broker or dealer in respect thereof, or otherwise,
assist such Broker-Dealer in complying with the requirements of such Rules and
By-Laws, including, without limitation, by:
(i) if such Rules or By-Laws shall so require,
engaging a "qualified independent underwriter" (as defined in
such Rules) to participate in the preparation of the
Registration Statement, to exercise usual standards of due
diligence with respect thereto and, if any portion of the
offering contemplated by such Registration Statement is an
underwritten offering or is made through a placement or sales
agent, to recommend the yield of such Securities;
(ii) indemnifying any such qualified independent
underwriter to the extent of the indemnification of
underwriters provided in Section 7 hereof; and
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(iii) providing such information to such
Broker-Dealer as may be required in order for such
Broker-Dealer to comply with the requirements of such Rules.
(v) The Company shall use its best efforts to take all other
steps necessary to effect the registration of the Securities or the New
Securities, as the case may be, covered by a Registration Statement.
6. REGISTRATION EXPENSES. The Company shall bear all expenses incurred
in connection with the performance of its obligations under Sections 2, 3 and 5
hereof and, in the event of any Shelf Registration Statement, will reimburse the
Holders for the reasonable fees and disbursements of one firm or counsel
designated by the Majority Holders to act as counsel for the Holders in
connection therewith, and, in the case of any Exchange Offer Registration
Statement, will reimburse the Initial Purchasers for the reasonable fees and
disbursements of counsel designated by the Majority Holders to act as counsel in
connection therewith.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each Holder of
Securities or New Securities, as the case may be, covered by any Registration
Statement (including each Initial Purchaser and, with respect to any Prospectus
delivery as contemplated in Section 5(h) hereof, each Exchanging Dealer), the
directors, officers, employees and agents of each such Holder and each Person
who controls any such Holder within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement as originally filed or in any amendment thereof, or in any preliminary
Prospectus or the Prospectus, or in any amendment thereof or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that the Company will not be liable in
any case to the extent that any such loss, claim, damage or liability arises out
of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf of any such
Holder specifically for inclusion therein. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
The Company also agrees to indemnify or contribute as provided in
Section 7(d)
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to Losses of each any underwriter of Securities or New Securities, as the case
may be, registered under a Shelf Registration Statement, their directors,
officers, employees or agents and each Person who controls such underwriter on
substantially the same basis as that of the indemnification of the Initial
Purchasers and the selling Holders provided in this Section 7(a) and shall, if
requested by any Holder, enter into an underwriting agreement reflecting such
agreement, as provided in Section 5(p) hereof.
(b) Each Holder of securities covered by a Registration Statement
(including each Initial Purchaser and, with respect to any Prospectus delivery
as contemplated in Section 5(h) hereof, each Exchanging Dealer) severally agrees
to indemnify and hold harmless the Company each of its directors each of its
officers who signs such Registration Statement and each Person who controls the
Company within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each such Holder, but only
with reference to written information relating to such Holder furnished to the
Company by or on behalf of such Holder specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 7 or notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section, notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above unless and to the
extent it did not otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses; and
(ii) will not, in any event, relieve the indemnifying party from any obligations
to any indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint
counsel of the indemnifying party's choice at the indemnifying party's expense
to represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be responsible
for the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); PROVIDED, HOWEVER, that such
counsel shall be satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest; (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party; (iii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action; or (iv) the indemnifying party shall authorize the
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indemnified party to employ separate counsel at the expense of the indemnifying
party. An indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party shall
have a joint and several obligation to contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending same) (collectively
"Losses") to which such indemnified party may be subject in such proportion as
is appropriate to reflect the relative benefits received by such indemnifying
party, on the one hand, and such indemnified party, on the other hand, from the
Initial Placement and the Registration Statement which resulted in such Losses;
PROVIDED, HOWEVER, that in no case shall any Initial Purchaser or any subsequent
Holder of any Security or New Security be responsible, in the aggregate, for any
amount in excess of the purchase discount or commission applicable to such
Security, or in the case of a New Security, applicable to the Security that was
exchangeable into such New Security, as set forth on the cover page of the Final
Memorandum, nor shall any underwriter be responsible for any amount in excess of
the underwriting discount or commission applicable to the securities purchased
by such underwriter under the Registration Statement which resulted in such
Losses. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the indemnifying party and the indemnified party
shall contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of such indemnifying party, on the
one hand, and such indemnified party, on the other hand, in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company shall be
deemed to be equal to the sum of (x) the total net proceeds from the Initial
Placement (before deducting expenses) as set forth on the cover page of the
Final Memorandum and (y) the total amount of additional interest which the
Company was not required to pay as a result of registering the securities
covered by the Registration Statement which resulted in such Losses. Benefits
received by the Initial Purchasers shall be deemed to be equal to the total
purchase discounts and commissions as set forth on the cover page of the Final
Memorandum, and benefits received by any other Holders shall be deemed to be
equal to the value of receiving Securities or New Securities, as applicable,
registered under the Act. Benefits received by any underwriter shall be deemed
to be equal to the total underwriting discounts and commissions, as set forth on
the cover page of the Prospectus forming a part of the Registration Statement
which resulted in such Losses. Relative fault shall be determined by reference
to, among other things, whether any alleged untrue statement or omission relates
to information provided by the indemnifying party, on the one hand, or by the
indemnified party, on the other hand, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue
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statement or omission. The parties agree that it would not be just and equitable
if contribution were determined by pro rata allocation (even if the Holders were
treated as one entity for such purpose) or any other method of allocation which
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section, each Person who
controls a Holder within the meaning of either the Act or the Exchange Act and
each director, officer, employee and agent of such Holder shall have the same
rights to contribution as such Holder, and each Person who controls the Company
within the meaning of either the Act or the Exchange Act, each officer of the
Company who shall have signed the Registration Statement and each director of
the Company shall have the same rights to contribution as the Company, subject
in each case to the applicable terms and conditions of this paragraph (d).
(e) The provisions of this Section will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder or
the Company or any of the officers, directors or controlling Persons referred to
in this Section hereof, and will survive the sale by a Holder of securities
covered by a Registration Statement.
8. UNDERWRITTEN REGISTRATIONS.
(a) If any of the Securities or New Securities, as the case may be,
covered by any Shelf Registration Statement are to be sold in an underwritten
offering, the Managing Underwriters shall be selected by the Majority Holders.
(b) No Person may participate in any underwritten offering pursuant
to any Shelf Registration Statement, unless such Person (i) agrees to sell such
Person's Securities or New Securities, as the case may be, on the basis
reasonably provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements; and (ii) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements.
9. NO INCONSISTENT AGREEMENTS. The Company has not, as of the date
hereof, entered into, nor shall it, on or after the date hereof, enter into, any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders herein or otherwise conflicts with the provisions hereof.
10. AMENDMENTS AND WAIVERS. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, qualified, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of the
Majority Holders (or, after the consummation of any Registered Exchange Offer in
accordance with Section 2 hereof, of New Securities);
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PROVIDED that, with respect to any matter that directly or indirectly affects
the rights of any Initial Purchaser hereunder, the Company shall obtain the
written consent of each such Initial Purchaser against which such amendment,
qualification, supplement, waiver or consent is to be effective. Notwithstanding
the foregoing (except the foregoing proviso), a waiver or consent to departure
from the provisions hereof with respect to a matter that relates exclusively to
the rights of Holders whose Securities or New Securities, as the case may be,
are being sold pursuant to a Registration Statement and that does not directly
or indirectly affect the rights of other Holders may be given by the Majority
Holders, determined on the basis of Securities or New Securities, as the case
may be, being sold rather than registered under such Registration Statement.
11. NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier or air courier guaranteeing overnight delivery:
(a) if to a Holder, at the most current address given by such
holder to the Company in accordance with the provisions of this Section, which
address initially is, with respect to each Holder, the address of such Holder
maintained by the Trustee under the Indenture, with a copy in like manner to
Salomon Smith Barney Inc.;
(b) if to you, initially at the respective addresses set forth in
the Purchase Agreement; and
(c) if to the Company, initially at its address set forth in the
Purchase Agreement.
All such notices and communications shall be deemed to have been
duly given when received.
The Initial Purchasers or the Company by notice to the other
parties may designate additional or different addresses for subsequent notices
or communications.
12. SUCCESSORS. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties, including,
without the need for an express assignment or any consent by the Company
thereto, subsequent Holders of Securities and the New Securities. The Company
hereby agrees to extend the benefits of this Agreement to any Holder of
Securities and the New Securities, and any such Holder may specifically enforce
the provisions of this Agreement as if an original party hereto.
13. COUNTERPARTS. This agreement may be in signed counterparts, each of
which shall an original and all of which together shall constitute one and the
same agreement.
14. HEADINGS. The headings used herein are for convenience only and
shall not affect the construction hereof.
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<PAGE>
15. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed in the State of New York.
16. SEVERABILITY. In the event that any one of more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
shall be enforceable to the fullest extent permitted by law.
17. SECURITIES HELD BY THE COMPANY, ETC. Whenever the consent or
approval of Holders of a specified percentage of principal amount of Securities
or New Securities is required hereunder, Securities or New Securities, as
applicable, held by the Company or its Affiliates (other than subsequent Holders
of Securities or New Securities if such subsequent Holders are deemed to be
Affiliates solely by reason of their holdings of such Securities or New
Securities) shall not be counted in determining whether such consent or approval
was given by the Holders of such required percentage.
[SIGNATURES ON FOLLOWING PAGE]
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<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this Agreement and your acceptance shall represent a binding agreement
between the Company and the several Initial Purchasers.
Very truly yours,
INTERNATIONAL SPEEDWAY
CORPORATION
By: /s/ Glenn R. Padgett
-----------------------------
Name: Glenn R. Padgett
----------------------
Title: Assistant Secretary
---------------------
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON SMITH BARNEY INC.
FIRST UNION SECURITIES, INC.
By: SALOMON SMITH BARNEY INC.
By:/s/ James M. Oakes, Jr.
---------------------------------
Name: James M. Oakes, Jr.
-------------------------
Title: Director
------------------------
For themselves and the other several Initial
Purchasers named in Schedule I to
the foregoing Agreement.
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<PAGE>
ANNEX A
Each Broker-Dealer that receives New Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Securities. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
Broker-Dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a Broker-Dealer in connection
with resales of New Securities received in exchange for Securities where such
Securities were acquired by such Broker-Dealer as a result of market-making
activities or other trading activities. The Company has agreed that, starting on
the Expiration Date (as defined herein) and ending on the close of business six
months after the Expiration Date, it will make this Prospectus available to any
Broker-Dealer for use in connection with any such resale. See "Plan of
Distribution".
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<PAGE>
ANNEX B
Each Broker-Dealer that receives New Securities for its own account in
exchange for Securities, where such Securities were acquired by such
Broker-Dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such New Securities. See "Plan of Distribution".
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<PAGE>
ANNEX C
PLAN OF DISTRIBUTION
Each Broker-Dealer that receives New Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Broker-Dealer in connection with resales of New Securities received in
exchange for Securities where such Securities were acquired as a result of
market-making activities or other trading activities. The Company has agreed
that, starting on the Expiration Date and ending on the close of business six
months after the Expiration Date, it will make this Prospectus, as amended or
supplemented, available to any Broker-Dealer for use in connection with any such
resale. In addition, until __________, 199__, all dealers effecting transactions
in the New Securities may be required to deliver a prospectus.
The Company will not receive any proceeds from any sale of New
Securities by Brokers-Dealers. New Securities received by Broker-Dealers for
their own account pursuant to the Exchange Offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the New Securities or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such Broker-Dealer and/or the purchasers of any such New
Securities. Any Broker-Dealer that effects any resale of New Securities that
were received by it for its own account pursuant to the Exchange Offer and any
broker or dealer that participates in a distribution of such New Securities may
be deemed to be an "underwriter" within the meaning of the Securities Act and
any profit of any such resale of New Securities and any commissions or
concessions received by any such Persons may be deemed to be underwriting
compensation under the Securities Act. The Letter of Transmittal states that by
acknowledging that it will deliver and by delivering a prospectus, a
Broker-Dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
For a period of six months after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any Broker-Dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Exchange Offer (including the expenses of one counsel for the
holders of the Securities) other than commissions or concessions of any brokers
or dealers and will indemnify the holders of the Securities (including any
Broker-Dealers) against certain liabilities, including liabilities under the
Securities Act.
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<PAGE>
ANNEX D
RIDER A
CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name:______________________________________
Address:___________________________________
RIDER B
If the undersigned is not a Broker-Dealer, the undersigned represents
that it acquired the New Securities in the ordinary course of its business, it
is not engaged in, and does not intend to engage in, a distribution of New
Securities and it has not arrangements or understandings with any Person to
participate in a distribution of the New Securities. If the undersigned is a
Broker-Dealer that will receive New Securities for its own account in exchange
for Securities, it represents that the Securities to be exchange for New
Securities were acquired by it as a result of market-making activities or other
trading activities and acknowledges that it will deliver a prospectus in
connection with any resale of such New Securities; however, by so acknowledging
and by delivering a prospectus, the undersigned will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act.
-27-
EXHIBIT 4.3
INTERNATIONAL SPEEDWAY CORPORATION
$225,000,000
7-7/8% Senior Notes Due 2004
Purchase Agreement
New York, New York
October 1, 1999
Salomon Smith Barney
First Union Securities, Inc.
As Representatives of the Initial Purchasers
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
International Speedway Corporation, a corporation organized
under the laws of Florida (the "Company"), proposes to issue and sell to the
several parties named in Schedule I hereto (the "Initial Purchasers"), for whom
you (the "Representatives") are acting as representatives, $225,000,000
principal amount of its 7-7/8% Senior Notes Due 2004 (the "Securities"). The
Securities are to be issued under an indenture (the "Indenture") to be dated as
of October 6, 1999, between the Company and First Union National Bank, as
trustee (the "Trustee"). The Securities have the benefit of a Registration
Rights Agreement (the "Registration Rights Agreement"), to be dated as of
October 6, 1999, between the Company and the Initial Purchasers, pursuant to
which the Company has agreed to register the Securities under the Act subject to
the terms and conditions therein specified. To the extent there are no
additional parties listed on Schedule I other than you, the term Representatives
as used herein shall mean you as the Initial Purchasers, and the terms
Representatives and Initial Purchasers shall mean either the singular or plural
as the context requires. The use of the neuter in this Agreement shall include
the feminine and masculine wherever appropriate. Certain terms used herein are
defined in Section 17 hereof.
The sale of the Securities to the Initial Purchasers will be
made without
<PAGE>
registration of the Securities under the Act in reliance upon exemptions from
the registration requirements of the Act.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated September 24, 1999 (as amended
or supplemented at the Execution Time, including any and all exhibits thereto
and any information incorporated by reference therein, the "Preliminary
Memorandum"), and a final offering memorandum, dated October 1, 1999 (as amended
or supplemented at the Execution Time, including any and all exhibits thereto
and any information incorporated by reference therein, the "Final Memorandum").
Each of the Preliminary Memorandum and the Final Memorandum sets forth certain
information concerning the Company and the Securities. The Company hereby
confirms that it has authorized the use of the Preliminary Memorandum and the
Final Memorandum, and any amendment or supplement thereto, in connection with
the offer and sale of the Securities by the Initial Purchasers. Unless stated to
the contrary, any references herein to the terms "amend", "amendment" or
"supplement" with respect to the Final Memorandum shall be deemed to refer to
and include any information filed under the Exchange Act subsequent to the
Execution Time which is incorporated by reference therein.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to each Initial Purchaser as set forth below in this Section 1 (it being
understood that the use of the term "Person" in this Section 1 shall be deemed
to exclude the Initial Purchasers and their respective Affiliates, as well as
any Person acting on their behalf at their direction).
(a) The Preliminary Memorandum, at the date thereof, did not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. At the Execution Time, on the
Closing Date (as defined below) and on any settlement date, the Final Memorandum
did not, and will not (and any amendment or supplement thereto, at the date
thereof, at the Closing Date and on any settlement date, will not), contain any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; PROVIDED, HOWEVER, that the Company makes no
representation or warranty as to the information contained in or omitted from
the Preliminary Memorandum or the Final Memorandum, or any amendment or
supplement thereto, in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of the Initial Purchasers
through the Representatives specifically for inclusion therein.
(b) Neither the Company, nor any of its Affiliates, nor any
Person acting on its or their behalf has, directly or indirectly, made offers or
sales of any security, or solicited offers to buy any security, under
circumstances that would require the registration of the Securities under the
Act.
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<PAGE>
(c) 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) in
connection with any offer or sale of the Securities in the United States.
(d) The Securities satisfy the eligibility requirements of
Rule 144A(d)(3) under the Act.
(e) Neither the Company, nor any of its Affiliates, nor any
Person acting on its or their behalf has engaged in any directed selling efforts
(within the meaning of Regulation S) with respect to the Securities, and each of
them has complied with the offering restrictions requirement of Regulation S.
(f) The Company is not, and after giving effect to the
offering and sale of the Securities and the application of the proceeds thereof
as described in the Final Memorandum will not be, an "investment company" within
the meaning of the Investment Company Act, without taking account of any
exemption arising out of the number of holders of the Company's securities.
(g) The Company is subject to and in full compliance with the
reporting requirements of Section 13 or Section 15(d) of the Exchange Act.
(h) The Company has not paid or agreed to pay to any Person
any compensation for soliciting another to purchase any of the Securities
(except as contemplated by this Agreement).
(i) The Company has not taken, directly or indirectly, any
action designed to cause or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(j) The information, if any, provided by the Company pursuant
to Section 5(h) hereof will not, at the date thereof, contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(k) Each of the Company and its Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction in which it is chartered or organized with full
corporate power and authority to own or lease, as the case may be, and to
operate its properties and conduct its business as described in the Final
Memorandum, and is duly qualified to do business as a foreign corporation and is
in good standing under the laws of each jurisdiction which requires such
qualification, except where the failure to so exist or qualify would not have a
material adverse effect on the condition (financial or otherwise),
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<PAGE>
prospects, earnings, business or properties of the Company and its Subsidiaries,
taken as a whole (a "Material Adverse Effect").
(l) All the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are fully paid
and nonassessable, and, except as otherwise set forth in the Final Memorandum,
all outstanding shares of capital stock of the Subsidiaries are owned by the
Company either directly or through wholly owned Subsidiaries free and clear of
any perfected security interest or any other security interests, claims, liens
or encumbrances.
(m) the Company's authorized equity capitalization is as set
forth in the Final Memorandum.
(n) The statements in the Final Memorandum under the headings
"Description of the Notes" and "Exchange Offer; Registration Rights," and under
the heading "Risk Factors" describing certain legal proceedings affecting the
Company, fairly summarize the matters therein described.
(o) This Agreement has been duly authorized, executed and
delivered by the Company; the Indenture has been duly authorized and, assuming
due authorization, execution and delivery thereof by the Trustee, when executed
and delivered by the Company, will constitute a legal, valid, binding instrument
enforceable against the Company in accordance with its terms (subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally from time to time
in effect and to general principles of equity, and subject, as to the
enforcement of rights of indemnity and contribution, to applicable federal and
state securities laws and principles of public policy); the Securities have been
duly authorized, and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Initial
Purchasers, will have been duly executed and delivered by the Company and will
constitute the legal, valid and binding obligations of the Company entitled to
the benefits of the Indenture (subject, as to the enforcement of remedies, to
applicable bankruptcy, insolvency, moratorium or other laws affecting creditors'
rights generally from time to time in effect and to general principles of
equity, and subject, as to the enforcement of rights of indemnity and
contribution, to applicable federal and state securities laws and principles of
public policy); and the Registration Rights Agreement has been duly authorized
and, when executed and delivered by the Company, will constitute the legal,
valid, binding and enforceable instrument of the Company (subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally from time to time
in effect and to general principles of equity, and subject, as to the
enforcement of rights of indemnity and contribution, to applicable federal and
state securities laws and principles of public policy).
(p) No consent, approval, authorization, filing with or order
of any court or
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<PAGE>
governmental agency or body is required to be obtained or filed, as applicable,
by the Company or any Subsidiary in connection with the transactions
contemplated herein or in the Indenture or the Registration Rights Agreement,
except such as will be obtained under the Act and the Trust Indenture Act and
such as may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by the Initial
Purchasers in the manner contemplated herein and in the Final Memorandum and the
Registration Rights Agreement.
(q) Neither the execution and delivery of the Indenture, this
Agreement or the Registration Rights Agreement, the issue and sale of the
Securities, nor the consummation of any other of the transactions herein or
therein contemplated, nor the fulfillment of the terms hereof or thereof will
conflict with, result in a breach or violation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any of its
Subsidiaries pursuant to (i) the charter or by-laws of the Company or any of its
Subsidiaries; (ii) the terms of any indenture, contract, lease, mortgage, deed
of trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Company or any of its
Subsidiaries is a party or bound or to which its or their property is subject,
other than conflicts, breaches, violations or liens that, individually or in the
aggregate, would not have a Material Adverse Effect; or (iii) any statute, law,
rule, regulation, judgment, order or decree applicable to the Company or any of
its Subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over the
Company or any of its Subsidiaries or any of its or their properties, other than
violations that, individually or in the aggregate, would not have a Material
Adverse Effect.
(r) (i) The selected financial data set forth under the
captions "Offering Memorandum Summary--Summary Financial Information" and
"Selected Financial Data" in the Final Memorandum fairly present, on the basis
stated in the Final Memorandum, the information included therein; (ii) the pro
forma financial statements included in the Final Memorandum include assumptions
that provide a reasonable basis for presenting the significant effects directly
attributable to the transactions and events described therein, the related pro
forma adjustments give appropriate effect to those assumptions, and the pro
forma adjustments reflect the proper application of those adjustments to the
historical financial statement amounts in the pro forma financial statements
included in the Final Memorandum; (iii) the pro forma financial statements
included in the Final Memorandum comply as to form in all material respects with
the applicable accounting requirements of Regulation S-X under the Act; and (iv)
the pro forma adjustments have been properly applied to the historical amounts
in the compilation of those statements.
(s) Except as set forth in or contemplated in the Final
Memorandum, no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or any of its
Subsidiaries or its or their property is pending or, to the best knowledge of
the Company, threatened that (i) could reasonably be expected to
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<PAGE>
have a material adverse effect on the performance of this Agreement, the
Indenture or the Registration Rights Agreement, or the consummation of any of
the transactions contemplated hereby or thereby; or (ii) could reasonably be
expected to have a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business.
(t) Each of the Company and each of its Subsidiaries owns or
leases all such properties as are necessary to the conduct of its operations as
presently conducted.
(u) Neither the Company nor any Subsidiary is in violation or
default of (i) any provision of its charter or bylaws; (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which it is a party or bound or to which its property is subject, other than
violations or defaults that, individually or in the aggregate, would not have a
Material Adverse Effect; or (iii) any statute, law, rule, regulation, judgment,
order or decree applicable to the Company or any of its Subsidiaries of any
court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or such Subsidiary or any
of its properties, as applicable, other than violations or defaults that,
individually or in the aggregate, would not have a Material Adverse Effect.
(v) Each of Ernst & Young LLP, the accountants who have
certified certain financial statements of the Company and its consolidated
subsidiaries, and Deloitte & Touche LLP, the accountants who have certified
certain financial statements of Penske Motorsports, Inc. ("Penske") and its
consolidated subsidiaries, are independent public accountants with respect to
the Company within the meaning of the Act and the applicable published rules and
regulations thereunder.
(w) There are no stamp or other issuance or transfer taxes or
duties or other similar fees or charges required to be paid in connection with
the execution and delivery of this Agreement or the issuance or sale by the
Company of the Securities.
(x) The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested extensions
thereof (except in any case in which the failure so to file would not have a
Material Adverse Effect), whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto) and has paid all
taxes required to be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is currently being contested in
good faith or as would not have a Material Adverse Effect, whether or not
arising from transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Memorandum.
(y) No labor problem or dispute with the employees of the
Company or any of
-6-
<PAGE>
its Subsidiaries exists or, to the best knowledge of the Company, is threatened
or imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or its Subsidiaries' principal
suppliers, contractors or customers, that could have a Material Adverse Effect,
whether or not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Final Memorandum.
(z) The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
are engaged; all policies of insurance and fidelity or surety bonds insuring the
Company or any of its Subsidiaries or their respective businesses, assets,
employees, officers and directors are in full force and effect; the Company and
its Subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by the Company or
any of its Subsidiaries under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of
rights clause, other than claims that, individually or in the aggregate, if so
denied, would not have a Material Adverse Effect; neither the Company nor any
such Subsidiary has been refused any insurance coverage sought or applied for;
and neither the Company nor any such Subsidiary has any reason to believe that
it will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a Material
Adverse Effect, except as set forth in or contemplated in the Final Memorandum.
(aa) No Subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from making
any other distribution on such Subsidiary's capital stock, from repaying to the
Company any loans or advances to such Subsidiary from the Company or from
transferring any of such Subsidiary's property or assets to the Company or any
other subsidiary of the Company, except as described in or contemplated by the
Final Memorandum.
(bb) The Company and its Subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, except where the failure to possess any of the foregoing
would not have a Material Adverse Effect, and neither the Company nor any such
Subsidiary has received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a Material Adverse Effect, except as set forth in or contemplated in
the Final Memorandum.
(cc) The Company and each of its Subsidiaries maintain a
system of internal accounting controls sufficient 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 generally
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<PAGE>
accepted accounting principles 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 action
is taken with respect to any differences.
(dd) The Company and its Subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"); (ii) have received and are in compliance
with all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses; and (iii) have not
received notice of any actual or potential liability for the investigation or
remediation of any disposal or release of hazardous or toxic substances or
wastes, pollutants or contaminants, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals, or liability would not, individually or in the aggregate, have a
Material Adverse Effect, except as set forth in or contemplated in the Final
Memorandum; and, except as set forth in the Final Memorandum, neither the
Company nor any of the Subsidiaries has been named as a "potentially responsible
party" under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended.
(ee) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its Subsidiaries, in the course of
which it identifies and evaluates associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws, or any permit,
license or approval, any related constraints on operating activities and any
potential liabilities to third parties); on the basis of such review, the
Company has reasonably concluded that such associated costs and liabilities
would not, singly or in the aggregate, have a Material Adverse Effect, except as
set forth in or contemplated in the Final Memorandum.
(ff) Each of the Company and its Subsidiaries has fulfilled
its obligations, if any, under the minimum funding standards of Section 302 of
the United States Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and the regulations and published interpretations thereunder with
respect to each "plan" (as defined in Section 3(3) of ERISA and such regulations
and published interpretations) in which employees of the Company and its
Subsidiaries are eligible to participate and each such plan is in compliance in
all material respects with the presently applicable provisions of ERISA and such
regulations and published interpretations; the Company and its Subsidiaries have
not incurred any unpaid liability to the Pension Benefit Guaranty Corporation
(other than for the payment of premiums in the ordinary course) or to any such
plan under Title IV of ERISA.
(gg) The Company and its Subsidiaries have implemented a
comprehensive,
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<PAGE>
detailed program to analyze and address the risk that the computer hardware and
software used by them may be unable to recognize and properly execute
date-sensitive functions involving certain dates prior to and any dates after
December 31, 1999 (the "Year 2000 Problem"), and have determined that such risk
will be remedied on a timely basis without material expense and will not have a
material adverse effect upon the financial condition and results of operations
of the Company and its Subsidiaries, taken as a whole; and the Company believes,
after due inquiry, that each material supplier, vendor, customer or financial
service organization used or serviced by the Company and its Subsidiaries has
remedied or will remedy on a timely basis the Year 2000 Problem, except to the
extent that a failure to remedy by any such supplier, vendor, customer or
financial service organization would not have a Material Adverse Effect. The
Company is in compliance with the Commission's staff legal bulletin No. 5 dated
January 12, 1998 related to Year 2000 compliance.
(hh) The Company and its Subsidiaries own or possess all
patent, trademarks, trademark registration, service marks, service mark
registrations, trade names, copyrights, licenses, inventions, trade secrets and
rights described in the Final Memorandum as being owned by them, or any of them,
or necessary for the conduct of their respective businesses, and the Company is
not aware of any claim to the contrary or any challenge by any other Person to
the rights of the Company or any of its Subsidiaries with respect to the
foregoing.
(ii) The Company has complied with all provisions of Florida
Statutes 517.075, relating to issuers doing business with Cuba.
Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and
warranty by the Company, as to matters covered thereby, to each Initial
Purchaser.
2. PURCHASE AND SALE. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Initial Purchaser, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
99.245% of the principal amount thereof, the principal amount of Securities set
forth opposite such Initial Purchaser's name in Schedule I hereto.
3. DELIVERY AND PAYMENT. Delivery of and payment for the Securities
shall be made at 10:00 A.M., New York City time, on October 6, 1999, or at such
time on such later date (not later than October 15, 1999) as the Representatives
shall designate, which date and time may be postponed by agreement between the
Representatives and the Company or as provided in Section 9 hereof (such date
and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made to the Representatives
for the respective accounts of the several Initial Purchasers against payment by
the several Initial Purchasers through the Representatives of the purchase price
thereof to or upon the order of the
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Company by wire transfer payable in same-day funds to the account specified by
the Company. Delivery of the Securities shall be made through the facilities of
The Depository Trust Company unless the Representatives shall otherwise
instruct.
4. OFFERING BY INITIAL PURCHASERS. Each Initial Purchaser, severally
and not jointly, represents and warrants to and agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell,
any Securities except (i) to those it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Act) and that, in
connection with each such sale, it has taken or will take reasonable steps to
ensure that the purchaser of such Securities is aware that such sale is being
made in reliance on Rule 144A; (ii) to other institutional "accredited
investors" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D) who
provide to it and to the Company a letter in the form of Exhibit A hereto; or
(iii) in accordance with the restrictions set forth in Exhibit B hereto.
(b) Neither it nor any Person acting on its behalf has made or
will make offers or sales of the Securities in the United States by means of any
form of general solicitation or general advertising (within the meaning of
Regulation D) in the United States or under circumstances that would require
registration of the Securities under the Act.
5. AGREEMENTS. The Company agrees with each Initial Purchaser that:
(a) The Company will furnish to each Initial Purchaser and to
counsel for the Initial Purchasers, without charge, during the period referred
to in paragraph (c) below, as many copies of the Final Memorandum and any
amendments and supplements thereto as it may reasonably request.
(b) The Company will not amend or supplement the Final
Memorandum, other than by filing documents under the Exchange Act that are
incorporated by reference therein, without the prior written consent of the
Representatives; PROVIDED, HOWEVER, that, prior to the completion of the
distribution of the Securities by the Initial Purchasers (as determined by the
Representatives), the Company will not file any document under the Exchange Act
that is incorporated by reference in the Final Memorandum unless, prior to such
proposed filing, the Company has furnished the Representatives with a copy of
such document for their review and the Representatives have not reasonably
objected to the filing of such document. The Company will promptly advise the
Representatives when any document filed under the Exchange Act that is
incorporated by reference in the Final Memorandum shall have been filed with the
Commission.
(c) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers (as determined by the Representatives), any
event occurs as a result of which
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the Final Memorandum, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, or if it should be necessary to amend or supplement
the Final Memorandum to comply with applicable law, the Company promptly (i)
will notify the Representatives of any such event; (ii) subject to the
requirements of paragraph (b) of this Section 5, will prepare an amendment or
supplement that will correct such statement or omission or effect such
compliance; and (iii) will supply any supplemented or amended Final Memorandum
to the several Initial Purchasers and counsel for the Initial Purchasers without
charge in such quantities as you may reasonably request.
(d) The Company will arrange, if necessary, for the
qualification of the Securities for sale by the Initial Purchasers under the
laws of such jurisdictions as the Representatives may designate and will
maintain such qualifications in effect so long as required for the sale of the
Securities; PROVIDED that in no event shall the Company be obligated to qualify
to do business in any jurisdiction where it is not now so qualified or to take
any action that would subject it to service of process in suits, other than
those arising out of the offering or sale of the Securities, in any jurisdiction
where it is not now so subject. The Company will promptly advise the
Representatives of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose.
(e) The Company will not, and will not permit any of its
Affiliates to, resell any Securities that have been acquired by any of them.
(f) Neither the Company, nor any of its Affiliates, nor any
Person acting on its or their behalf at its or their direction will, directly or
indirectly, make offers or sales of any security, or solicit offers to buy any
security, under circumstances that would require the registration of the
Securities under the Act.
(g) Neither the Company, nor any of its Affiliates, nor any
Person acting on its or their behalf at its or their direction will engage in
any form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with any offer or sale of the Securities in the
United States.
(h) So long as any of the Securities are "restricted
securities" within the meaning of Rule 144(a)(3) under the Act, the Company
will, during any period in which it is not subject to and in compliance with
Section 13 or 15(d) of the Exchange Act or it is not exempt from such reporting
requirements pursuant to and in compliance with Rule 12g3-2(b) under the
Exchange Act, provide to each holder of such restricted securities and to each
prospective purchaser (as designated by such holder) of such restricted
securities, upon the request of such holder or prospective purchaser, any
information required to be provided by Rule 144A(d)(4) under the Act. This
covenant is intended to be for the benefit of the holders, and the prospective
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purchasers designated by such holders, from time to time of such restricted
securities.
(i) Neither the Company, nor any of its Affiliates, nor any
Person acting on its or their behalf at its or their discretion will engage in
any directed selling efforts (within the meaning of Regulation S) with respect
to the Securities, and each of them will comply with the offering restrictions
requirement of Regulation S.
(j) The Company will cooperate with the Representatives and
use its best efforts to permit the Securities to be eligible for clearance and
settlement through The Depository Trust Company.
(k) The Company will not for a period of 7 days following the
Execution Time, without the prior written consent of Salomon Smith Barney,
offer, sell or contract to sell, or otherwise dispose of (or enter into any
transaction which is designed to, or might reasonably be expected to, result in
the disposition (whether by actual disposition or effective economic disposition
due to cash settlement or otherwise) by the Company or any Affiliate of the
Company or any Person in privity with the Company or any Affiliate of the
Company), directly or indirectly, or announce the offering of, any debt
securities issued or guaranteed by the Company (other than the Securities).
(l) The Company will not take, directly or indirectly, any
action designed to or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(m) In connection with any disposition of Securities pursuant
to a transaction made in compliance with paragraph 6(a), paragraph 6(d) or
paragraph 6(f) of Exhibit A, the Company will reissue certificates evidencing
such Securities without the legend referred to in paragraph 5 of Exhibit A
(provided, in the case of a transaction made in compliance with paragraph 6(f)
of Exhibit A, that the legal opinion referred to therein so permits).
(n) The Company agrees to pay the costs and expenses relating
to the following matters: (i) the preparation of the Indenture and the
Registration Rights Agreement, the issuance of the Securities and the fees of
the Trustee; (ii) the preparation, printing or reproduction of the Preliminary
Memorandum and Final Memorandum and each amendment or supplement to either of
them; (iii) the printing (or reproduction) and delivery (including postage, air
freight charges and charges for counting and packaging) of such copies of the
Preliminary Memorandum and Final Memorandum, and all amendments or supplements
to either of them, as may, in each case, be reasonably requested for use in
connection with the offering and sale of the Securities; (iv) the preparation,
printing, authentication, issuance and delivery of certificates for the
Securities, including any stamp or transfer taxes in connection with the
original issuance and sale of the Securities; (v) the printing (or reproduction)
and delivery of this Agreement, any blue
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<PAGE>
sky memorandum and all other agreements or documents printed (or reproduced) and
delivered in connection with the offering of the Securities; (vi) any
registration or qualification of the Securities for offer and sale under the
securities or blue sky laws of the several states (including filing fees and the
reasonable fees and expenses of one counsel for the Initial Purchasers relating
to such registration and qualification); (vii) admitting the Securities for
trading in the PORTAL Market; (viii) the transportation and other expenses
incurred by or on behalf of Company representatives (which shall not include the
Representatives or the Initial Purchasers) in connection with presentations to
prospective purchasers of the Securities; (ix) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local and
special counsel) for the Company; and (x) all other costs and expenses incident
to the performance by the Company of its obligations hereunder.
6. CONDITIONS TO THE OBLIGATIONS OF THE INITIAL PURCHASERS. The
obligations of the Initial Purchasers to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Company contained herein at the Execution Time, the Closing Date and any
settlement date pursuant to Section 3 hereof, to the accuracy of the statements
of the Company made in any certificates pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) The Company shall have requested and caused Greenberg
Traurig, P.A., counsel for the Company, to furnish to the Representatives its
opinion, dated the Closing Date and addressed to the Representatives, to the
effect that:
(i) the Company and each of its Subsidiaries
(individually, a "Subsidiary" and collectively, the
"Subsidiaries") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the jurisdiction in which it is chartered or organized, with
full corporate power and authority to own or lease, as the
case may be, and to operate its properties and conduct its
business as described in the Final Memorandum, and, to the
knowledge of such counsel, is duly qualified to do business as
a foreign corporation and is in good standing under the laws
of each jurisdiction which requires such qualification, except
where the failure so to qualify would not have, individually
or in the aggregate, a Material Adverse Effect;
(ii) all the outstanding shares of capital stock of
the Company and each Subsidiary have been duly and validly
authorized and issued and are fully paid and nonassessable,
and, except as otherwise set forth in the Final Memorandum,
all outstanding shares of capital stock of the Subsidiaries
are owned by the Company either directly or through wholly
owned Subsidiaries, to the knowledge of such counsel, free and
clear of any security interest and, to the knowledge of such
counsel, after due inquiry, any other security interests,
claims, liens or
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<PAGE>
encumbrances;
(iii) the Company's authorized equity capitalization
is as set forth in the Final Memorandum;
(iv) the Indenture has been duly authorized, executed
and delivered, and constitutes a legal, valid and binding
instrument enforceable against the Company in accordance with
its terms (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally from time
to time in effect and to general principles of equity, and
subject, as to the enforcement of rights of indemnity or
contribution, to applicable federal or state securities laws
or principles of public policy); the Securities have been duly
and validly authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered
to and paid for by the Initial Purchasers under this
Agreement, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the
Indenture (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally from time
to time in effect and to general principles of equity, and
subject, as to the enforcement of rights of indemnity or
contribution, to applicable federal or state securities laws
or principles of public policy); the Registration Rights
Agreement has been duly authorized, executed and delivered and
constitutes the legal, valid, binding and enforceable
instrument of the Company (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors'
rights generally from time to time in effect and to general
principles of equity, and subject, as to the enforcement of
rights of indemnity or contribution, to applicable federal or
state securities laws or principles of public policy); and the
statements set forth under the heading "Description of the
Notes" and "Exchange Offer/ Registration Rights" in the Final
Memorandum, insofar as such statements purport to summarize
certain provisions of the Securities, the Indenture and the
Registration Rights Agreement, provide a fair summary of such
provisions;
(v) to the knowledge of such counsel, there is no
pending or threatened action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its Subsidiaries or
its or their property that (A) is not adequately disclosed in
the Final Memorandum, except in each case for such proceedings
that, if the subject of an unfavorable decision, ruling or
finding would not singly or in the aggregate, result in a
Material Adverse Effect, or (B) challenges any of the
trademarks or service marks of the Company or its Subsidiaries
described in the Final
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<PAGE>
Memorandum;
(vi) such counsel has no reason to believe that at
the Execution Time and on the Closing Date the Final
Memorandum contained or contains any untrue statement of a
material fact or omitted or omits to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (in
each case, other than the financial statements and other
financial information and statistical data contained therein,
as to which such counsel need express no opinion);
(vii) this Agreement has been duly authorized,
executed and delivered by the Company;
(viii) no consent, approval, authorization, filing
with or order of any court or governmental agency or body is
required to be obtained or filed, as applicable, by the
Company or any Subsidiary in connection with the transactions
contemplated herein or in the Indenture and the Registration
Rights Agreement, except such as will be obtained under the
Act and the Trust Indenture Act and such as may be required
under the blue sky or securities laws of any jurisdiction in
connection with the purchase and sale of the Securities by the
Initial Purchasers in the manner contemplated in this
Agreement and the Final Memorandum and the Registration Rights
Agreement and such other approvals (specified in such opinion)
as have been obtained (it being understood that such counsel
need not express any opinion regarding blue sky or state
securities laws);
(ix) neither the execution and delivery of the
Indenture, this Agreement or the Registration Rights
Agreement, the issue and sale of the Securities, nor the
consummation of any other of the transactions herein or
therein contemplated, nor the fulfillment of the terms hereof
or thereof will conflict with, result in a breach or violation
of, or imposition of any lien, charge or encumbrance upon any
property or asset of the Company or its Subsidiaries pursuant
to, (i) the charter or by-laws of the Company or its
Subsidiaries; (ii) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement
or other agreement, obligation, condition, covenant or
instrument to which, to the knowledge of such counsel, the
Company or any of its Subsidiaries is a party or bound or to
which its respective property is subject, which breach,
violation or imposition, individually or in the aggregate,
would have a Material Adverse Effect; or (iii) any statute,
law, rule, regulation (assuming compliance with applicable
blue sky and state securities laws), judgment, order or decree
applicable to the Company or any of its Subsidiaries of any
court, regulatory body, administrative agency, governmental
body, arbitrator or other authority
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<PAGE>
having jurisdiction over the Company, any of its Subsidiaries
or any of their respective properties, which breach, violation
or imposition, individually or in the aggregate, would have a
Material Adverse Effect;
(x) assuming the accuracy of the representations and
warranties and compliance with the agreements contained
herein, no registration of the Securities under the Act, and
no qualification of an indenture under the Trust Indenture
Act, are required for the offer and sale by the Initial
Purchasers of the Securities in the manner contemplated by
this Agreement; and
(xi) the Company is not and, after giving effect to
the offering and sale of the Securities and the application of
the proceeds thereof as described in the Final Memorandum,
will not be an "investment company" as defined in the
Investment Company Act without taking account of any exemption
arising out of the number of holders of the Company's
securities.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
jurisdiction of incorporation of the Company, the State of New York or the
Federal laws of the United States, to the extent they deem proper and specified
in such opinion, upon the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the Initial
Purchasers; and (B) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and public officials.
References to the Final Memorandum in this Section 6(a) include any amendment or
supplement thereto at the Closing Date.
(b) The Representatives shall have received from Akerman,
Senterfitt & Eidson, P.A., counsel for the Initial Purchasers, such opinion or
opinions, dated the Closing Date and addressed to the Representatives, with
respect to the issuance and sale of the Securities, the Indenture, the
Registration Rights Agreement, the Final Memorandum (as amended or supplemented
at the Closing Date) and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to pass
upon such matters.
(c) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the President
and the principal financial or accounting officer of the Company, dated the
Closing Date, to the effect that the signers of such certificate have carefully
examined the Final Memorandum, any amendment or supplement to the Final
Memorandum and this Agreement and that:
(i) the representations and warranties of the Company
in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as
if made on the Closing Date, and the Company has
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<PAGE>
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date; and
(ii) since the date of the most recent financial
statements included in the Final Memorandum, there has been no
material adverse change in the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated by the Final
Memorandum.
(d) At the Execution Time and at the Closing Date, the Company
shall have requested and caused Ernst & Young LLP to furnish to the
Representatives letters, dated respectively as of the Execution Time and as of
the Closing Date, in form and substance satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of the Act
and the Exchange Act and the applicable rules and regulations thereunder, that
they have performed a review of the unaudited interim financial information of
the Company for the six-month period ended May 31, 1999 and as at May 31, 1999,
and stating in effect that:
(i) in their opinion the pro forma financial
statements included or incorporated in the Final Memorandum
and reported on by them comply as to form in all material
respects with the applicable accounting requirements of the
Exchange Act and the related published rules and regulations
thereunder;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company
and its subsidiaries; their limited review in accordance with
the standards established under Statement on Auditing
Standards No. 71, of the unaudited interim financial
information for the six-month period ended May 31, 1999, and
as at May 31, 1999, as indicated in their report dated October
1, 1999; carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the
stockholders, directors and any committees of the Company and
the Subsidiaries; and inquiries of certain officials of the
Company who have responsibility for financial and accounting
matters of the Company and its subsidiaries as to transactions
and events subsequent to November 30, 1998, nothing came to
their attention which caused them to believe that:
(A) any unaudited financial statements
included or incorporated in the Final Memorandum do
not comply in form in all material respects with
applicable accounting requirements and with the
published rules and regulations of the Commission
with respect to financial statements
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included or incorporated in quarterly reports on Form
10-Q under the Exchange Act; and said unaudited
financial statements are not in conformity with
generally accepted accounting principles applied on a
basis substantially consistent with that of the
audited financial statements included or incorporated
in the Final Memorandum; or
(B) with respect to the period subsequent to
May 31, 1999, there were any changes, at a specified
date not more than five days prior to the date of the
letter, in the long-term debt of the Company and its
subsidiaries or capital stock of the Company or
decreases in the consolidated net current assets or
shareholders' equity of the Company and its
subsidiaries as compared with the amounts shown on
the May 31, 1999 unaudited pro-forma consolidated
balance sheet included or incorporated in the Final
Memorandum, or for the period from June 1, 1999 to
such specified date there were any decreases, as
compared with the corresponding period in the
preceding year, in consolidated net sales or in the
total or per share amounts of net income of the
Company and its subsidiaries, except in all instances
for changes or decreases set forth in such letter, in
which case the letter shall be accompanied by an
explanation by the Company as to the significance
thereof unless said explanation is not deemed
necessary by the Representatives; or
(C) the information included under the
headings "Offering Memorandum Summary--Summary
Financial Information" and "Selected Financial Data"
is not in conformity with the disclosure requirements
of Regulation S-K;
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Final
Memorandum, including the information set forth under the
captions "Offering Memorandum Summary--Summary Financial
Information," "Capitalization," Selected Financial Data," "Pro
Forma Financial Data" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in
the Final Memorandum, agrees with the accounting records of
the Company and its subsidiaries, excluding any questions of
legal interpretation;
(iv) on the basis of a reading of the unaudited pro
forma financial statements (the "pro forma financial
statements") included or incorporated in the
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Final Memorandum; carrying out certain specified procedures;
inquiries of certain officials of the Company and Penske who
have responsibility for financial and accounting matters; and
proving the arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts in the pro forma
financial statements, nothing came to their attention which
caused them to believe that the pro forma financial statements
do not comply in form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation
S-X or that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of such
statements.
References to the Final Memorandum in this Section 6(d)
include any amendment or supplement thereto at the date of the applicable
letter.
(e) At the Execution Time and at the Closing Date, the Company
shall have requested and caused Deloitte & Touche LLP to furnish to the
Representatives letters, dated respectively as of the Execution Time and as of
the Closing Date, in form and substance satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of the Act
and the Exchange Act and the applicable rules and regulations thereunder, that
they have performed a review of the unaudited interim financial information of
Penske for the six-month period ended June 30, 1999 and as at June 30, 1999, and
stating in effect that:
(i) in their opinion the pro forma financial
statements included or incorporated in the Final Memorandum
and reported on by them comply as to form in all material
respects with the applicable accounting requirements of the
Exchange Act and the related published rules and regulations
thereunder;
(ii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of
Penske and its subsidiaries) set forth in the Final
Memorandum, including the information set forth under the
captions "Offering Memorandum Summary--Summary Financial
Information," "Capitalization," Selected Financial Data," "Pro
Forma Financial Data" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in
the Final Memorandum, agrees with the accounting records of
the Company and its subsidiaries, excluding any questions of
legal interpretation;
(iii) on the basis of a reading of the unaudited pro
forma financial statements (the "pro forma financial
statements") included or incorporated in the Final Memorandum;
carrying out certain specified procedures; inquiries of
certain officials of the Company and Penske who have
responsibility for financial and
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accounting matters; and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical
amounts in the pro forma financial statements, nothing came to
their attention which caused them to believe that the pro
forma financial statements do not comply in form in all
material respects with the applicable accounting requirements
of Rule 11-02 of Regulation S-X or that the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of such statements.
References to the Final Memorandum in this Section 6(e)
include any amendment or supplement thereto at the date of the applicable
letter.
(f) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Final Memorandum (exclusive of any
amendment or supplement thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph (d) of this
Section 6; or (ii) any change, or any development involving a prospective
change, in or affecting the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its Subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final Memorandum
(exclusive of any amendment or supplement thereto) the effect of which, in any
case referred to in clause (i) or (ii) above, is, in the sole judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to market the Securities as contemplated by the Final Memorandum
(exclusive of any amendment or supplement thereto).
(g) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act) or any notice given of any intended or potential
decrease in any such rating or of a possible change in any such rating that does
not indicate the direction of the possible change.
(h) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information, certificates and
documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Initial Purchasers, this Agreement and all obligations of the Initial Purchasers
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company in
writing or by telephone or facsimile confirmed in writing.
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The documents required to be delivered by this Section 6 will
be delivered at the office of counsel for the Company in New York, New York, on
the Closing Date.
7. REIMBURSEMENT OF EXPENSES. If the sale of the Securities provided
for herein is not consummated because any condition to the obligations of the
Initial Purchasers set forth in Section 6 hereof is not satisfied, because of
any termination pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof other than by reason of a default by any of
the Initial Purchasers, the Company will reimburse the Initial Purchasers
severally through Salomon Smith Barney on demand for all reasonable
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Securities.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Initial Purchaser, the directors, officers, employees and agents of each Initial
Purchaser and each Person who controls any Initial Purchaser within the meaning
of either the Act or the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Preliminary Memorandum, the Final Memorandum (or in any
supplement or amendment thereto) or any information provided by the Company to
any holder or prospective purchaser of Securities pursuant to Section 5(h), or
in any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made in
the Preliminary Memorandum or the Final Memorandum, or in any amendment thereof
or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Initial Purchasers
through the Representatives specifically for inclusion therein. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.
(b) Each Initial Purchaser severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers, and each Person who
-21-
<PAGE>
controls the Company within the meaning of either the Act or the Exchange Act,
to the same extent as the foregoing indemnity from the Company to each Initial
Purchaser, but only with reference to written information relating to such
Initial Purchaser furnished to the Company by or on behalf of such Initial
Purchaser through the Representatives specifically for inclusion in the
Preliminary Memorandum or the Final Memorandum (or in any amendment or
supplement thereto). This indemnity agreement will be in addition to any
liability which any Initial Purchaser may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph of the cover
page regarding the delivery of the Securities and, under the heading "Plan of
Distribution", (i) the sentences related to concessions and reallowances; (ii)
the paragraph related to the delivery of the Securities; and (iii) the paragraph
related to stabilization, syndicate covering transactions and penalty bids in
the Preliminary Memorandum and the Final Memorandum, constitute the only
information furnished in writing by or on behalf of the Initial Purchasers for
inclusion in the Preliminary Memorandum or the Final Memorandum (or in any
amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses;
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
PROVIDED, HOWEVER, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest; (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action; or (iv) the indemnifying party
shall authorize the indemnified party to employ separate
-22-
<PAGE>
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Initial Purchasers agree
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Initial Purchasers may be subject in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and by the Initial Purchasers on the other from the offering of the
Securities; PROVIDED, HOWEVER, that in no case shall any Initial Purchaser
(except as may be provided in any agreement among the Initial Purchasers
relating to the offering of the Securities) be responsible for any amount in
excess of the purchase discount or commission applicable to the Securities
purchased by such Initial Purchaser hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the Initial Purchasers shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and of the Initial Purchasers on the other in connection
with the statements or omissions which resulted in such Losses, as well as any
other relevant equitable considerations. Benefits received by the Company shall
be deemed to be equal to the total net proceeds from the offering (before
deducting expenses) received by it, and benefits received by the Initial
Purchasers shall be deemed to be equal to the total purchase discounts and
commissions in each case set forth on the cover of the Final Memorandum.
Relative fault shall be determined by reference to, among other things, whether
any untrue or any alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information provided by the
Company on the one hand or the Initial Purchasers on the other, the intent of
the parties and their relative knowledge, information and opportunity to correct
or prevent such untrue statement or omission. The Company and the Initial
Purchasers agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each Person who
controls an Initial Purchaser within the meaning of either the Act or the
Exchange Act and each director, officer, employee and agent of an Initial
Purchaser shall have the same rights to contribution as such Initial Purchaser,
and each Person who controls the Company within the
-23-
<PAGE>
meaning of either the Act or the Exchange Act and each officer and director of
the Company shall have the same rights to contribution as the Company, subject
in each case to the applicable terms and conditions of this paragraph (d).
9. DEFAULT BY AN INITIAL PURCHASER. If any one or more Initial
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Initial Purchasers)
the Securities which the defaulting Initial Purchaser or Initial Purchasers
agreed but failed to purchase; PROVIDED, HOWEVER, that in the event that the
aggregate amount of Securities which the defaulting Initial Purchaser or Initial
Purchasers agreed but failed to purchase shall exceed 10% of the aggregate
amount of Securities set forth in Schedule I hereto, the remaining Initial
Purchasers shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Securities, and if such nondefaulting Initial
Purchasers do not purchase all the Securities, this Agreement will terminate
without liability to any nondefaulting Initial Purchaser or the Company. In the
event of a default by any Initial Purchaser as set forth in this Section 9, the
Closing Date shall be postponed for such period, not exceeding five Business
Days, as the Representatives shall determine in order that the required changes
in the Final Memorandum or in any other documents or arrangements may be
effected. Nothing contained in this Agreement shall relieve any defaulting
Initial Purchaser of its liability, if any, to the Company or any nondefaulting
Initial Purchaser for damages occasioned by its default hereunder.
10. TERMINATION. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Company's Common Stock shall have been suspended by the
Commission or the Nasdaq National Market, or trading in securities generally on
the New York Stock Exchange or the Nasdaq National Market shall have been
suspended or limited or minimum prices shall have been established on such
Exchange or the Nasdaq National Market; (ii) a banking moratorium shall have
been declared either by Federal or New York State authorities; or (iii) there
shall have occurred any outbreak or escalation of hostilities, declaration by
the United States of a national emergency or war or other calamity or crisis the
effect of which on financial markets is such as to make it, in the sole judgment
of the Representatives, impracticable or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Final Memorandum
(exclusive of any amendment or supplement thereto).
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and
-24-
<PAGE>
of the Initial Purchasers set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of the Initial Purchasers or the Company or any of the officers,
directors or controlling Persons referred to in Section 8 hereof, and will
survive delivery of and payment for the Securities. The provisions of Sections 7
and 8 hereof shall survive the termination or cancellation of this Agreement.
12. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, (i) if sent to the Representatives, will be
mailed, delivered or telefaxed to Salomon Smith Barney at 388 Greenwich Street,
New York, New York 10013, telecopy: (212) 816-7912, Attention: General Counsel,
with a copy to Akerman, Senterfitt & Eidson, P.A., 450 East Las Olas Boulevard,
Suite 950, Fort Lauderdale, Florida 33301-2227, telecopy: (954) 463-2224,
Attention: Donn A. Beloff, Esq.; or (ii) if sent to the Company, will be mailed,
delivered or telefaxed to the Company at 1801 W. International Speedway
Boulevard, Daytona Beach, Florida 32114, telecopy: (904) 947-6537, Attention:
William C. France, Chairman of the Board and Chief Executive Officer, with a
copy to Greenberg Traurig, P.A., 1221 Brickell Avenue, Miami, Florida 33131,
telecopy: (305) 579-0717, Attention: Bruce E. Macdonough, Esq.
13. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling Persons referred to in Section 8 hereof, and,
except as expressly set forth in Section 5(h) hereof, no other Person will have
any right or obligation hereunder.
14. APPLICABLE LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.
16. HEADINGS. The section headings used herein are for convenience only
and shall not affect the construction hereof.
17. DEFINITIONS. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Affiliate" shall have the meaning specified in Rule 501(b) of
Regulation D.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or
-25-
<PAGE>
obligated by law to close in The City of New York.
"Commission" shall mean the Securities and Exchange
Commission.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended, and the rules and regulations of the Commission
promulgated thereunder.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"Person" shall mean any individual, corporation, company
(including any limited liability company), association, partnership,
joint venture, trust, unincorporated organization, government or any
agency or political subdivision thereof or any other entity.
"Regulation D" shall mean Regulation D under the Act.
"Regulation S" shall mean Regulation S under the Act.
"Subsidiary" or "Subsidiaries" shall have the meaning ascribed
to the term "Restricted Subsidiary" in the Indenture, but shall only
include any "Restricted Subsidiary" in existence as of the Execution
Time.
"Trust Indenture Act" shall mean the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Commission
promulgated thereunder.
[SIGNATURES ON FOLLOWING PAGE]
-26-
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Initial Purchasers.
Very truly yours,
INTERNATIONAL SPEEDWAY
CORPORATION
By: /S/ JAMES C. FRANCE
------------------------------
Name: JAMES C. FRANCE
-----------------------
Title: PRESIDENT
----------------------
The foregoing Agreement is hereby confirmed and
accepted as of the date first above written.
SALOMON SMITH BARNEY INC.
FIRST UNION SECURITIES, INC.
By: SALOMON SMITH BARNEY INC.
By: /S/ RICHARD L. MORIARTY
---------------------------------
Name: RICHARD L. MORIARTY
-------------------------
Title: MANAGING DIRECTOR
------------------------
-27-
<PAGE>
SCHEDULE I
PRINCIPAL
AMOUNT OF NOTES
INITIAL PURCHASERS TO BE PURCHASED
- ------------------ ---------------
Salomon Smith Barney Inc. .......................................$112,500,000
First Union Securities, Inc......................................$ 78,750,000
Banc One Capital Markets, Inc....................................$ 11,250,000
Raymond James & Associates, Inc..................................$ 11,250,000
SunTrust Equitable Securities Corporation........................$ 11,250,000
Total ...........................................................$225,000,000
-28-
<PAGE>
EXHIBIT A
Non-Distribution Letter for Institutional Accredited Investors
________________, 1999
Salomon Smith Barney
First Union Securities, Inc.
As Representatives of the
Initial Purchasers
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
International Speedway Corporation
1801 West International Speedway, Boulevard
Daytona Beach, Florida 32114
Re: Purchase of $________ principal amount
of 7_% Senior Notes Due 2004 (the "Securities")
of International Speedway Corporation (the "Company")(1)
Ladies and Gentlemen:
In connection with our purchase of the Securities we confirm that:
1. We understand that the Securities are not being and will not be
registered under the Securities Act of 1933, as amended (the "Act"), and are
being sold to us in a transaction that is exempt from the registration
requirements of the Act.
2. We acknowledge that (a) neither the Company, nor the Initial
Purchasers (as defined in the Offering Memorandum dated October 1, 1999 relating
to the Securities (the "Final
- --------
(1) Each U.S. purchaser, or account for which each U.S. purchaser is acting,
should purchase at least $250,000 of Securities.
A-1
<PAGE>
Memorandum")) nor any person acting on behalf of the Company or the Initial
Purchasers has made any representation to us with respect to the Company or the
offer or sale of any Securities; and (b) any information we desire concerning
the Company and the Securities or any other matter relevant to our decision to
purchase the Securities (including a copy of the Final Memorandum) is or has
been made available to us.
3. We have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an investment in
the Securities, and we are (or any account for which we are purchasing under
paragraph 4 below is) an institutional "accredited investor" (within the meaning
of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Act) able to bear
the economic risk of investment in the Securities.
4. We are acquiring the Securities for our own account (or for accounts
as to which we exercise sole investment discretion and have authority to make,
and do make, the statements contained in this letter) and not with a view to any
distribution of the Securities, subject, nevertheless, to the understanding that
the disposition of our property will at all times be and remain within our
control.
5. We understand that (a) the Securities will be in registered form
only and that any certificates delivered to us in respect of the Securities will
bear a legend substantially to the following effect:
"These Securities have not been registered under the
Securities Act of 1933. Further offers or sales of these Securities are subject
to certain restrictions, as set forth in the Offering Memorandum dated October
1, 1999 relating to these Securities."
and (b) the Company has agreed to reissue such certificates
without the foregoing legend only in the event of a disposition of the
Securities in accordance with the provisions of paragraph 6 below (provided, in
the case of a disposition of the Securities in accordance with paragraph 6(f)
below, that the legal opinion referred to in such paragraph so permits), or at
our request at such time as we would be permitted to dispose of them in
accordance with paragraph 6(a) below.
6. We agree that in the event that at some future time we wish to
dispose of any of the Securities, we will not do so unless such disposition is
made in accordance with any applicable securities laws of any state of the
United States and:
(a) the Securities are sold in compliance with Rule 144(k)
under the Act; or
(b) the Securities are sold in compliance with Rule 144A under
the Act; or
(c) the Securities are sold in compliance with Rule 904 of
Regulation S under the Act; or
A-2
<PAGE>
(d) the Securities are sold pursuant to an effective
registration statement under the Act; or
(e) the Securities are sold to the Company or an affiliate (as
defined in Rule 501(b) of Regulation D) of the Company; or
(f) the Securities are disposed of in any other transaction
that does not require registration under the Act, and we theretofore have
furnished to the Company or its designee an opinion of counsel experienced in
securities law matters to such effect or such other documentation as the Company
or its designee may reasonably request.
Very truly yours,
By:____________________________________
(Authorized Officer)
A-3
<PAGE>
EXHIBIT B
SELLING RESTRICTIONS FOR OFFERS AND
SALES OUTSIDE THE UNITED STATES
(1) (a) The Securities have not been and will not be registered under
the Act and may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons except in accordance with Regulation S
under the Act or pursuant to an exemption from the registration requirements of
the Act. Each Initial Purchaser represents and agrees that, except as otherwise
permitted by Section 4(a)(i) or (ii) of the Agreement to which this is an
exhibit, it has offered and sold the Securities, and will offer and sell the
Securities, (i) as part of their distribution at any time; and (ii) otherwise
until 40 days after the later of the commencement of the offering and the
Closing Date, only in accordance with Rule 903 of Regulation S under the Act.
Accordingly, each Initial Purchaser represents and agrees that neither it, nor
any of its Affiliates nor any person acting on its or their behalf has engaged
or will engage in any directed selling efforts with respect to the Securities,
and that it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Initial Purchaser agrees that, at
or prior to the confirmation of sale of Securities (other than a sale of
Securities pursuant to Section 4(a)(i) or (ii) of the Agreement to which this is
an exhibit), it shall have sent to each distributor, dealer or person receiving
a selling concession, fee or other remuneration that purchases Securities from
it during the distribution compliance period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the "Act") and may not be
offered or sold within the United States or to, or for the
account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after
the later of the commencement of the offering and October 6,
1999, except in either case in accordance with Regulation S or
Rule 144A under the Act. Terms used above have the meanings
given to them by Regulation S."
(b) Each Initial Purchaser also represents and agrees that it
has not entered and will not enter into any contractual arrangement with any
distributor with respect to the distribution of the Securities, except with its
Affiliates or with the prior written consent of the Company.
(c) Terms used in this section have the meanings given to them
by Regulation S.
(2) Each Initial Purchaser represents and agrees that (i) it has not
offered or sold, and will not offer or sell, in the United Kingdom, by means of
any document, any Securities other than to persons whose ordinary business it is
to buy or sell shares or debentures, whether
B-1
<PAGE>
as principal or as agent (except in circumstances which do not constitute an
offer to the public within the meaning of the Companies Act 1989 of Great
Britain); (ii) it has complied and will comply with all applicable provisions of
the Financial Services Act 1986 of the United Kingdom with respect to anything
done by it in relation to the Securities in, from or otherwise involving the
United Kingdom; and (iii) it has only issued or passed on and will only issue or
pass on in the United Kingdom any document received by it in connection with the
issue of the Securities to a person who is of a kind described in Article 9(3)
of the Financial Services Act 1986 (Investment Advertisements) (Exemptions)
Order 1996 or is a person to whom the document may otherwise lawfully be issued
or passed on.
B-2
EXHIBIT 5.1
GREENBERG TRAURIG, P.A.
1221 BRICKELL AVENUE
MIAMI, FLORIDA 33131
January 4, 2000
International Speedway Corporation
1801 West International Speedway Boulevard
Daytona Beach, Florida 32114
Ladies and Gentlemen:
We have acted as counsel to International Speedway Corporation, a
Florida corporation (the "Company"), in connection with the preparation of a
Registration Statement on Form S-4, including the Prospectus constituting a part
thereof (the "Registration Statement"), to be filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the
"Securities Act"), relating to an offer to exchange (the "Exchange Offer") the
Company's registered 7.875% Senior Notes due 2004 (the "Registered Notes") for
all of the Company's outstanding 7.875% Senior Notes due 2004 (the "Outstanding
Notes"). The Registered Notes will be guaranteed (the "Guarantees") by the
Guarantors (as defined).
The Outstanding Notes were issued, and the Registered Notes will be
issued, pursuant to an Indenture (the "Indenture") dated as of October 6, 1999,
by and among the Company, certain subsidiaries of the Company party thereto (the
"Guarantors") and First Union National Bank, as Trustee (the "Trustee").
We have examined such documents and records and other certificates and
instruments and have conducted such investigation as we have deemed necessary to
enable us to render this opinion.
Based upon the foregoing, and in reliance thereon, and subject to the
assumptions, limitations, qualifications and exceptions set forth below, we are
of the opinion that:
1. Assuming the Registration Statement (including any amendments
thereto) shall become effective under the Securities Act and the execution and
delivery of the Registered Notes have been duly authorized by all necessary
action on the part of the Company, when executed and authenticated by the
Trustee in accordance with their terms and the terms of the Indenture, and
delivered in exchange for the Outstanding Notes pursuant to the Indenture and
the Exchange Offer, the Registered Notes will be legally issued and valid and
binding obligations of the Company enforceable in accordance with their terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium,
or similar laws relating to or affecting creditors' rights generally (including,
without limitation, fraudulent conveyance laws) and by general principles of
equity, including, without limitation, concepts of materiality, reasonableness,
good faith and fair dealing and the possible unavailability of specific
performance or injunctive relief regardless of whether considered in a
proceeding in equity or at law; and
<PAGE>
2. Assuming the Registration Statement (including any amendments
thereto) shall become effective under the Securities Act and the execution and
delivery of the Guarantees have been duly authorized by all necessary corporate
action on the part of the Guarantors, when executed and authenticated by the
Trustee in accordance with their terms and the terms of the Indenture, and
delivered pursuant to the Indenture and the Exchange Offer, the Guarantees will
be legally issued and valid and binding obligations of the Guarantors
enforceable in accordance with their terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to
or affecting creditors' rights generally (including, without limitation,
fraudulent conveyance laws) and by general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing and the possible unavailability of specific performance or injunctive
relief regardless of whether considered in a proceeding in equity or at law.
Our opinion as to enforceability of the Registered Notes and the
Guarantees is subject to the qualification that certain provisions thereof may
be unenforceable in whole or in part under the laws of the State of Florida and
New York, as applicable, but the inclusion of any such provision will not effect
the validity of the Registered Notes or the Guarantees and each of them contain
legally adequate provisions for the realization of the principal legal rights
and benefits afforded thereby. We express no opinion concerning federal or state
securities laws.
We are qualified to practice law in the State of Florida and we do not
purport to be experts on the law of any other jurisdiction other than the
federal laws of the United States of America. In rendering our opinions with
respect to the Registered Notes and the Guarantees, we have assumed with your
permission, and without independent investigation, that the applicable laws of
the State of New York are identical in all relevant respects to the substantive
laws of the State of Florida. We express no opinion and make no representation
with respect to the law of any other jurisdiction.
This opinion is for your benefit and it may not be reprinted,
reproduced or distributed to any other person for any purpose without our prior
written consent, except that we hereby consent to the reference to our firm
under the caption "Legal Matters" in the Prospectus which is filed as part of
the Registration Statement, and to the filing of this opinion as an exhibit to
such Registration Statement. In giving this consent, we do not admit that we are
experts within the meaning of Section 11 of the Securities Act or within the
category of persons whose consent is required by Section 7 of the Securities
Act. Our opinion is expressly limited to the matters set forth above and we
render no opinion, whether by implication or otherwise, as to any other matters
relating to the Company, the Guarantors or any other person, or any other
document or agreement involved with the transactions contemplated by the
Exchange Offer. We assume no obligation to advise you of facts, circumstances,
events or developments which hereafter may be brought to our attention and which
may alter, affect or modify the opinions expressed herein.
Sincerely,
/s/ GREENBERG TRAURIG, P.A.
GREENBERG TRAURIG, P.A.
EXHIBIT 12.1
INTERNATIONAL SPEEDWAY CORPORATION
STATEMENT OF COMPUTATION OF UNAUDITED RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS, EXCEPT RATIO INFORMATION)
<TABLE>
<CAPTION>
THREE TWELVE
MONTHS MONTHS
YEAR ENDED AUGUST 31,(1) ENDED ENDED
--------------------------- NOVEMBER 30, NOVEMBER 30,
1994 1995 1996 1996(1) 1996(1)
------- ------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Earnings:
Income (loss) before income taxes $23,228 $29,417 $31,644 $(2,608) $30,374
Less: Minority interest - - - - -
Less: Equity in net income (loss) from equity investments 207 285 1,441 (304) 1,291
Add: Fixed Charges, from below 71 67 70 83 137
------- ------- ------- ------- -------
$23,092 $29,199 $30,273 $(2,221) $29,220
======= ======= ======= ======= =======
Fixed Charges:
Interest expenses and capitalized - - - 69 69
Amortized discounts and capitalized
expenses related to indebtedness - - - - -
Estimate of interest within rental expense 71 67 70 14 68
------- ------- ------- ------- -------
$ 71 $ 67 $ 70 $ 83 $ 137
======= ======= ======= ======= =======
Ratio of earnings to fixed charges 325.2x 435.8x 432.5x (2) 213.3x
======= ======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED NOVEMBER 30, NOVEMBER 30,
----------------------- , -----------------
1997 1998 1998 1999
------- ------- - ------- -------
<S> <C> <C> <C> <C>
Earnings:
Income before income taxes $47,954 $65,085 $39,244 $69,519
Less: Minority interest - - - 77
Less: Equity in net income (loss) from equity investments 366 (905) (111) (1,472)
Add: Fixed Charges, from below 551 774 657 4,511
------- ------- ------- -------
$48,249 $66,765 $40,012 $73,675
======= ======= ======= =======
Fixed Charges:
Interest expenses and capitalized 509 582 518 4,261
Amortized discounts and capitalized
expenses related to indebtedness - - - -
Estimate of interest within rental expense 152 192 139 250
------- ------- ------- -------
$ 661 $ 774 $ 657 $ 4,511
======= ======= ======= =======
Ratio of earnings to fixed charges 73.0x 86.3x 60.9x 16.3x
======= ======= ======= =======
<FN>
(1) The Company changed its fiscal year end to November 30 effective December 1, 1996. This resulted in a three-month transition
period commencing September 1, 1996 and ending November 30, 1996. The unaudited results of the 12-month period November 30, 1996
are presented for the purpose of comparison to the fiscal year ended November 30, 1997.
(2) The deficiency of earnings available to cover fixed charges for the three months ended November 30, 1996
was approximately $2.3 million.
</FN>
</TABLE>
EXHIBIT 21.1
SUBSIDIARIES OF THE REGISTRANT
Americrown Service Corporation,
a South Carolina Corporation
The California Speedway Corporation,
a Delaware Corporation
d/b/a/ California Speedway
Chicago Holdings, Inc.,
a Nevada Corporation
Competition Tire South, Inc.,
a Delaware Corporation
Competition Tire West, Inc.,
a Michigan Corporation
Event Equipment Leasing, Inc.,
a Florida Corporation
Event Support Corporation,
a Florida Corporation
Great Western Sports, Inc.,
an Arizona Corporation
d/b/a/ Tucson Raceway Park
Homestead-Miami Speedway, LLC,
a Delaware LLC
d/b/a Homestead-Miami Speedway
ISC Properties, Inc.,
a Florida Corporation
ISC Publications, Inc.,
a Florida Corporation
Kansas Speedway Corporation,
a Kansas Corporation
Kansas Speedway Development Corp.,
a Kansas Corporation
Miami Speedway Corp.,
a Nevada Corporation
Michigan International Speedway, Inc.,
a Michigan Corporation
d/b/a Michigan Speedway
Motor Racing Network, Inc.,
a Florida Corporation
<PAGE>
Motorsports Alliance, LLC,
a Delaware LLC
Motorsports International Corp.,
a Pennsylvania Corporation
New York International Speedway Corporation,
a Delaware Corporation
North American Testing Company,
a Florida Corporation
North Carolina Speedway, Inc.,
a North Carolina Corporation
d/b/a North Carolina Speedway
Pennsylvania International Raceway, Inc.,
a Pennsylvania Corporation
d/b/a Nazareth Speedway
Phoenix Speedway Corp.,
a Delaware Corporation
d/b/a Phoenix International Raceway
Regiment, Inc.,
a North Carolina Corporation
Richmond International Raceway, Inc.,
a Delaware Corporation
Rocky Mountain Speedway Corporation,
a Colorado Corporation
Seasonal Services, Inc.,
a Florida Corporation
South Carolina International Speedway Corporation,
a South Carolina Corporation
d/b/a/ Darlington International Raceway
Watkins Glen International, Inc.,
a New York Corporation
d/b/a Watkins Glen International
88 Corp.,
a Delaware Corporation
EXHIBIT 23.1
Consent of Independent Certified Public Accountants
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4 No. 333-00000) and related Prospectus of
International Speedway Corporation for the registration of $225 million in
7.875% Senior Notes due 2004 and to the inclusion of our report dated January
22, 1999, except for Note 15, as to which the date is December 30, 1999 in the
Company's Form 8-K dated January 4, 2000, with respect to the consolidated
financial statements and schedules of International Speedway Corporation
included in its Annual Report (Form 10-K) for the year ended November 30, 1998,
filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
- -----------------
Jacksonville, Florida
December 30, 1999
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
International Speedway Corporation on Form S-4 of our report on the consolidated
financial statements of Penske Motorsports, Inc., dated February 1, 1999,
appearing in the Annual Report on Form 10-K of Penske Motorsports, Inc., for the
year ended December 31, 1998 and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Detroit, Michigan
January 4, 2000
