October 18, 2001

Scotland County Raceway Letter to the Editor

From: Ron Anderson

Promoter Scotland County

Raceway

To: All Racers, Spectators, Race Sponsors and Interested Parties

It has been my pleasure to work with you during the 2001 race season.

I thank all the sponsors for the financial support and confidence in a first year race program.

I thank the racers for their patience while we were getting our staff and facility organized, and for continuing to support the track verbally and with their presence during the race year.

I thank the spectators for supporting the track with their presence and for their kind words of encouragement.

I am very disappointed by my failure, after numerous attempts, to even obtain a meeting to discuss the future of the raceway with the Scotland County Fair Board. As with any lessor/lessee arrangement a certain amount of disagreement and/or discord between the parties may exist. However try as I may, I have been unable to create a reasonable constructive negotiation between myself and the Fair Board.

I honored my commitment to build a program. We have a great race program, certainly with room for improvement but as good or better than most tracks in the tri-state area. We have had some of the most exciting late model racing in the country. (Where else do you see four wide racing at 100 MPH for almost an entire lap)? We have had sprint car racing at 110 MPH. Some of the best A modified racers in the country (and they are local guys), not to mention great B modified, hobby stock, stock car and two man cruiser action.

I am at this time sharing with you the offer I was never able to discuss with the Scotland County Fair Board for the promotion of the Raceway for next year and the significant future. It follows:

What I wanted:

1. A 10-year lease on the Raceway; (from West Side of the gravel road directly behind the grandstand to the fence at Highway 15. From the ditch at the north end of the Raceway to the fence before Lake Road at the South of the Raceway), and one quonset hut. This lease would of course require certain performance criteria, i.e. number of races per year, certain maintenance requirements, etc.

2. Control of all functions that happen on the raceway. (I'll be happy to cooperate with the Fire Department for the Demo Derby and the Fair Board for tractor pulls, etc.)

3. Exclusive rights to solicit and market racing sponsorships and race advertising for the raceway.

4. Have permission to build and/or make improvements as required on the leased property (at my own expense of course).

5. Have all rights to vendor selection and product sales at the raceway.

6. Parking rights on the fairgrounds at no additional charge for all promoted events.

7. Untreated water as required at no charge.

8. Sewage disposal on a regular scheduled basis.

What I was willing to give:

1. I would have agreed to invest a minimum of $20,000.00 dollars in improvements to the raceway as my lease payment in 2002. (I would however, have the final decision on what improvements are made).

2. During the 2nd through the 10th years, I would have agreed to invest a minimum of $5,000.00 per year in improvements to the raceway in addition to $300.00 in payment to the Scotland County Fair Board for each week in which an event is promoted and held, as lease payment.

3. I would have agreed to do all maintenance on the raceway, on the grandstands (once they were brought to a serviceable state), and on the leased grounds.

4. I would of course be responsible for all utilities used by the Raceway.

The Raceway would still belong to the County and after the ten-year lease period the improved property could be leased to the highest bidder.

I believe this was a fair and equitable offer that would have allowed this promoter the freedom to invest in the raceway long term, the county to get a much improved facility, and the community to enjoy a quality race program as well as the revenue it would have generated for local establishments.

I made a request for a special Fair Board meeting to discuss this proposal during a special Fair Board meeting in August and stated this was an urgent matter that needed to be addressed quickly. I made numerous additional requests for a meeting in August to discuss this proposal and additional requests in September. At the end of September I was given the attached lease to sign. On Monaday the 15th of October, I spoke with the president of the Scotland County Agricultural and Mechanical Society, Phil Aylward, at which time he stated to me "there is very little wiggle room in which to negotiate" the lease.

This lease was created with no input from the promoter and is totally unacceptable with no room for the promoter to grow a program or to invest in the raceway with any reasonable expectation of return. Without a multiple year contract and the opportunity for growth and investment, continuing to try to build a quality race program is futile.

As the Fair Board pointed out in their September 13th article in the Memphis Democrat, "The promoter, whoever he is, must look at promoting weekly racing, as a business". Maybe they should consider how much money a race program brings into other community businesses and how many promoters are standing in line to accept this kind of lease.

Also attached you will find the original 2001 agreement which you will see has a first option to renew which has not been honored because the terms and conditions have been changed.

I apologize to the racers, sponsors, spectators, and community for not being able to continue and grow the program we all worked to build, but at this time I must reject this lease and again apologize for my failure to create a constructive negotiation and dialog with the Fair Board.

Proposed New

Lease For Raceway



This Lease is made and entered into this _________ day of ________________ , 2001, by and between Scotland County Agricultural and Mechanical Society, hereinafter referred to as Lessor, and R.L. Anderson, hereinafter referred to as Lessee, with reference to the Scotland County Raceway, hereinafter referred to the Raceway.

The parties hereto, for and in consideration of the rents, covenants and agreements contained herein agree as follows:

1. PREMISES. That Lessor hereby leases to Lessee and Lessee hereby takes from Lessor the premises described as the Scotland County Raceway track, pit area, parking lot, north food stand, south food stand, public bathrooms, bathrooms in art hall and office area in art hall building. The parties hereby acknowledge that the Quonset huts and all other areas of the Scotland County Fair Grounds are excluded from said Agreement.

The Lessor and Lessee agree that Lessee shall have NO SPRINT CAR RACES AT THE RACEWAY.

Lessee will have exclusive rights to solicit and market racing sponsorships and race advertising at the Scotland County Raceway for the period of the Agreement.

2. SCOTLAND COUNTY FAIR. Lessor and Lessee hereby agree that Lessor shall regain exclusive use of all areas of the Scotland County Fairgrounds including racetrack, pit area, parking lot, north food stand, south food stand, public bathrooms, bathrooms in art hall and office area in art hall building for the week of the Scotland County Fair. Parties hereby agree that the Lessor during this period of time will utilize the track for tractor pulls, demolition derby, entertainment, or any other purposes at the sole discretion of the Lessor. The parties further agree that the Lessor will have until the Wednesday following the completion of the Scotland County Fair to clean up the racetrack and pit area.

Lessee will commit to provide two (2) separate nights of racing events during the Scotland County Fair Week. Neither race will be on the Saturday of the Scotland County Fair. All concessions and beer from these two (2) events will be payable to the Lessor. Lessee shall pay the purse, put on the races, get the proceeds from the grandstand and pit admissions.

The parties further agree that the Lessor shall have exclusive use of the racetrack, pit area, parking lot, north food stand, south food stand, public bathrooms, bathrooms in art hall and office area in art hall building during the Scotland County Antique Fair for purpose of holding the Antique Tractor Pull. Said date to be set by Lessor.

3. RENT. During the Lease Term, Lessee shall pay Lessor rent for the leased property in the amount of Six Hundred Dollars ($600.00) per event sponsored by Lessee or held at the Scotland County Raceway. Said payment will be payable on the last day of the month. The parties agree that Three Hundred Dollars ($300.00) of this rental will be paid directly to the Fairboard account. The parties further agree that Three Hundred Dollars ($300.00) of this rental shall be placed into an account for the material for maintenance and materials for grandstand repair or other general capital improvement. No labor charges can be made against this amount. Lessee hereby agrees to present a financial statement to the Scotland County Fairboard at least monthly itemizing his expenditures out of said account.

All mowing of the entire leased premises shall be at Lessees expense and shall be Lessees responsibility.

4. TERM. Subject to either termination as hereinafter provided, the initial term of this lease shall be for the period commencing on April 1, 2002 and ending on October 31, 2002.

5. UTILITIES. The Lessee shall pay all charges for water, electricity, gas and telephone used during the term of this Lease.

6. DEPOSIT. The Lessor and Lessee agree that Lessee shall pay to Lessor a deposit of Five Thousand ($5,000.00) cash to be held in an interest bearing account (interest payable to Lessee if Lessee complies with all the terms and condition of this Agreement). The Five Thousand Dollars shall be payable as follows: Two Thousand Five Hundred ($2,500.00) payable on or before October 15, 2001 and Two Thousand Five Hundred ($2,500.00) payable on or before March 1, 2002.

Said Deposit shall be returned to Lessee if Lessee has a minimum of twelve (12) separate evenings of racing events between April 1, 2002 and October 31, 2002; if Lessee pays all water, electric, phone or other bills incurred by Lessee; and if Lessee repairs all damages and does all required maintenance to the leased premises.

If Lessee fails to fulfill any of the above conditions, the Deposit shall be reduced by the amount of said bill or maintenance cost. If Lessee fails to hold twelve (12) separate evenings of racing events between April 1, 2002 and October 31, 2002 then said deposit shall be taxed Six Hundred Dollars ($600.00) for each evening of racing less than the agreed upon twelve (12).

Within thirty days after the termination of this Lease Lessor hereby agrees to return Lessee's deposit, or to provide Lessee with a written itemized list of damages, bills or other charges for which the deposit or any portion thereof is withheld, along with the balance of the deposit; and further, to give the Lessee written notice of the time and date of the inspection of premises to determine the amount of the security deposit to be withheld. Lessor shall send all notice, payments and statements to the Lessee's address as set forth in this Agreement.

7. MAINTENANCE. Lessee agrees to maintain and operate the Scotland County Raceway and keep the same in good repair. Lessee may at his own costs and expense erect or install other permanent fixtures on said Leased premises with the advanced written approval of Lessor. Lessee agrees that any such improvements become the property of Lessor without contribution from Lessor.

Lessee agrees to return the premises in as good as repair and condition as at the time of the signing of this Lease.

8. RIGHT TO TERMINATE. Either party may terminate this Lease at any time by giving the other party written notice thereof at least ninety (90) days before the termination date.

9. LESSOR'S RIGHT OF ACCESS. Lessor shall have the right to enter the leased property and inspect it at any time. Lessee shall provide one (1) ticket for pit or grandstand entry per event per Scotland County Agricultural and Mechanical Society board member at no cost to said member.

10. OTHER INDEMNIFI-CATION. During the Lease Term, Lessee assumes all risks relating to the Leased Property normally associated with ownership of such Property, including personal injury claims. Lessee shall be responsible for any damages to the Leased Property occurring during the Lease Term which are not caused by the negligence of Lessor or Lessor's agents. Further, Lessee agrees to indemnify and hold Lessor harmless from any liability, demand, action, claim, loss cost, penalty, fine, clean-up expense or other expense of any kind or character including, but not limited to, reasonable attorneys' fees of Lessor, relating to such assumed risks or arising out of Lessee's use or occupancy of the leased Property during the Lease Term. Lessee shall also have Lessor listed as a coinsured on his race insurance policy.

11. MISCELLANEOUS. Lessee agrees to keep all track equipment in the pit area and not on the fair grounds. Lessee shall keep all fuel in containers which meet the Department of Natural Resources Regulations and under containment in the pit area.

Lessee and Lessor agree that Lessee shall do the following:

a. Promote and market all races in a professional and business like manner.

b. Hire all paid employees (approximately 25) from the surrounding area.

c. Hire local organizations for facility cleanup, (ie Boy Scouts, Girl Scouts, 4H).

d. Provide a family oriented race venue including some events for children.

e. Repair any damage caused during a promoted event.

f. Be responsible for track maintenance, concessions, rest rooms, and trash removal for all promoted events.

g. Be responsible for utilities and insurance for all promoted events.

h. Pay all race purses.

12. NOTICE

(a) In the event any notices are to be given to Lessor, they shall be addressed to:

Phil Aylward,

President Scotland County

Agricultural and Mechanical

Society

Rt. 2 Box 144

Memphis, MO 63555



With a copy to Lessor's attorney:

Kimberly J. Nicoli

133 S. Main Street

Memphis, MO 63555

and deposited in the United States Mail, Certified Mail, Return Receipt Requested, postage prepaid.

(b) In the event any notices are to be given to Lessee, they shall be addressed to:

R.L. Anderson

232 Prime Street

Downing, MO 63536

And deposited in the United States Mail, Certified Mail, Return Receipt Requested, postage prepaid.

(c) For the purposes hereof, the date of mailing shall be deemed to be the date notice is given.

13. ASSIGNMENT OF LEASE. Lessee shall not at any time assign this lease or any part thereof without the consent in writing of Lessor.

14. CANCELLATION OF LEASE. This agreement is made upon the express condition that Lessor shall not be liable for any loss, damages, injuries, or other casualties of whatever kind or by whomever caused to the property or person of another, whether the person or property of Lessee, its agents or employees, or third persons, occasioned by any cause(s) whatsoever, including failure of lessor to keep the premises in repair or any other acts of negligence by lessor, while in or upon the premises, or any part of the premises, during the term of this agreement or occasioned by any occupancy or use of the premises or any activity carried on by Lessee in connection with the lease of the premises, and Lessee covenants and agrees to indemnity and save harmless Lessor from all liabilities, charges expenses (including counsel fees) and costs on account of or by reason of any such injuries, liabilities, claims, suits or losses, however occurring, or damages growing out of same.

Original Lease

Agreement



Agreement

R.L. Anderson proposes to market and promote all racing at the Scotland County Raceway. This commitment would be for a minimum of but not limited to twelve race dates starting in May 2001 and ending in September 2001. The classes of cars to be raced will be determined at a future date after meeting with area drivers and car owners. Classes will be discussed with the fair board, with the promoter of the races having the final decision. I will commit to race one night of late mods on Wednesday, July 4th, 2001 and one night of sprint cars on Thursday, July 5th, 2001, during Fair week. In addition R.L. Anderson agrees to relinquish one Saturday in September to the Antique Fair. All other Saturdays between the beginning of May and the End of September are reserved for and committed to the race promoter R.L. Anderson.

R.L. Anderson agrees and commits to the following:

* To promote and market all races in a professional and business like manner.

* To hire all paid employees (approximately 25) from the surrounding area.

* To hire local organizations for facility cleanup, (ie Boys Scouts, Girls Scouts, 4H).

* To provide a family oriented race venue including some events for children.

* To repair any damage caused during a promoted event, less normal wear and tear.

* To be responsible for track maintenance, concessions, rest rooms, and trash removal for all promoted events.

* To be responsible for utilities and insurance for all promoted events.



Budget and Expenses

* R.L. Anderson agrees to provide the Scotland County fair board a security deposit of $2,000 to be deposited in an interest bearing trust account prior to the start of racing. This deposit to be refundable at the end of the lease if any damage caused to the facilities, less normal wear and tear, is repaired.

* R.L. Anderson agrees to pay the Scotland County fair board $500 per week for any week in which a race is promoted and raced, except for events canceled and/or rescheduled because of inclement weather or other unavoidable condition.

* All concessions sales and vendor selection (both pit and spectator side) will be exclusively R.L. Anderson, for all events promoted by the same. Spectator side concession sales will be conceded to the Scotland County fair board during the week of the County Fair, and during the Antique Fair.

* R.L. Anderson will have exclusive rights to solicit and market racing sponsorships and race advertising at the Scotland County Raceway for the period of the agreement.

* R.L. Anderson will pay all race purses.



History

I would require the historical race data i.e. racers names, addresses, phone numbers, and/or any past mailing lists from the Scotland County fair board as well as any other historical information that might be relevant.



Future

* If R.L. Anderson fulfills the commitments as stated in this proposal/contract the Scotland County fair board agrees to give R.L. Anderson first option to renew this lease for additional years at rates not to exceed a 20% increase for any single year.



By our signatures below we agree to be bound by the terms and conditions listed above.

R.L. Anderson, Promoter

11-29-00



Phil Aylward, Fair Board President

11-29-00

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