AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 4, 1996
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
 SPEEDWAY MOTORSPORTS, INC.
(Exact name of registrant as specified in its charter)

            DELAWARE                      51-0363307
(State or Other Jurisdiction of        (I.R.S. Employer
 Incorporation or Organization)      Identification No.)	

U.S. HIGHWAY 29 NORTH
P.O. BOX 600
CONCORD, NORTH CAROLINA 28026-0600
TELEPHONE (704) 455-3239
(Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices)
MR. O. BRUTON SMITH
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
SPEEDWAY MOTORSPORTS, INC.
U.S. HIGHWAY 29 NORTH
P.O. BOX 600
CONCORD, NORTH CAROLINA 28026-0600
TELEPHONE (704) 455-3239
(Name, address, including zip code, and telephone number, including area code, of agent for service)
COPIES TO:
GARY C. IVEY, ESQ.
PARKER, POE, ADAMS & BERNSTEIN L.L.P.
2500 CHARLOTTE PLAZA
CHARLOTTE, NORTH CAROLINA 28244
TELEPHONE (704) 372-9000
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment, please check the following box.
[ ]
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please 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(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
[CAPTION]

        TITLE OF EACH CLASS                                       PROPOSED MAXIMUM         PROPOSED MAXIMUM
          OF SECURITIES TO                 AMOUNT TO BE            OFFERING PRICE         AGGREGATE OFFERING
           BE REGISTERED                  REGISTERED (1)            PER SHARE (1)              PRICE (2)
5 3/4% Convertible Subordinated
  Debentures Due 2003.............          $70,000,000                 100%                  $70,000,000
Common Stock,
  $.01 par value..................              (2)                      --                       --

        TITLE OF EACH CLASS                  AMOUNT OF
          OF SECURITIES TO                 REGISTRATION
           BE REGISTERED                        FEE
5 3/4% Convertible Subordinated
  Debentures Due 2003.............          $21,212.13
Common Stock,
  $.01 par value..................              --	

(1) Estimated solely for the purpose of calculating the registration fee, pursuant to Rule 457(i) of Regulation C under the Securities Act of 1933.
(2) Such presently indeterminable number of shares of Common Stock as shall be issuable from time to time upon conversion of the Debentures.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.

SUBJECT TO COMPLETION, DATED OCTOBER 4, 1996
 $70,000,000
(Speedway logo appears here)

ATLANTA, BRISTOL & CHARLOTTE MOTOR SPEEDWAYS
TEXAS INTERNATIONAL RACEWAY
600 RACING
5 3/4% Convertible Subordinated Debentures Due 2003 Interest Payable March 31 and September 30 This Prospectus relates to $70,000,000 aggregate principal amount of 5 3/4% Convertible Subordinated Debentures Due 2003 (the "Debentures") offered hereby (the "Offering") and the shares of Common Stock of Speedway Motorsports, Inc. (the "Company") that are issuable upon conversion of the Debentures (the "Shares" and, together with the Debentures, are sometimes referred to as the "Securities"). The Securities may be offered from time to time for the account of the Selling Security Holders (as defined herein). The Debentures are convertible into the Shares at any time after November 30, 1996 and at or before maturity, unless previously redeemed, at a conversion price of $31.11 per share, subject to adjustment in certain events. The Common Stock of the Company is traded on The New York Stock Exchange (the "NYSE") under the symbol "TRK." On October 3, 1996, the closing price of the Common Stock as reported by the NYSE was $27.00 per share.
The Debentures do not provide for a sinking fund and will be sold in $1,000 denominations. The Debentures are not redeemable by the Company prior to September 30, 2000. Subject to the foregoing, the Debentures are redeemable at the option of the Company, in whole or in part, at the redemption prices set forth in this Prospectus, together with accrued interest. Upon a Repurchase Event (as defined herein), each holder of Debentures shall have the right, at the holder's option, to require the Company to repurchase such holder's Debentures at a purchase price equal to 100% of the principal amount thereof, plus accrued interest. See "Description of Debentures -- Certain Rights to Require Repurchase of Debentures."
The Debentures are unsecured obligations of the Company and are subordinate to all present and future Senior Indebtedness (as defined herein) of the Company and will be effectively subordinated to all indebtedness and liabilities of subsidiaries of the Company. As of August 31, 1996, Senior Indebtedness or indebtedness to which the Debentures are effectively subordinated was approximately $41.6 million. The Indenture (as defined herein) will not restrict the incurrence of any other indebtedness or liabilities by the Company or its subsidiaries. See "Description of Debentures -- Subordination." There is no currently established trading market for the Debentures. The Company intends to apply for listing of the Debentures on the NYSE. The Debentures have been designated for trading in the Private Offerings, Resales and Trading through Automated Linkages ("PORTAL") Market. For a description of certain income tax consequences to holders of the Debentures, see "Certain United States Federal Income Tax Consequences." The Debentures and the Shares are being registered to permit public secondary trading of the Debentures and, upon conversion, the Shares, by the holders thereof from time to time after the date of this Prospectus (the "Selling Security Holders"). The Company has agreed, among other things, to bear its own expenses (not including selling commissions or discounts, fees and the expenses of counsel and other advisors to the holders of the Debentures or the Shares and other expenses of the holders) in connection with the registration and sale of the Debentures and the Shares covered by this Prospectus.
The Company will not receive any of the proceeds from the sales of the Debentures or the Shares by the Selling Security Holders. Securities may be offered, in negotiated transactions or otherwise, at market prices prevailing at the time of sale or at negotiated prices. In addition, the Securities may be offered from time to time through ordinary brokerage transactions on the NYSE. To the extent required, the principal amount of Debentures or the number of Shares to be sold, the offering price thereof, the name of each Selling Security Holder and each broker-dealer, if any, and any applicable commissions or discounts with respect to a particular offering will be set forth in an accompanying Prospectus Supplement or, if appropriate, in a post-effective amendment to the Registration Statement of which this Prospectus is a part (the "Registration Statement"). See "Plan of Distribution." The Selling Security Holders may be deemed to be "Underwriters" as defined in the Securities Act of 1933, as amended (the "Securities Act"). If any broker-dealers are used by the Selling Security Holders, any commissions paid to broker-dealers and, if broker-dealers purchase any Debentures or Shares as principals, any profits received by such broker-dealers on the resale of the Debentures or Shares may be deemed to be underwriting discounts or commissions under the Securities Act. In addition, any profits realized by the Selling Security Holders may be deemed to be underwriting commissions.
SEE "RISK FACTORS" BEGINNING ON PAGE 7 OF THIS PROSPECTUS FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1996.
(A redherring appears rotated on the left hand side of this page and reads as follows:)
Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State.

The Debentures were originally issued by the Company on October 1, 1996, in a private placement pursuant to Rule 144A and Regulation S under the Securities Act (the "Debenture Offering"), with Wheat First Butcher Singer, Montgomery Securities and J.C. Bradford & Co. as initial purchasers therein (the "Initial Purchasers").
Unless the context otherwise requires, references herein to the "Company" mean Speedway Motorsports, Inc. ("SMI") and its subsidiaries considered as one enterprise. "Atlanta Motor Speedway(Register mark)" and "Charlotte Motor Speedway(Register mark)" are registered trademarks and service marks of the Company. Trademark and service mark registrations are pending with respect to "Speedway Motorsports," "Bristol Motor Speedway" and "Texas International Raceway." "NASCAR(Register mark)" and "Grand National(Register mark)" are registered trademarks and service marks of the National Association of Stock Car Auto Racing, Inc. ("NASCAR").
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PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE READ IN CONJUNCTION WITH, THE MORE DETAILED INFORMATION AND CONSOLIDATED FINANCIAL STATEMENTS (INCLUDING THE NOTES THERETO) APPEARING ELSEWHERE IN THIS PROSPECTUS. UNLESS OTHERWISE INDICATED, ALL INFORMATION CONTAINED HEREIN ASSUMES NO EXERCISE OF THE INITIAL PURCHASERS' OVER-ALLOTMENT OPTION GRANTED IN CONNECTION WITH THE DEBENTURE OFFERING OR OF OPTIONS GRANTED PURSUANT TO THE COMPANY'S STOCK OPTION
PLANS. SEE "PLAN OF DISTRIBUTION".
THE COMPANY Speedway Motorsports, Inc., the owner and operator of Atlanta Motor Speedway ("AMS"), Bristol Motor Speedway ("BMS"), which was acquired in January 1996, and Charlotte Motor Speedway ("CMS"), is a leading promoter, marketer and sponsor of motorsports activities in the United States. The Company is also currently constructing Texas International Raceway ("TIR"). The Company expects to sponsor 14 major racing events in 1997 sanctioned by NASCAR, including eight races associated with the Winston Cup professional stock car racing circuit (the "Winston Cup") and six races associated with the Busch Grand National circuit. The Company has experienced substantial growth in revenues and profitability as a result of the continued improvement and expansion of its facilities, its consistent marketing and promotional efforts and the overall increase in popularity of Winston Cup, Busch Grand National and other motorsports events in the United States.
The Company's primary growth strategy is to utilize its promotional and marketing expertise to take advantage of opportunities at its existing facilities and in attractive new markets. This growth strategy involves expanding permanent seating capacity, expanding television coverage and sponsorships, promoting the sale of its "Legends Cars" for use on its "Legends Car Racing Circuit," increasing daily usage of facilities, and acquiring and developing additional motorsports facilities.
In 1995, the Company derived approximately 83% of its total revenues from events sanctioned by NASCAR. Based on information developed independently by The Goodyear Tire & Rubber Co. ("Goodyear"), spectator attendance at Winston Cup and Busch Grand National events increased at compound annual growth rates of 15.1% and 17.3%, respectively, from 1993 to 1995. Management believes that spectator demand for its largest events exceeds existing permanent seating capacity at each of AMS, BMS and CMS, which had, at December 31, 1995, permanent seating capacity of 102,076, 70,905 and 111,681, respectively, in each case excluding infield admission, temporary seats and general admission. To date in 1996, the Company has increased permanent seating capacity by approximately 7,000 additional grandstand seats at BMS.
In recent years, television coverage and corporate sponsorship have increased for NASCAR-related events. All NASCAR Winston Cup and Busch Grand National events currently are broadcast by ABC, CBS, ESPN, TBS or TNN. The Company has recently entered into new television rights contracts for all its major sanctioned events. Major national corporate sponsorship of NASCAR-sanctioned events also has increased significantly, according to NASCAR. Sponsors include such companies as Coca-Cola, General Motors, McDonald's, Procter & Gamble and RJR Nabisco.
The Company also owns, operates and sanctions the Legends Car Racing Circuit (the "Legends Circuit"), an entry-level stock car racing series. It manufactures and sells 5/8-scale modified cars, modeled after those driven by legendary early NASCAR racers, for use on the Legends Circuit ("Legends Cars") through its 600 Racing, Inc. subsidiary ("600 Racing").
RECENT DEVELOPMENTS The Company is nearing the completion of TIR, a 1.5-mile, lighted, banked asphalt "quad-oval" superspeedway, with anticipated permanent seating capacity for 150,000 and 205 luxury suites. TIR is expected to be the first superspeedway built in the United States since 1969. The Company expects TIR to draw spectators from throughout the south central United States. Upon completion, the Company expects TIR to be the second-largest sports facility in the United States in terms of permanent seating capacity. In July 1996, the Company and NASCAR jointly announced that, subject to the completion of TIR, the Company will sponsor its first Winston Cup race at TIR, the Texas 500, and a companion NASCAR Busch Grand National race, in April 1997. In addition, TIR expects to sponsor Indy Racing League events in 1997. In August 1996, the Company announced that it had entered into a four-year television rights agreement with CBS Sports for the NASCAR-sanctioned races at TIR.
3

THE OFFERING

Securities Offered..................  $70,000,000 principal amount of 5 3/4% Convertible Subordinated Debentures
                                      due 2003 and 2,250,080 shares of Common Stock of the Company issuable upon
                                      conversion thereof, subject to adjustment under certain circumstances.
Payment of Interest.................  March 31 and September 30, commencing March 31, 1997.
Conversion..........................  Convertible into Common Stock of the Company at the option of the holder at
                                      any time after November 30, 1996 and at or before maturity, unless
                                      previously redeemed, at $31.11 per share, subject to adjustment upon the
                                      occurrence of certain events. See "Description of Debentures -- Conversion
                                      Rights."
Subordination.......................  Subordinated to all present and future Senior Indebtedness (as defined) of
                                      the Company and effectively subordinated to all indebtedness and other
                                      liabilities of subsidiaries of the Company. Senior Indebtedness of the
                                      Company and indebtedness and other liabilities of its subsidiaries
                                      aggregated approximately $41.6 million at August 31, 1996. The Indenture
                                      contains no limitation on the incurrence of indebtedness (including Senior
                                      Indebtedness) or other liabilities by the Company and its subsidiaries. See
                                      "Description of Debentures -- Subordination."
Redemption..........................  The Debentures are not redeemable by the Company prior to September 30,
                                      2000. Subject to the foregoing, the Debentures are redeemable in whole or
                                      in part, at the option of the Company, at the redemption prices set forth
                                      herein, together with accrued interest. See "Description of
                                      Debentures -- Optional Redemption."
Redemption at Holder's Option.......  In the event that there shall occur a Repurchase Event (as defined), each
                                      holder of the Debentures shall have the right, at the holder's option, to
                                      require the Company to repurchase such holder's Debentures at 100% of their
                                      principal amount, plus accrued interest. The term Repurchase Event is
                                      limited to transactions involving a Change in Control (as defined) or a
                                      Termination of Trading (as defined), and does not include other events that
                                      might adversely affect the financial condition of the Company. The
                                      Company's ability to repurchase the Debentures following a Repurchase Event
                                      is dependent upon the Company having sufficient funds and may be limited by
                                      the terms of the Company's Senior Indebtedness or the subordination
                                      provisions of the Indenture. There is no assurance that the Company will be
                                      able to repurchase the Debentures upon the occurrence of a Repurchase
                                      Event. See "Description of Debentures -- Certain Rights to Require
                                      Repurchase of Debentures."
Registration Rights.................  The Debentures and the Shares are currently subject to certain restrictions
                                      on transfer. However, pursuant to a registration rights agreement between
                                      the Company and the Initial Purchasers (the "Registration Rights
                                      Agreement"), the Company has agreed to file a shelf registration statement
                                      under the Securities Act with the Commission relating to resales of the
                                      Debentures and the Common Stock issuable upon conversion thereof. The
                                      Registration Statement of which this Prospectus is a part is being filed
                                      pursuant to such agreement. See "Description of Debentures -- Registration
                                      Rights; Liquidated Damages."
Use of Proceeds.....................  The net proceeds from the Debenture Offering will be used by the Company to
                                      repay indebtedness, for the construction of TIR and for general corporate
                                      purposes. The Company will not receive any of the proceeds from the sales
                                      of the Debentures or the Shares by the Selling Security Holders pursuant to
                                      this Prospectus. The Selling Security Holders will receive all the net
                                      proceeds from any sale of the Debentures or Shares offered hereby. See "Use
                                      of Proceeds" and "Selling Security Holders."	

The Company's principal executive office is located on U.S. Highway 29 North in Concord, North Carolina. Its preferred mailing address is Post Office Box 600, Concord, North Carolina 28026-0600, and its telephone number is (704) 455-3239.
PROSPECTIVE INVESTORS ARE CAUTIONED THAT CERTAIN STATEMENTS CONTAINED IN THIS PROSPECTUS ARE FORWARD LOOKING STATEMENTS. SEE "RISK FACTORS -- ACTUAL
RESULTS MAY DIFFER FROM FORWARD LOOKING STATEMENTS."
4

SUMMARY FINANCIAL DATA(1)

                                                                                                  SIX MONTHS ENDED
                                                                                                       JUNE 30
                                                 YEAR ENDED DECEMBER 31,                             (UNAUDITED)
                                 1991         1992         1993         1994         1995         1995         1996
                                                 (IN THOUSANDS, EXCEPT PER SHARE AND SELECTED DATA)
INCOME STATEMENT DATA
Total revenues..............     $37,455      $47,774      $54,568      $64,537      $75,573      $38,954      $53,146
Total operating expenses....      26,280       32,736       36,497       43,749       45,884       23,377       31,884
Operating income............      11,175       15,038       18,071       20,788       29,689       15,577       21,262
Interest expense............       4,676        4,527        4,520        4,282          917          917          566
Income from continuing
  operations................       5,380        6,453        9,241       10,470       19,590        9,653       13,680
Net income..................       4,513        5,878        9,203       10,176       19,457        9,520       13,680
Income from continuing
  operations applicable to
  Common
  Stock(2)..................                                              7,464       19,590        9,653       13,680
Income per share from
  continuing operations
  applicable to Common
  Stock(3)..................                                              $0.25        $0.53        $0.27        $0.34
Weighted average shares
  outstanding(3)............                                             30,400       37,275       35,689       40,490
Ratio of income to fixed
  charges(4)................       2.90x        3.37x        4.33x        5.23x       36.13x       18.10x       19.82x
Ratio of EBITDA to interest
  expense(5)................       3.74x        4.40x        5.37x        6.38x       42.64x       21.09x       47.77x
Pro forma ratio of income to
  fixed charges(6)..........                                                          11.95x                    18.92x
Pro forma ratio of EBITDA to
  interest expense(6).......                                                          14.59x                    44.77x
SELECTED DATA
EBITDA (in thousands)(5)....     $17,504      $19,915      $24,273      $27,307      $39,100      $19,335      $27,039
Depreciation and
  amortization
  (in thousands)............      $3,759       $4,289       $4,375       $4,500       $4,893       $2,330       $3,796
Number of NASCAR-sanctioned
  events....................           7            8            8            8            8            5            7
Total admissions(7).........     658,000      770,000      818,000      866,000      934,000      533,000      697,000
Attendance at Winston Cup
  events(8).................   3,377,000    3,700,000    4,020,000    4,896,000    5,327,000	

                                                                                               JUNE 30, 1996
                                                                                                (UNAUDITED)
                                                                                         ACTUAL      AS ADJUSTED(9)
BALANCE SHEET DATA
Working capital......................................................................   $ 31,523        $ 59,523
Total assets.........................................................................    294,339         324,339
Long-term debt, including current maturities(10).....................................     41,635           1,635
Convertible subordinated debentures..................................................         --          70,000
Stockholders' equity.................................................................    192,023         192,023	

5

(1) The year end data include CMS and AMS and exclude BMS which was acquired in January 1996. The six month period ended June 30, 1996 data include BMS and the six month period ended June 30, 1995 data exclude BMS.
(2) These data represent reported income from continuing operations less accretion in 1994 in the estimated redemption value of certain warrants to purchase AMS stock. On December 16, 1994, AMS redeemed such warrants from NationsBank, N.A. (Carolinas). See Note 10 to Audited Consolidated Financial Statements.
(3) The 1994 income per share from continuing operations applicable to Common Stock has been prepared on a pro forma basis to reflect the 30.4 million common shares outstanding after giving effect to a restructuring whereby CMS and AMS became wholly-owned subsidiaries of SMI, including 400,000 common equivalent shares arising from stock options. See Note 1 to Audited Consolidated Financial Statements.
(4) The ratio of income to fixed charges is computed by dividing fixed charges into income from continuing operations before income taxes plus fixed charges. Fixed charges consist of interest, whether expensed or capitalized, amortization of financing costs and the estimated interest component of rent expense. Capitalized interest amounted to $546,000 for the six months ended June 30, 1996. For the year ended December 31, 1995 and for the six month period ended June 30, 1996, this ratio increased as a result of the reduction of interest expense due to the repayment of bank debt with the proceeds from Common Stock publicly issued by the Company in March 1995.
(5) EBITDA represents income from continuing operations before interest expense, income taxes and depreciation and amortization. EBITDA is included herein because management believes that certain investors may find EBITDA useful for measuring a company's ability to service its debt; however, EBITDA does not represent cash flow from operations, as defined by generally accepted accounting principles, and should not be considered as a substitute for net income as an indicator of the Company's operating performance or for cash flow as a measure of liquidity. The ratio of EBITDA to interest expense is computed by dividing interest expense into EBITDA. This ratio should be examined in conjunction with the Audited and Unaudited Consolidated Financial Statements of the Company included elsewhere herein. For the year ended December 31, 1995 and for the six month period ended June 30, 1996, this ratio increased as a result of the reduction of interest expense due to the repayment of bank debt with the proceeds from Common Stock publicly issued by the Company in March 1995.
(6) Pro forma ratio of income to fixed charges and pro forma ratio of EBITDA to interest expense assume that all bank debt outstanding during 1995 and the six months ended June 30, 1996 was refinanced with the proceeds of the Debenture Offering and such portion of the Debenture Offering allocated to the refinancing of bank debt remained outstanding for the pro forma periods presented. The effect of such refinancing is an increase in interest expense and amortization of financing costs of approximately $1.9 million for 1995 and $55,000 for the six month period ended June 30, 1996. These increases resulted primarily from the portion of the Debenture Offering used to refinance the bank debt being considered outstanding for the entire pro forma periods presented, whereas the actual bank debt was repaid in March 1995. The pro forma ratio of income to fixed charges and pro forma ratio of EBITDA to interest expense do not reflect any income earned from the proceeds of the Debenture Offering in excess of the refinanced bank debt amounts.
(7) "Total admissions" consists of tickets issued for Winston Cup, Busch Grand National and Automobile Racing Club of America ("ARCA") races and other race-related events.
(8) Source: Goodyear. Only annual data available.
(9) Adjusted to give effect to the sale of the Debentures offered by the Company pursuant to the Debenture Offering and the use of the net proceeds therefrom. Net proceeds of approximately $68.0 million were received by the Company from the sale of $70.0 million in aggregate principal amount of the Debentures less the Initial Purchasers' commissions and discounts. See "Use of Proceeds."
(10) Total debt as of August 31, 1996 was $41.6 million. Data does not include the Debentures.
6

RISK FACTORS
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS, IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS AND IN THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE, BEFORE PURCHASING THE DEBENTURES OR THE SHARES.
SUBORDINATION OF DEBENTURES. The Debentures are subordinate in right of payment to all current and future Senior Indebtedness of the Company. Senior Indebtedness includes all secured indebtedness of the Company, whether existing on or created or incurred after the date of the issuance of the Debentures, that is not made subordinate to or pari passu with the Debentures by the instrument creating the indebtedness. At June 30, 1996, the aggregate amount of Senior Indebtedness outstanding and the aggregate amount of indebtedness and other liabilities of the Company and its subsidiaries to which the Debentures are effectively subordinated was approximately $41.6 million. As of June 30, 1996, after giving effect to the repayment of approximately $40.0 million of indebtedness with proceeds from the Debenture Offering, the Company will have approximately $1.6 million of indebtedness outstanding, which constitutes Senior Indebtedness or indebtedness to which the Debentures are effectively subordinated. The Indenture does not limit the amount of additional indebtedness, including Senior Indebtedness, which the Company can create, incur, assume or guarantee. By reason of such subordination of the Debentures, in the event of insolvency, bankruptcy, liquidation, reorganization, dissolution or winding up of the business of the Company or upon a default in payment with respect to any Senior Indebtedness of the Company or an event of default with respect to such indebtedness resulting in the acceleration thereof, the assets of the Company will be available to pay the amounts due on the Debentures only after all Senior Indebtedness of the Company has been paid in full. In addition, holders of the Debentures are effectively subordinated to the claims of creditors of the Company's subsidiaries, to the extent of the assets of such subsidiaries. In the event of the insolvency, bankruptcy, liquidation, reorganization, dissolution or winding up of the business of any subsidiary of the Company, creditors of such subsidiary generally will have the right to be paid in full before any distribution is made to the Company or the holders of the Debentures. See "Description of Debentures." HOLDING COMPANY STRUCTURE. The Company conducts its operations through its direct and indirect subsidiaries and has no operations of its own. The Company will be dependent on the cash flow from its subsidiaries in order to meet its debt service obligations, including its obligations under the Debentures. The Debentures are obligations exclusively of the Company. The Company's subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due pursuant to the Debentures or to make any funds available therefor, whether by dividends, loans or other payments. In addition, the payment of dividends and certain loans and advances to the Company by such subsidiaries may be subject to certain statutory or contractual restrictions, are contingent upon the earnings of such subsidiaries and are subject to various business considerations.
LIMITATIONS ON REPURCHASE OF DEBENTURES UPON A REPURCHASE EVENT. In the event of a Repurchase Event, which includes a Change in Control and a Termination of Trading (each as defined herein), each holder of the Debentures will have the right, at the holder's option, to require the Company to repurchase all or a portion of such holder's Debentures at a purchase price equal to 100% of the principal amount thereof plus accrued interest to the repurchase date. The Company's ability to repurchase the Debentures upon a Repurchase Event may be limited by the terms of the Company's Senior Indebtedness and the subordination provisions of the Indenture. Further, the ability of the Company to repurchase Debentures upon a Repurchase Event will be dependent on the availability of sufficient funds and compliance with applicable securities laws. Accordingly, there can be no assurance that the Company will be able to repurchase the Debentures upon a Repurchase Event. The term "Repurchase Event" is limited to certain specified transactions and may not include other events that might adversely affect the financial condition of the Company, nor would the requirement that the Company offer to repurchase the Debentures upon a Repurchase Event necessarily afford holders of the Debentures protection in the event of a highly leveraged reorganization, merger or similar transaction involving the Company. See "Description of Debentures." ABSENCE OF PUBLIC MARKET. As of the date of this Prospectus, the Debentures are owned by a small number of institutional investors, and prior to this Offering there has not been any public market for the Debentures. There can be no assurance as to the liquidity of any markets that may develop for the Debentures, the ability of the
7

holders to sell their Debentures or the price at which holders of the Debentures may be able to sell their Debentures. Future trading prices of the Debentures will depend on many factors, including, among other things, prevailing interest rates, the Company's operating results, the price of the Common Stock and the market for similar securities. The Initial Purchasers have informed the Company that the Initial Purchasers intend to make a market in the Debentures offered hereby; however, the Initial Purchasers are not obligated to do so and any such market making activity may be terminated at any time without notice to the holder of the Debentures. See "Description of the Debentures -- Registrations Rights; Liquidated Damages." The Debentures have been designated for trading in the PORTAL Market. The Company intends to apply for listing of the Debentures on the NYSE.
RELATIONSHIP WITH NASCAR. The Company's success has been and will remain dependent to a significant extent upon maintaining a good working relationship with NASCAR, the sanctioning body for Winston Cup and Busch Grand National races. The Company currently holds licenses to sponsor eight Winston Cup races and six Busch Grand National races. In 1995, NASCAR-sanctioned races accounted for approximately 83% of the Company's total revenues (85% on a pro forma basis if BMS were owned by the Company for the year ended December 31, 1995). Each NASCAR event license is awarded on an annual basis. Although management believes that its relationship with NASCAR is good, NASCAR is under no obligation to continue to license the Company to sponsor any event. Nonrenewal of a NASCAR event license would have a material adverse effect on the Company's financial condition and results of operations. The Company's strategy has included growth through the addition of motorsports facilities. There can be no assurance that the Company will continue to obtain NASCAR licenses to sponsor races at such facilities. See "NASCAR."
FINANCIAL IMPACT OF BAD WEATHER. The Company sponsors and promotes outdoor motorsports events. Weather conditions affect sales of tickets, concessions and souvenirs, among other things, at these events. Although the Company sells tickets well in advance of its events, poor weather conditions can have an effect on the Company's results of operations. See "Business -- Operations." INDUSTRY SPONSORSHIPS AND GOVERNMENT REGULATION. The motorsports industry generates significant revenue each year from the promotion, sponsorship and advertising of various companies and their products. Government regulation can adversely impact the availability to motorsports of this promotion, sponsorship and advertising revenue. Advertising by the tobacco and liquor industries is generally subject to greater governmental regulation than advertising by other sponsors of the Company's events. In addition, certain of the Company's sponsorship contracts are terminable upon the implementation of adverse regulations. In August 1996, the U.S. Food and Drug Administration (the "FDA") published final regulations that substantially restrict tobacco industry sponsorship of sporting events. Implementation of the new regulations affecting sponsorship is scheduled to occur in February 1998. No assurance can be given that the tobacco industry will continue to sponsor sporting events, that suitable alternative sponsors could be located or that NASCAR will continue to sanction individual racing events sponsored by the tobacco industry at any of the Company's facilities. The Company is aware of several pending legal challenges to the regulations by third parties which, the Company believes, are likely to extend the regulatory process. The final outcome of this regulatory process is uncertain, and the impact on the Company, if any, is unclear.
UNCERTAIN PROSPECTS OF NEW SPEEDWAY IN NEW MARKET. In 1995, the Company began construction of a superspeedway in Fort Worth, Texas. While management is unable at this time to determine the total cost of construction, it currently estimates total construction costs will be approximately $130 million. The Company's ability to implement successfully its expansion plans in Fort Worth or elsewhere will depend on a number of factors, including (i) the Company's ability to obtain additional licenses to sponsor NASCAR-sanctioned events, (ii) the cooperation of local government officials, (iii) the Company's capital resources, (iv) the Company's ability to control construction and operations costs and (v) the Company's ability to hire qualified personnel. The Company's inability for any reason to implement its expansion plans would adversely affect its business prospects. In addition, the timing of the new facility opening, and of any cost associated with obtaining a NASCAR license, may have a negative effect on the Company's financial condition and results of operations in one or more future reporting periods. No assurance can be given that TIR will be completed or completed within projected costs or time schedules or that, if and when completed, TIR will be profitable. See "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Overview" and " -- Liquidity and Capital Resources."
8

DEPENDENCE ON KEY PERSONNEL. The Company's success depends upon the availability and performance of its senior management, particularly Bruton Smith, the Company's Chairman and Chief Executive Officer, and H.A. "Humpy" Wheeler, its President and Chief Operating Officer, who have managed the Company as a team for over 20 years. Their experience within the industry, especially their working relationship with NASCAR, will continue to be of considerable importance to the Company. The loss of any of the Company's key personnel or its inability to attract and retain key employees in the future could have a material adverse effect on the Company's operations and business plans. See "NASCAR," "Business -- Growth Strategy" and "Management." SEASONALITY AND EXPECTED QUARTERLY LOSSES. The Company has derived a substantial portion of its total revenues from admissions and event-related revenue attributable to NASCAR-sanctioned races held in March, May, October and November. As a result, the Company's business has been, and is expected to remain, highly seasonal. During 1994 and 1995, the Company's second and fourth quarters accounted, on average, for approximately 80% of the Company's total annual revenues and approximately 106% of its total annual operating income. During 1997, the Company expects the second quarter to represent a significantly higher percentage of annual revenues and operating income as a result of the addition of racing events at TIR and the scheduling of racing events at BMS. The Company sometimes produces an operating loss during its first quarter, when it sponsors only one Winston Cup race. The concentration of the Company's racing events in the second quarter and the growth in the Company's operations with attendant increases in overhead expenses will tend to increase operating losses in future first quarters. The Company historically produced an operating loss during its third quarter, when it sponsored no NASCAR-sanctioned races, and, although the Company sponsored a Winston Cup race at BMS in August, 1996, it is uncertain as to what degree this will affect seasonality. Additionally, race dates at the Company's various facilities may from time to time be changed, lessening the comparability of the financial results of quarters between years and increasing or decreasing the seasonal nature of the Company's business. See "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Overview" and " -- Seasonality and Quarterly Results." CONTROL OF THE COMPANY. As of the date of this Propectus, assuming all Debentures are converted into Common Stock, Mr. Smith, who is the Chairman and Chief Executive Officer of the Company, owns directly and indirectly, approximately 66.7% (approximately 66.3% if the Initial Purchasers' over-allotment option pursuant to the Debenture Offering is exercised in full) of the outstanding shares of Common Stock. As a result, Mr. Smith will continue to control the outcome of substantially all issues submitted to the Company's stockholders, including the election of all of the Company's directors. The purchasers of the Debentures who convert their Debentures into Common Stock, individually and in the aggregate with all other public stockholders, will be minority stockholders.
LEGAL PROCEEDING. As a result of an audit of AMS with respect to its tax years ended November 30, 1988 and October 31, 1990, the Internal Revenue Service (the "IRS") has asserted that AMS is liable for additional income taxes, penalties and interest. The total assessment for taxes, penalties and interest (net of tax benefit for deductibility of interest) through June 30, 1996 is approximately $7.3 million. In November 1993, AMS filed a protest contesting the assessment. Management intends to continue contesting the allegations of a deficiency. There can be no assurance, however, that the ultimate resolution of this proceeding will not have a material adverse effect on the Company's results of operations or financial condition. See "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Liquidity and Capital Resources" and Note 12 to Audited Consolidated Financial Statements.
LIABILITY FOR PERSONAL INJURIES. Motorsports can be dangerous to participants and to spectators. The Company maintains insurance policies that provide coverage within limits that are sufficient, in management's judgment, to protect the Company from material financial loss due to liability for personal injuries sustained by persons on the Company's premises in the ordinary course of Company business. Nevertheless, there can be no assurance that such insurance will be adequate at all times and in all circumstances. The Company also may be subject to product liability claims, for which it is self-insured, with respect to the manufacture and sale of Legends Cars. The Company's financial condition and results of operations would be adversely affected to the extent claims and associated expenses exceed insurance recoveries.
ENVIRONMENTAL MATTERS. The Company's property at CMS includes areas that were used as solid waste landfills for many years. Landfilling of general categories of municipal solid waste on the CMS property ceased in 1992, but CMS currently allows certain property to be used for land clearing and inert debris landfilling and for
9

construction and demolition debris landfilling. Management believes that the Company's operations, including the landfills on its property, 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 by the conduct of the Company's business or by pollutants, substances, contaminants or wastes used, generated or disposed of by the Company, or which may be found on the property of the Company, the Company may be held liable for such damage and may be required to pay the cost of investigation or remediation, or both, of such contamination or damage caused thereby. The amount of such liability, as to which the Company is self-insured, could be material. Changes in federal, state, or local laws, regulations or requirements, or the discovery of theretofore unknown conditions, could require additional expenditures by the Company.
ACTUAL RESULTS MAY DIFFER FROM FORWARD LOOKING STATEMENTS. Statements in this Prospectus that reflect projections or expectations of future financial or economic performance of the Company, and statements of the Company's plans and objectives for future operations, including those contained in "Management's Discussion and Analysis of Financial Condition and Results of Operations" or relating to the completion and cost of TIR and the Company's future sponsorship of races, are "forward looking" statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). No assurance can be given that actual results or events will not differ materially from those projected, estimated, assumed or anticipated in any such forward looking statements. Important factors that could result in such differences, in addition to the other risk factors identified above, include: general economic conditions in the Company's markets, including inflation, recession, interest rates and other economic factors; casualty to or other disruption of the Company's facilities and equipment; and other factors that generally affect the business of sports and recreation companies.
USE OF PROCEEDS The Company will not receive any of the proceeds from the sales of the Debentures or the Shares by the Selling Security Holders. See "Selling Security Holders" for a list of those persons and entities receiving the proceeds from the sales of the Debentures or the Shares pursuant to this Prospectus.
The net proceeds to the Company from the sale of $70.0 million in aggregate principal amount of Debentures pursuant to the Debenture Offering, after deducting offering expenses and the Initial Purchasers' commissions and discounts, was approximately $68.0 million. Of such proceeds, management expects to apply approximately $40.0 million to repay bank debt incurred to date in 1996 and currently outstanding. The debt to be repaid by the Company with proceeds of the Debenture Offering bore interest, through June 30, 1996, at rates per annum ranging from 6.3% to 6.6%.
The remainder of such proceeds from the Debenture Offering will be used for the construction of TIR and for general corporate purposes either directly or through the repayment of additional bank debt incurred for such purposes prior to the closing of this Offering. On March 7, 1996, the Company entered into an unsecured working capital and letter of credit facility (the "Credit Facility") with a borrowing limit of $110.0 million. The Credit Facility remains available after the completion of the Debenture Offering to provide funds for general corporate purposes, including for the construction of TIR. See "Management's Discussion and Analysis of Financial Condition and Results of Operation -- Liquidity and Capital Resources." All amounts outstanding under the Credit Facility constitute Senior Indebtedness, to which the Company's repayment obligation under the Debentures is subordinate. See "Description of Debentures." Pending application of the net proceeds of the Debenture Offering to the uses described above, the Company intends to invest such proceeds in investment grade, interest-bearing instruments or in investment companies that invest principally in such instruments.
DIVIDEND POLICY The Company intends to retain any earnings to provide funds for the operation and expansion of its business. As a holding company, the Company will depend on dividends and other payments from AMS, BMS, CMS and TIR and its other subsidiaries to pay cash dividends to stockholders, as well as to meet debt service requirements and to pay operating expenses.
The Company does not anticipate paying any cash dividends in the foreseeable future. Any decision concerning the payment of dividends on the Common Stock will depend upon the results of operations, financial condition and capital expenditure plans of the Company, as well as such other factors as the Board of Directors, in its sole discretion, may consider relevant. Furthermore, the Credit Facility includes covenants which preclude the payment of dividends.
10

CAPITALIZATION
The following table sets forth the capitalization of the Company and as adjusted to reflect the sale of the Debentures in the Debenture Offering and the application of the estimated net proceeds therefrom as described under "Use of Proceeds."

                                                                                   JUNE 30, 1996
                                                                                    (UNAUDITED)
                                                                                   (IN THOUSANDS)
                                                                              ACTUAL     AS ADJUSTED(1)
Current portion of long-term debt.........................................   $    348       $    348
Long-term debt, less current portion......................................   $ 41,287       $  1,287
Convertible subordinated debentures.......................................         --         70,000
Stockholders' equity:
  Preferred Stock, par value $0.10 per share,
     3,000,000 shares authorized, no shares issued
     and outstanding......................................................         --             --
  Common Stock, $0.01 par value, 100,000,000 shares authorized, and
     41,255,455 shares issued and outstanding(2)..........................        412            412
  Additional paid-in capital..............................................    155,019        155,019
  Retained earnings.......................................................     36,624         36,624
  Deduct:
     Unrealized loss on marketable equity securities......................        (32)           (32)
       Total stockholders' equity.........................................    192,023        192,023
          Total capitalization............................................   $233,310       $263,310	

(1) These data reflect estimated net proceeds of $68.0 million, from the sale of $70.0 million in aggregate principal amount of Debentures sold by the Company in the Debenture Offering, assuming that such net proceeds were applied on June 30, 1996 to pay down approximately $40.0 million in bank debt currently outstanding, with the remaining net proceeds being placed in short-term investments. See "Use of Proceeds."
(2) These data exclude 1,170,000 shares of Common Stock reserved for issuance upon the exercise of options granted to date pursuant to the Company's stock option plans and exclude any Common Stock that may be issued upon conversion of Debentures.
PRICE RANGE OF COMMON STOCK Since February 24, 1995, the date of the Company's initial public offering, the Company's Common Stock has been traded on the NYSE under the symbol "TRK." The following table sets forth the high and low sales prices for the Company's Common Stock, as reported by the NYSE Composite Tape for each calendar quarter during the periods indicated and giving effect to the Company's two for one stock split effected as of March 15, 1996 in the form of a 100% Common Stock dividend. Prior to February 24, 1995, the Company was privately held and there was no public market for the Common Stock.

                                                                                    HIGH        LOW
1995:
  First Quarter (from February 24, 1995)........................................   $ 9.938    $ 8.813
  Second Quarter................................................................    10.875      8.875
  Third Quarter.................................................................    13.625     10.688
  Fourth Quarter................................................................    15.500     12.813
1996:
  First Quarter.................................................................    27.625     13.813
  Second Quarter................................................................    31.000     24.000
  Third Quarter.................................................................    29.875     20.375
  Fourth Quarter (through October 3, 1996)......................................    27.250     25.625	

11

SELECTED FINANCIAL DATA
The following selected financial data for the five years ended December 31, 1995 have been derived from audited financial statements. The financial statements for the three years ended December 31, 1995 were audited by Deloitte & Touche LLP, independent auditors, and these financial statements and auditors' report are contained elsewhere in this Prospectus. The financial data for the six month periods ended June 30, 1995 and 1996 are derived from unaudited consolidated financial statements. The unaudited consolidated financial statements include all adjustments, consisting of normal recurring accruals, which the Company's management considers necessary for a fair presentation of the financial position and the results of operations for these periods. Operating results for the six months ended June 30, 1996 are not necessarily indicative of the results that may be expected for the entire year ending December 31, 1996. All of the data set forth below are qualified by this reference to, and should be read in conjunction with, the Company's Audited and Unaudited Consolidated Financial Statements (including the Notes thereto), and its "Management's Discussion and Analysis of Financial Condition and Results of Operations," appearing elsewhere in this Prospectus.

                                                                                              SIX MONTHS ENDED
                                                                                                   JUNE 30
                                                        YEAR ENDED DECEMBER 31,                  (UNAUDITED)
                                             1991      1992      1993      1994      1995      1995      1996
                                                           (IN THOUSANDS, EXCEPT PER SHARE DATA)
INCOME STATEMENT DATA(1)
Revenues:
  Admissions..............................  $20,698   $26,018   $27,727   $31,523   $36,569   $18,577   $27,306
  Event-related revenue...................   14,826    19,096    22,115    24,814    27,783    14,448    19,040
  Other operating revenue.................    1,931     2,660     4,726     8,200    11,221     5,929     6,800
       Total revenues.....................   37,455    47,774    54,568    64,537    75,573    38,954    53,146
Operating Expenses:
  Direct expense of events................   13,591    16,553    17,778    18,327    19,999    10,297    15,133
  Other direct operating expense..........    1,457     1,844     3,715     6,110     7,611     3,940     4,333
  General and administrative..............    7,473    10,050    10,629    11,812    13,381     6,810     8,622
  Non-cash stock compensation(2)..........       --        --        --     3,000        --        --        --
  Depreciation and amortization...........    3,759     4,289     4,375     4,500     4,893     2,330     3,796
       Total operating expenses...........   26,280    32,736    36,497    43,749    45,884    23,377    31,884
Operating income..........................   11,175    15,038    18,071    20,788    29,689    15,577    21,262
Interest income (expense), net............   (4,210)   (4,291)   (4,128)   (3,855)      (24)     (486)      449
Other income..............................    2,104       352     1,435     1,592     3,392       997       781
Equity in earnings of NWS(3)..............       --        --        --        --       233        --       185
Income from continuing operations before
  income taxes............................    9,069    11,099    15,378    18,525    33,290    16,088    22,677
Provision for income taxes................    3,689     4,646     6,137     8,055    13,700     6,435     8,997
Income from continuing operations.........    5,380     6,453     9,241    10,470    19,590     9,653    13,680
Discontinued operations...................     (867)     (575)      (38)     (294)       --        --        --
Income before extraordinary item..........    4,513     5,878     9,203    10,176    19,590     9,653    13,680
Extraordinary item, net...................       --        --        --        --      (133)     (133)       --
Net income................................  $ 4,513   $ 5,878   $ 9,203   $10,176   $19,457   $ 9,520   $13,680
Income from continuing operations
  applicable to Common Stock(4)...........                                $ 7,464   $19,590   $ 9,653   $13,680
Income per share from continuing
  operations applicable to Common
  Stock(5)................................                                $  0.25   $  0.53   $  0.27   $  0.34
Weighted average shares
  outstanding(5)..........................                                 30,400    37,275    35,689    40,490
Ratio of income to fixed charges(6).......    2.90x     3.37x     4.33x     5.23x    36.13x    18.10x    19.82x
Ratio of EBITDA to interest
  expense(7)..............................    3.74x     4.40x     5.37x     6.38x    42.64x    21.09x    47.77x
Pro forma ratio of income to fixed charges
  (8).....................................                                           11.95x              18.92x
Pro forma ratio of EBITDA to interest
  expense(8)..............................                                           14.59x              44.77x	

                                                                                            JUNE 30, 1996
                                                     DECEMBER 31,                            (UNAUDITED)
                                    1991      1992      1993      1994       1995      ACTUAL    AS ADJUSTED(9)
BALANCE SHEET DATA(1)
Working capital (deficit)........  $(5,715)  $(6,307)  $(2,039)  $(1,344)  $ (1,816)  $ 31,523      $  59,523
Total assets.....................   79,307    79,999    89,184    93,453    136,446    294,339        324,339
Long-term debt, including current
  maturities(10).................   46,901    46,081    43,564    47,261      1,806     41,635          1,635
Convertible subordinated
  debentures.....................       --        --        --        --         --         --         70,000
Put warrants.....................      772     3,038     4,994        --         --         --             --
Stockholders' equity.............   11,961    11,086    16,517    19,232     95,380    192,023        192,023	

12

(1) The year-end data include CMS and AMS and exclude BMS which was acquired in January 1996. The six months period ended June 30, 1996 data include BMS and the six months period ended June 30, 1995 data exclude BMS.
(2) On December 21, 1994, the Company granted options to nine employees to purchase an aggregate of 800,000 shares of Common Stock at an exercise price of $3.75 per share. As a result, the Company recorded a non-cash stock compensation charge of $3.0 million (before tax) in December 1994. See Note 16 to Audited Consolidated Financial Statements.
(3) North Wilkesboro Speedway ("NWS") located in North Wilkesboro, North Carolina, of which the Company is a 50% owner.
(4) These data represent reported income from continuing operations less accretion in 1994 in the estimated redemption value of certain warrants to purchase AMS stock. On December 16, 1994, AMS redeemed such warrants from NationsBank, N.A. (Carolinas). See Note 10 to Audited Consolidated Financial Statements.
(5) The 1994 income per share from continuing operations applicable to Common Stock has been prepared on a pro forma basis to reflect the 30.4 million common shares outstanding after giving effect to a restructuring whereby CMS and AMS became wholly-owned subsidiaries of SMI, including 400,000 common equivalent shares arising from stock options. See Note 1 to Audited Consolidated Financial Statements.
(6) The ratio of income to fixed charges is computed by dividing fixed charges into income from continuing operations before income taxes plus fixed charges. Fixed charges consist of interest, whether expensed or capitalized, amortization of financing costs and the estimated interest component of rent expense. Capitalized interest amounted to $546,000 for the six months ended June 30, 1996. For the year ended December 31, 1995 and for the six month period ended June 30, 1996, this ratio increased as a result of the reduction of interest expenses due to the repayment of bank debt with the proceeds from Common Stock publicly issued by the Company in March 1995.
(7) EBITDA represents income from continuing operations before interest expense, income taxes and depreciation and amortization. EBITDA is included herein because management believes that certain investors may find EBITDA useful for measuring a company's ability to service its debt; however, EBITDA does not represent cash flow from operations, as defined by generally accepted accounting principles, and should not be considered as a substitute for net income as an indicator of the Company's operating performance or for cash flow as a measure of liquidity. The ratio of EBITDA to interest expense is computed by dividing interest expense into EBITDA. This ratio should be examined in conjunction with the Audited and Unaudited Consolidated Financial Statements of the Company included elsewhere herein. For the year ended December 31, 1995 and for the six month period ended June 30, 1996, this ratio increased as a result of the reduction of interest expenses due to the repayment of bank debt with the proceeds from Common Stock publicly issued by the Company in March 1995.
(8) Pro forma ratio of income to fixed charges and pro forma ratio of EBITDA to interest expense assume that all bank debt outstanding during 1995 and the six months ended June 30, 1996 was refinanced with the proceeds of the Debenture Offering and such portion of the Debenture Offering allocated to the refinancing of bank debt remained outstanding for the pro forma periods presented. The effect of such refinancing is an increase in interest expense and amortization of financing costs of approximately $1.9 million for 1995 and $55,000 for the six month period ended June 30, 1996. These increases resulted primarily from the portion of the Debenture Offering used to refinance the bank debt being considered outstanding for the entire pro forma periods presented, whereas the actual bank debt was repaid in March 1995. The pro forma ratio of income to fixed charges and pro forma ratio of EBITDA to interest expense do not reflect any income earned from the proceeds of the Debenture Offering in excess of the refinanced bank debt amounts.
(9) Adjusted to give effect to the sale of the Debentures offered by the Company pursuant to the Debenture Offering and the use of the net proceeds therefrom. Net proceeds of $68.0 million were received by the Company from the sale of $70.0 million in aggregate principal amount of the Debentures less the Initial Purchasers' commissions and discounts. See "Use of Proceeds."
(10) Total debt as of August 31, 1996 was $41.6 million. Data does not include the Debentures.
13

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the Audited and Unaudited Consolidated Financial Statements (including the Notes thereto) appearing elsewhere in this Prospectus.
OVERVIEW
The Company derives revenues principally from the sale of tickets to car races held at AMS, BMS and CMS, from food and beverage concession sales and souvenir sales made during such events, from the sale of sponsorships to companies that desire to advertise or sell their products or services at such events and from the licensing of television, cable network and radio rights to broadcast such events. The Company has derived additional revenue in recent years from the Speedway Club, a dining and entertainment facility at CMS, and, since 1991, from Legends Car sales.
The Company classifies its revenues as admissions, event-related revenues and other operating revenue. "Admissions" includes ticket sales for all of the Company's events. "Event-related revenues" includes concession and souvenir sales, luxury suite rentals, sponsorship fees and broadcast rights fees. "Other operating revenue" includes the Speedway Club and Legends Car revenues.
The Company classifies its expenses to include direct expense of events and other direct operating expense, among other things. "Direct expense of events" principally consists of race purses, sanctioning fees, cost of souvenir sales, compensation of certain employees, advertising and, prior to 1995, management fees to Sonic Financial Corporation ("Sonic"), a majority shareholder of the Company controlled by the Company's Chairman. "Other direct operating expense" includes cost of the Speedway Club and Legends Car sales.
The Company's revenue items produce different operating margins. Sponsorships, broadcast rights, ticket sales and luxury suite rentals produce higher margins than concessions and souvenir sales, as well as Legends Car sales.
The Company sponsors and promotes outdoor motorsports events. Weather conditions affect sales of tickets, concessions and souvenirs, among other things, at these events. Although the Company sells tickets well in advance of its events, poor weather conditions can have an effect on the Company's results of operations.
The Company has derived a substantial portion of its total revenues from admissions and event-related revenue attributable to NASCAR-sanctioned races held in March, May, October and November. As a result, the Company's business has been, and is expected to remain, highly seasonal. During 1994 and 1995, the Company's second and fourth quarters accounted, on average, for approximately 80% of the Company's total annual revenues and approximately 106% of its total annual operating income. During 1997, the Company expects the second quarter to represent a significantly higher percentage of annual revenues and operating income as a result of the addition of racing events at TIR and the scheduling of racing events at BMS. The Company sometimes produces an operating loss during its first quarter, when it sponsors only one Winston Cup race. The concentration of the Company's racing events in the second quarter and the growth in the Company's operations with attendant increases in overhead expenses will tend to increase operating losses in future first quarters. The Company historically produced an operating loss during its third quarter, when it sponsored no NASCAR-sanctioned races, and, although the Company sponsored a Winston Cup race at BMS in August 1996, it is uncertain as to what degree this will affect seasonality. Additionally, race dates at the Company's various facilities may from time to time be changed, lessening the comparability of the financial results of quarters between years and increasing or decreasing the seasonal nature of the Company's business.
Significant growth in the Company's revenues will depend on consistent investment in facilities. In addition to several capital projects underway at AMS, BMS and CMS, the Company has also begun construction of a superspeedway in Fort Worth, Texas. The Company's investment in TIR will be substantial. There can be no assurance that such facility will be completed or profitable.
The Company does not believe that its financial performance has been materially affected by inflation. The Company has been able to mitigate the effects of inflation by increasing prices.
14

RESULTS OF CONTINUING OPERATIONS
 The table below shows the relationship of income and expense items relative to total revenue from continuing operations for the fiscal years ended December 31, 1993, 1994 and 1995 and the six months ended June 30, 1995 and 1996.

                                                                                   SIX MONTHS ENDED
                                                    YEAR ENDED DECEMBER 31,            JUNE 30,
                                                  1993       1994       1995       1995       1996
Revenues:
  Admissions...................................    50.8%      48.8%      48.4%      47.7%      51.4%
  Event-related revenue........................    40.5       38.5       36.8       37.1       35.8
  Other operating revenue......................     8.7       12.7       14.8       15.2       12.8
     Total revenues............................   100.0%     100.0%     100.0%     100.0%     100.0%
Operating Expenses:
  Direct expense of events.....................    32.6       28.4       26.5       26.4       28.5
  Other direct operating expense...............     6.8        9.5       10.0       10.1        8.2
  General and administrative...................    19.5       18.3       17.7       17.5       16.2
  Non-cash stock compensation..................    --          4.6       --         --         --
  Depreciation and amortization................     8.0        7.0        6.5        6.0        7.1
     Total operating expenses..................    66.9       67.8       60.7       60.0       60.0
Operating income...............................    33.1       32.2       39.3       40.0       40.0
Interest income (expense), net.................    (7.6)      (6.0)      --         (1.2)       0.8
Other income...................................     2.6        2.5        4.4        2.6        1.5
Equity in earnings of NWS......................    --         --          0.3       --          0.3
Provision for income taxes.....................   (11.1)     (12.5)     (18.1)     (16.6)     (16.9)
Income from continuing operations..............    17.0%      16.2%      25.9%      24.8%      25.7%	

SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995
TOTAL REVENUES. Total revenues for the six months ended June 30, 1996 increased by $14.2 million, or 36.4%, to $53.1 million, over such revenues for the same year earlier period. This improvement was due to increases in all revenue items, particularly admissions and event-related revenues. Admissions for the six months ended June 30, 1996 increased by $8.7 million, or 47.0%, over admissions for the same year earlier period. This increase was due primarily to the acquisition of BMS in January 1996, which hosted race events in the second quarter, and to growth in admissions to NASCAR-sanctioned racing events. Event-related revenue for the six months ended June 30, 1996 increased by $4.6 million, or 31.8%, over such revenue for the same year earlier period. This increase was due to the acquisition of BMS and to increased rental revenue at CMS from newly constructed VIP suites. Other operating revenue for the six months ended June 30, 1996 increased by $871,000, or 14.7%, over such revenue for the same year earlier period, due primarily to Legends Car sales.
DIRECT EXPENSE OF EVENTS. Direct expense of events for the six months ended June 30, 1996 increased by $4.8 million, or 47.0%, over such expense for the same year earlier period. Such increase was due primarily to the acquisition of BMS and increased operating costs associated with increased seating capacity at CMS.
OTHER DIRECT OPERATING EXPENSE. Other direct operating expense for the six months ended June 30, 1996 increased by $393,000, or 10.0%, over such expense for the same year earlier period. The increase was primarily attributable to the increase in Legends Car sales referred to above.
GENERAL AND ADMINISTRATIVE. As a percentage of total revenues, general and administrative expense decreased from 17.5% for the six months ended June 30, 1995 to 16.2% for the six months ended June 30, 1996. General and administrative expense for the six months ended June 30, 1996 increased by $1.8 million, or 26.6%, over such expense for the same year earlier period. This change was due primarily to general and administrative expenses incurred at BMS which was acquired in the first quarter of 1996, and to a lesser extent an increase in total compensation expense.
15

DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense for the six months ended June 30, 1996 increased by $1.5 million, or 62.9%, over such expense for the same year earlier period. This increase was due to additions to property and equipment at CMS and AMS and the acquisition of BMS.
OPERATING INCOME. Operating income for the six month period ended June 30, 1996 increased by $5.7 million, or 36.5%, over such income for the same year earlier period. This increase was due to the factors discussed above.
INTEREST INCOME (EXPENSE), NET. Interest income, net, for the six month period ended June 30, 1996 was $449,000, compared to interest expense, net, for the six month period ended June 30, 1995 of $486,000. This change was due to higher levels of cash invested, from the public stock offering that occurred on April 1, 1996, in the six months ended June 30, 1996 as compared to the same year earlier period.
OTHER INCOME. Other income for the six months ended June 30, 1996 decreased by $216,000 from such income for the six month period ending June 30, 1995. This decrease was due to decreased gains on sale of AMS condominiums.
EQUITY IN EARNINGS OF NORTH WILKESBORO SPEEDWAY. In the six month period ended June 30, 1996, the Company recognized equity income from its 50% investment in NWS equal to $185,000. This income was a result of NWS conducting race events during the six month period ended June 30, 1996. In the six month period ended June 30, 1995 there was no similar income, since the Company acquired the equity interest in NWS in late June 1995.
PROVISION FOR INCOME TAXES. The Company's effective income tax rate for the six month period ended June 30, 1996 was 39.7%, compared to an effective tax rate for the period ended June 30, 1995 of 40.0%.
INCOME BEFORE EXTRAORDINARY ITEM. Income before extraordinary item for the six month period ended June 30, 1996 increased by $4.0 million, or 41.7%, over such income for the same year earlier period, due to the factors discussed above.
EXTRAORDINARY ITEM, NET. Upon repaying the long-term debt, related net debt issuance costs previously amortized were written off in the six months ended June 30, 1995, as an extraordinary item. There were no similar charges for the six months ending June 30, 1996.
NET INCOME. Net income for the six months ended June 30, 1996, when compared to the same period in the prior year, reflects improved earnings in the Company's historical operations, and an increase in income due to the newly acquired BMS which hosted race events in the three month period ended June 30, 1996.
YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994 TOTAL REVENUES. Total revenues for 1995 increased by $11.0 million, or 17.1%, to $75.6 million, over such revenues for 1994. This improvement was due to increases in each of the revenue categories. Admissions for 1995 increased by $5.0 million, or 16.0%, over admissions for 1994. This increase was due primarily to additions to permanent seating capacity, growth in attendance at NASCAR-sanctioned racing events, price increases and one additional non-NASCAR event in 1995. Event-related revenue for 1995 increased by $3.0 million, or 12.0%, over such revenue for 1994. This increase was attributable to a significant increase in luxury suite rentals, increased souvenir and concession sales and, to a lesser extent, sponsorship revenue. Other operating revenue for 1995 increased by $3.0 million, or 36.8%, over such revenue for 1994. Legends Car revenues accounted for the substantial portion of this increase.
DIRECT EXPENSE OF EVENTS. Direct expense of events for 1995 increased by $1.7 million, or 9.1%, over such expense for 1994. Such increase was due to increases in the size of purses and sanctioning fees required for the Company's NASCAR-sanctioned racing events and, to a lesser extent, one additional non-NASCAR event.
OTHER DIRECT OPERATING EXPENSE. Other direct operating expense for 1995 increased by $1.5 million, or 24.6%, over such expense for 1994. The increase was primarily attributable to the cost of sales associated with the increase in Legends Car revenues.
GENERAL AND ADMINISTRATIVE. As a percentage of total revenues, general and administrative expense decreased to 17.7% for 1995 from 18.3% for 1994. This improvement was due to scale efficiencies resulting from increases in revenues outpacing increases in general and administrative costs. General and administrative expense
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for 1995 increased by $1.6 million, or 13.3%, over such expense for 1994. This change was due primarily to the increase in the number of employees, predominantly at 600 Racing, and in average compensation. Increases in Social Security, health insurance and other similar charges associated with increased levels and amounts of employment also occurred.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense for 1995 increased by $393,000, or 8.7%, over such expense for 1994. This increase was due to additions to property and equipment at AMS, CMS, and 600 Racing.
OPERATING INCOME. Operating income for 1995 increased by $8.9 million, or 42.8%, over such income for 1994. This increase was due to the factors discussed above.
INTEREST EXPENSE, NET. Interest expense, net, for 1995 decreased by $3.8 million, or 99.4%, from such expense for 1994. This decrease was due to the repayment of substantially all of the long-term debt with the proceeds of the Company's initial public offering in February 1995 and interest income on short-term investments.
OTHER INCOME. Other income for 1995 increased by $1.8 million over such income for 1994. This increase was due to gains on the sale of land and condominiums.
PROVISION FOR INCOME TAXES. The Company's effective income tax rate for 1995 was 41%, compared to an effective tax rate for 1994 of 43%.
INCOME FROM CONTINUING OPERATIONS. Income from continuing operations for 1995 increased by $9.1 million, or 87.1%, over such income for 1994, due to the factors discussed above.
EXTRAORDINARY ITEM, NET. Upon repaying the Company's long-term debt, related net debt issuance costs previously unamortized were written off as an extraordinary item. There were no similar charges for 1994.
YEAR ENDED DECEMBER 31, 1994 COMPARED TO YEAR ENDED DECEMBER 31, 1993 TOTAL REVENUES. Total revenues for 1994 increased by $10.0 million, or 18.3%, to $64.5 million, over such revenues for 1993. This improvement was due to increases in each of the revenue categories, particularly other operating revenue. Admissions for 1994 increased by $3.8 million, or 13.7%, over admissions for 1993. This increase was due to a variety of factors, including growth in admissions to NASCAR-sanctioned racing events. Event-related revenue for 1994 increased by $2.7 million, or 12.2%, over such revenue for 1993. This increase was attributable to a significant increase in sponsorship revenue and, to a lesser extent, souvenir sales. Other operating revenue for 1994 increased by $3.5 million, or 73.5%, over such revenue for 1993. Legends Car sales accounted for substantially all of the increase.
DIRECT EXPENSE OF EVENTS. Direct expense of events for 1994 increased by $549,000, or 3.1%, over such expense for 1993. Such increase was due to increases in the size of purses required for the Company's NASCAR-sanctioned racing events and, to a lesser extent, increases in the sanctioning fees payable for such events. Such expense decreased as a percentage of total revenues to 28.4% in 1994 from 32.6% in 1993. The 1993 margin was affected adversely by a snowstorm at AMS. Increased sponsorship revenue in 1994 also contributed to the improvement.
OTHER DIRECT OPERATING EXPENSE. Other direct operating expense for 1994 increased by $2.4 million, or 64.5%, over such expense for 1993. As a percentage of total revenues, other direct operating expense increased to 9.5% for 1994 from 6.8% for 1993. This increase was due to higher Legends Car cost of sales, which in turn was due to increased Legends Car sales.
GENERAL AND ADMINISTRATIVE. As a percentage of total revenues, general and administrative expense decreased to 18.3% for 1994 from 19.5% for 1993. This improvement was due to scale efficiencies resulting from increases in revenues outpacing increases in general and administrative costs. General and administrative expense for 1994 increased by $1.2 million, or 11.1%, over such expense for 1993. This change was due to increases in the number of employees and in average compensation, together with increases in Social Security, health insurance and other similar charges associated with increased levels and amounts of employment.
NON-CASH STOCK COMPENSATION. On December 21, 1994, the Company granted options to nine employees to purchase an aggregate of 800,000 shares of Common Stock at an exercise price of $3.75 per share. The Company
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recorded a non-cash stock compensation charge of $3.0 million before taxes in December 1994. There were no similar charges in 1993. See Note 16 to Consolidated Financial Statements.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense for 1994 increased by $125,000, or 2.9%, over such expense for 1993. This increase was due to additions to property and equipment at both CMS and AMS.
OPERATING INCOME. Operating income for 1994 increased by $2.7 million, or 15.0%, over such income for 1993. This increase was due to the factors discussed above.
INTEREST EXPENSE, NET. Interest expense, net, for 1994 decreased by $273,000, or 6.6%, compared to 1993. This decrease was due to a combination of additional interest income and a decline in average borrowing levels.
OTHER INCOME. Other income for the year ended December 31, 1994 increased by $157,000 over such income for the prior year. This increase was due primarily to gains on the sale of marketable equity securities.
PROVISION FOR INCOME TAXES. The Company's effective income tax rate for 1994 was 43%, compared to an effective tax rate for 1993 of 40%.
INCOME FROM CONTINUING OPERATIONS. Income from continuing operations for 1994 increased by $1.2 million, or 13.3%, over such income for 1993, due to the factors discussed above.
SEASONALITY AND QUARTERLY RESULTS
The Company derived a substantial portion of its 1995 total revenues from admissions and event-related revenue attributable to eight NASCAR-sanctioned races held in March, May, October and November. As a result, the Company's business has been, and is expected to remain, highly seasonal. In January 1996, the Company acquired BMS, which sponsors, among other things, NASCAR-sanctioned races in March and August. The effect of BMS is not set forth in the following information except with respect to the information for the second quarter of 1996. Set forth below is certain summary information with respect to the Company's operations for the most recent ten quarters.

                                    1994 (UNAUDITED)                            1995 (UNAUDITED)                 1996 (UNAUDITED)
                          1ST        2ND        3RD        4TH        1ST        2ND        3RD        4TH        1ST        2ND
                        QUARTER    QUARTER    QUARTER    QUARTER    QUARTER    QUARTER    QUARTER    QUARTER    QUARTER    QUARTER
                                                     (IN THOUSANDS, EXCEPT NASCAR-SANCTIONED EVENTS)
Total revenues.......... $9,363    $24,338    $2,916     $27,920    $11,245    $27,709    $4,098     $32,521    $12,330    $40,816
Operating income
  (loss)................  1,036    11,848     (2,621)    10,525      1,457     14,120     (3,147)    17,259        963     20,299
Income (loss) from
  continuing
  operations............     61     6,604     (1,754)     5,559        411      9,242       (637)    10,574        387     13,293
NASCAR-sanctioned
  events................      2         3          0          3          2          3          0          3          2          5	

The fourth quarter 1994 operating results include a $3.0 million non-cash stock compensation charge. See Note 16 to Consolidated Financial Statements.
The results of operations for the three and six month periods ended June 30, 1996 and 1995 are not indicative of the results that may be expected for the entire year because of the seasonality discussed above.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically met its working capital and capital expenditure requirements through a combination of cash flow from operations and borrowings, particularly bank loans. The Company has loans outstanding through NationsBank, N.A. ("NationsBank") as described below and intends to pay down such loans from the net proceeds of the Debenture Offering. See "Use of Proceeds."
Although the Company has expended significant amounts of cash in 1996 for the construction of TIR and the improvement and expansion of AMS, BMS and CMS, the Company's financial condition and liquidity strengthened during the six months ended June 30, 1996. This improvement was due to several factors, including the sale of 3.0 million shares of the Company's Common Stock in April 1996 for net cash proceeds of approximately $78.5 million, record operating results during the six months ended June 30, 1996, during which net income amounted to $13.7 million and net cash generated by operations amounted to $25.8 million, and the receipt of $40.0 million from long-term borrowings under the new bank Credit Facility. Cash and cash
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equivalents were $59.6 million at June 30, 1996, an increase of $49.5 million from December 31, 1995. Working capital increased $33.3 million to $31.5 million at June 30, 1996 from December 31, 1995. Long-term debt, including current portion, was $41.6 million, an increase of $39.8 million from December 31, 1995. Stockholders' equity was $192.0 million, an increase of $96.6 million over the prior year end.
The Company expects to continue to generate positive cash flows from its existing speedway operations. Even though the Company has experienced improvement in its financial condition, liquidity and credit availability, such resources will be needed to fund the Company's continued growth, including the completion of construction of TIR and the improvement and expansion of AMS, BMS and CMS. As of June 30, 1996, the Company had incurred capitalized costs aggregating $67.7 million associated with TIR, representing an increase of $54.5 million over such capitalized cost at December 31, 1995.
The Company does not anticipate paying any cash dividends in the foreseeable future. Any decision concerning the payment of dividends on the Common Stock will depend upon the results of operations, financial condition and capital expenditure plans of the Company, as well as such other factors as the Board of Directors, in its sole discretion, may consider relevant.
In conjunction with its January 1996 acquisition of BMS, the Company obtained from NationsBank an unsecured, short-term line of credit in an aggregate principal amount of up to $50.0 million (the "90-Day Facility"). A total of $32.7 million in aggregate principal amount was borrowed under the 90-Day Facility, which amount was applied to fund the purchase price for the common stock of BMS and the working capital needs of the Company.
The Company subsequently consummated longer term financing through the Credit Facility, retired the 90-Day Facility and borrowed additional funds for working capital purposes. As of the date hereof, the Company has a total of $40.0 million in aggregate principal amount outstanding under the Credit Facility as described above. Such borrowings were applied by the Company for general corporate purposes, including for the construction of TIR. The Credit Facility is an unsecured working capital and letter of credit arrangement provided by a syndicate of banks led by NationsBank. The Company may make other draws under the Credit Facility to meet its various additional working capital needs.
The Credit Facility has an overall borrowing limit of $110.0 million with a sub-limit of $7.0 million for standby letters of credit. The Credit Facility will mature in three years unless extended annually thereafter for two additional years at the option of the lenders. Draws are permitted under the Credit Facility for the following purposes: (i) refinancing outstanding borrowings, including the 90-Day Facility, (ii) financing seasonal working capital needs, and (iii) financing general corporate purposes, including the costs of constructing TIR. Although the Credit Facility is unsecured, the Company has agreed not to pledge its assets to any third party. In addition, the Company has made certain financial covenants, including specified levels of net worth and ratios of (i) debt to equity, (ii) debt to EBITDA, and (iii) earnings before interest and taxes (EBIT) to interest expense. The Credit Facility also prohibits the Company from making cash expenditures in excess of $10.0 million in the aggregate to acquire additional motor speedways, without the consent of the lenders, and limits its consolidated capital expenditures, exclusive of expenditures on TIR, to amounts not to exceed $80.0 million in the aggregate for fiscal years 1996 and 1997 and $40.0 million for fiscal year 1998 and for each fiscal year thereafter. The Company also agreed to certain other limitations or prohibitions concerning the incurrence of other indebtedness, guaranties, asset sales, investments, dividends, distributions and redemptions. The Credit Facility permits additional indebtedness, within certain parameters including through a sale-leaseback transaction, for the permanent financing of TIR.
NationsBank has extended credit to CMS pursuant to a reimbursement agreement dated March 11, 1994 (the "I-85 Reimbursement Agreement") pursuant to which CMS agreed to reimburse NationsBank for draws by the North Carolina Department of Transportation on a letter of credit with a stated amount of $1.9 million. Such letter of credit secures the Company's obligations relating to the construction of an improved access road to CMS from I-85. The I-85 Reimbursement Agreement is secured by approximately $2.1 million of cash equivalents maintained in an account with NationsBank.
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LEGAL PROCEEDINGS
On September 9, 1993, the IRS asserted that AMS, as the successor in interest to BND, Inc. ("BND"), is liable for additional income taxes, penalties and interest. The total assessment including taxes, penalties and interest (net of tax benefit for deductibility of interest) through June 30, 1996 is approximately $7.3 million. This deficiency allegedly relates to BND's income tax returns for the years ended November 30, 1988 and October 31, 1990. The IRS alleges that, during the acquisition of AMS by the Company's Chairman and Chief Executive Officer in October 1990, BND's merger into Atlanta International Raceway, Inc., the predecessor of AMS ("AIR"), resulted in a taxable gain to BND equal to the excess of liabilities assumed by AIR over the adjusted basis of assets transferred to AIR. Moreover, this taxable gain allegedly eliminates a net operating loss carryback to the tax return filed for the year ended November 30, 1988. On November 30, 1993, AMS filed a protest contesting the assessment. At the date of this Prospectus, no further action by the IRS has occurred with respect to this matter. Management intends to continue contesting the allegations of a deficiency. There can be no assurance, however, that the ultimate resolution of this proceeding will not have a material adverse effect on the Company's results of operations or financial condition.
CAPITAL EXPENDITURES
The Company's capital expenditures, excluding condominium construction, totalled $40.7 million in 1995, $5.0 million in 1994 and $3.7 million in 1993. Such expenditures were directed primarily toward the construction of grandstand seating and suites, the acquisition and improvement of real estate at CMS and AMS, the paving of the principal tracks at CMS and AMS, construction of the Winston Cup garage at CMS and, in 1995, the construction of TIR.
The Company expects to continue to make substantial capital improvements in its facilities to meet increasing demand and to increase revenue. Currently, a number of major capital projects are underway, the most significant of which is the acquisition and construction of TIR. Land and land improvements and construction in progress at June 30, 1996 associated with TIR aggregated approximately $67.7 million. While management is unable at this time to determine the total cost of construction, it currently estimates that total construction costs at TIR will approximate $130 million. No assurance can be given that the actual cost of constructing TIR will remain within this estimate. Numerous factors, many of which are beyond the Company's control, may influence the ultimate cost of TIR, including undetected soil or land conditions, additional land acquisition costs, increases in the cost of construction materials and labor, unforeseen changes in the design of TIR, litigation, accidents or natural disasters affecting the construction site and national or regional economic changes. In addition, the actual cost of TIR could vary materially from the foregoing estimate if the Company's assumptions about the quality of materials or workmanship required to complete TIR or the cost of financing such construction were to change. The TIR construction is also subject to state and local permitting processes, which if changed, could materially affect the cost of TIR. A lawsuit recently filed by adjacent landowners in response to the construction of TIR and the annexation of their land by the City of Fort Worth is not expected by management to have a material impact on the cost of TIR. Also, in July 1996 TIR conducted a ceremonial ground breaking for 58 condominiums to be built above turn two overlooking TIR.
To date in 1996 the Company has increased permanent seating capacity by approximately 7,000 additional grandstand seats at BMS. The Company is also in the process of acquiring additional land for parking and camping at BMS. In 1996, the Company also intends to complete 16 suites at AMS as well as complete other facility improvement projects. The estimated aggregate cost of capital improvements, exclusive of TIR, is expected to range from $20 million to $40 million in 1996. No assurance can be given that such aggregate cost will remain within this estimated range. Factors that could cause the actual cost to vary from this range include, but are not limited to, bad weather during construction, increases in design, labor or materials costs and changes in contractors.
In addition to expansion and improvements of its existing speedway facilities and business operations, the Company is continually evaluating new opportunities that will add value for the Company's stockholders, including the expansion and development of its existing Legends Cars products and markets and the expansion into complementary businesses.
Management anticipates that the net proceeds of the Debenture Offering, together with cash from operations and funds expected to be available through the Credit Facility, will sustain the Company's operating needs,
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including planned capital expenditures at AMS, BMS, CMS and TIR, through 1996 and into 1997. Based upon the anticipated future financing requirements of the Company, management expects that the Company will, from time to time, engage in additional financings of a character and in amounts to be determined.
ENVIRONMENTAL MATTERS
The Company's property at CMS includes areas that were used as solid waste landfills for many years. Landfilling of general categories of municipal solid waste on the CMS property ceased in 1992, but CMS currently allows certain property to be used for land clearing and inert debris landfilling and for construction and demolition debris landfilling. Management believes that the Company's operations, including the landfills on its property, are in compliance with all applicable federal, state and local environmental laws and regulations. Management is not aware of any situation related to landfill operations which would adversely affect the Company's financial position or future results of operations.
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NATIONAL ASSOCIATION OF STOCK CAR AUTO RACING, INC. (NASCAR)
The National Association of Stock Car Auto Racing, Inc. has been influential in the growth and development of professional stock car racing. NASCAR is owned and operated by Bill France, Jr. and other members of the France family and is the premier official sanctioning body of professional stock car racing in the United States. Its officials supervise the conduct of all races that constitute the Winston Cup and Busch Grand National stock car series. In 1995, the Company derived a substantial majority of its total revenues from eight NASCAR-sanctioned racing events. As a result of the BMS acquisition, the Company will have 12 such races in 1996. As a result of the April 1997 Winston Cup and Busch Grand National race dates set for TIR, the Company will have 14 such races in 1997, subject to completion of TIR.
OVERVIEW OF STOCK CAR RACING
Professional stock car racing developed in the southeastern United States in the 1930's. It began to mature in 1947, when Bill France, Sr. organized NASCAR in Daytona Beach, Florida. The first NASCAR-sanctioned race was held on June 19, 1949 in Charlotte. The "superspeedway era" of stock car racing began in 1959, when the France family completed construction of the Daytona International Speedway and sponsored the first "Daytona 500." A superspeedway is a banked, paved track longer than one mile. Superspeedways were built in the early 1960's near Atlanta (AMS), near Charlotte (CMS) and elsewhere in the Southeast. NASCAR also sanctions Winston Cup races on shorter tracks, such as BMS, which was built in 1961. The industry began to gather momentum in the mid-1960's, when major North American automobile and tire producers first offered engineering and financial support. In the late 1960's, NASCAR decided to create a more elite circuit focused on the best drivers. Accordingly, it reduced the number of races in its premier series from approximately 50 to approximately 30. In 1971, R.J. Reynolds began to sponsor NASCAR racing by developing the Winston Cup series as a marketing outlet for its products.
NASCAR events, particularly Winston Cup races, enjoy a large and growing base of spectator support. According to statistics compiled by Goodyear, total attendance at all 1995 Winston Cup events was 5,327,000, reflecting a compound annual growth rate of 15.1% from 1993 to 1995. The entire Winston Cup series is broadcast to national television audiences by five networks: ABC, CBS, ESPN, TBS and TNN. Increased media coverage has led to national recognition of several "star" NASCAR drivers. The result has been not only record NASCAR race attendance, but also increasing payments to track owners for broadcast rights and sponsorship fees.
Management believes that the increasing payments for broadcast rights and sponsorship fees are a result of the demographic appeal of the spectator base to advertisers. Surveys published recently by NASCAR indicate that 38% of Winston Cup spectators are women; 53% work in professional, managerial or skilled labor jobs; 58% are married; 65% own homes; and 78% use credit cards. The median annual family income of Winston Cup spectators has been estimated in NASCAR publications at $39,280. Corporate sponsors of NASCAR-sanctioned events now include most major North American automobile producers and parts manufacturers, the largest and best-known food, beverage and tobacco companies and leading firms in other manufacturing and consumer products industries.
GOVERNANCE OF STOCK CAR RACING
NASCAR regulates its membership, including drivers and their crews, team owners and track owners, the composition of race cars and the sanctioning of races. It sanctions events by means of one-year agreements executed with track owners, each of which specifies the race date, the sanctioning fee and the purse payable by the track owner. NASCAR officials control qualifying procedures, the line-up of the cars, the start of the race, the control of cars throughout the race, the election to stop or delay a race, "pit" activity, "flagging," the positioning of cars, the assessment of lap and time penalties and the completion of the race.
ECONOMICS OF STOCK CAR RACING
SPONSORS. Sponsors are active in all phases of professional stock car racing. They support drivers and teams by funding certain costs of their operations. They support track owners by funding certain costs of specific races. In return, sponsors receive advertising exposure on television and radio, through newspapers, printed brochures and advertisements and at the track on race day. Companies negotiate sponsorship arrangements with reference to
22

a team's racing success and spectator and viewer demographic characteristics. A "major" team sponsorship might pay $1.5 million or more to the team; a "minor" sponsorship, $250,000 to $500,000.
TEAM OWNERS. In most instances, team owners underwrite the financial risk of placing their teams in competition. They contract with drivers, hire pit crews and mechanics and syndicate sponsorship of their teams. Management estimates that the average Winston Cup team spends approximately $50,000 to $60,000 per event, or approximately $1.5 million to $2.0 million per season.
DRIVERS. A substantial majority of drivers contract independently with team owners while a few drivers own their own teams. Drivers receive income from contracts with team owners, sponsorship fees and prize money. Successful drivers also may receive income from personal endorsement fees and souvenir sales. The personality and racing success of a driver can be an important marketing advantage for a team owner because it can attract corporate sponsorships.
TRACK OWNERS. Track owners market and promote events at their facilities, and they negotiate directly with television and radio networks for coverage of such events. Their revenue sources include admissions, sponsorships, advertising and broadcast fees, concessions and souvenir sales.
THE WINSTON CUP
NASCAR's premier circuit is the Winston Cup series, which currently begins with the "Daytona 500" in February and concludes with the "NAPA 500" in November. Including two "all-star" races, 33 races are licensed annually to 18 tracks operating in 15 states. The 1996 Winston Cup schedule is as follows:

 DATE                      RACE                                LOCATION
Feb.     "Busch Clash" (all-star race)
11                                                   Daytona Beach, Fla.
Feb.     "Daytona 500"
18                                                   Daytona Beach, Fla.
Feb.     "Goodwrench 400"
25                                                   Rockingham, N.C.
Mar. 3   "Pontiac Excitement 400"                    Richmond, Va.
MAR.     "PUROLATOR 500"
10                                                   HAMPTON, GA. (AMS)
Mar.     "TranSouth Financial 400"
24                                                   Darlington, S.C.
MAR.     "FOOD CITY 500"
31                                                   BRISTOL, TENN. (BMS)
Apr.     "First Union 400"
14                                                   N. Wilkesboro, N.C. (NWS)(1)
Apr.     "Goody's Headache Powders 500"
21                                                   Martinsville, Va.
Apr.     "Winston Select 500"
28                                                   Talladega, Ala.
May 5    "Save Mart Supermarkets 300"                Sonoma, Calif.
MAY 18   "THE WINSTON SELECT" (ALL-STAR RACE)        CONCORD, N.C. (CMS)
MAY 26   "COCA-COLA 600"                             CONCORD, N.C. (CMS)
June 2   "Miller 500"                                Dover, Del.
June     "UAW-GM Teamwork 500"
16                                                   Long Pond, Pa.
June     "Miller 400"
23                                                   Brooklyn, Mich.
July 6   "Pepsi 400"                                 Daytona Beach, Fla.
July     "Slick 50 300"
14                                                   Loudon, N.H.
July     "Miller 500"
21                                                   Long Pond, Pa.
July     "Diehard 500"
28                                                   Talladega, Ala.
Aug. 3   "Brickyard 400"                             Indianapolis, Ind.
Aug.     "The Bud at the Glen"
11                                                   Watkins Glen, N.Y.
Aug.     "GM Goodwrench Dealer 400"
18                                                   Brooklyn, Mich.
AUG.     "GOODY'S HEADACHE POWDERS 500"
24                                                   BRISTOL, TENN. (BMS)
Sept.    "Mountain Dew Southern 500"
1                                                    Darlington, S.C.
Sept.    "Miller 400"
7                                                    Richmond, Va.
Sept.    "MBNA 500"
15                                                   Dover, Del.
Sept.    "Hanes 500"
22                                                   Martinsville, Va.
Sept.    "Tyson Holly Farms 400"
29                                                   N. Wilkesboro, N.C. (NWS)(1)
OCT. 6   "UAW-GM QUALITY 500"                        CONCORD, N.C. (CMS)
Oct.     "AC-Delco 400"
20                                                   Rockingham, N.C.
Oct.     "Dura Lube 500"
27                                                   Phoenix, Ariz.
NOV.     "NAPA 500"
10                                                   HAMPTON, GA. (AMS)	

(1) The Company owns 50% of the outstanding capital stock of NWS.
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As the table indicates, no track currently sponsors more than two Winston Cup series events. The Company holds licenses for two such events at each of its three existing tracks. CMS also holds the license for the all-star race held on May 18, "The Winston Select." Every Winston Cup event in 1996 is scheduled to be televised on ABC, CBS, ESPN, TBS or TNN.
THE BUSCH GRAND NATIONAL SERIES
The second-tier NASCAR circuit is the Busch Grand National series, which in 1996 is scheduled to include 26 races held at 20 tracks in 14 states. Many track owners who hold Winston Cup licenses also hold Busch Grand National events on the day preceding a Winston Cup event. Accordingly, Winston Cup drivers will occasionally compete in Busch Grand National races, which can boost overall attendance. The Company is licensed for five such events in 1996: the "Busch Light 300" at AMS on March 9, the "Goody's Headache Powders 250" at BMS on March 30, the "Red Dog 300" at CMS on May 25, the "Food City 250" at BMS on August 23 and the "All Pro Auto Parts Bumper to Bumper 300" at CMS on October 5, all of which are scheduled to be televised. Each of the Busch Grand National events at the Company's tracks will be conducted on the day before a Winston Cup event.
OTHER MOTORSPORTS
Other motorsports include NASCAR-sanctioned Craftsman Truck racing, stock car racing not sanctioned by NASCAR, "Indy car" racing, "Formula One" racing and sports car racing.
CRAFTSMAN TRUCK RACING. In 1995, a new NASCAR-sanctioned Craftsman Truck circuit was introduced to the public. According to statistics compiled by Goodyear, Craftsman Truck events attracted 551,500 spectators to 20 events in 1995. In 1996, 24 Craftsman Truck series events will be held at 23 tracks in 19 states. The Company held one Craftsman Truck race at BMS on June 22, 1996: the "Coca-Cola Truck 200." NWS is licensed to hold one Craftsman Truck race on September 28, 1996: the "Lowe's Home Improvement Warehouse 250." STOCK CAR RACING. NASCAR sanctions nearly all of the important stock car racing events. Another, less-well-known association is the American Race Car Association, which sanctions a stock car racing circuit that ranks in prestige just below the Busch Grand National circuit. The Company currently sponsors two ARCA races annually at each of AMS and CMS.
INDY CAR RACING. "Indy cars" take their name from the Indianapolis Motor Speedway, of Indianapolis, Indiana, which holds the "Indianapolis 500" on the last Sunday before Memorial Day every year. Indy car racing is sanctioned by several associations: the United States Auto Club ("USAC"), which governs the conduct of the "Indianapolis 500"; the Championship Auto Racing Team ("CART"), which split from USAC in the early 1980's; and, beginning in 1996, the Indy Racing League. The Company currently sponsors no Indy car races, but anticipates sponsoring Indy Racing League events at TIR, subject to its completion, during the 1997 racing year.
FORMULA ONE AND SPORTS CAR RACING. Formula One car races are held on road courses in Europe, Australia and Japan and are sanctioned by the Federation Internationale de l'Automobile ("FIA"). The Company has never sponsored a Formula One race and has no plans to do so. Sports car racing is sanctioned in the United States by the Sports Car Club of America ("SCCA") and by the International Motor Sports Association ("IMSA"), which sponsor races held on road courses throughout the country. The Company occasionally leases its tracks for sports car racing events.
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BUSINESS
Speedway Motorsports, Inc., the owner and operator of Atlanta, Bristol and Charlotte Motor Speedways, is a leading promoter, marketer and sponsor of motorsports activities in the United States. The Company is also nearing completion of a superspeedway in Fort Worth, Texas known as Texas International Raceway, a 1.5-mile, lighted, banked asphalt, "quad-oval" superspeedway, with anticipated permanent seating capacity for 150,000 and 205 luxury suites. In July 1996, the Company and NASCAR jointly announced that the Company will sponsor a Winston Cup race, the Texas 500, and a companion Busch Grand National event at TIR in April 1997 subject to the completion of TIR. As a result, the Company will sponsor 14 major racing events in 1997 sanctioned by NASCAR, including eight races associated with the Winston Cup circuit and six races associated with the Busch Grand National circuit. In addition, the Company recently announced that TIR expects to sponsor Indy Racing League events in 1997. The Company has experienced substantial growth in revenues and profitability as a result of the continued improvements and expansion of its facilities, its consistent marketing and promotional efforts and the overall increase in popularity of Winston Cup, Busch Grand National and other motorsports events in the United States.
In 1995, the Company derived approximately 83% of its total revenues from events sanctioned by NASCAR. Based on information developed independently by Goodyear, spectator attendance at Winston Cup and Busch Grand National events has increased at compound annual growth rates of 15.1% and 17.3%, respectively, from 1993 to 1995. Management believes that spectator demand for its largest events exceeds existing permanent seating capacity at each of AMS, BMS and CMS, which had, at December 31, 1995, permanent seating capacity of 102,076, 70,905 and 111,681, respectively, in each case excluding infield admission, temporary seats and general admission. During 1996, the Company increased permanent seating capacity by approximately 7,000 additional grandstand seats at BMS.
In recent years, television coverage and corporate sponsorship have increased for NASCAR-related events. All NASCAR Winston Cup and Busch Grand National events currently are broadcast by ABC, CBS, ESPN, TBS or TNN. Major national corporate sponsorship of NASCAR-sanctioned events also has increased significantly, according to NASCAR. Sponsors include such companies as Coca-Cola, General Motors, McDonald's, Procter & Gamble and RJR Nabisco. The Company intends to increase the exposure of its current Winston Cup and Busch Grand National events, add television coverage to other track events and increase sponsorship revenue.
OPERATING STRATEGY
The Company's operating strategy is to increase profitability through the promotion and production of racing and related events at modern facilities, which serve to enhance customer loyalty. The key elements of this strategy are as follows:
COMMITMENT TO QUALITY AND CUSTOMER SATISFACTION. Upon assuming control of CMS in 1975, management embarked upon a series of capital improvements, including the construction of additional permanent grandstand seating, new luxury suites, trackside dining and entertainment facilities and a condominium complex overlooking the track. In 1992, CMS became the first and only superspeedway in North America to offer nighttime racing. Following the purchase of AMS in 1990, the Company began to implement a similar strategy there by constructing additional grandstand seating, luxury suites and condominiums. In addition, the Company is constructing new food concessions and restroom facilities at AMS, BMS and CMS to increase the comfort of race spectators.
INNOVATIVE MARKETING AND EVENT PROMOTION. Management believes that it is important to market the Company's scheduled events throughout the year, both regionally and nationally. The Company markets its events by offering tours of its facilities, providing satellite links for media outlets, conducting direct mail campaigns and staging pre-race promotional activities such as live music, skydivers and daredevil stunts. The Company's marketing program also includes the solicitation of prospective event sponsors. Sponsorship provisions for a typical NASCAR-sanctioned event include luxury suite rentals, block ticket sales and Company-catered hospitality, as well as souvenir race program and track signage advertising.
UTILIZATION OF MEDIA. The Company negotiates directly with network and cable television companies for live coverage of its NASCAR-sanctioned races. On August 13, 1996, TIR signed a four-year television rights agreement with CBS Sports for the recently announced April races at TIR. In May 1996, AMS signed a four-year television rights agreement with ESPN for the 1997 through the year 2000 NASCAR seasons. Also in May 1996, BMS entered into a seven-year television rights agreement with ESPN covering the April and August NASCAR Winston Cup and related races starting with the August 1996 NASCAR event through the year 2002 NASCAR season. In December 1995, CMS negotiated a three-year television rights agreement with Turner Sports, Inc.
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("TSI"). The TSI agreement covers the May and October NASCAR and ARCA races at CMS to be broadcast on TBS. In August 1996, CMS entered into a one-year television rights agreement with TNN for the 1997 Winston Select race and associated events.
The Company also broadcasts its Winston Cup races at CMS over its proprietary Performance Racing Network ("PRN"), which is a radio network syndicated to more than 300 radio stations. PRN sponsors a weekly racing-oriented radio program throughout the NASCAR season, which is syndicated to more than 100 radio stations. The Company expects to enter into similar arrangements with PRN for events at AMS and TIR. Management also seeks to increase the visibility of its racing events and facilities through local and regional media interaction. For example, each January the Company sponsors a four-day media tour of CMS to promote the upcoming Winston Cup season. In 1996, this event featured prominent Winston Cup drivers and attracted more than 160 media personnel representing television networks and stations from throughout the United States.
GROWTH STRATEGY
Management believes that the Company can achieve its growth objectives by increasing attendance and revenues at existing facilities and by expanding its promotional and marketing expertise to take advantage of opportunities in attractive new markets. It intends to implement this growth strategy through the following means.
COMPLETION OF TIR. Upon completion, TIR will be a 1.5-mile, lighted, banked asphalt "quad-oval" superspeedway, with anticipated permanent seating capacity for 150,000 and 205 luxury suites. In addition, the Company is constructing 58 condominiums at TIR. Subject to the completion of TIR, the Company will sponsor a Busch Grand National race at TIR on April 5, 1997 and the Texas 500 Winston Cup event on April 6, 1997. The Company is attempting to obtain a second Winston Cup event date at TIR, but no assurance can be given that a second date will be awarded by NASCAR. TIR also expects to sponsor Indy Racing League events in 1997.
EXPANSION OF AMS, BMS AND CMS. Management believes that spectator demand for its largest events exceeds existing permanent seating capacity. The Company plans to continue its expansion by adding permanent grandstand seating and luxury suites at AMS, BMS and CMS. During the remainder of 1996, the Company expects to complete additional suites at AMS, BMS and CMS. Prior to its August 1996 NASCAR races, BMS increased permanent seating capacity by approximately 7,000 additional grandstand seats. Since the acquisition of AMS in 1990, the Company has constructed more than 78,000 grandstand seats at AMS, BMS and CMS. The Company intends to construct a series of new grandstands and luxury suites at AMS in conjunction with reconfiguring the track from an oval to a quad-oval design. The Company also intends to construct a series of new grandstand seats and luxury suites at AMS, BMS and CMS. Management believes that the expansion of AMS, BMS and CMS will generate additional admissions and event-related revenues.
EXPANSION OF TELEVISION COVERAGE AND SPONSORSHIP. NASCAR-sanctioned stock car racing is experiencing significant growth in television viewership and spectator attendance. This growth has allowed the Company to expand its television coverage to include more races and to negotiate more favorable broadcast rights fees with television networks as well as to negotiate more favorable contract terms with sponsors. Management believes that spectator interest in stock car racing will continue to grow, thereby increasing broadcast media and sponsors' interest in the sport. The Company intends to increase media exposure of its current Winston Cup and Busch Grand National events, to add television coverage to other track events and to increase sponsorship revenue.
DEVELOPMENT OF THE LEGENDS CAR BUSINESS. In 1992, the Company developed the Legends Circuit. The Company sells cars used in Legends Circuit racing events at retail prices of less than $12,000 and is the official sanctioning body of the Legends Circuit. At these retail prices, management believes that Legends Cars become economically affordable to a new group of racing enthusiasts who previously could not race on an organized circuit. In 1995, 1994 and 1993, Legends Cars represented 11.1%, 8.9% and 4.2%, respectively, of total revenues.
INCREASE IN DAILY USAGE OF FACILITIES. Management constantly seeks revenue-producing uses for the Company's track facilities on days not committed to racing events. Such other uses include car shows, auto fairs, driving schools, vehicle testing and settings for television commercials, concerts, print advertisements and motion pictures. In 1995, 1994 and 1993, non-race-day track rentals accounted for 1.7%, 1.8% and 1.9%, respectively, of the Company's total revenues.
ADDITION OF OTHER FACILITIES OR OPERATIONS. The Company also considers growth by acquisition and development of motorsports and other facilities or operations as appropriate opportunities arise. If such development or acquisition opportunities appear suitable to the Company's plans and business, management will attempt to realize these opportunities.
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OPERATIONS
 The Company's operations consist principally of racing and related events. The Company also sells Legends Cars and sanctions the Legends Circuit. Its other activities are ancillary to its core racing business.
RACING AND RELATED EVENTS
NASCAR-sanctioned races have been held annually at AMS and CMS since they were built in 1960 and at BMS since it was built in 1961.
In 1996, AMS is scheduled to hold two Winston Cup races and one Busch Grand National race, as well as several other races and events. Its NASCAR-sanctioned racing schedule is as follows:

DATE                                 EVENT                                     CIRCUIT
March 9       "Busch Light 300"                                      Busch Grand National
March 10      "Purolator 500"                                        Winston Cup
November 10   "NAPA 500"                                             Winston Cup	

In 1996, BMS is scheduled to hold two Winston Cup races and two Busch Grand National races, as well as several other races and events. Its NASCAR-sanctioned racing schedule is as follows:

DATE                                 EVENT                                     CIRCUIT
March 30      "Goody's Headache Powders 250"                         Busch Grand National
March 31      "Food City 500"                                        Winston Cup
August 23     "Food City 250"                                        Busch Grand National
August 24     "Goody's Headache Powders 500"                         Winston Cup	

In 1996, CMS is scheduled to hold three Winston Cup races and two Busch Grand National races, as well as several other races and events. Its NASCAR-sanctioned racing schedule is as follows:

DATE                                 EVENT                                     CIRCUIT
May 18        "The Winston Select"                                   Winston Cup (all-star race)
May 25        "Red Dog 300"                                          Busch Grand National
May 26        "Coca-Cola 600"                                        Winston Cup
October 5     "All Pro Auto Parts Bumper to Bumper 300"              Busch Grand National
October 6     "UAW-GM Quality 500"                                   Winston Cup	

In 1996, the Company is also scheduled to sponsor an IROC event and two ARCA races at CMS and two ARCA races at AMS.
The following table shows selected revenues of the Company for the years ended December 31, 1993, 1994 and 1995 and the six months ended June 30, 1996. All numbers, except for the six months ended June 30, 1996 data, exclude information for BMS.

                                                                                           SIX MONTHS
                                                                                              ENDED
                                                                                          JUNE 30, 1996
                                                          1993       1994       1995       (UNAUDITED)
                                                                         (IN THOUSANDS)
Admissions............................................   $27,727    $31,523    $36,569       $27,306
Sponsorship revenue...................................     4,121      4,916      5,758         3,430
Broadcast revenue.....................................     1,890      2,791      3,228         2,807
Other.................................................    20,830     25,307     30,018        19,603
  Total...............................................   $54,568    $64,537    $75,573       $53,146	

ADMISSIONS. Grandstand ticket prices at the Company's NASCAR-sanctioned events in 1996 range from $10.00 to $92.00. In general, as NASCAR increases sanctioning fees and purses, the Company raises ticket prices.
SPONSORSHIP REVENUE. The Company's revenue from corporate sponsorships is paid in accordance with negotiated contracts. The identities of sponsors and the terms of sponsorship change from time to time. The Company currently has sponsorship contracts with such major manufacturing and consumer products companies as Coca-Cola, Miller Brewing Company, Anheuser-Busch, the National Automotive Parts Association, Purolator,
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Chevrolet and Ford. Some contracts allow the sponsor to name a particular racing event, as in the "Coca-Cola 600" and the "UAW-GM Quality 500." Other consideration ranges from "Official Car" designation (as with Ford at AMS and BMS and Chevrolet at CMS) to exclusive advertising and promotional rights in the sponsor's product category (as with Anheuser-Busch at AMS and BMS and Miller at CMS). None of the Company's event sponsors accounted for as much as 5% of total revenues in 1995.
BROADCAST REVENUE. The Company has negotiated contracts with television networks and stations for the broadcast coverage of all of its NASCAR-sanctioned events. The Company has contracts with ABC, CBS, ESPN, TBS and TNN covering events at AMS, BMS, CMS and TIR. CMS events are carried over Company-owned PRN to over 300 radio stations. The Company anticipates entering into similar arrangements with PRN for events at AMS and TIR. The Company derives revenue from the sale of commercial time on PRN. None of the Company's broadcast contracts accounted for as much as 5% of total revenues in 1995.
OTHER REVENUE. The Company derives other revenue from the sale of souvenirs and concessions, from fees paid for catering "hospitality" receptions and private parties and from parking. In addition, its facilities at AMS and CMS include a total of 137 luxury suites available for leasing to corporate sponsors or others at rates per annum ranging from $15,600 to $70,000 at December 31, 1995. CMS has also constructed 40 boxes, each containing 32 seats, which are currently available for renting by corporate sponsors or others at rates per annum of $34,060. The Company's tracks and related facilities often are leased to others for use in stock car driving lessons; for testing, research and development of race cars and racing products; for use as a setting for commercials and motion pictures; and for other outdoor events.
LEGENDS CARS AND THE LEGENDS CIRCUIT
Introduced by the Company in 1992, Legends Cars are 5/8-scale versions of the modified cars driven by legendary early NASCAR racers. Designed primarily to race on "short" tracks of 3/8-mile or less, they are currently available in five body styles modelled after classic sedans and coupes. Legends Circuit races, at CMS and elsewhere, are sanctioned by a Company subsidiary. More than 750 sanctioned races were held nationwide in 1995. Beginning in 1995, Legends Cars have been manufactured by 600 Racing, at a leased 92,000-square-foot facility located approximately two miles from CMS. Prior to 1995, Legends Cars were manufactured by an unaffiliated company.
Management believes that the Legends Car is one of only a few complete race cars manufactured in the United States for a retail price of less than $12,000. At these retail prices, management believes that Legends Cars are economically affordable to a new group of racing enthusiasts who otherwise could not race on an organized circuit. A small percentage of these cars are purchased for "show" rather than racing. Legends Cars are not designed for general road use. Cars and parts are currently marketed and sold through approximately 40 distributors doing business in approximately 33 states, Canada, England, Australia and the United Arab Emirates. The Company's Legends Car business has experienced substantial growth since its inception in 1992. In 1995, it generated $8.4 million in revenue and $1.1 million in operating income.
OTHER ACTIVITIES
The Company also owns Smith Tower, a seven-story, 135,000-square foot building adjoining the main grandstand and overlooking the principal track at CMS. Smith Tower houses the Speedway Club, the corporate offices of CMS and office space leased to others. The Speedway Club is an exclusive dining and entertainment facility located on the fifth and sixth floors of Smith Tower. Open year-round, it is a focal point of the Company's efforts to improve the amenities and enhance the comfort of its facilities for the benefit of spectators.
The Company has built 46 trackside condominiums at AMS of which 34 were sold at June 30, 1996. It built and sold 40 trackside condominiums at CMS in the 1980's and another 12 units at CMS from 1991 to 1994. The CMS units were originally sold at prices ranging up to $475,000. Some are used by team owners and drivers, which is believed to enhance their commercial appeal. In addition, the Company is building 58 condominiums at TIR.
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MOTORSPORTS FACILITIES
 ATLANTA MOTOR SPEEDWAY. AMS is located on 870 acres of Company-owned land in Hampton, Georgia, approximately 30 miles south of downtown Atlanta. Built in 1960, today it is a modern, attractive facility, although it has not been enhanced to the same degree as CMS, having been acquired less than six years ago. The AMS track is a 1.5-mile banked asphalt oval in excellent condition; it was repaved in 1994. The Company has begun to improve and increase spectator seating arrangements at AMS in conjunction with the conversion of the track to a quad-oval. In the interim, it will continue to use temporary bleacher seats to partially satisfy demand at certain of its events.
BRISTOL MOTOR SPEEDWAY. In January 1996, the Company acquired 100% of the capital stock of BMS. BMS occupies approximately 100 acres in Bristol, Tennessee and is a one-half mile banked concrete oval. In 1995, BMS had revenues of $11.7 million. BMS currently sponsors four major racing events annually sanctioned by NASCAR, including two Winston Cup and two Busch Grand National events. BMS is one of the most popular facilities in the Winston Cup circuit among race fans due to its 36 degree banked turns and lighted nighttime races. Management believes that spectator demand for its Winston Cup events at BMS significantly exceeds existing permanent seating capacity.
CHARLOTTE MOTOR SPEEDWAY. CMS is located in Concord, North Carolina, approximately 12 miles northeast of downtown Charlotte. On Winston Cup race days it uses more than 1,000 acres of land, some of which is leased from others. CMS was among the first few superspeedways built and today is often described in the trade press as the most modern, attractive facility on the Winston Cup circuit. The principal track is a 1.5-mile banked asphalt "quad-oval" facility in excellent condition, having been repaved in 1994, and is the only superspeedway in North America that is lighted for nighttime racing. CMS also has three lighted "short" tracks (a 1/5-mile asphalt oval, a 1/4-mile asphalt oval and a 1/5-mile dirt oval), as well as a 2.25-mile asphalt road course. The Company has consistently improved and increased spectator seating arrangements at CMS.
TEXAS INTERNATIONAL RACEWAY. TIR, currently under construction, will be a 1.5-mile, lighted, banked asphalt quad-oval superspeedway, with anticipated permanent seating capacity for 150,000 and 205 luxury suites. TIR is expected to be the first superspeedway built in the United States since 1969. The Company expects TIR to draw spectators from throughout the south central United States. Upon completion, the Company expects TIR to be the second-largest sports facility in the United States in terms of permanent seating capacity.
INVESTMENT IN OTHER SPEEDWAY FACILITIES. In June 1995, the Company acquired 50% of the outstanding capital stock of NWS, a privately-held speedway located in northwestern North Carolina. In January 1996, an entity unaffiliated with the Company acquired the remainder of NWS' outstanding shares. Although the Company has representation on the NWS board of directors, it does not control the operations of NWS.
During the first quarter of 1995, Bruton Smith, the Company's Chairman and Chief Executive Officer, acquired approximately 24% of the outstanding common stock of North Carolina Motor Speedway, Inc. ("NCMS"), a privately held speedway in Rockingham, North Carolina. The Company also holds shares of NCMS common stock representing less than 1% of its outstanding shares. Mr. Smith has offered to sell his common stock in NCMS to the Company at his cost, although the Company has not determined at this time whether to accept this offer.
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MANAGEMENT
The directors, executive officers and certain other senior officers of the Company are as follows:

NAME                          AGE           PRINCIPAL POSITION(S) WITH THE COMPANY
O. Bruton Smith.........         70     Chief Executive Officer and Chairman*
H.A. "Humpy" Wheeler....         57     President, Chief Operating Officer and
                                        Director of SMI; President and General Manager
                                          of CMS*
William R. Brooks.......         46     Vice President, Treasurer, Chief Financial
                                        Officer and Director*
Edwin R. Clark..........         41     Executive Vice President and Director of SMI;
                                          President and General Manager of AMS*
William P. Benton.......         72     Director
Mark M. Gambill.........         45     Director
William E. Gossage......         36     Vice President and General Manager of TIR
M. Jeffrey Byrd.........         46     Vice President and General Manager of BMS	

* Executive officer. O. BRUTON SMITH has been Chief Executive Officer and a director of CMS since 1975. He was a founder of CMS in 1959 and was an executive officer and director of CMS until 1961, when it entered reorganization proceedings under the bankruptcy laws. Mr. Smith became Chief Executive Officer, President and a director of AMS upon acquiring it in 1990. He became Chief Executive Officer and Chairman of SMI upon its organization in December 1994, became the Chairman and President of BMS upon its acquisition in January 1996 and became the Chairman and President of TIR upon its founding in 1995. Mr. Smith also owns and operates Town & Country Ford, Inc. ("T&C"), among other private businesses. He was the controlling stockholder of North Carolina Federal Savings & Loan Association, a federally-chartered thrift, when it entered receivership under the Resolution Trust Corporation in March 1990. H.A. "HUMPY" WHEELER was hired in 1975 and has been a director and General Manager of CMS since 1976. Mr. Wheeler was named President of CMS in 1980, and became a director of AMS upon its acquisition in 1990. He became President, Chief Operating Officer and a director of SMI upon its organization in December 1994. Mr. Wheeler has been a Vice President and a director of BMS since its acquisition in January 1996 and a Vice President and director of TIR since its founding in 1995. WILLIAM R. BROOKS joined Sonic from Price Waterhouse in 1983. Promoted from Tax Manager to Controller in 1985, he was promoted again, to Chief Financial Officer, in 1989. Mr. Brooks has been Vice President of CMS for more than five years and has been Vice President and a director of AMS since its acquisition in 1990. He became Vice President, Treasurer, Chief Financial Officer and a director of SMI upon its organization in December 1994 and has been the President and a director of Speedway Funding Corp., the Company's financing subsidiary ("SFC"), since 1995. In January 1996, Mr. Brooks was appointed the Vice President, Secretary and Treasurer of BMS and, in 1995, the Vice President, Treasurer and director of TIR. EDWIN R. CLARK became Vice President and General Manager of AMS in 1992 and was promoted to President and General Manager of AMS in 1995. Prior to that appointment, he was CMS' Vice President of Events from 1981 to 1992. Mr. Clark became Executive Vice President of SMI upon its organization in December 1994 and became a director of SMI in 1995. WILLIAM P. BENTON became a director of SMI in 1995. Since 1986, Mr. Benton has been Vice Chairman of Wells, Rich, Greene/BDDP Inc., an advertising agency with offices in New York and Detroit. He is also a consultant to the chairmen and the chief executive officers of TI Group plc and Allied Holdings Inc. Mr. Benton retired from Ford Motor Company as its Vice President of Marketing Worldwide in 1984 after a 37-year career with that company. MARK M. GAMBILL became a director of SMI in 1995. Mr. Gambill has been employed continuously since 1972 by Wheat, First Securities, Inc., an investment banking firm headquartered in Richmond, Virginia. In 1996, he was named President of Wheat, First Securities, Inc. Previously, Mr. Gambill acted as head of the Capital
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Markets division, including Corporate and Public Finance, Taxable Fixed Income, Municipal Sales and Trading, Equity Sales, Trading and Research. Mr. Gambill also has served on the Board of Directors of Wheat, First Securities, Inc. since 1983.
WILLIAM E. GOSSAGE became Vice President and General Manager of TIR in August 1995. Before that appointment, he was Vice President of Public Relations at CMS from 1989 to 1995. Mr. Gossage previously worked with Miller Brewing Company in its motorsports public relations program and served in various public relations and managerial capacities at two other NASCAR-sanctioned tracks.
M. JEFFREY BYRD was hired effective March 1, 1996 as Vice President and General Manager of BMS. Prior to working at BMS, Mr. Byrd had been continuously employed by RJR Nabisco for 23 years in various sports marketing positions, most recently as Vice President of business development for its Sports Marketing Enterprises affiliate.
Directors are generally elected to serve in staggered terms of three years and until their successors shall have been elected and qualified. The terms of Messrs. Wheeler and Clark expire in 1997; the terms of Messrs. Smith and Benton expire in 1998; and the terms of Messrs. Brooks and Gambill expire in 1999. Officers are elected by the Board of Directors to hold office until the first meeting of the Board of Directors following the next annual meeting of stockholders and until their successors are elected and qualified.
Messrs. Benton and Gambill serve as members of the Audit Committee of the Board of Directors. Messrs. Benton, Gambill and Smith serve as members of the Compensation Committee.
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DESCRIPTION OF DEBENTURES
On October 1, 1996, the Company issued and sold, through the Initial Purchasers, an aggregate principal amount of $70,000,000 of the Debentures to "qualified institutional buyers" (as defined in Rule 144A under the Securities Act) ("Qualified Institutional Buyers") and certain other investors pursuant to Regulation S under the Securities Act in a private placement. As of the date of this Prospectus, the Debentures are issued and outstanding under an Indenture dated as of September 1, 1996 (the "Indenture") between the Company and First Union National Bank of North Carolina, as trustee (the "Trustee"). The Indenture is included as an exhibit to the Registration Statement to which this Prospectus is a part. The following summaries of certain provisions of the Indenture do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all of the provisions of the Indenture, including the definition therein of certain terms. Wherever particular sections or defined terms of the Indenture are referred to, such sections or defined terms are incorporated herein by reference.
GENERAL
The Debentures are unsecured obligations of the Company, are limited to $70.0 million in aggregate principal amount ($77.0 million if the Initial Purchaser's over-allotment option is exercised in full) and mature on September 30, 2003. The Debentures will bear interest at the rate of 5 3/4% per annum from October 1, 1996 or from the most recent Interest Payment Date to which interest has been paid or provided for, payable semi-annually on March 31 and September 30 of each year, commencing March 31, 1997, to the Person in whose name the Debenture (or any predecessor Debenture) is registered at the close of business on the preceding March 15 or September 15, as the case may be. Interest on the Debentures is paid on the basis of a 360-day year of 12 30-day months.
Principal of, and premium, if any, interest and Liquidated Damages (if any) on, the Debentures is payable (i) in respect of Debentures held of record by the Depository Trust Company ("DTC") or its nominee in same day funds on or prior to the payment dates with respect to such amounts and (ii) in respect of Debentures held of record by holders other than DTC or its nominee at the office of the Trustee, or its agent, in New York, New York. The Debentures may be surrendered for transfer, exchange or conversion at the office of the Trustee, or its agent, in New York, New York. In addition, with respect to Debentures held of record by holders other than DTC or its nominee, payment of interest and Liquidated Damages may be made at the option of the Company by check mailed to the address of the persons entitled thereto as it appears in the Register for the Debentures on the Regular Record Date for such interest. (Section 301) The Debentures will be issued only in registered form, without coupons and in denominations of $1,000 or any integral multiple thereof. No service charge will be made for any transfer or exchange of the Debentures, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge and any other expenses (including the fees and expenses of the Trustee) payable in connection therewith. The Company is not required (i) to issue, register the transfer of or exchange any Debentures during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption and ending at the close of business on the day of such mailing, or
(ii) to register the transfer of or exchange any Debenture selected for redemption in whole or in part, except the unredeemed portion of Debentures being redeemed in part. All monies paid by the Company to the Trustee or any Paying Agent for the payment of principal of and premium and interest on any Debenture which remain unclaimed for two years after such principal, premium or interest become due and payable may be repaid to the Company. Thereafter, the Holder of such Debenture may, as an unsecured general creditor, look only to the Company for payment thereof. The Indenture does not contain any provisions that would provide protection to Holders of the Debentures against a sudden and dramatic decline in credit quality of the Company resulting from any takeover, recapitalization or similar restructuring, except as described below under "Certain Rights to Require Repurchase of Debentures."
CONVERSION RIGHTS The Debentures are convertible into Common Stock at any time after November 30, 1996 and prior to redemption or final maturity, initially at the conversion price of $31.11 per share. The right to convert Debentures
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which have been called for redemption will terminate at the close of business on the second business day preceding the Redemption Date. (Section 1301) See "Optional Redemption" below.
The conversion price is subject to adjustment upon the occurrence of any of the following events: (i) the subdivision, combination or reclassification of outstanding shares of Common Stock; (ii) the payment in shares of Common Stock of a dividend or distribution on any class of capital stock of the Company;
(iii) the issuance of rights or warrants to all holders of Common Stock entitling them to acquire shares of Common Stock at a price per share less than the Current Market Price; (iv) the distribution to holders of Common Stock of shares of capital stock other than Common Stock, evidences of indebtedness or assets (including securities, but excluding dividends or distributions paid exclusively in cash and dividends, distributions, rights and warrants referred to above); (v) a distribution of cash (excluding any cash portion of a distribution resulting in an adjustment pursuant to clause (iv) above) to all holders of Common Stock in an aggregate amount that, together with (A) all other cash distributions made within the 12 months preceding such distribution and (B) any cash and the fair market value of other consideration payable in respect of any tender offer by the Company or a subsidiary of the Company for the Common Stock consummated within the 12 months preceding such distribution, exceeds 12.5% of the Company's market capitalization (being the product of the Current Market Price times the number of shares of Common Stock then outstanding) on the date fixed for determining the stockholders entitled to such distribution; and
(vi) the consummation of a tender offer made by the Company or any subsidiary of the Company for the Common Stock which involves an aggregate consideration that, together with (X) any cash and other consideration payable in respect of any tender offer by the Company or a subsidiary of the Company for the Common Stock consummated within the 12 months preceding the consummation of such tender offer and (Y) the aggregate amount of all cash distributions (excluding any cash portion of a distribution resulting in an adjustment pursuant to clause (iv) above) to all holders of the Common Stock within the 12 months preceding the consummation of such tender offer, exceeds 12.5% of the Company's market capitalization at the date of consummation of such tender offer. No adjustment of the conversion price will be required to be made until cumulative adjustments amount to at least one percent of the conversion price, as last adjusted. Any adjustment that would otherwise be required to be made shall be carried forward and taken into account in any subsequent adjustment. In addition to the foregoing adjustments, the Company will be permitted to reduce the conversion price as it considers to be advisable in order that any event treated for federal income tax purposes as a dividend of stock or stock rights will not be taxable to the holders of the Common Stock or, if that is not possible, to diminish any income taxes that are otherwise payable because of such event.
(Article Thirteen) In the case of any consolidation or merger of the Company with any other corporation (other than one in which no change is made in the Common Stock), or any sale or transfer of all or substantially all of the assets of the Company, the Holder of any Debenture then outstanding will, with certain exceptions, have the right thereafter to convert such Debenture only into the kind and amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer by a holder of the number of shares of Common Stock into which such Debenture might have been converted immediately prior to such consolidation, merger, sale or transfer; and adjustments will be provided for events subsequent thereto that are as nearly equivalent as practical to the conversion price adjustments described above. (Section 1311) Fractional shares of Common Stock will not be issued upon conversion, but, in lieu thereof, the Company will pay a cash adjustment based upon the then Closing Price at the close of business on the day of conversion. (Section 1303) If any Debentures are surrendered for conversion during the period from the opening of business on any Regular Record Date through and including the next succeeding Interest Payment Date (except any such Debentures called for redemption), such Debentures when surrendered for conversion must be accompanied by payment in next day funds of an amount equal to the interest thereon which the registered Holder on such Regular Record Date is to receive. (Section 1302) Except as described in the preceding sentence, no interest will be payable by the Company on converted Debentures with respect to any Interest Payment Date subsequent to the date of conversion. (Section 307) No other payment or adjustment for interest or dividends is to be made upon conversion.
SUBORDINATION
The payment of the principal of and premium, if any, interest and Liquidated Damages, if any, on the Debentures will, to the extent set forth in the Indenture, be subordinated in right of payment to the prior payment in full of all Senior Indebtedness. If there is a payment or distribution of assets to creditors upon any liquidation,
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dissolution, winding up, reorganization, assignment for the benefit of creditors, marshalling of assets or any bankruptcy, insolvency or similar proceedings of the Company, the holders of all Senior Indebtedness will be entitled to receive payment in full of all amounts due or to become due thereon or provision for such payment in money or money's worth before the Holders of the Debentures will be entitled to receive any payment in respect of the principal of or premium, if any, interest or Liquidated Damages, if any, on the Debentures. In the event of the acceleration of the Maturity of the Debentures, the holders of all Senior Indebtedness will first be entitled to receive payment in full in cash of all amounts due thereon or provision for such payment in money or money's worth before the Holders of the Debentures will be entitled to receive any payment for the principal of or premium, if any, interest or Liquidated Damages, if any, on the Debentures. No payments on account of principal of or premium, if any, interest or Liquidated Damages, if any, on the Debentures or on account of the purchase or acquisition of Debentures may be made if there has occurred and is continuing a default in any payment with respect to Senior Indebtedness, any acceleration of the maturity of any Senior Indebtedness or if any judicial proceeding is pending with respect to any such default. (Article Twelve)
Senior Indebtedness is defined in the Indenture as (a) all indebtedness (whether secured or unsecured) of the Company for money borrowed under the Company's revolving credit and line of credit facilities and any predecessor or successor credit facilities thereto, whether outstanding on the date of execution of the Indenture or thereafter created, incurred or assumed, (b) all indebtedness of the Company for money borrowed, whether outstanding on the date of execution of the Indenture or thereafter created, incurred or assumed, except any such other indebtedness that by the terms of the instrument or instruments by which such indebtedness was created or incurred expressly provides that it
(i) is junior in right of payment to the Debentures or (ii) ranks PARI PASSU in right of payment with the Debentures, and (c) any amendments, renewals, extensions, modifications, refinancings and refundings of any of the foregoing. The term "indebtedness for money borrowed" when used with respect to the Company is defined to mean (i) any obligation of, or any obligation guaranteed by, the Company for the repayment of borrowed money (including without limitation fees, penalties and other obligations in respect thereof), whether or not evidenced by bonds, debentures, notes or other written instruments, and reimbursement obligations for letters of credit, (ii) any deferred payment obligation of, or any such obligation guaranteed by, the Company for the payment of the purchase price of property or assets evidenced by a note or similar instrument and (iii) any obligation of, or any such obligation guaranteed by, the Company for the payment of rent or other amounts under a lease of property or assets which obligation is required to be classified and accounted for as a capitalized lease on the balance sheet of the Company under generally accepted accounting principles, but such terms shall exclude indebtedness to trade creditors.
(Section 101) The Company conducts its operations through its direct and indirect subsidiaries and has no operations of its own. The Company will be dependent upon the cash flow from its subsidiaries in order to meet its debt service obligations, including its obligations under the Debentures. The Debentures are obligations exclusively of the Company. The Company's subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due pursuant to the Debentures or to make any funds available therefor, whether by dividends, loans or other payments. In addition, the payment of dividends and certain loans and advances to the Company by such subsidiaries may be subject to certain statutory or contractual restrictions, are contingent upon the earnings of such subsidiaries and are subject to various business considerations. The Debentures are effectively subordinated to all indebtedness and other liabilities and commitments (including trade payables and lease obligations) of the Company's subsidiaries to the extent of the assets of such subsidiaries. Any right of the Company to receive assets of any such subsidiary upon the liquidation or reorganization of any such subsidiary (and the consequent right of the Holders of the Debentures to participate in those assets) will be effectively subordinated to the claims of that subsidiary's creditors, except to the extent that the Company is itself recognized as a creditor of such subsidiary, in which case the claims of the Company would still be subordinate to any security in the assets of such subsidiary and any indebtedness of such subsidiary senior to that held by the Company. All current and future amounts outstanding under the Credit Facility constitute Senior Indebtedness. The Indenture does not limit or prohibit the incurrence of Senior Indebtedness. At August 31, 1996, the aggregate amount of Senior Indebtedness outstanding and the amount of indebtedness and other liabilities of the Company and its subsidiaries to which the Debentures are effectively subordinated was approximately $41.6 million. The Company also expects to incur Senior Indebtedness from time to time in the future.
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OPTIONAL REDEMPTION
 The Debentures are redeemable, at the Company's option, in whole or from time to time in part, at any time on or after September 30, 2000, upon not less than 30 nor more than 60 days' notice mailed to each Holder of Debentures to be redeemed at its address appearing in the Security Register and prior to Maturity at the following Redemption Prices (expressed as percentages of the principal amount) plus accrued interest to the Redemption Date (subject to the right of Holders of record on the relevant Regular Record Date to receive interest due on an Interest Payment Date that is on or prior to the Redemption Date) (Article Eleven).
If redeemed during the 12-month period beginning September 30, in the year indicated, the redemption price shall be:

         REDEMPTION
YEAR       PRICE
2000       102.46%
2001       101.64%
2002       100.82%	

No sinking fund is provided for the Debentures. 
CONSOLIDATION, MERGER AND SALE OF ASSETS
 The Company will not consolidate with or merge into any other Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person unless (a) if applicable, the Person formed by such consolidation or into which the Company is merged or the Person which acquires or leases all or substantially all the properties and assets of the Company is a corporation, partnership or, trust organized and validly existing under the laws of the United States or any state thereof or the District of Columbia and expressly assumes payment of the principal of and premium, if any, and interest on the Debentures and performance and observance of each obligation of the Company under the Indenture, (b) after consummating such consolidation, merger, transfer or lease, no Default or Event of Default will occur and be continuing, (c) such consolidation, merger or acquisition does not adversely affect the validity or enforceability of the Debentures and (d) the Company has delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease complies with the provisions of the Indenture. (Section 801) 
CERTAIN RIGHTS TO REQUIRE REPURCHASE OF DEBENTURES
 In the event of any Repurchase Event (as defined below) occurring on or prior to Maturity, each Holder of Debentures will have the right, at the Holder's option, to require the Company to repurchase all or any part of the Holder's Debentures on the date (the "Repurchase Date") that is 30 days after the date the Company gives notice of the Repurchase Event as described below at a price (the "Repurchase Price") equal to 100% of the principal amount thereof, together with accrued and unpaid interest to the Repurchase Date. (Section 1401) On or prior to the Repurchase Date, the Company shall deposit with the Trustee or a Paying Agent an amount of money sufficient to pay the Repurchase Price of the Debentures which are to be repaid on or promptly following the Repurchase Date. (Section 1403)
Failure by the Company to provide timely notice of a Repurchase Event, as provided for below, or to repurchase the Debentures when required under the preceding paragraph will result in an Event of Default under the Indenture whether or not such repurchase is permitted by the subordination provisions of the Indenture. (Section 501)
On or before the 15th day after the occurrence of a Repurchase Event, the Company is obligated to mail to all Holders of Debentures a notice of the occurrence of such Repurchase Event and identifying the Repurchase Date, the date by which the repurchase right must be exercised, the Repurchase Price for Debentures and the procedures which the Holder must follow to exercise this right. To exercise the repurchase right, the Holder of a Debenture must deliver, on or before the close of business on the Repurchase Date, written notice to the Company (or an agent designated by the Company for such purpose) and to the Trustee of the Holder's exercise of such right, together with the certificates evidencing the Debentures with respect to which the right is being exercised, duly endorsed for transfer. (Section 1402)
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A "Repurchase Event" shall have occurred upon the occurrence of a Change in Control (as defined below) or a Termination of Trading (as defined below).
(Section 1406)
A "Change in Control" shall occur when: (i) all or substantially all of the Company's assets are sold as an entirety to any person or related group of persons; (ii) there shall be consummated any consolidation or merger of the Company (A) in which the Company is not the continuing or surviving corporation (other than a consolidation or merger with a wholly owned subsidiary of the Company in which all shares of Common Stock outstanding immediately prior to the effectiveness thereof are changed into or exchanged for the same consideration) or (B) pursuant to which the Common Stock would be converted into cash, securities or other property, except in the case of (A) and (B), a consolidation or merger of the Company in which the holders of the Common Stock immediately prior to the consolidation or merger have, directly or indirectly, at least a majority of the total voting power of all classes of capital stock entitled to vote generally in the election of directors of the continuing or surviving corporation immediately after such consolidation or merger in substantially the same proportion as their ownership of Common Stock immediately before such transaction; (iii) any person, or any persons acting together which would constitute a "group" for purposes of Section 13(d) of the Exchange Act, together with any affiliates thereof (excluding, for purposes of this clause, O. Bruton Smith, Sonic Financial Corporation and their affiliates) shall beneficially own (as defined in Rule 13d-3 under the Exchange Act) at least 50% of the total voting power of all classes of capital stock of the Company entitled to vote generally in the election of directors of the Company; (iv) at any time during any consecutive two-year period, individuals who at the beginning of such period constituted the Board of Directors of the Company (together with any new directors whose election by such Board of Directors or whose nomination for election by the stockholders of the Company was approved by a vote of 66 2/3% of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of the Company then in office; or (v) the Company is liquidated or dissolved or adopts a plan of liquidation or dissolution. (Section 1406) A "Termination of Trading" shall occur if the Common Stock (or other common stock into which the Debentures are then convertible) is neither listed for trading on a U.S. national securities exchange nor approved for trading on an established automated over-the-counter trading market in the United States.
(Section 1406)
The right to require the Company to repurchase Debentures as a result of the occurrence of a Repurchase Event could create an event of default under Senior Indebtedness of the Company, as a result of which any repurchase could, absent a waiver, be blocked by the subordination provisions of the Debentures. See "Subordination." Failure by the Company to repurchase the Debentures when required will result in an Event of Default with respect to the Debentures whether or not such repurchase is permitted by the subordination provisions. The Company's ability to pay cash to the Holders of Debentures upon a repurchase may be limited by certain financial covenants contained in the Company's Senior Indebtedness.
In the event a Repurchase Event occurs and the Holders exercise their rights to require the Company to repurchase Debentures, the Company intends to comply with applicable tender offer rules under the Exchange Act, including Rules 13e-4 and 14e-1, as then in effect, with respect to any such purchase.
The foregoing provisions would not necessarily afford Holders of the Debentures protection in the event of highly leveraged or other transactions involving the Company that may adversely affect Holders. In addition, the foregoing provisions may discourage open market purchases of the Common Stock or a non-negotiated tender or exchange offer for such stock and, accordingly, may limit a stockholder's ability to realize a premium over the market price of the Common Stock in connection with any such transaction.
LIMITATIONS ON DISPOSITION OF STOCK OF MATERIAL SUBSIDIARIES The Company will not issue, sell, transfer or otherwise dispose of any shares of, securities convertible into or warrants, rights or options to subscribe for or purchase shares of, capital stock (other than preferred stock having no voting rights of any kind) of any of its Material Subsidiaries nor will it permit any of its Material Subsidiaries to issue, sell, transfer or otherwise dispose of any shares (other than directors' qualifying shares) of, or securities convertible into, or warrants, rights or options to subscribe for or purchase shares of, capital stock (other than preferred stock having no voting rights of any kind) of any of the Company's Material Subsidiaries if, after giving effect to any such transaction and the issuances of the maximum number of shares issuable upon the conversion or exercise of all such convertible securities, warrants, rights or options, the Company would own,
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directly or indirectly, less than 80% of the shares of any of its Material Subsidiaries (other than preferred stock having no voting rights of any kind); PROVIDED, HOWEVER, that (i) any issuance, sale, transfer or other disposition permitted by the foregoing may only be made for at least a fair market value consideration, and (ii) the foregoing shall not prohibit any such issuance or disposition of securities if required by any law or any regulation or order of any governmental or regulatory authority. Notwithstanding the foregoing, (iii) the Company may merge or consolidate any of its Material Subsidiaries into or with another direct wholly-owned Subsidiary of the Company and (iv) the Company may, subject to the Indenture, sell, transfer or otherwise dispose of the entire capital stock of any of its Material Subsidiaries at one time for at least a fair market value consideration. (Section 1008) As of the date of this Prospectus, the Company's Material Subsidiaries consist of Atlanta Motor Speedway, Inc., Bristol Motor Speedway, Inc., Charlotte Motor Speedway, Inc. and Texas Motor Speedway, Inc. d/b/a Texas International Raceway.
RULE 144A INFORMATION REQUIREMENT
The Company has agreed to furnish to the Holders or beneficial holders of the Debentures and prospective purchasers of the Debentures designated by the Holders of the Debentures, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act until such time as the Company registers the Debentures and the Shares for resale under the Securities Act. (Section 705)
EVENTS OF DEFAULT
 The following are Events of Default under the Indenture with respect to the Debentures: (a) default in the payment of principal of or premium, if any, on any Debenture when due (even if such payment is prohibited by the subordination provisions of the Indenture); (b) default in the payment of any interest on, or Liquidated Damages with respect to, any Debenture when due, which default continues for 30 days (even if such payment is prohibited by the subordination provisions of the Indenture); (c) failure to provide timely notice of a Repurchase Event as required by the Indenture; (d) default in the payment of the Repurchase Price in respect of any Debenture on the Repurchase Date therefor (even if such payment is prohibited by the subordination provisions of the Indenture); (e) default in the performance, or breach, of any other covenant of the Company in the Indenture which continues for 60 days after written notice as provided in the Indenture; (f) default under any bond, debenture, note or other evidence of indebtedness for money borrowed by the Company or any subsidiary of the Company or under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by the Company or any subsidiary of the Company, whether such indebtedness now exists or shall hereafter be created, which default shall constitute a failure to pay the principal of indebtedness in excess of $5,000,000 when due and payable after the expiration of any applicable grace period with respect thereto or shall have resulted in indebtedness in excess of $5,000,000 becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, without such indebtedness having been discharged, or such acceleration having been rescinded or annulled, within a period of 30 days after there shall have been given to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Outstanding Debentures a written notice specifying such default and requiring the Company to cause such indebtedness to be discharged or cause such acceleration to be rescinded or annulled; and (g) certain events in bankruptcy, insolvency or reorganization of the Company or any Material Subsidiary of the Company. (Section 501) If an Event of Default with respect to the Debentures shall occur and be continuing, the Trustee or the Holders of not less than 25% in aggregate principal amount of the Outstanding Debentures then outstanding may declare the principal of, premium, if any, and interest accrued on the Debentures to the date of declaration and Liquidated Damages, if any, on all such Debentures to be due and payable immediately, but if the Company cures all Events of Default (except the nonpayment of interest on, premium, if any, and principal of any Debentures) and certain other conditions are met, such declaration may be canceled and past defaults may be waived by the holders of a majority in principal amount of Outstanding Debentures. If an Event of Default shall occur as a result of an event of bankruptcy, insolvency or reorganization of the Company or any subsidiary of the Company, the principal of, premium, if any, accrued and unpaid interest and Liquidated Damages, if any, on the Debentures shall automatically become due and payable. (Section 502) The Company is required to furnish to the Trustee annually a statement as to the performance by the Company of certain of its obligations under the Indenture and as to any default in such performance. (Section 1004) The Indenture provides that the Trustee may withhold
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notice to the Holders of the Debentures of any continuing default (except in the payment of the principal of or premium, if any, or interest on any Debentures) if the Trustee considers it in the interest of Holders of the Debentures to do so. (Section 602)
MODIFICATION, AMENDMENTS AND WAIVERS
 Except as provided in the next two succeeding paragraphs, the Indenture or the Debentures may be amended or supplemented with the consent of the Holders of not less than a majority in principal amount of the Debentures, and any past default hereunder and its consequences may be waived by the Holders of not less than a majority in principal amount of the Debentures. (Article Nine and Section 513)
Without the consent of the Holder of each Outstanding Debenture affected, an amendment or supplement may not: (i) change the Maturity of the principal of, or any installment of interest on, any Debenture, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or change the place of payment where, or the coin or currency in which, any Debenture or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or adversely affect the right to convert any Debenture as provided in the Indenture, or modify the provisions of the Indenture relating to the Holder's right to require repurchase, or the provisions of the Indenture with respect to the subordination of the Debentures, in a manner adverse to the Holders; (ii) reduce the percentage in principal amount of the Debentures, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver of compliance with certain provisions of the Indenture or certain defaults thereunder and their consequences provided for in the Indenture; (iii) make any change in the Indenture relating to waivers of past Defaults or the right of Holders of Debentures to receive payments of principal of, premium, if any, interest or Liquidated Damages, if any, on the Debentures; or (iv) modify any of the provisions of the Indenture relating to amendment, supplement or waiver (except to increase any such percentage or to provide that certain other provisions of the Indenture cannot be modified or waived without the consent of the Holder of each Debenture affected). (Section 902)
Modifications and amendments of the Indenture may be made by the Company and the Trustee without the consent of the Holders to: (a) cause the Indenture to be qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"); (b) evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company herein and in the Debentures; (c) add to the covenants of the Company for the benefit of the Holders or an additional Event of Default, or surrender any right or power conferred upon the Company; (d) secure the Debentures; (e) make provision with respect to the conversion rights of Holders in the event of a consolidation, merger or sale of assets involving the Company, as required by the Indenture; (f) evidence and provide for the acceptance of appointment by a successor Trustee with respect to the Debentures; (g) cure any ambiguity, correct or supplement any provision which may be defective or inconsistent with any other provision, or make any other provisions with respect to matters or questions arising under the Indenture which shall not be inconsistent with the provisions of the Indenture, PROVIDED, HOWEVER, that no such modifications or amendment may adversely affect the interest of Holders in any material respect.
(Section 901)
BOOK-ENTRY, DELIVERY AND FORM
 The Debentures that were sold to Qualified Institutional Buyers in the Debenture Offering in reliance on Rule 144A under the Securities Act are represented by a single global Debenture (the "Rule 144A Global Security") which was deposited with, or on behalf of, DTC and registered in the name of DTC or its nominee (the "Global Security Holder"). (Section 201) Except as set forth below, the Rule 144A Global Security may be transferred, in whole and not in part, only to DTC or another nominee of DTC. Investors may hold their beneficial interests in the Rule 144A Global Security directly through DTC if they are Participants in such system or indirectly through organizations that are Participants in such system. (Section 304) The Debentures that were sold outside of the United States in the Debenture Offering in reliance on Regulation S under the Securities Act are represented by the Regulation S Temporary Global Security. The Regulation S Temporary Global Security was deposited on behalf of the subscribers therefor with a custodian for DTC. The
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Regulation S Temporary Global Security is registered in the name of DTC or its nominee for credit to the subscribers' respective accounts at Morgan Guaranty Trust Company of New York, Brussels office, as operator of Euroclear or Cedel Bank. Beneficial interests in the Regulation S Temporary Global Security may be held only through Euroclear or Cedel Bank. (Section 201) Within a reasonable period of time after the expiration of the 40-day restricted period referred to in Rule 903(c)(3) of Regulation S under the Securities Act (the "40-day restricted period"), the Regulation S Temporary Global Security will be exchanged for the Regulation S Permanent Global Security upon delivery to DTC of certification of compliance with the transfer restrictions applicable to the Debentures and pursuant to Regulation S under the Securities Act as provided in the Indenture. (Section 304) The Regulation S Permanent Global Security will be deposited with a custodian and will be registered in the name of a nominee of DTC. (Section 201) Cedel Bank and Euroclear will hold beneficial interests in the Regulation S Permanent Global Security on behalf of their participants through their respective depositaries, which in turn will hold such beneficial interests in the Regulation S Permanent Global Security in participants' securities accounts in the depositaries' names on the books of DTC.
Prior to and after the expiration of the 40-day restricted period, a beneficial interest in the Regulation S Temporary Global Security may be transferred to a person who takes delivery in the form of an interest in the Rule 144A Global Security only upon receipt by the Trustee of a written certification from the transferor in the form required by the Indenture to the effect that such transfer is being made (i) to a person whom the transferor reasonably believes is a Qualified Institutional Buyer in a transaction meeting the requirements under the Securities Act (in which case such certificate must be accompanied by an opinion of counsel regarding the availability of such exemption) and (ii) in accordance with all applicable securities laws of any state of the United States or any other jurisdiction. Beneficial interests in the Rule 144A Global Security may be transferred to a person who takes delivery in the form of an interest in the Regulation S Temporary or Permanent Global Security, whether before, on or after the 40-day restricted period, only upon receipt by the Trustee of a written certification from the transferor in the form required by the Indenture to the effect that such transfer is being made in accordance with Regulation S. Any beneficial interest in one of the Global Securities that is transferred to a person who takes delivery in the form of an interest in another Global Security will, upon transfer, cease to be an interest in such Global Security and become an interest in such other Global Security and, accordingly, will thereafter be subject to all transfer restrictions and other procedures applicable to beneficial interests in such other Global Security for as long as it remains such an interest. (Section 304) Because of time zone differences, the securities accounts of Euroclear or Cedel Bank participants (each, a "Member Organization") purchasing an interest in a Global Security from a Depositary Participant that is not a Member Organization will be credited during the securities settlement processing day
(which must be a business day for Euroclear or Cedel Bank, as the case may be)
immediately following the Depositary settlement date. Transactions in interests in a Global Security settled during any securities settlement processing day will be reported to the relevant Member Organization on the same day. Cash received in Euroclear or Cedel Bank as a result of sales of interests in a Global Security by or through a Member Organization to a Depositary Participant that is not a Member Organization will be received with value on the Depositary settlement date, but will not be available in the relevant Euroclear or Cedel Bank cash account until the business day following settlement at the Depositary. The Debentures have been designated for trading in the PORTAL Market.
Subject to compliance with the transfer restrictions applicable to the Global Securities described above and in the Indenture, cross-market transfers between holders of interests in the Rule 144A Global Security, on the one hand, and direct or indirect account holders at a Member Organization holding interests in the Regulation S Permanent Global Security, on the other, will be effected through the Depositary in accordance with the Depositary's rules and the rules of Euroclear or Cedel Bank, as applicable. Such cross-market transactions will require, among other things, delivery of instructions by such Member Organization to Euroclear or Cedel Bank, as the case may be, in accordance with the rules and procedures and within deadlines (Brussels time) established in Euroclear or Cedel Bank, as the case may be. If the transaction complies with all relevant requirements, Euroclear or Cedel Bank, as the case may be, will then deliver instructions to its depositary to take action to effect final settlement on its behalf.
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DTC is a limited-purpose trust company that was created to hold securities for its participating organizations (collectively, the "Participants" or "DTC's Participants") and to facilitate the clearance and settlement of transactions in such securities between Participants through electronic book-entry changes in accounts of its Participants. DTC's Participants include securities brokers and dealers (including the Initial Purchasers), banks and trust companies, clearing corporations and certain other organizations. Access to the Depositary's system is also available to other entities such as banks, brokers, dealers and trust companies (collectively, the "Indirect Participants" or "DTC's Indirect Participants") that clear through or maintain a custodial relationship with a Participant, either directly or indirectly. Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through DTC's Participants or DTC's Indirect Participants.
Pursuant to procedures established by DTC (i) upon the issuance of the Rule 144A Global Securities, the Regulation S Temporary Global Securities or the Regulation S Permanent Global Securities (each, a "Global Security" and together, the "Global Securities"), DTC will credit the accounts of Participants designated by the Initial Purchaser with portions of the principal amount of the Global Securities and (ii) ownership of the Debentures evidenced by the Global Securities will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC (with respect to the interests of the Depositary's Participants), DTC's Participants and DTC's Indirect Participants. Prospective purchasers are advised that the laws of some states require that certain persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer Debentures evidenced by the Global Securities will be limited to such extent.
So long as the Global Security Holder is the registered owner of any Debentures, the Global Security Holder will be considered the sole Holder under the Indenture of any Debentures evidenced by the Global Securities. Beneficial owners of Debentures evidenced by the Global Securities will not be considered the owners or holders thereof under the Indenture for any purpose, including with respect to the giving of any directions, instructions or approvals to the Trustee thereunder. Neither the Company nor the Trustee will have any responsibility or liability for any aspect of the records of DTC or for maintaining, supervising or reviewing any records of DTC relating to the Debentures.
Payments in respect of the principal of, premium, if any, interest and Liquidated Damages, if any, on any Debentures registered in the name of the Global Security Holder on the applicable Record Date will be payable by the Trustee to or at the direction of the Global Security Holder in its capacity as the registered holder under the Indenture. Under the terms of the Indenture, the Company and the Trustee may treat the persons in whose names Debentures, including the Global Securities, are registered as the owners thereof for the purpose of receiving such payments. Consequently, neither the Company nor the Trustee has or will have any responsibility or liability for the payment of such amounts to beneficial owners of Debentures (including principal, premium, if any, interest and Liquidated Damages, if any). The Company believes, however, that it is currently the policy of DTC to immediately credit the accounts of the relevant Participants with such payments, in amounts proportionate to their respective holdings of beneficial interests in the relevant security as shown on the records of DTC. Payments by Participants and Indirect Participants to the beneficial owners of Debentures will be governed by standing instructions and customary practice and will be the responsibility of Participants or Indirect Participants.
PAYMENTS; CERTIFICATIONS BY HOLDERS OF THE REGULATION S TEMPORARY GLOBAL SECURITY
A holder of a beneficial interest in the Regulation S Temporary Global Security must provide Euroclear or Cedel Bank, as the case may be, with a certificate in the form required by the Indenture certifying that the beneficial owner of the interest in the Regulation S Temporary Global Security is either not a U.S. Person (as defined below) or has purchased such interest in a transaction that is exempt from the registration requirements under the Securities Act and is in the process of obtaining a beneficial interest in the Rule 144A Global Security in exchange for its beneficial interest in the Regulation S Temporary Global Security (the "Regulation S Certificate"), and Euroclear or Cedel Bank, as the case may be, must provide to the Trustee (or the Paying Agent if other than the Trustee) a certificate in the form required by the Indenture, prior to (i) the payment of interest or principal with respect to such holder's beneficial interest in the Regulation S Temporary Global Security and (ii) any exchange of such beneficial interest for a beneficial interest in the Regulation S Permanent Global Security. "U.S. Person" means (i) any individual resident in the United States, (ii) any partnership or corporation organized or incorporated under the laws of the United States, (iii) any estate of which any executor or administrator is a U.S. Person (other than an estate governed by foreign law and of which at least one executor or administrator is a non-U.S. Person who has sole or shared investment discretion with respect to its assets), (iv) any trust of which
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any trustee is a U.S. Person (other than a trust of which at least one trustee is a non-U.S. Person who has sole or shared investment discretion with respect to its assets and no beneficiary of the trust (and no settlor if the trust is revocable) is a U.S. Person), (v) any agency or branch of a foreign entity located in the United States, (vi) any non-discretionary or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. Person, (vii) any discretionary or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated or (if an individual) resident in the United States (other than such an account held for the benefit or account of a non-U.S. Person) and (viii) any partnership or corporation organized or incorporated under the laws of a foreign jurisdiction and formed by a U.S. Person principally for the purpose of investing in securities not registered under the Securities Act (unless it is organized or incorporated, and owned, by accredited investors within the meaning of Rule 501(a) under the Securities Act who are not natural persons, estates or trusts); provided, however, that the term "U.S. Person" shall not include (A) a branch or agency of a U.S. Person that is located and operating outside the United States for valid business purposes as a locally regulated branch or agency engaged in the banking or insurance business, (B) any employee benefit plan established and administered in accordance with the law, customary practices and documentation of a foreign country and (C) the international organizations set forth in Section 902(c)(7) of Regulation S under the Securities Act and any other similar international organizations, and their agencies, affiliates and pension plans. (Section 304) 
CERTIFICATED SECURITIES
 Subject to certain conditions, any person having a beneficial interest in the Global Securities may, upon request to the Trustee, exchange such beneficial interest for Debentures evidenced by registered, definitive Certificated Securities. Upon any such issuance, the Trustee is required to register such Certificated Securities in the name of, and cause the same to be delivered to, such person or persons (or the nominee of any thereof). All such Certificated Securities may be subject to legend requirements as provided in the Indenture. In addition, if (i) the Company notifies the Trustee in writing that DTC is no longer willing or able to act as a depositary and the Company is unable to locate a qualified successor within 90 days or (ii) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of Debentures in the form of Certificated Securities under the Indenture, then, upon surrender by the Global Security Holder of its Global Securities, Debentures in such form will be issued to each person that the Global Security Holder and DTC identify as being the beneficial owner of the related Debentures.
(Section 304)
Neither the Company nor the Trustee will be liable for any delay by the Global Security Holder or DTC in identifying the beneficial owners of Debentures and the Company and the Trustee may conclusively rely on, and will be protected in relying on, instructions from the Global Security Holder or DTC for all purposes.
SAME-DAY SETTLEMENT AND PAYMENT
The Indenture requires that payments in respect of the Debentures represented by the Global Security (including principal, premium, if any, interest and Liquidated Damages, if any) be made by wire transfer of immediately available funds to the accounts specified by the Global Security Holder. With respect to Certificated Securities, the Company will make all payments of principal, premium, if any, interest and Liquidated Damages, if any, by wire transfer of immediately available funds to the accounts specified by the Holders thereof or, if no such account is specified, by mailing a check to each such Holder's registered address. Secondary trading in long-term notes and debentures of corporate issuers is generally settled in clearing-house or next-day funds. In contrast, the Debentures represented by the Global Security are eligible to trade in the PORTAL Market (and the Company intends to apply for listing of the Debentures on the NYSE) and to trade in the Depositary's Same-Day Funds Settlement System, and any permitted secondary market trading activity in such Debentures will, therefore, be required by the Depositary to be settled in immediately available funds. The Company expects that secondary trading in the Certificated Securities also will be settled in immediately available funds.
REGISTRATION RIGHTS; LIQUIDATED DAMAGES
Pursuant to a registration rights agreement dated as September 26, 1996 (the "Registration Rights Agreement") the Company agreed for the benefit of the Holders, that (i) it would, at its cost, within 60 days after the closing of the Debenture Offering (the "Debenture Closing"), file a shelf registration statement (the "Shelf Registration Statement") with the Commission with respect to resales of the Debentures and the Shares, (ii) it will use
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its best efforts to cause such Shelf Registration Statement to be declared effective by the Commission within 150 days after the Debenture Closing, and
(iii) it will use its best efforts to keep such Shelf Registration Statement continuously effective under the Securities Act until, subject to certain exceptions specified in the Registration Rights Agreement, October 1, 1999. The Registration Statement of which this Prospectus is a part has been filed pursuant to such agreement. The Company will be permitted to suspend use of the prospectus that is part of the Shelf Registration Statement during certain periods of time and in certain circumstances relating to pending corporate developments and public filings with the Commission and similar events. If (a) the Company fails to file the Shelf Registration Statement required by the Registration Rights Agreement on or before the date specified for such filing,
(b) such Shelf Registration Statement is not declared effective by the Commission on or prior to the date specified for such effectiveness (the "Effectiveness Target Date") or (c) the Shelf Registration Statement is declared effective but thereafter ceases to be effective in connection with resales of Transfer Restricted Securities (as defined below) during the periods specified in the Registration Rights Agreement (each such event referred to in clauses (a) through (c) above a "Registration Default"), then the Company will pay Liquidated Damages to each Holder, with respect to the first 90-day period immediately following the occurrence of such Registration Default in an amount equal to $0.05 per week per $1,000 aggregate principal amount of the Debentures (and $0.01 per week per Share) held by such Holder. The amount of the Liquidated Damages will increase by an additional $0.05 per week per $1,000 aggregate principal amount of the Debentures (and $0.01 per week per Share) held by each Holder with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of Liquidated Damages of $0.25 per week per $1,000 aggregate principal amount of the Debentures (and $0.05 per week per Share) held by each Holder. All accrued Liquidated Damages will be paid by the Company on each Interest Payment Date in cash. Such payment will be made to the Holder of the Global Securities by wire transfer of immediately available funds or by federal funds check and to Holders of Certificated Securities, if any, by wire transfer to the accounts specified by them or by mailing checks to their registered addresses if no such accounts have been specified. Following the cure of all Registration Defaults, the accrual of Liquidated Damages will cease. For purposes of the foregoing, "Transfer Restricted Securities" means each Debenture and each Share until the earlier of (i) the date on which such Debenture or Share has been effectively registered under the Securities Act and disposed of pursuant to an effective registration statement, (ii) the date on which such Debenture or Share is distributed to the public pursuant to Rule 144 under the Securities Act (or any similar provision then in effect) or is saleable pursuant to Rule 144(k) under the Securities Act and all legends thereon relating to transfer restrictions have been removed, or (iii) the date on which such Debenture or Share ceases to be outstanding. Holders of Debentures will be required to deliver information to be used in connection with the Shelf Registration Statement within time periods set forth in the Registration Rights Agreement in order to have their Debentures or Shares included in the Shelf Registration Statement and benefit from the provisions regarding Liquidated Damages set forth above. The Company will provide to each registered holder of the Debentures or the Shares, who is named in the prospectus and who so requests in writing, copies of the prospectus which will be a part of such Shelf Registration Statement, notify each of the Initial Purchasers when such Shelf Registration Statement for the Debentures and Shares has become effective and take certain other actions as are required to permit unrestricted resales of the Debentures and Shares. A holder of Debentures or Shares that sells such Securities pursuant to a Shelf Registration Statement generally will be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the Registration Rights Agreement which are applicable to such a holder (including certain indemnification and contribution rights and obligations). The foregoing summary of certain provisions of the Registration Rights Agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the provisions of the Registration Rights Agreement. The Registration Rights Agreement is included as an exhibit to the Registration Statement to which this Prospectus is a part.
GOVERNING LAW
The Indenture and Debentures are governed by and construed in accordance with the laws of the State of New York, without giving effect to such State's conflicts of laws principles. (Section 112)
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INFORMATION CONCERNING THE TRUSTEE
 The Company and its subsidiaries may maintain deposit accounts and conduct other banking transactions with the Trustee in the ordinary course of business.
ABSENCE OF PUBLIC TRADING MARKET
As of the date of this Prospectus, the Debentures are owned by a small number of institutional investors, and prior to this Offering there has not been any public market for the Debentures. There can be no assurance as to the liquidity of any markets that may develop for the Debentures, the ability of the holders to sell their Debentures or at what price holders of the Debentures will be able to sell their Debentures. Future trading prices of the Debentures will depend upon many factors including, among other things, prevailing interest rates, the Company's operating results, the price of the Common Stock and the market for similar securities. The Initial Purchasers have informed the Company that they intend to make a market in the Debentures offered hereby; however, the Initial Purchasers are not obligated to do so and any such market making activity may be terminated at any time without notice to the holders of the Debentures. See " -- Registration Rights; Liquidated Damages." The Debentures have been designated for trading in the PORTAL Market and the Company intends to apply for listing of the Debentures on the NYSE.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of certain United States federal income tax considerations to holders of the Debentures. This discussion is based upon the Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations, Internal Revenue Service ("IRS") rulings, and judicial decisions now in effect, all of which are subject to change (possibly with retroactive effect) or different interpretations.
This discussion does not deal with all aspects of United States federal income taxation that may be important to holders of the Debentures or shares of Common Stock and does not deal with tax consequences arising under the laws of any foreign, state or local jurisdiction. This discussion is for general information only, and does not purport to address all tax consequences that may be important to particular purchasers in light of their personal circumstances, or to certain types of purchasers (such as certain financial institutions, insurance companies, tax-exempt entities, dealers in securities or persons who hold the Debentures or Common Stock in connection with a straddle) that may be subject to special rules. This discussion assumes that each holder holds the Debentures and the shares of Common Stock received upon conversion thereof as capital assets.
For the purpose of this discussion, a "Non-U.S. Holder" refers to any holder who is not a United States person. The term "United States person" means a citizen or resident of the United States, a corporation or partnership created or organized in the United States or any state thereof, or an estate or trust the income of which is includible in income for United States federal income tax purposes regardless of its source. (Generally, for tax years beginning after December 31, 1996, a trust is a United States person only if (i) a court within the United States is able to exercise primary supervision over the administration of the trust, and (ii) one or more United States fiduciaries have the authority to control all substantial trust decisions.)
PROSPECTIVE PURCHASERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THEIR OWNERSHIP AND DISPOSITION OF THE DEBENTURES, INCLUDING CONVERSION OF THE DEBENTURES, AND THE EFFECT THAT THEIR PARTICULAR CIRCUMSTANCES MAY HAVE ON SUCH TAX CONSEQUENCES.
OWNERSHIP OF THE DEBENTURES
INTEREST ON DEBENTURES. Interest on Debentures will be taxable to a holder as ordinary interest income in accordance with the holder's methods of tax accounting at the time that such interest is accrued or (actually or constructively) received. The Debentures were not issued with original issue discount ("OID") within the meaning of the Code.
CONSTRUCTIVE DIVIDEND. Adjustments to the conversion rate as provided in the Indenture in most cases will not constitute a taxable event for a Holder. However, certain corporate transactions, such as distributions of assets to holders of Common Stock, may cause a deemed distribution to the holders of the Debentures if the conversion price or conversion ratio of the Debentures is adjusted to reflect such corporate transaction. Such deemed distributions will be taxable as a dividend, return of capital, or capital gain in accordance with the earnings and profits rules discussed under "Dividends on Shares of Common Stock."
SALE OR EXCHANGE OF DEBENTURES OR SHARES OF COMMON STOCK. In general, a holder of Debentures will recognize gain or loss upon the sale, redemption, retirement or other disposition of the Debentures measured by the difference between the amount of cash and the fair market value of any property received (except to the extent attributable to the payment of accrued interest) and the holder's adjusted tax basis in the Debentures. A holder's tax basis in Debentures generally will equal the cost of the Debentures to the holder increased by the amount of market discount, if any, previously taken into income by the holder or decreased by any bond premium theretofore amortized by the holder with respect to the Debentures. (For the basis and holding period of shares of Common Stock, see "Conversion of Debentures.") In general, each holder of Common Stock into which the Debentures have been converted will recognize gain or loss upon the sale, exchange, redemption, or other disposition of the Common Stock under rules similar to those applicable to the Debentures. Special rules may apply to redemptions of the Common Stock which may result in the amount paid being treated as a dividend. Subject to the market discount rules discussed below, the gain or loss on the disposition of the Debentures or shares of Common Stock will be capital gain or loss and will be long-term gain or loss if the Debentures or shares of Common Stock have been held for more than one year at the time of such disposition.
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CONVERSION OF DEBENTURES. A holder of Debentures will not recognize gain or loss on the conversion of the Debentures solely into shares of Common Stock. The holder's tax basis in the shares of Common Stock received upon conversion of the Debentures will be equal to the holder's aggregate basis in the Debentures exchanged therefor (less any portion thereof allocable to cash received in lieu of a fractional share). The holding period of the shares of Common Stock received by the holder upon conversion of Debentures will generally include the period during which the holder held the Debentures prior to the conversion. Cash received in lieu of a fractional share of Common Stock should be treated as a payment in exchange for such fractional share rather than as a dividend. Gain or loss recognized on the receipt of cash paid in lieu of such fractional shares generally will equal the difference between the amount of cash received and the amount of tax basis allocable to the fractional shares.
MARKET DISCOUNT. The resale of Debentures may be affected by the "market discount" provisions of the Code. For this purpose, the market discount on a Debenture will generally be equal to the amount, if any, by which the stated redemption price at maturity of the Debenture immediately after its acquisition exceeds the holder's tax basis in the Debenture. Subject to a de minimis exception, these provisions generally require a holder of a Debenture acquired at a market discount to treat as ordinary income any gain recognized on the disposition of such Debenture to the extent of the "accrued market discount" on such Debenture at the time of disposition. If a Debenture with accrued market discount is converted into Common Stock pursuant to the conversion feature, the amount of such accrued market discount generally will be taxable as ordinary income upon disposition of the Common Stock. In general, market discount on a Debenture will be treated as accruing on a straight-line basis over the term of such Debenture, or, at the election of the holder, under a constant yield method. A holder of a Debenture acquired at a market discount may be required to defer the deduction of a portion of the interest on any indebtedness incurred or maintained to purchase or carry the Debenture until the Debenture is disposed of in a taxable transaction, unless the holder elects to include accrued market discount in income currently.
AMORTIZABLE PREMIUM. A purchaser of a Debenture at a premium over its stated principal amount, plus accrued interest, generally may elect to amortize such premium ("Section 171 premium") from the purchase date to the Debenture's maturity date, under a constant yield method that reflects semiannual compounding based on the Debenture's payment period. Amortizable premium, however, will not include any premium attributable to a Debenture's conversion feature. The premium attributable to the conversion feature is the excess, if any, of the Debenture's purchase price over what would be the Debenture's fair market value if there were no conversion feature. That hypothetical fair market value is to be determined by reference to nonconvertible bonds of similar character. Except as otherwise may be provided in Treasury Regulations, amortized Section 171 premium is treated as an offset to interest income on a Debenture and not as a separate deduction. Recently proposed regulations would treat amortized Section 171 premium only as an offset to interest income on a Debenture and not as a separate deduction.
DIVIDENDS ON SHARES OF COMMON STOCK. Distributions on shares of Common Stock will constitute dividends for United States federal income tax purposes to the extent of current or accumulated earnings and profits of the Company as determined under United States federal income tax principles. Dividends paid to holders that are United States corporations may qualify for the dividends-received deduction. To the extent, if any, that a holder receives distributions on shares of Common Stock that would otherwise constitute a dividend for United States federal income tax purposes but that exceed current and accumulated earnings and profits of the Company, such distribution will be treated first as a non-taxable return of capital reducing the holder's basis in the shares of Common Stock. Any such distribution in excess of the holder's basis in the shares of Common Stock generally will be treated as capital gain.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS APPLICABLE TO NON-U.S. HOLDERS INTEREST ON DEBENTURES. Generally, interest paid on the Debentures to a Non U.S.-Holder will not be subject to United States federal income tax if: such interest is not effectively connected with the conduct of a trade or business within the United States by such Non-U.S. Holder; the Non-U.S. Holder does not actually or constructively own 10% or more of the total voting power of all classes of stock of the Company entitled to vote and is not a "controlled foreign corporation" with respect to which the Company is a "related person" within the meaning of the Code; and the beneficial owner, under penalty of perjury, certifies to the payor that the owner is not a United States person and provides the owner's name and address. If certain requirements are satisfied, the certification described above may be provided by a securities clearing organization, a bank, or other financial institution that holds customers' securities in the ordinary course of its trade or business. For this purpose, the holder of
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Debentures would be deemed to own constructively the Common Stock into which it could be converted. A holder that is not exempt from tax under these rules will be subject to United States federal income tax withholding at a rate of 30% unless the interest is effectively connected with the conduct of a United States trade or business, in which case the interest will be subject to the United States federal income tax on net income that applies to United States persons generally. Non-U.S. Holders should consult applicable income tax treaties, which may provide for a lower rate of withholding or other different rules.
SALE OR EXCHANGE OF DEBENTURES OR SHARES OF COMMON STOCK. A Non-U.S. Holder generally will not be subject to United States federal income tax on gain recognized upon the sale or other disposition of Debentures or shares of Common Stock unless the gain is effectively connected with the conduct of a trade or business within the United States by the Non-U.S. Holder, or in the case of a Non-U.S. Holder who is a nonresident alien individual and holds the Common Stock as a capital asset, such holder is present in the United States for 183 or more days in the taxable year and certain other circumstances are present. However, if the Company is a "United States real property holding corporation," a Non-U.S. Holder may be subject to federal income tax with respect to gain realized on the disposition of Debentures or shares of Common Stock, and any amount withheld pursuant to the rules applicable to dispositions of shares in a "United States real property holding corporation" will be creditable against such Non U.S. Holder's United States federal income tax liability and may entitle such Non-U.S. Holder to a refund upon furnishing the required information to the IRS. Non-U.S. Holders should consult applicable income tax treaties, which may provide different rules.
CONVERSION OF DEBENTURES. A Non-U.S. Holder generally will not be subject to United States federal income tax on the conversion of a Debenture into shares of Common Stock. To the extent a Non-U.S. Holder receives cash in lieu of a fractional share on conversion, such cash may give rise to gain that would be subject to the rules described above with respect to the sale or exchange of a Debenture or Common Stock.
DIVIDENDS ON SHARES OF COMMON STOCK. Generally, any distribution on shares of Common Stock to a Non-U.S. Holder will be subject to United States federal income tax withholding at a rate of 30% unless the dividend is effectively connected with the conduct of trade or business within the United States by the Non-U.S. Holder, in which case the dividend will be subject to the United States federal income tax on net income that applies to United States persons generally (and, with respect to corporate holders under certain circumstances, the branch profits tax). Non-U.S. Holders should consult any applicable income tax treaties, which may provide for a lower rate of withholding or other rules different from those described above. A Non-U.S. Holder may be required to satisfy certain certification requirements in order to claim a reduction of or exemption from withholding under the foregoing rules.
INFORMATION REPORTING AND BACKUP WITHHOLDING U.S. HOLDERS. Information reporting and backup withholding may apply to payments of principal, interest or dividends on or the proceeds of the sale or other disposition of the Debentures or shares of Common Stock with respect to certain noncorporate U.S. Holders. Such U.S. Holders generally will be subject to backup withholding at a rate of 31% unless the recipient of such payment supplies a taxpayer identification number, certified under penalties of perjury, as well as certain other information, or otherwise establishes in the manner prescribed by law an exemption from backup withholding. Any amount withheld under backup withholding is allowable as a credit against the U.S. Holder's federal income tax.
NON-U.S. HOLDERS. Generally, information reporting and backup withholding of United States federal income tax at a rate of 31% may apply to payments of principal, interest and dividends to Non-U.S. Holders if the payee fails to certify that the holder is a Non-U.S. person. The 31% backup withholding tax generally will not apply to interest or dividends subject to the 30% withholding tax discussed above.
The payment of the proceeds of the dispostion of Debentures or shares of Common Stock to or through the United States office of a United States or foreign broker will be subject to information reporting and backup withholding unless the owner provides a required certification or otherwise establishes an exemption. The proceeds of the dispostion by a Non-U.S. Holder of Debentures or share of Common Stock to or through a foreign office of a broker generally will not be subject to backup withholding. However, if such broker is a U.S. person, a controlled foreign corporation for United States tax purposes, or a foreign person 50% or more of whose gross income from all sources for certain periods is from activities that are effectively connected with a United States trade or business, information reporting will apply unless such broker has documentary evidence in its files of the
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owner's foreign status and has no actual knowledge to the contrary or unless the owner otherwise establishes an exemption. Both backup withholding and information reporting will apply to the proceeds from such dispositions if the broker has actual knowledge that the payee is a U.S. Holder.
Recently proposed regulations would modify the information and backup withholding tax rules for Non-U.S. Holders and, if adopted in final form, generally would be effective for payments made after December 31, 1997.
DESCRIPTION OF CAPITAL STOCK The Company's authorized capital stock consists of 100,000,000 shares of Common Stock, par value $.01 per share, and 3,000,000 shares of Preferred Stock, par value $.10 per share (the "Preferred Stock"). As of the date of this Prospectus, there are 41,255,455 shares of Common Stock and no shares of Preferred Stock issued and outstanding. Assuming all Debentures are converted to Common Stock, 43,505,535 shares of Common Stock would be issued and outstanding. All of the issued and outstanding shares of Common Stock are fully paid and nonassessable.
The following summary description of the Company's capital stock does not purport to be complete and is qualified in its entirety by this reference to the Company's Certificate of Incorporation and Bylaws.
COMMON STOCK
The holders of validly issued and outstanding shares of Common Stock are entitled to one vote per share of record on all matters to be voted upon by stockholders. At a meeting of stockholders at which a quorum is present, a majority of the votes cast decides all questions, unless the matter is one upon which a different vote is required by express provision of law or the Company's Certificate of Incorporation or Bylaws. There is no cumulative voting with respect to the election of directors (or any other matter), but the Company's Board of Directors is classified. The holders of a majority of the shares at a meeting at which a quorum is present can, therefore, elect all of the directors of the class then to be elected if they choose to do so, and, in such event, the holders of the remaining shares would not be able to elect any directors of that class.
The holders of Common Stock have no preemptive rights and have no rights to convert their Common Stock into any other securities.
Subject to the rights of holders of Preferred Stock, if any, in the event of a liquidation, dissolution or winding up of the Company, holders of Common Stock are entitled to participate equally, share for share, in all assets remaining after payment of liabilities.
The holders of Common Stock are entitled to receive ratably such dividends as the Board of Directors may declare out of funds legally available therefor, when and if so declared. The payment by the Company of dividends, if any, rests within the discretion of its Board of Directors and will depend upon the Company's results of operations, financial condition and capital expenditure plans, as well as other factors considered relevant by the Board of Directors. The Credit Facility includes covenants, which preclude the payment of dividends. See "Dividend Policy."
PREFERRED STOCK
 No shares of Preferred Stock are outstanding. The Company's Certificate of Incorporation authorizes the Board of Directors to issue up to 3.0 million shares of Preferred Stock in one or more series and to establish such relative voting, dividend, redemption, liquidation, conversion and other powers, preferences, rights, qualifications, limitations and restrictions as the Board of Directors may determine without further approval of the stockholders of the Company. The issuance of Preferred Stock by the Board of Directors could, among other things, adversely affect the voting power of the holders of Common Stock and, under certain circumstances, make it more difficult for a person or group to gain control of the Company.
The issuance of any series of Preferred Stock, and the relative powers, preferences, rights, qualifications, limitations and restrictions of such series, if and when established, will depend upon, among other things, the future capital needs of the Company, the then-existing market conditions and other factors that, in the judgment of the Board of Directors, might warrant the issuance of Preferred Stock. At the date of this Prospectus, there are no plans, agreements or understandings relative to the issuance of any shares of Preferred Stock.
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DELAWARE LAW AND CERTAIN CHARTER AND BYLAW PROVISIONS
Certain provisions of the General Corporation Law of the State of Delaware and of the Company's Certificate of Incorporation and Bylaws, summarized in the following paragraphs, may be considered to have an antitakeover effect and may delay, deter or prevent a tender offer, proxy contest or other takeover attempt that a stockholder might consider to be in such stockholder's best interest, including such an attempt as might result in payment of a premium over the market price for shares held by stockholders.
DELAWARE ANTITAKEOVER LAW. The Company, a Delaware corporation, is subject to the provisions of the General Corporation Law of the State of Delaware, including Section 203. In general, Section 203 prohibits a public Delaware corporation from engaging in a "business combination" with an "interested stockholder" for a period of three years after the date of the transaction in which such person became an interested stockholder unless: (i) prior to such date, the Board of Directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; or (ii) upon becoming an interested stockholder, the stockholder then owned at least 85% of the voting stock, as defined in Section 203; or (iii) subsequent to such date, the business combination is approved by both the Board of Directors and by holders of at least 66 2/3% of the corporation's outstanding voting stock, excluding shares owned by the interested stockholder. For these purposes, the term "business combination" includes mergers, asset sales and other similar transactions with an "interested stockholder." An "interested stockholder" is a person who, together with affiliates and associates, owns (or, within the prior three years, did own) 15% or more of the corporation's voting stock. Although Section 203 permits a corporation to elect not to be governed by its provisions, the Company to date has not made this election.
CLASSIFIED BOARD OF DIRECTORS. The Company's Bylaws provide for the Board of Directors to be divided into three classes of directors serving staggered three-year terms. As a result, approximately one-third of the Board of Directors will be elected each year. Classification of the Board of Directors expands the time required to change the composition of a majority of directors and may tend to discourage a takeover bid for the Company. Moreover, under the General Corporation Law of the State of Delaware, in the case of a corporation having a classified Board of Directors, the stockholders may remove a director only for cause. The Company's Certificate of Incorporation and Bylaws so provide. These provisions, when coupled with provisions of the Company's Certificate of Incorporation and Bylaws authorizing only the Board of Directors to fill vacant directorships, will preclude stockholders of the Company from removing incumbent directors without cause and simultaneously gaining control of the Board of Directors by filling the vacancies with their own nominees.
SPECIAL MEETINGS OF STOCKHOLDERS; NO ACTION WITHOUT MEETING. The Company's Bylaws provide that special meetings of stockholders may be called only by the Chairman or by the Secretary or any Assistant Secretary at the request in writing of a majority of the Board of Directors of the Company. The Company's Bylaws also provide that no action required to be taken or that may be taken at any annual or special meeting of stockholders may be taken without a meeting; the power of stockholders to consent in writing, without a meeting, to the taking of any action is specifically denied. These provisions may make it more difficult for stockholders to take action opposed by the Board of Directors.
ADVANCE NOTICE REQUIREMENTS FOR STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS. The Company's Bylaws provide that stockholders seeking to bring business before an annual meeting of stockholders, or to nominate candidates for election as directors at an annual or a special meeting of stockholders, must provide timely notice thereof in writing. To be timely, a stockholder's notice must be delivered to, or mailed and received at, the principal executive office of the Company, (i) in the case of an annual meeting that is called for a date that is within 30 days before or after the anniversary date of the immediately preceding annual meeting of stockholders, not less than 60 days nor more than 90 days prior to such anniversary date, and, (ii) in the case of an annual meeting that is called for a date that is not within 30 days before or after the anniversary date of the immediately preceding annual meeting, or in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the tenth day following the day on which notice of the date of the meeting was mailed or public disclosure of the date of the meeting was made, whichever occurs first. The Bylaws also specify certain requirements for a stockholder's notice to be in proper written form. These provisions may preclude some stockholders from making nominations for directors at an annual or special meeting or from bringing other matters before the stockholders at a meeting.
48

TRANSFER AGENT
 The transfer agent and registrar for the Common Stock is First Union National Bank of North Carolina, Charlotte, North Carolina.
SHARES ELIGIBLE FOR FUTURE SALE
As of the date of this Prospectus, assuming all Debentures are converted into Common Stock, the Company would have outstanding 43,505,535 shares of Common Stock. Of such amount, the 2,250,080 Shares registered for sale in connection herewith and 12,110,000 shares of Common Stock registered in connection with the Company's prior public offerings are freely transferable and may be resold without further registration under the Securities Act. The holders of the remaining 31,395,535 shares will be entitled to resell them only pursuant to a registration statement under the Securities Act or an applicable exemption from registration thereunder such as an exemption provided by Rule 144.
In general, under Rule 144 as currently in effect, a person (or persons whose shares are aggregated) who has beneficially owned "restricted securities" for at least two years may, under certain circumstances, resell within any three-month period such number of shares as does not exceed the greater of one percent of the then-outstanding shares or the average weekly trading volume during the four calendar weeks prior to such resale. Rule 144 also permits, under certain circumstances, the resale of shares without any quantity limitation by a person who has satisfied a three-year holding period and who is not, and has not been for the preceding three months, an affiliate of the Company. In addition, holding periods of successive non-affiliate owners are aggregated for purposes of determining compliance with these two- and three-year holding period requirements.
As of the date of this Prospectus, none of the 29,145,455 shares of Common Stock outstanding on the date of this Prospectus and not sold in the Company's prior public offerings will have been held for at least two years. Since all such shares are restricted securities, none of them may currently be resold pursuant to Rule 144.
The availability of shares for sale or actual sales under Rule 144 may have an adverse effect on the market price of the Common Stock. Sales under Rule 144 also could impair the Company's ability to market additional equity securities. The Company and all directors and executive officers of the Company have agreed not to offer, sell, contract to sell, or otherwise dispose of, any shares of Common Stock or securities convertible into or exchangeable for Common Stock until after January 25, 1997 without the prior written consent of the representatives of the Initial Purchasers.
49

PLAN OF DISTRIBUTION
The Debentures and the Shares are being registered to permit secondary trading of such securities by the holders thereof from time to time after the date of this Prospectus. The Company has agreed, among other things, to bear its own expenses (not including selling commissions or discounts, fees and expenses of counsel and other advisors to holders of the Debentures and the Shares, and other expenses of the holders) in connection with the registration and sale of the Debentures and the Shares covered by this Prospectus.
The Company will not receive any of the proceeds from the offering of the Debentures and Shares by the Selling Security Holders hereby. The Company has been advised by the Selling Security Holders that the Selling Security Holders may sell all or a portion of the Debentures and Shares beneficially owned by them and offered hereby from time to time on any exchange on which the securities are listed on terms to be determined at the times of such sales. The Selling Security Holders may also make private sales directly or through a broker or brokers. Alternatively, any of the Selling Security Holders may from time to time offer the Debentures or Shares beneficially owned by them through broker-dealers, who may receive compensation in the form of discounts, commissions or concessions from the Selling Security Holders and the purchasers of the Debentures or Shares from whom they may act as agent. To the extent required, the aggregate principal amount of Debentures and number of Shares to be sold, the names of Selling Security Holders, the purchase price, the name of any such broker-dealer and any applicable commissions with respect to any particular offer will be set forth in an accompanying Prospectus Supplement, or, if appropriate, in a post-effective amendment to the Registration Statement of which this Prospectus is a part. The aggregate proceeds to the Selling Security Holders from the sale of the Debentures or Shares offered by them hereby will be the purchase price of such Debentures or Shares less discounts and commissions, if any.
The Debentures and the Shares may be sold from time to time in one or more transactions at fixed offering prices, which may be changed, or at varying prices determined at the time of sale or at negotiated prices. Such prices will be determined by the holders of such securities or by agreement between such holders and broker-dealers who may receive fees or commissions in connection therewith.
The outstanding Common Stock is listed for trading on the NYSE, and the Shares have been approved for listing on the NYSE. The Initial Purchasers have advised the Company that they are making and currently intend to continue making a market in the Debentures; however, they are not obligated to do so and any such market-making may be discontinued at any time without notice, in the sole discretion of the Initial Purchasers. The Company also intends to apply for listing of the Debentures on the NYSE. No assurance can be given, however, as to the development of liquidity of any trading market that may develop for the Debentures. See "Risk Factors -- Absence of Public Market." In order to comply with the securities laws of certain states, if applicable, the Debentures and Shares will be sold in such jurisdictions only through registered or licensed brokers or dealers. In addition, in certain states the Debentures and Shares may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.
The Selling Security Holders and any broker-dealers that participate with the Selling Security Holders in the distribution of the Debentures or the Shares may be deemed to be "underwriters" within the meaning of the Securities Act, in which event any commissions received by such broker-dealers on the resale of the Debentures or the Shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.
In addition, any securities covered by this Prospectus which qualify for sale pursuant to Rule 144 or Rule 144A of the Securities Act may be sold under Rule 144 or Rule 144A rather than pursuant to this Prospectus. There is no assurance that any Selling Security Holder will sell any or all of the Debentures or Shares described herein, and any Selling Security Holder may transfer, devise or gift such securities by other means not described herein.
The Debentures were originally sold to the Initial Purchasers on October 1, 1996 in a private placement at a purchase price of 97.5% of their principal amount. The Company agreed to indemnify and hold such Initial Purchasers harmless against certain liabilities under the Securities Act that could arise in connection with the sale of the Debentures by them. The Company and the Selling Security Holders are obligated to indemnify each other against certain liabilities arising under the Securities Act.
50

For additional information concerning the registration rights of Selling Security Holders pursuant to which this Registration Statement is filed, see "Description of the Debentures -- Registration Rights; Liquidated Damages." 
SELLING SECURITY HOLDERS
 The following table sets forth information concerning the principal amount of Debentures beneficially owned by each Selling Security Holder which may be offered from time to time pursuant to this Prospectus.* Other than as a result of the ownership or placement of Debentures or Common Stock, none of the Selling Security Holders has had any material relationship with the Company within the past three years, except as noted herein. The table has been prepared based upon information furnished to the Company by or on behalf of the Selling Security Holders.

                                                                            PRINCIPAL AMOUNT
                                                      PRINCIPAL AMOUNT       OF DEBENTURES
                                                        OF DEBENTURES            BEING                PERCENT OF
NAME*                                                BENEFICIALLY OWNED*      REGISTERED*       OUTSTANDING DEBENTURES*	

* The Selling Security Holders have informed the Company that they will provide the foregoing information to the Company upon the earlier of the exercise or expiration of the Initial Purchasers' over-allotment option granted to them pursuant to the Debenture Offering. The Company intends to file a pre-effective amendment to include such information as provided by the Selling Security Holders. Because the Selling Security Holders may sell all or some of the Debentures which they hold and shares of Common Stock issued upon conversion thereof pursuant to this Offering, no estimate can be given as to the aggregate amount of Debentures or shares of Common Stock that are to be offered hereby or that will be owned by the Selling Security Holders upon completion of this Offering. Accordingly, the aggregate principal amount of Debentures offered hereby may decrease. As of the date of this Prospectus, the aggregate principal amount of Debentures outstanding is $70,000,000. See "Plan of Distribution." LEGAL MATTERS The validity of the Securities offered hereby will be passed upon by Parker, Poe, Adams & Bernstein L.L.P., Charlotte, North Carolina, counsel to the Company.
EXPERTS The financial statements of Speedway Motorsports, Inc. and Subsidiaries for each of the three years ended December 31, 1995, and of Bristol Motor Speedway, Inc. for the year ended December 31, 1995, included and incorporated by reference in this Prospectus and the related financial statement schedule of Speedway Motorsports, Inc. for each of the three years ended December 31, 1995, included elsewhere in the Registration Statement have been audited by Deloitte & Touche LLP, independent auditors, as stated in their reports which are included in and incorporated by reference herein, and have been so included and incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing. The report of Deloitte & Touche LLP on the financial statements and schedule of Speedway Motorsports, Inc. and Subsidiaries for each of the three years ended December 31, 1995 expresses an unqualified opinion and includes an explanatory paragraph relating to significant tax adjustments proposed by the IRS for additional income taxes and penalties plus interest at Atlanta Motor Speedway, Inc.
51

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents have been filed with the Commission by the Company and are hereby incorporated by reference into this Prospectus: (i) the Company's Annual Report on Form 10-K for the year ended December 31, 1995 (File No. 1-13582); (ii) the Company's Quarterly Reports on Form 10-Q for the quarters ended March 28, 1996 and June 30, 1996; (iii) the Company's Current Report on Form 8-K filed on February 5, 1996 and amendment thereto on Form 8-K/A filed on March 1, 1996 and the Company's Current Report on Form 8-K filed on September 9, 1996; and (iv) the description of the Common Stock contained in the Company's Registration Statement on Form 8-A filed with the Commission pursuant to Section 12 of the Exchange Act. All other documents and reports filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act from the date of this Prospectus and prior to the termination of this Offering shall be deemed to be incorporated by reference herein and shall be deemed to be a part hereof from the date of the filing of such reports and documents.
Any statement contained in a document incorporated or deemed incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any subsequently filed document that is also deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person to whom a Prospectus is delivered, upon written or oral request of such person, a copy of any document incorporated herein by reference (not including exhibits to documents that have been incorporated herein by reference unless such exhibits are specifically incorporated by reference in the document which this Prospectus incorporates). Requests should be directed to Ms. Marylaurel E. Wilks, Speedway Motorsports, Inc., U.S. Highway 29 North, P.O. Box 600, Concord, North Carolina 28026-0600, telephone: (704) 455-3239.
AVAILABLE INFORMATION The Company is subject to the informational and reporting requirements of the Exchange Act, and in accordance therewith files reports, proxy statements and other information with the Commission. Such reports, proxy statements and other information, may be inspected and copied at the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of the Commission located at 7 World Trade Center, Suite 1300, New York, New York 10048 and at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. The Commission maintains an Internet Web site that contains reports, proxy and information statements and other information regarding the Company and other registrants that file electronically with the Commission. The address of such site is http://www.sec.gov. Copies of all or any part of such materials may be obtained from any such office upon payment of the fees prescribed by the Commission. Such information may also be inspected and copied at the offices of the New York Stock Exchange at 20 Broad Street, New York, New York 10005. The Company's Common Stock is traded on the New York Stock Exchange under the symbol "TRK."
The Company has filed with the Commission the Registration Statement on Form S-3 under the Securities Act for the offering of the Securities made by this Prospectus. This Prospectus, filed as part of the Registration Statement, does not contain all the information set forth in the Registration Statement and the exhibits and schedules thereto. For further information about the Company and the Securities offered pursuant to this Prospectus, refer to the Registration Statement and the exhibits and schedules thereto, all of which may be inspected without charge or copied at the Commission's offices (at the locations described above) and copies of which may be obtained at prescribed rates from the Public Reference Section of the Commission (at the location described above). Statements made in this Prospectus about the contents of any contract, agreement or document are not necessarily complete and in each instance reference is made to the copy of such contract, agreement or document filed as an exhibit to the Registration Statement and each such statement is qualified in its entirety by such reference.
52

INDEX TO FINANCIAL STATEMENTS

                                                                                                              PAGE
SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES:
  INDEPENDENT AUDITORS' REPORT.............................................................................    F-2
  AUDITED CONSOLIDATED FINANCIAL STATEMENTS:
     Consolidated Balance Sheets at December 31, 1994 and 1995.............................................    F-3
     Consolidated Statements of Income for the years ended December 31, 1993, 1994
       and 1995............................................................................................    F-5
     Consolidated Statements of Stockholders' Equity for the years ended December 31, 1993,
       1994 and 1995.......................................................................................    F-6
     Consolidated Statements of Cash Flows for the years ended December 31, 1993, 1994
       and 1995............................................................................................    F-7
     Notes to Consolidated Financial Statements............................................................    F-8
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS:
     Consolidated Balance Sheets (Unaudited) at June 30, 1996..............................................   F-19
     Consolidated Statements of Income (Unaudited) for the six months ended June 30, 1995
       and 1996............................................................................................   F-21
     Consolidated Statement of Stockholders' Equity (Unaudited) for the period
       ended June 30, 1996.................................................................................   F-22
     Consolidated Statements of Cash Flows (Unaudited) for the six months ended
       June 30, 1995 and 1996..............................................................................   F-23
     Notes to Unaudited Consolidated Financial Statements..................................................   F-24
BRISTOL MOTOR SPEEDWAY, INC.:
  INDEPENDENT AUDITORS' REPORT.............................................................................   F-28
  FINANCIAL STATEMENTS:
     Balance Sheet at December 31, 1995....................................................................   F-29
     Statement of Income and Retained Earnings for the year ended December 31, 1995........................   F-30
     Statement of Cash Flows for the year ended December 31, 1995..........................................   F-31
     Notes to Financial Statements.........................................................................   F-32
UNAUDITED PRO FORMA FINANCIAL STATEMENTS REFLECTING THE BUSINESS COMBINATION OF SPEEDWAY MOTORSPORTS, INC.
  AND BRISTOL MOTOR
  SPEEDWAY, INC.:
     Description of Unaudited Pro Forma Financial Statements...............................................   F-34
     Pro Forma Balance Sheet at December 31, 1995 (Unaudited) and Notes thereto............................   F-35
     Pro Forma Statement of Income for the year ended December 31, 1995 (Unaudited) and Notes thereto......   F-37	

F-1

INDEPENDENT AUDITORS' REPORT
BOARD OF DIRECTORS
SPEEDWAY MOTORSPORTS, INC.
 CHARLOTTE, NORTH CAROLINA
We have audited the accompanying consolidated balance sheets of Speedway Motorsports, Inc. and subsidiaries as of December 31, 1994 and 1995, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 1995. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 1994 and 1995, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1995 in conformity with generally accepted accounting principles.
As discussed in Note 12 to the consolidated financial statements, the Internal Revenue Service has proposed significant adjustments for additional income taxes and penalties, plus interest, at Atlanta Motor Speedway, Inc. DELOITTE & TOUCHE LLP
Charlotte, North Carolina
March 1, 1996
F-2

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1994 AND 1995
 (DOLLARS IN THOUSANDS)

                                                                                               1994
                                                                                             PRO FORMA
                                                                                  1994       (NOTE 1)        1995
                                                                                            (UNAUDITED)
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents (Note 9)..........................................   $ 7,046      $ 7,046      $ 10,132
  Restricted cash (Note 2)....................................................       350          350            86
  Trade accounts receivable (Note 2)..........................................     3,551        3,551         6,511
  Refundable income taxes.....................................................       504          504           727
  Inventories (Note 3)........................................................     4,125        4,125         5,372
  Speedway condominiums held for sale
     (Note 7).................................................................     4,599        4,599         3,142
  Prepaid expenses............................................................       158          158           185
     Total current assets.....................................................    20,333       20,333        26,155
PROPERTY AND EQUIPMENT, NET (Note 6)..........................................    55,114       55,114        93,105
GOODWILL (Note 2).............................................................     6,576        6,576         6,392
OTHER ASSETS:
  Investment In North Wilkesboro Speedway (Note 4)............................     --          --             6,283
  Marketable equity securities (Notes 2 and 5)................................     1,063        1,063         1,855
  Note receivable -- affiliate (Note 13)......................................       884          884           934
  Investment in real estate joint venture (Notes 1 and 8).....................     8,330       --             --
  Other assets (Notes 2, 9 and 13)............................................     1,153        1,153         1,722
     Total other assets.......................................................    11,430        3,100        10,794
     TOTAL....................................................................   $93,453      $85,123      $136,446	

F-3

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS -- (CONTINUED)
DECEMBER 31, 1994 AND 1995
 (DOLLARS IN THOUSANDS)

                                                                                               1994
                                                                                             PRO FORMA
                                                                                  1994       (NOTE 1)        1995
                                                                                            (UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Current maturities of long-term debt (Note 9)...............................   $ 5,272      $ 5,272      $    348
  Accounts payable............................................................     1,568        1,568         7,743
  Deferred race event income, net (Note 2)....................................     9,292        9,292        13,345
  Accrued expenses and other liabilities......................................     4,862        4,862         5,870
  Due to former stockholders (Note 11)........................................       683          683           665
       Total current liabilities..............................................    21,677       21,677        27,971
LONG-TERM DEBT (Note 9).......................................................    41,989       41,989         1,458
PAYABLE TO AFFILIATED COMPANY (Note 13).......................................     2,601        2,601         2,603
DEFERRED MEMBERSHIP INCOME, NET (Note 2)......................................     1,838        1,838         1,563
DEFERRED INCOME TAXES (Note 12)...............................................     5,534        6,249         6,717
OTHER LIABILITIES.............................................................       582          582           754
       Total liabilities......................................................    74,221       74,936        41,066
COMMITMENTS AND CONTINGENCIES (Notes 6, 12 and 14)............................
STOCKHOLDERS' EQUITY (Notes 1 and 5):
  Preferred stock.............................................................        --           --            --
  Common stock................................................................        28          300           380
  Additional paid-in capital..................................................     6,707        6,435        72,148
  Retained earnings...........................................................    12,532        3,487        22,944
  Deduct:
     Unrealized loss on marketable equity securities..........................       (35)         (35)          (92)
       Total stockholders' equity.............................................    19,232       10,187        95,380
       TOTAL..................................................................   $93,453      $85,123      $136,446	

See notes to consolidated financial statements.
F-4

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
 (DOLLARS AND SHARES IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

                                                                                     1993       1994       1995
REVENUES (Note 2):
  Admissions.....................................................................   $27,727    $31,523    $36,569
  Event related revenue..........................................................    22,115     24,814     27,783
  Other operating revenue........................................................     4,726      8,200     11,221
     Total revenues..............................................................    54,568     64,537     75,573
OPERATING EXPENSES:
  Direct expense of events.......................................................    17,778     18,327     19,999
  Other direct operating expense.................................................     3,715      6,110      7,611
  General and administrative.....................................................    10,629     11,812     13,381
  Non-cash stock compensation (Note 16)..........................................        --      3,000         --
  Depreciation and amortization..................................................     4,375      4,500      4,893
     Total operating expenses....................................................    36,497     43,749     45,884
OPERATING INCOME.................................................................    18,071     20,788     29,689
INTEREST EXPENSE, NET (Notes 9 and 13)...........................................    (4,128)    (3,855)       (24)
OTHER INCOME (Note 15)...........................................................     1,435      1,592      3,392
EQUITY IN EARNINGS OF NORTH WILKESBORO SPEEDWAY
  (Note 4).......................................................................        --         --        233
INCOME FROM CONTINUING OPERATIONS BEFORE
  INCOME TAXES...................................................................    15,378     18,525     33,290
PROVISION FOR INCOME TAXES (Note 12).............................................    (6,137)    (8,055)   (13,700)
INCOME FROM CONTINUING OPERATIONS................................................     9,241     10,470     19,590
DISCONTINUED OPERATIONS -- Equity in net loss of real estate joint
  venture (Notes 1 and 8)........................................................       (38)      (294)        --
INCOME BEFORE EXTRAORDINARY ITEM.................................................     9,203     10,176     19,590
EXTRAORDINARY ITEM, NET (Note 9).................................................        --         --       (133)
NET INCOME.......................................................................   $ 9,203    $10,176    $19,457
NET INCOME APPLICABLE TO COMMON STOCK (Note 10)..................................              $ 7,170    $19,457
PER SHARE DATA (Notes 1 and 10):
  Income from continuing operations applicable to common stock...................              $  0.25    $  0.53
  Discontinued operations........................................................                (0.01)        --
  Net income applicable to common stock..........................................              $  0.24    $  0.53
WEIGHTED AVERAGE SHARES OUTSTANDING (Notes 1 and 16).............................               30,400     37,275	

See notes to consolidated financial statements.
F-5

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
 (DOLLARS AND SHARES IN THOUSANDS)

                                                                                     UNREALIZED       LOANS
                                                                                     GAIN (LOSS)   RECEIVABLE
                                                              ADDITIONAL            ON MARKETABLE  FROM SONIC       TOTAL
                                              COMMON STOCK     PAID-IN    RETAINED     EQUITY       FINANCIAL   STOCKHOLDERS'
                                            SHARES   AMOUNT    CAPITAL    EARNINGS   SECURITIES    CORPORATION     EQUITY
BALANCE, DECEMBER 31, 1992.................     28  $    28    $  3,706   $ 26,631      $(295)      $ (18,984)     $11,086
  Net income...............................   --      --             --      9,203     --                  --        9,203
  Interest on related party loans and
    advances...............................   --      --             --        468     --                  --          468
  Change in estimated redemption value of
    put warrants...........................   --      --             --     (1,957)    --                  --       (1,957)
  Net unrealized gain on marketable equity
    securities.............................   --      --             --         --         11              --           11
  Increase in loan receivable from Sonic
    Financial Corporation, net.............   --      --             --         --     --              (2,294)      (2,294)
BALANCE, DECEMBER 31, 1993.................     28       28       3,706     34,345       (284)        (21,278)      16,517
  Net income...............................   --      --             --     10,176     --                  --       10,176
  Interest on related party loans and
    advances...............................   --      --             --        508     --                  --          508
  Change in estimated redemption value of
    put warrants (Note 10).................   --      --             --     (3,006)    --                  --       (3,006)
  Net unrealized gain on marketable equity
    securities.............................   --      --         --             --        249              --          249
  Increase in loan receivable from Sonic
    Financial Corporation, net.............   --      --             --         --     --              (8,213)      (8,213)
  Issuance of Speedway Motorsports, Inc.
    common stock (Note 1)..................      2    --              1         --     --                  --            1
  Distribution to Sonic Financial
    Corporation
    (Note 13)..............................                                (29,491)                    29,491           --
  Non-cash stock compensation
    (Note 16)..............................   --      --          3,000         --     --                  --        3,000
BALANCE, DECEMBER 31, 1994.................     30       28       6,707     12,532        (35)         --           19,232
  Net income...............................     --       --          --     19,457         --              --       19,457
  Restructuring of ownership prior to
    initial public offering (Note 1)....... 29,970      272        (272)        --         --              --           --
  Issuance of Speedway Motorsports, Inc.
    common stock (Note 1)..................  8,000       80      65,713         --         --              --       65,793
  Joint venture disposal (Notes 1 and 8)...     --       --          --     (9,045)        --              --       (9,045)
  Net unrealized loss on marketable equity
    securities.............................     --       --          --         --        (57)             --          (57)
BALANCE, DECEMBER 31, 1995................. 38,000  $   380    $ 72,148   $ 22,944      $ (92)             --      $95,380	

See notes to consolidated financial statements.
F-6

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
 (DOLLARS IN THOUSANDS)

                                                                                        1993       1994      1995
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income.........................................................................  $ 9,203   $ 10,176   $19,457
  Extraordinary item, net............................................................       --         --       133
  Adjustments to reconcile net income to net cash provided by operating activities:
     Depreciation and amortization...................................................    4,375      4,500     4,893
     Equity in earnings of North Wilkesboro Speedway.................................       --         --      (233)
     Equity in net loss of real estate joint venture.................................       64        491        --
     Non-cash stock compensation.....................................................       --      3,000        --
     Gain on sale of marketable equity securities....................................       --     (1,060)     (242)
     Gain on sale of fixed assets....................................................       --        (77)   (1,199)
     Amortization of deferred membership income......................................     (275)      (274)     (275)
     Other...........................................................................     (114)      (490)       --
     Changes in operating assets and liabilities:
       Trade accounts receivable.....................................................     (411)    (1,209)   (2,960)
       Inventories...................................................................   (1,607)      (942)   (1,247)
       Other current assets and liabilities..........................................    1,067        560     7,275
       Condominiums held for sale....................................................   (1,441)    (2,623)    1,457
       Deferred race event income....................................................    1,356      1,890     4,053
       Other assets and liabilities..................................................      365         51       (67)
          Net cash provided by operating activities..................................   12,582     13,993    31,045
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of long-term debt...........................................    3,000      6,429        --
  Increase in loans receivable from Sonic Financial Corporation......................   (2,294)    (7,422)       --
  Principal payments on long-term debt...............................................   (6,717)   (10,732)  (47,424)
  Advances from related parties......................................................    2,324        301         2
  Issuance of common stock...........................................................       --          1    65,793
          Net cash provided by (used in) financing activities........................   (3,687)   (11,423)   18,371
CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures...............................................................   (3,696)    (5,009)  (40,718)
  Investment in North Wilkesboro Speedway............................................                        (6,050)
  Purchase of marketable equity securities...........................................       --       (924)   (2,809)
  Proceeds from sales of marketable equity securities................................       --      1,345     1,451
  Proceeds from sale of fixed assets.................................................       --        243     1,796
  Contribution of capital to real estate joint venture...............................   (1,074)       (42)       --
  Repayments from related parties....................................................       --        500        --
          Net cash used in investing activities......................................   (4,770)    (3,887)  (46,330)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.................................    4,125     (1,317)    3,086
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR.......................................    4,238      8,363     7,046
CASH AND CASH EQUIVALENTS AT END OF YEAR.............................................  $ 8,363   $  7,046   $10,132
SUPPLEMENTAL CASH FLOW INFORMATION:
  Cash paid for interest.............................................................  $ 3,970   $  4,341   $ 1,486
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
  FINANCING ACTIVITIES:
  Land acquired in exchange for long-term obligation.................................  $ 1,200
  Bank debt incurred in connection with redemption of put warrants (Note 10).........            $  8,000
  Road construction costs financed with a note payable (Note 9)......................                       $ 1,969	

See notes to consolidated financial statements.
F-7

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
1. BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS BASIS OF PRESENTATION -- The 1995 consolidated financial statements include the accounts of Speedway Motorsports, Inc. (SMI), and its wholly-owned subsidiaries, Charlotte Motor Speedway, Inc. and subsidiaries (CMS), Atlanta Motor Speedway, Inc. (AMS), Texas International Raceway (TIR) and Speedway Funding Corp. (collectively, the Company). In March 1995, CMS and AMS became wholly-owned subsidiaries of SMI. Sonic Financial Corporation (Sonic), an affiliate of the Company through common ownership, and other shareholders of CMS and AMS became shareholders of SMI in a corporate restructuring (Restructuring) prior to the initial public offering of common stock by SMI in early 1995. Prior to the Restructuring, the accompanying financial statements reflect the combined accounts of SMI, CMS and AMS. The combination of SMI, CMS and AMS has been accounted for at historical cost in a manner similar to a pooling-of-interest because the entities were under common management and control. On February 9, 1996, the Company's Board of Directors approved a two for one stock split for each share of the Company's common stock. This stock split will be effective March 15, 1996 in the form of a 100% common stock dividend payable to stockholders of record as of February 26, 1996. All share and per share information in the accompanying consolidated and combined financial statements take into account this stock split. The capital structure of the consolidated entity at December 31, 1995 was comprised of Speedway Motorsports, Inc. common stock, par value per share of $0.01, 50,000,000 shares authorized and 38,000,000 shares issued and outstanding which corresponds to a total par value of $380,000. Additionally, SMI has authorized 3,000,000 shares of preferred stock with a par value of $.10 per share. Shares of preferred stock may be issued in one or more series with rights and restrictions as may be determined by the Company's Board of Directors. No preferred shares were issued and outstanding at December 31, 1995. The following summarizes the capital structure of the combined entity at December 31, 1994 (amounts in thousands except par value per share and par value):

                                                                                         COMMON STOCK
                                                                         PAR VALUE      SHARES      SHARES      PAR
COMPANY                                                                  PER SHARE    AUTHORIZED    ISSUED     VALUE
Speedway Motorsports, Inc.............................................     $0.01        50,000         2      $    20
Charlotte Motor Speedway, Inc.........................................      1.00           100        16       16,000
Atlanta Motor Speedway, Inc...........................................      1.00         2,000        12       12,000
                                                                                                      30      $28,020	

As described above, the Company completed an initial public offering of SMI common stock in 1995. SMI had 38,000,000 common shares outstanding immediately after the public offering was consummated, of which approximately 9,000,000 shares are held by new outside investors. Net proceeds of the 1995 initial public offering of $65,793,000 were used to repay existing bank indebtedness, expand the CMS and AMS racing facilities, and for other general corporate purposes. Had the 1995 initial public stock offering and related repayment of debt occurred on January 1, 1995, income from continuing operations applicable to common stock would have been $0.52 per share.
DESCRIPTION OF BUSINESS -- CMS owns and operates a 1.5-mile oval, asphalt speedway located in Concord, North Carolina. CMS stages three major National Association of Stock Car Auto Racing (NASCAR) Winston Cup events annually, two in May and one in October. Additionally, two Busch Grand National races are held annually, each preceding a Winston Cup event. In addition, CMS will host an International Race of Champions (IROC) race and two Automobile Racing Club of America (ARCA) races in 1996. All of these events are sanctioned by NASCAR, IROC or ARCA. The Charlotte facility also includes a 2 1/4-mile road course, a 1/4-mile asphalt oval track, a 1/5-mile asphalt oval track and a 1/5-mile dirt oval track, all of which have races run on them throughout the year.
F-8

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CMS also owns an office and entertainment complex which overlooks the main speedway. A wholly-owned subsidiary, The Speedway Club, Inc. (Speedway Club), derives rental, catering and dining revenues from the complex. Additionally, CMS has constructed 52 condominiums overlooking the main speedway, all of which have been sold.
CMS, through its wholly-owned subsidiary, 600 Racing, Inc., is also engaged in the development and sale of 5/8-scale cars (Legends Cars) modeled after older-style coupes and sedans. Revenue is derived from the sale of vehicles and vehicle parts.
AMS owns and operates a 1.5-mile oval, asphalt speedway located in Hampton, Georgia. Two NASCAR Winston Cup events are held annually, one in March and one in November. Additionally, a Busch Grand National race and two ARCA races are also held annually, generally preceding a Winston Cup event. All of these events are sanctioned by NASCAR or ARCA. AMS is in the process of selling the 12 remaining condominiums, which overlook the Atlanta speedway (see Note 7).
TIR was established on February 13, 1995 for the purpose of operating an asphalt speedway in Fort Worth, Texas (see Note 6).
On January 22, 1996, the Company acquired 100% of the outstanding capital stock of Bristol Motor Speedway (BMS) (see Note 18).
PLANNED PUBLIC OFFERING OF COMMON STOCK -- The Company is planning a public offering of common stock in March 1996. It is anticipated that SMI will have 41,100,000 common shares outstanding immediately after the public offering is consummated. It is anticipated that the net proceeds from this offering will be used to repay bank indebtedness incurred in early 1996, construct TIR and for other general corporate purposes.
1994 PRO FORMA BALANCE SHEET -- The pro forma balance sheet at December 31, 1994 reflects the following two items:
The 30,000,000 shares of common stock of the Company, after giving effect to the Restructuring, resulting in an increase to common stock and a reduction of additional paid-in capital by $272,000.
On December 21, 1994, CMS agreed to dispose of its investment in Chartown, a real estate joint venture (Chartown), in order to focus on the motorsports entertainment industry (see Note 8). Motorsports racing and related motorsports activities represent the Company's principal operations. Chartown is being accounted for as discontinued operations for all periods presented. The December 31, 1994 pro forma balance sheet has been adjusted to reflect this disposition by reducing the investment in Chartown from $8,330,000 to zero, increasing deferred income taxes by $715,000 and reducing retained earnings by $9,045,000. The disposal of the Company's interest in Chartown was completed in March 1995. There is no effect of Chartown on the accompanying 1995 consolidated statement of income.
PER SHARE DATA -- The 1995 per share amounts have been prepared to reflect the 37,275,000 weighted average shares outstanding for the year ended December 31, 1995, including 612,000 common share equivalents arising from stock options. The 1994 per share amounts have been prepared on a pro forma basis to reflect the 30,400,000 common shares outstanding after giving effect to the Restructuring, including 400,000 common share equivalents arising from stock options.
The 1994 pro forma balance sheet and the 1994 pro forma per share amounts are presented for informational purposes only, do not reflect any activity subsequent to December 31, 1994 and do not purport to present actual balances as of December 31, 1994 and for the year then ended.
2. SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION AND COMBINATION -- The consolidated and combined financial statements as described above, include the accounts of SMI, CMS and its wholly-owned subsidiaries, AMS and TIR. All significant intercompany accounts and transactions have been eliminated in consolidation and combination.
F-9

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
REVENUE RECOGNITION -- Admissions revenue consists of ticket sales, and other event related revenues consist of amounts received from sponsorships, television, concessions, commissions and souvenir sales. Other revenue consists of Legends Car sales, Speedway Club restaurant and catering, and Speedway Club membership income.
Prior to the acquisition of BMS in January 1996, the Company's major racing events were held in May and October (Charlotte) and March and November (Atlanta). The Company recognizes admissions and other event related revenues when the events are held. Advance revenues and certain related direct expenses pertaining to a specific event are deferred until such time as the event is held. The deferred expenses primarily include race purses and sanctioning fees remitted to NASCAR. Deferred race event income, net, as of December 31, 1994 and 1995 relates predominantly to the events held in March and May of both 1995 and 1996. If circumstances prevent a race from being held at any time during the racing season, all advance revenue must be refunded and all direct event expenses deferred would be immediately recognized except for race purses which would be refundable from NASCAR.
The Speedway Club has sold lifetime memberships which entitle individual members to certain private dining and racing event seating privileges. Net revenues from lifetime membership fees are being amortized into income over the 25-year estimated useful life of the related property. During each of the years ended December 31, 1993, 1994 and 1995, approximately $275,000 of lifetime membership income was recognized. The Speedway Club also offers executive memberships, which entitle members to certain dining privileges and require a monthly assessment. Executive membership fees are recognized as income as they are billed.
600 Racing, Inc. recognizes revenue as vehicles are shipped to customers. CASH AND CASH EQUIVALENTS -- The Company classifies as cash equivalents all highly liquid investments with original maturities at date of purchase of three months or less. Cash equivalents principally consist of commercial paper and United States Treasury securities.
RESTRICTED CASH -- Restricted cash is composed of customer deposits received on the speedway condominiums under construction and held for sale. Such deposits are held in an escrow account until the sale closes.
TRADE ACCOUNTS RECEIVABLE -- Trade accounts receivable are shown net of allowance for doubtful accounts of approximately $183,000 and $146,000 in 1994 and 1995, respectively.
INVENTORIES -- Inventories, which consist of souvenirs, foods, finished vehicles, parts and accessories, are stated at the lower of cost determined on a first-in, first-out basis, or market.
MARKETABLE EQUITY SECURITIES -- The Company's marketable equity securities are classified as "available for sale" and are not bought and held principally for the purpose of selling them in the near term. As such, these securities are reported at fair value, with unrealized gains and losses, net of tax, excluded from earnings and reported as a separate component of stockholders' equity. It is management's intention to hold these securities through 1996, and accordingly, they are reflected as non-current assets. Realized gains and losses on sales of marketable equity securities are calculated using the specific identification method.
PROPERTY AND EQUIPMENT -- Property and equipment are recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets. Expenditures for repairs and maintenance are charged to expense when incurred. Construction in progress includes all direct costs of fixed assets under construction, and at December 31, 1995 primarily represents costs incurred for the construction of TIR.
GOODWILL -- Goodwill represents the excess of business acquisition costs over the fair value of the assets acquired and is being amortized on a straight-line basis over 40 years. Goodwill is shown net of accumulated amortization of $764,000 and $948,000 in 1994 and 1995, respectively. Management evaluates the recoverability of goodwill based on the expected future profitability of acquired businesses.
F-10

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DEFERRED FINANCING COSTS -- Deferred financing costs, which are included in other noncurrent assets, are amortized over the term of the related debt.
ADVERTISING EXPENSES -- Advertising costs are expensed as incurred. Advertising expenses amounted to $1,527,000, $1,568,000 and $1,543,000 in 1993, 1994 and 1995, respectively.
INCOME TAXES -- The Company recognizes deferred tax assets and liabilities for the future income tax effect of temporary differences between the book and tax bases of assets and liabilities assuming they will be realized and settled at the amounts reported in the financial statements.
FAIR VALUE OF FINANCIAL INSTRUMENTS -- The Company's financial instruments consist of cash, accounts and notes receivable, accounts payable and long-term debt. The carrying value of these financial instruments approximate their fair value at December 31, 1995.
USE OF ESTIMATES -- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual future results could differ from those estimates.
3. INVENTORIES Inventories as of December 31, 1994 and 1995 consisted of the following components (dollars in thousands):

                                                                                       1994      1995
Souvenirs..........................................................................   $2,328    $2,242
Finished vehicles, parts and accessories...........................................    1,728     3,057
Food...............................................................................       69        73
  Total............................................................................   $4,125    $5,372	

4. INVESTMENT IN NORTH WILKESBORO SPEEDWAY In June 1995, the Company purchased 50% of the outstanding capital stock of North Wilkesboro Speedway (NWS), a privately-held speedway located in northwestern North Carolina, for $6,050,000 in cash. This investment is being accounted for using the equity method of accounting. Total assets of NWS at December 31, 1995 were $6,565,000. Total revenues for NWS for the period from June 16, 1995 to December 31, 1995 amounted to $2,757,000. The Company's proportionate share of net income of NWS for the period from June 16, 1995 to December 31, 1995 amounted to $233,000.
5. MARKETABLE EQUITY SECURITIES To reduce the carrying amount of long-term marketable equity securities to market value at December 31, 1994 and 1995, valuation allowances of $53,000 and $159,000, net of $18,000 and $67,000 in tax benefits, respectively, that would be realized in the event the securities were sold at a loss, were recorded by a charge to stockholders' equity. Realized gains on sales of marketable equity securities during the years ended December 31, 1994 and 1995 were $1,061,000 and $242,000, respectively.
F-11

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
6. PROPERTY AND EQUIPMENT Property and equipment as of December 31, 1994 and 1995 is summarized as follows (dollars in thousands):

                                                                                             ESTIMATED
                                                                      1994        1995      USEFUL LIVES
Land and land improvements.......................................   $ 11,738    $ 17,963    5-20 years
Racetracks and grandstands.......................................     35,054      55,733    10-35
Buildings and luxury suites......................................     31,590      32,336    7-30
Machinery and equipment..........................................      4,294       6,373    3-20
Restaurant equipment.............................................        614         617    5-7
Furniture and fixtures...........................................      1,878       2,648    5-10
Autos and trucks.................................................         72          94    3-5
Construction in progress.........................................        669      12,708
  Total..........................................................     85,909     128,472
Less accumulated depreciation....................................    (30,795)    (35,367)
  Total..........................................................   $ 55,114    $ 93,105	

In 1995, the Company began constructing TIR at a 950 acre site in Fort Worth, Texas. TIR will be a 1.5-mile, banked asphalt "quad-oval" superspeedway. Land and land improvements include approximately $5,000,000 paid to acquire the land on which the TIR facility will be located. Included in construction in progress at December 31, 1995 is approximately $8,200,000 representating costs incurred relating to the ongoing construction of TIR. Company management currently estimates the total cost of this facility to range from $100 million to $110 million. The land acquisition and construction cost to date have been financed through a combination of cash flows from operations, a portion of the proceeds from the 1995 initial public offering and borrowings under a short-term bank credit facility obtained in January 1996. Management expects to finance the remaining costs of this facility through a combination of proceeds from the 1996 public offering described in Note 1 and from borrowing under a longer term bank credit facility currently being negotiated with a syndicate of banks led by NationsBank (see Note 18). Management's objective is for TIR to be prepared to hold an event in 1996, although no such event has been scheduled. Management is actively pursuing the scheduling of motorsports racing and other events at this facility. Preoperating promotional costs associated with TIR were insignificant through December 31, 1995.
Also included in construction in progress at December 31, 1995 is approximately $2,000,000 representing the Company's entire share of the cost to construct an improved access road to CMS from Interstate 85. This project is expected to be completed in 1996.
7. SPEEDWAY CONDOMINIUMS HELD FOR SALE AMS has constructed 46 condominiums overlooking the Atlanta speedway. Of the 46 total condominium units constructed, 34 were sold as of December 31, 1995. The remaining unsold condominiums are substantially complete. Accordingly, there are no significant remaining costs to complete these condominiums.
8. DISPOSAL OF INVESTMENT IN REAL ESTATE JOINT VENTURE On December 21, 1994, CMS agreed to dispose of its 50% investment in a real estate joint venture (Chartown) prior to the completion of its 1995 initial public offering. This disposition, which was completed in early 1995, resulted in the transfer of CMS' interest in this joint venture at its net book value of approximately $9,045,000, consisting of the Company's investment in the joint venture of $8,330,000 plus a related deferred tax asset of $715,000, to an affiliate and the subsequent dividend of the proceeds thereof to Sonic. The Company's retained earnings was reduced by an amount equivalent to the net book value of the assets distributed.
F-12

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Total revenue and net loss of the joint venture for each of the years ended December 31, 1993 and 1994 is as follows (dollars in thousands):

                                                                                       1993      1994
Total revenues.....................................................................   $5,137    $2,609
Net loss...........................................................................      (71)     (546)
CMS' share of loss, net of tax benefit of $26 in 1993 and $198 in 1994.............      (38)     (294)	

The Company incurred no income or losses from the operations of Chartown in 1995 or its disposal.
Chartown leases an office and warehouse facility, located near CMS, to 600 Racing, Inc. for Legends Car operations. This operating lease is renewable annually. The current lease provides for annual rent of approximately $133,000 through July 31, 1996. Rent expense (net of sub-rental income) under this lease was $26,000 and $44,000 in 1994 and 1995, respectively.
9. LONG-TERM DEBT Long-term debt as of December 31, 1994 and 1995 consists of the following (dollars in thousands):

                                                                                    1994       1995
Total loans payable to NationsBank..............................................   $46,588    $    --
Other...........................................................................       673         --
Note payable-road construction..................................................        --      1,806
  Total.........................................................................    47,261      1,806
Less current maturities.........................................................    (5,272)      (348)
  Total.........................................................................   $41,989    $ 1,458	

Long-term debt as of December 31, 1994 included various notes payable to NationsBank totaling $46,588,000. On March 3, 1995, these loans were repaid using the proceeds from the 1995 initial public offering. Accordingly, the unamortized debt issuance costs of $133,000, net of tax benefit of $89,000, related to these notes were expensed in 1995, and this amount is shown in the accompanying 1995 consolidated statement of income as an extraordinary item.
NOTE PAYABLE FOR ROAD CONSTRUCTION COSTS -- In 1995, the Company entered into an agreement, whereby the Company agreed to pay for a portion of the costs to construct an improved access road to CMS from Interstate 85 (see Note 6) under a note arrangement. This note payable is collateralized by a bank letter of credit from NationsBank. The Company has pledged cash equivalents of approximately $2,100,000 to secure this bank letter of credit. The note bears interest at 8%, with principal due as follows (dollars in thousands):

1996.................................................................   $  348
1997.................................................................      376
1998.................................................................      407
1999.................................................................      440
2000.................................................................      235
  Total..............................................................   $1,806	

Included in interest expense, net, on the accompanying consolidated statements of income is interest income in the amounts of $272,000, $426,000 and $899,000 for the years ended December 31, 1993, 1994 and 1995.
10. PUT WARRANTS In connection with bank financing received in 1990, AMS issued to NationsBank two common stock purchase warrants (Equity Warrants). These warrants entitled the holder to purchase a 37% equity interest in AMS at a price of $1 per share. The warrants were originally exercisable through October 23, 2005.
F-13

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
In connection with additional bank financing received during 1991, AMS issued to NationsBank a third common stock purchase warrant (Contingent Warrant). This warrant entitled the holder to purchase shares of AMS at $1 per share. The number of shares that could be purchased was based on the number of events of default, if any, which occurred subsequent to December 16, 1991. These events of default related to the aggregate capital expenditures during any fiscal year. Each event of default entitled the holder to exercise the warrant for 5% of the outstanding stock of AMS. However, in no event could the aggregate warrants issued during one calendar year under this financing exceed 5% of the outstanding stock of AMS. No event of default, as defined, occurred prior to the date the warrant was cancelled by NationsBank on December 16, 1994 (discussed below).
The warrants described above contained provisions whereby the holder could require AMS to redeem the warrants for cash at any time from October 23, 1995 through October 23, 2005. The per share redemption price was determined using the higher of book value, market price as determined in a public exchange, a cash flow capitalization formula or appraised value. On December 16, 1994, the Company redeemed the Equity Warrants from NationsBank for $8,000,000 and cancelled the Contingent Warrant. In each of the years from 1991 to 1994, the Company increased the carrying value of the Equity Warrants and decreased retained earnings in order to accrete the aggregate value of the put provision over the minimum stock warrant redemption period. Net income applicable to common stock of $7,170,000 for the year ended December 31, 1994 represents reported net income of the Company of $10,176,000 less the periodic accretion in estimated redemption value of the Equity Warrants of $3,006,000.
11. DUE TO FORMER STOCKHOLDERS In October 1990, the Company's Chairman and Chief Executive Officer acquired AMS in a merger pursuant to which all outstanding shares of Atlanta International Raceway, Inc. (the predecessor company of AMS) were converted into rights to receive cash. Less than all such shares had been tendered for cash as of December 31, 1995. The stockholder payable represents remaining per share amounts due to the former stockholders under the purchase agreement and plan of merger. These payables have no specified repayment terms and do not bear interest.
12. INCOME TAXES The components of the provision for income taxes are as follows (dollars in thousands):

                                                                            1993      1994      1995
Current.................................................................   $6,262    $8,426    $13,184
Deferred................................................................     (125)     (371)       516
  Total.................................................................   $6,137    $8,055    $13,700	

The tax effect of temporary differences which give rise to deferred income taxes are as follows (dollars in thousands):

                                                                                     1994       1995
Deferred tax liabilities:
  Property and equipment.........................................................   $ 8,828    $ 9,774
Deferred tax assets:
  Alternative minimum tax credit carryforward....................................       (27)        --
  Income previously recognized for tax purposes..................................    (1,009)      (608)
  Stock option compensation expense..............................................    (1,206)    (1,206)
  Real estate joint venture......................................................      (715)        --
  Other..........................................................................      (337)    (1,243)
                                                                                     (3,294)    (3,057)
     Total deferred tax liability................................................   $ 5,534    $ 6,717	

F-14

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
No valuation allowance against deferred tax assets has been recorded for any year presented.
The differences between the effective tax rate and the federal statutory tax rate in 1993, 1994 and 1995 are principally due to the effect of state income taxes (approximately 5% for 1993 and 1994, and 4% for 1995) and nondeductible items, including goodwill amortization.
The Company made income tax payments during 1993, 1994 and 1995 totaling approximately $6,200,000, $8,614,000 and $13,163,000, respectively.
On September 9, 1993, the Internal Revenue Service (IRS) asserted that AMS, as the successor in interest to BND, Inc. (BND), is liable for additional income taxes, penalties and interest. The total assessment for taxes, penalties and interest (net of tax benefit for deductibility of interest) through December 31, 1995 is approximately $7,000,000. This deficiency allegedly relates to BND's income tax returns for the years ended November 30, 1988 and October 31, 1990. The IRS alleges that, during the acquisition of AMS by the Company's Chairman and Chief Executive Officer in October 1990, BND's merger into Atlanta International Raceway, Inc., the predecessor of AMS (AIR), resulted in a taxable gain to BND equal to the excess of liabilities assumed by AIR over the adjusted basis of assets transferred to AIR. Moreover, this taxable gain allegedly eliminates a net operating loss carryback to the tax return filed for the year ended November 30, 1988. On November 30, 1993, AMS filed a protest contesting the assessment. At the date hereof, no further action has occurred with respect to this matter; however, the Company anticipates the scheduling of an appeals conference with the IRS during 1996. Management intends to continue contesting the allegations of a deficiency and has not provided for this contingency in the accompanying consolidated financial statements. There can be no assurance, however, that the ultimate resolution of this proceeding will not have a material adverse effect on the Company's future results of operations or financial condition.
13. RELATED PARTY TRANSACTIONS Note receivable -- affiliate at December 31, 1994 and 1995 consists of a note receivable of $884,000 and $934,000, respectively, including accrued interest of $384,000 in 1994 and $434,000 in 1995, from a partnership in which the Company's Chairman and Chief Executive Officer is a partner. The note due from the partnership to CMS is collateralized by certain land owned by the partnership and is payable on demand. Because CMS does not anticipate any repayment of this note during 1996, the entire balance has been classified as a noncurrent asset in the accompanying 1995 balance sheet. Amounts payable to affiliated company of approximately $2,601,000 and $2,603,000 at December 31, 1994 and 1995, respectively, represents acquisition and other expenses paid on behalf of AMS by Sonic during recent years. Of such amounts, approximately $1.8 million bears interest at 3.83% per annum. The remainder of the amount bears interest at prime plus 1%. The entire account balance is classified as long-term based on expected repayment dates. Interest expense incurred on this obligation was $65,000 in both 1993 and 1994 and $130,000 in 1995. Other noncurrent assets at December 31, 1995 includes a note receivable from the Company's Chairman and Chief Executive Officer in the amount of $528,000. The principal balance of the note represents premiums paid by the Company under a split-dollar life insurance trust arrangement on behalf of the Chairman, in excess of cash surrender value. The note bears interest at prime plus 1%. Interest income of $113,000, $118,000 and $75,000 was earned on amounts due from related parties during the years ended December 31, 1993, 1994 and 1995, respectively. The Company paid Sonic management fees of $1,500,000 per year in 1993 and 1994 for certain accounting, administrative and management services, including assistance in the planning and execution of racing events; maintenance of banking relationships; tax planning; preparation of tax returns and representation in tax examinations; record maintenance; internal audits and special audits; assistance to the Company's independent public accountants; and litigation support to the Company's legal counsel. In the opinion of Company management, the
F-15

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) management fees charged approximated the costs required for these services had the Company operated as a separate unaffiliated entity during this two year period.
On December 21, 1994, the Board of Directors of CMS declared a dividend to Sonic in the amount of $29,491,000 as part of the Restructuring. This amount represented a loan receivable, including accrued interest, from Sonic. Prior to the date of the dividend, the entire loan receivable had been recorded as a reduction of stockholders' equity because repayment had not been anticipated in the near future.
14. CONTINGENCIES The Company is involved in various lawsuits and disputes which arose in the ordinary course of business. In the opinion of the Company's management, the outcome of these matters will not have a material impact on the Company's financial condition or future results of operations. The Company's property at CMS includes areas that were used as solid waste landfills for many years. Landfilling of general categories of municipal solid waste on the CMS property ceased in 1992, but CMS currently allows certain property to be used for land clearing and inert debris landfilling and for construction and demolition debris landfilling. Management believes that the Company's operations, including the landfills on its property, are in compliance with all applicable federal, state and local environmental laws and regulations. Company management is not aware of any situation related to landfill operations which would adversely affect the Company's financial position or future results of operations.
15. OTHER INCOME Other income for the years ended December 31, 1993, 1994 and 1995 consists of the following (dollars in thousands):

                                                                             1993      1994      1995
Gain on sale of speedway condominiums....................................   $   78    $  303    $  761
Other income.............................................................    1,357     1,289     2,631
                                                                            $1,435    $1,592    $3,392	

Other income in 1993 is composed mainly of a cash settlement from an insurance carrier related to a disputed prior year claim by CMS. Other income in 1994 consists primarily of gains on sale of marketable equity securities. Other income in 1995 includes gains on sale of land and marketable equity securities, and landfill fees.
16. STOCK OPTION PLANS On December 21, 1994, the Board of Directors and stockholders of SMI adopted the Company's 1994 Stock Option Plan in order to attract and retain key personnel. Under the stock option plan, options to purchase up to an aggregate of 2,000,000 shares of common stock may be granted to directors, officers and key employees of SMI and its subsidiaries. Such options provide for the purchase of common stock at a price as determined by the Compensation Committee of the Board of Directors or, in the event that there is no such committee, by the Board of Directors. On December 21, 1994, SMI granted options to nine officers to purchase an aggregate of 800,000 shares of common stock at an exercise price of $3.75 per share. The Company recorded a noncash stock compensation charge of $3,000,000 (before tax) in December 1994, which represents the difference between management's estimate of the fair value of the SMI common stock at the date of grant, after considering the proposed initial public offering of the Company's stock discussed in Note 1, and the exercise price of the options granted. Also on December 21, 1994, SMI granted options to the same nine officers to purchase an aggregate of 320,000 shares of common stock at an exercise price equal to the initial public offering price of the common stock. In January 1995, SMI granted options to purchase 50,000 shares to another employee at an exercise price of $9.00 per share. In November 1995, SMI granted options to two officers to purchase an aggregate of 70,000
F-16

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) shares of common stock at an exercise price of $15.38 per share. The exercise price of all of the 1995 stock options was at the fair or trading value of the Company's common stock at the date of grant.
There have been no exercises of stock options through December 31, 1995. Effective January 1, 1996, the Company's Board of Directors adopted the Formula Stock Option Plan for the benefit of the Company's outside directors, subject to the approval of the Company's stockholders at the 1996 annual meeting. The new plan authorizes options to purchase up to an aggregate of 400,000 shares of common stock. Subject to such stockholder approval, effective January 2, 1996, the Company granted options to purchase 20,000 common shares to each of the Company's two outside directors at an exercise price equal to the fair market value per share of common stock at the date of award.
17. EMPLOYEE BENEFIT PLAN Effective October 1, 1994, Sonic established the Sonic Financial Corporation 401(k) Plan and Trust which is available to all employees of the Company. Under the Plan provisions, participants may elect to contribute up to 12% of their annual salary and bonus to the Plan, of which the Company will match 25% of the first 4% of annual salary and bonus contributed by the employee. Participants are fully vested in Company matching contributions after five years. The amount that the Company was required to contribute to the Plan for the period from October 1, 1994 to December 31, 1994 was immaterial. The Company contribution to the Plan amounted to approximately $40,000 in 1995.
18. SUBSEQUENT EVENTS ACQUISITION OF BRISTOL MOTOR SPEEDWAY. -- On January 22, 1996, the Company acquired 100% of the capital stock of BMS for $26,583,000, including $83,000 of direct acquisition costs. The purchase price was financed through a short-term credit facility (see below). BMS, which occupies approximately 100 acres in Bristol, Tennessee, is a one-half mile lighted, 36-degree banked concrete oval race track. BMS currently sponsors four major racing events annually sanctioned by NASCAR, including two Winston Cup and two Busch Grand National events. As part of this acquisition, the Company obtained a right of first refusal to acquire certain adjacent land used for camping and parking for race events. This acquisition was accounted for using the purchase method. NEW BORROWING ARRANGEMENTS. -- In conjunction with its January 1996 acquisition of BMS, the Company obtained from NationsBank an unsecured, short-term line of credit in an aggregate principal amount of up to $50,000,000 (the "90-Day Facility"). In early 1996, the Company borrowed $32,688,000 under the 90-Day Facility, which amount was used to fund the purchase price for the common stock of BMS and the working capital needs of the Company. In March 1996, the Company subsequently consummated longer term financing through a credit facility ("the Credit Facility"), retired the 90-Day Facility and borrowed additional funds for working capital purposes. The Company has a total of $40 million in aggregate principal amount outstanding under the Credit Facility. The Credit Facility is unsecured working capital and letter of credit arrangement provided by a syndicate of banks led by NationsBank. The Credit Facility has an overall borrowing limit of $110,000,000 with a sub-limit of $7,000,000 for standby letters of credit. The Credit Facility will mature in three years unless extended annually thereafter for two additional years at the option of the lenders. Draws are permitted under the Credit Facility for the following purposes: (i) refinancing outstanding borrowings, including the 90-Day Facility, (ii) financing seasonal working capital needs, and (iii) financing general corporate purposes, including the costs of constructing TIR. Although the Credit Facility is unsecured, the Company has agreed not to pledge its assets to any third party. In addition, the Company has made certain financial covenants, including specified levels of net worth and ratios of (i) debt to equity, (ii) debt to earnings before interest, taxes, depreciation and amortization (EBITDA), and (iii) earnings before interest and taxes (EBIT) to interest expense. The Credit Facility also prohibits the Company from making cash expenditures in excess of $10 million in the aggregate to acquire additional motor speedways, without the consent of the lenders, and limits its consolidated capital expenditures, exclusive of expenditures on TIR, to
F-17

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) amounts not to exceed $20 million in fiscal year 1996, $40 million in fiscal year 1997 and $20 million in fiscal year 1998 and thereafter. The Company also agreed to certain other limitations or prohibitions concerning the incurrence of other indebtedness, guaranties, asset sales, investments, cash dividends, distributions and redemptions. The Credit Facility permits additional indebtedness, within certain parameters, including through a sale-leaseback transaction, for the permanent financing of TIR.
F-18

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(DOLLARS IN THOUSANDS)

                                                                                         DECEMBER 31,     JUNE 30,
                                                                                             1995           1996
                                                                                                         (UNAUDITED)
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents...........................................................     $ 10,132       $  59,603
  Restricted cash.....................................................................           86              50
  Trade accounts receivable...........................................................        6,511           8,112
  Refundable income taxes.............................................................          727              --
  Inventories (Note 4)................................................................        5,372           6,019
  Speedway condominiums held for sale.................................................        3,142           3,720
  Prepaid expenses....................................................................          185             408
     Total current assets.............................................................       26,155          77,912
PROPERTY AND EQUIPMENT, NET (Note 5)..................................................       93,105         173,308
GOODWILL AND OTHER INTANGIBLE ASSETS (Note 9).........................................       12,675          36,660
OTHER ASSETS:
  Marketable equity securities........................................................        1,855           1,589
  Note receivable-affiliate (Note 8)..................................................          934             672
  Deferred financing costs............................................................           --             599
  Other assets........................................................................        1,722           3,599
     Total other assets...............................................................        4,511           6,459
     TOTAL............................................................................     $136,446       $ 294,339	

See notes to consolidated financial statements.
F-19

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(DOLLARS IN THOUSANDS)

                                                                                         DECEMBER 31,     JUNE 30,
                                                                                             1995           1996
                                                                                                         (UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Current maturities of long-term debt (Note 6).......................................     $    348       $     348
  Accounts payable....................................................................        7,743          15,523
  Deferred race event income, net.....................................................       13,345          20,926
  Accrued expenses and other liabilities..............................................        5,870           9,103
  Due to former stockholders..........................................................          665             489
       Total current liabilities......................................................       27,971          46,389
LONG-TERM DEBT (Note 6)...............................................................        1,458          41,287
PAYABLE TO AFFILIATED COMPANIES (Note 8)..............................................        2,603           2,603
DEFERRED MEMBERSHIP INCOME, NET.......................................................        1,563           1,426
DEFERRED INCOME TAXES.................................................................        6,717           9,960
OTHER LIABILITIES.....................................................................          754             651
       Total liabilities..............................................................       41,066         102,316
CONTINGENCY (Note 7)..................................................................
STOCKHOLDERS' EQUITY (Note 3):
  Preferred stock.....................................................................           --              --
  Common stock........................................................................          380             412
  Additional paid-in capital..........................................................       72,148         155,019
  Retained earnings...................................................................       22,944          36,624
  Deduct:
     Unrealized loss on marketable equity securities..................................          (92)            (32)
       Total stockholders' equity.....................................................       95,380         192,023
       TOTAL..........................................................................     $136,446       $ 294,339	

See notes to consolidated financial statements.
F-20

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(DOLLARS AND SHARES IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

                                                                                                 SIX MONTHS ENDED
                                                                                               JUNE 30,    JUNE 30,
                                                                                                 1995        1996
REVENUES:
  Admissions................................................................................   $ 18,577    $ 27,306
  Event related revenue.....................................................................     14,448      19,040
  Other operating revenue...................................................................      5,929       6,800
     Total revenues.........................................................................     38,954      53,146
OPERATING EXPENSES:
  Direct expense of events..................................................................     10,297      15,133
  Other direct operating expense............................................................      3,940       4,333
  General and administrative................................................................      6,810       8,622
  Depreciation and amortization.............................................................      2,330       3,796
     Total operating expenses...............................................................     23,377      31,884
OPERATING INCOME............................................................................     15,577      21,262
INTEREST INCOME (EXPENSE), NET..............................................................       (486)        449
OTHER INCOME................................................................................        997         781
EQUITY IN EARNINGS OF NORTH WILKESBORO SPEEDWAY.............................................         --         185
INCOME BEFORE INCOME TAXES AND EXTRAORDINARY ITEM...........................................     16,088      22,677
PROVISION FOR INCOME TAXES..................................................................      6,435       8,997
INCOME BEFORE EXTRAORDINARY ITEM............................................................      9,653      13,680
EXTRAORDINARY ITEM, NET (Note 6)............................................................       (133)         --
NET INCOME..................................................................................   $  9,520    $ 13,680
PER SHARE DATA:
  Income before extraordinary item..........................................................   $   0.27    $   0.34
  Extraordinary item, net...................................................................         --          --
  NET INCOME................................................................................   $   0.27    $   0.34
WEIGHTED AVERAGE SHARES OUTSTANDING (Note 2)................................................     35,689      40,490	

See notes to consolidated financial statements.
F-21

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)
(DOLLARS AND SHARES IN THOUSANDS)

                                                                                          UNREALIZED
                                                                                          GAIN (LOSS)
                                                               ADDITIONAL                ON MARKETABLE          TOTAL
                                             COMMON STOCK       PAID-IN      RETAINED       EQUITY          STOCKHOLDERS'
                                           SHARES    AMOUNT     CAPITAL      EARNINGS     SECURITIES           EQUITY
BALANCE DECEMBER 31, 1995...............   38,000     $380      $  72,148    $ 22,944        $ (92)           $  95,380
  Net income............................       --       --             --      13,680           --               13,680
  Issuance of Speedway Motorsports, Inc.
     common stock.......................    3,000       30         78,463          --           --               78,493
  Exercise of Speedway Motorsports, Inc.
     stock options......................      110        1            464          --           --                  465
  Issuance of common stock in
     conjunction with acquisition of
     Oil-Chem Research Corp.............      145        1          3,944          --           --                3,945
  Net unrealized gain on marketable
     equity securities..................       --       --             --          --           60                   60
BALANCE JUNE 30, 1996 (Unaudited).......   41,255     $412      $ 155,019    $ 36,624        $ (32)           $ 192,023	

See notes to consolidated financial statements.
F-22

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(DOLLARS IN THOUSANDS)

                                                                                                 SIX MONTHS ENDED
                                                                                               JUNE 30,    JUNE 30,
                                                                                                 1995        1996
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income................................................................................   $  9,520    $ 13,680
  Extraordinary item, net...................................................................        133          --
  Adjustments to reconcile net income to net cash provided by operating activities:
     Depreciation and amortization..........................................................      2,330       3,796
     Equity in earnings of North Wilkesboro Speedway........................................         --        (185)
     Gain on sale of marketable equity securities and investments...........................       (252)       (531)
     Amortization of deferred membership income.............................................       (138)       (137)
     Changes in operating assets and liabilities,net of of acquired business:
       Trade accounts receivable............................................................     (3,226)     (1,136)
       Inventories..........................................................................       (810)       (620)
       Other current assets and liabilities.................................................      5,595      14,955
       Condominiums held for sale...........................................................       (335)       (578)
       Accrued interest receivable from related parties.....................................        (25)        (25)
       Deferred race event income...........................................................      4,916         345
       Other assets and liabilities.........................................................       (558)     (3,806)
          Net cash provided by operating activities.........................................     17,150      25,758
CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal payments on long-term debt......................................................    (47,261)    (32,671)
  Issuance of long-term debt................................................................         --      72,500
  Advances from related parties.............................................................          2          --
  Issuance of common stock to public........................................................     65,793      78,493
  Issuance of common stock in connection with stock options exercised.......................         --         465
          Net cash provided by financing activities.........................................     18,534     118,787
CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures......................................................................     (6,175)    (69,102)
  Purchases of marketable equity securities and investments.................................     (6,209)       (606)
  Proceeds from sales of marketable equity securities and investments.......................        130       1,507
  Purchase of Bristol Motor Speedway........................................................         --     (26,646)
  Purchase of Oil-Chem Research Corp........................................................         --        (514)
  Repayments from related parties...........................................................         --         287
          Net cash used in investing activities.............................................    (12,254)    (95,074)
NET INCREASE IN CASH AND CASH EQUIVALENTS...................................................     23,430      49,471
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD............................................      7,046      10,132
CASH AND CASH EQUIVALENTS AT END OF PERIOD..................................................   $ 30,476    $ 59,603
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
  Road construction costs financed with a note payable (Note 6).............................   $  2,016    $     --	

See notes to consolidated financial statements.
F-23

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 1995 AND 1996
1. BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Speedway Motorsports, Inc. (SMI), and its wholly-owned subsidiaries, Charlotte Motor Speedway, Inc. and Subsidiaries (CMS), Atlanta Motor Speedway, Inc. (AMS), Texas International Raceway (TIR), Bristol Motor Speedway, Inc. (BMS), Oil-Chem Research Corp. and Subsidiary (ORC) and Speedway Funding Corp. (collectively, the Company).
These unaudited consolidated financial statements should be read in conjunction with the financial statements for Speedway Motorsports, Inc. for the fiscal year ended December 31, 1995 included in the Company's 1995 Annual Report on Form 10-K or the Company's Prospectus dated March 27, 1996, the financial statements for the quarter ended June 30, 1996 included in the Company's Quarterly Report on Form 10-Q and the Consolidated Financial Statement included in this Prospectus.
In management's opinion, these unaudited consolidated financial statements contain all adjustments necessary for their fair presentation at interim periods. All such adjustments are of a normal recurring nature.
The results of operations for interim periods are not necessarily indicative of operating results that may be expected for the entire year due to the seasonal aspect of event revenues.
The Company recognizes revenues and operating expenses for all events in the calendar quarter in which the events are conducted except when a major NASCAR race event occurs on the last weekend of a calendar quarter ended March 31, June 30, or September 30 in which case the race event revenues and operating expenses are recognized consistently in the immediately succeeding calendar quarter. The Company has adopted this accounting policy to help ensure comparability between quarterly financial statements.
A major NASCAR race event occurred at BMS on the weekend of March 29-31, 1996. Accordingly, the operating results of this race event are reflected in the second quarter of 1996. The cutoff date for the first quarter of calendar year 1996 was March 28, 1996. No major NASCAR race events were held on the last weekend of the calendar quarter ended June 30, 1996.
BUSINESS ACQUISITION -- On April 16, 1996, the Company acquired, through merger, 100% of the outstanding capital stock of ORC for $4,459,000 in Company stock and cash. ORC produces an environmentally friendly motor oil additive that the Company hopes to promote in conjunction with its speedways. The results of operations of this acquired business from the acquisition date through June 30, 1996 and for the corresponding prior year period on a pro forma basis were insignificant.
IMPACT OF NEW ACCOUNTING STANDARD -- In October 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation," which was effective for all companies beginning January 1, 1996. SFAS No. 123 requires expanded disclosures of stock-based compensation arrangements with employees and encourages (but does not require) compensation cost to be measured based on the fair value of the equity instrument awarded. Companies are permitted, however, to continue to apply APB Opinion No. 25, which recognizes compensation cost based on the intrinsic value of the equity instrument awarded. The Company will continue to apply APB Opinion No. 25 to its stock-based compensation awards to employees and will disclose the required pro forma effect on net income and earnings per share on an annual basis.
INCREASE IN AUTHORIZED SHARES OF COMMON STOCK -- On May 8, 1996, the Company's stockholders ratified an increase of authorized shares of Common Stock to 100,000,000.
RECLASSIFICATIONS -- Certain accounts in 1995 were reclassified to conform to current year presentation.
2. PER SHARE DATA
Per share amounts in the accompanying consolidated financial statements have been prepared to reflect the 40,490,000 weighted average shares outstanding for the six month periods ended June 30, 1996, including
F-24

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
874,000 common share equivalents arising from stock options. The per share amounts reflect the 35,689,000 weighted average shares outstanding for the six month periods ended June 30, 1995 after giving effect to the initial public offering, including 400,000 common share equivalents arising from stock options.
3. PUBLIC OFFERINGS OF COMMON STOCK
The Company completed an offering of common stock on April 1, 1996 by issuing 3,000,000 shares of common stock at a price of $27.625 per share. The net proceeds after offering expenses were $78,493,000.
The Company also completed an initial public offering of common stock on March 3, 1995 by issuing 8,000,000 shares of common stock at an initial price of $9 per share. The net proceeds after offering expenses were $65,793,000.
4. INVENTORIES
Inventories as of December 31, 1995 and June 30, 1996 consisted of the following components (dollars in thousands):

                                                                                DECEMBER 31,    JUNE 30,
                                                                                    1995          1996
Souvenirs....................................................................      $2,242        $2,362
Finished vehicles, parts and accessories.....................................       3,057         3,576
Food.........................................................................          73            81
  Total......................................................................      $5,372        $6,019	

5. DEVELOPMENT AND CONSTRUCTION OF TIR
In 1995, the Company began constructing TIR at a 950 acre site in Fort Worth, Texas. TIR will be a 1.5-mile, banked asphalt oval superspeedway. Land and land improvements and construction in progress at December 31, 1995 included approximately $13,200,000 representing costs incurred through that date related to the new track facility. As of June 30, 1996, capitalized costs associated with TIR aggregated approximately $67,742,000. Company management currently estimates the total cost of this facility to be approximately $130 million. No assurance can be given that the actual cost of constructing TIR will remain within this estimate. Numerous factors, many of which are beyond the Company's control, may influence the ultimate cost of TIR, including undetected soil or land conditions, additional land acquisition costs, increases in the cost of construction materials and labor, unforeseen changes in the design of TIR, litigation, accidents or natural disasters affecting the construction site and national or regional economic changes. In addition, the actual cost of TIR could vary materially from the foregoing estimate if the Company's assumptions about the quality of materials or workmanship required to complete TIR or the cost of financing such construction were to change. The TIR construction is also subject to state and local permitting processes, which if changed, could materially affect the cost of TIR. A lawsuit recently filed by adjacent landowners in response to the construction of TIR and the annexation of their land by the City of Fort Worth is not expected by management to have a material impact on the cost of TIR.
In July, 1996 the Company and NASCAR jointly announced that TIR will host its first NASCAR Winston Cup race on April 6, 1997 preceded by a Busch Grand National race. Management is actively pursuing the scheduling of additional motorsports racing and other events at this facility. Also, in July 1996 TIR conducted a ceremonial groundbreaking for 58 condominiums to be built above turn-two overlooking the speedway.
6. LONG-TERM DEBT AND EXTRAORDINARY ITEM
In conjunction with its January 1996 acquisition of BMS, the Company obtained from Nationsbank an unsecured, short-term line of credit in an aggregate principal amount of up to $50,000,000 (the "90-Day Facility"). In early 1996, the Company borrowed $32,688,000 under the 90-Day Facility, which amount was used to fund the purchase price for the common stock of BMS and the working capital needs of the Company.
F-25

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
In March 1996, the Company subsequently consummated longer term financing through a credit facility ("the Credit Facility"), retired the 90-Day Facility and borrowed additional funds for working capital purposes. The Company has a total of $40 million in aggregate principal amount outstanding under the Credit Facility at June 30, 1996. The Credit Facility is an unsecured working capital and letter of credit arrangement provided by a syndicate of banks led by Nationsbank.
The Credit Facility has an overall borrowing limit of $110,000,000 with a sub-limit of $7,000,000 for standby letters of credit. The Credit Facility will mature in three years unless extended annually thereafter for two additional years at the option of the lenders. Draws are permitted under the Credit Facility for the following purposes: (i) refinancing outstanding borrowings, including the 90-Day Facility, (ii) financing seasonal working capital needs,
(iii) financing general corporate purposes, including the costs of constructing TIR. Although the Credit Facility is unsecured, the Company has agreed not to pledge its assets to any third party. In addition, the Company has made certain financial covenants, including specified levels of net worth and ratios of (i) debt to equity, (ii) debt to earnings before interest, taxes, depreciation and amortization (EBITDA), and (iii) earnings before interest and taxes (EBIT) to interest expense. The Credit Facility also prohibits the Company from making cash expenditures in excess of $10 million in the aggregate to acquire additional motor speedways, without the consent of the lenders, and limits its consolidated capital expenditures, exclusive of expenditures on TIR, to amounts not to exceed $20 million in fiscal year 1996, $40 million in fiscal year 1997 and $20 million in fiscal year 1998 and thereafter. The Company also agreed to certain other limitations or prohibitions concerning the incurrence of other indebtedness, guaranties, asset sales, investments, cash dividends, distributions and redemptions. The Credit Facility permits additional indebtedness, within certain parameters, including through a sale-leaseback transaction, for the permanent financing of TIR.
Long-term debt at December 31, 1995 and June 30, 1996 also includes a note payable for road construction costs in the amount of $1,806,000 and $1,635,000, respectively.
Long-term debt as of December 31, 1994 of $47,261,000 included various notes payable to NationsBank totaling $46,588,000. On March 3, 1995, these loans were repaid using the proceeds from the initial public offering. Accordingly, the unamortized debt issuance costs of $133,000, net of tax, related to these notes were expensed in the three month period ended March 31, 1995.
7. INCOME TAXES
On September 9, 1993, the Internal Revenue Service (IRS) asserted that AMS, as the successor in interest to BND, Inc. (BND), is liable for additional income taxes, penalties and interest. The total assessment for taxes, penalties and interest (net of tax benefit for deductibility of interest) through December 31, 1995 was approximately $7,000,000. This deficiency allegedly relates to BND's income tax returns for the years ended November 30, 1988 and October 31, 1990. The IRS alleges that, during the acquisition of AMS by Mr. Smith in October 1990, BND's merger into Atlanta International Raceway, Inc., the predecessor of AMS (AIR), resulted in a taxable gain to BND equal to the excess of liabilities assumed by AIR over the adjusted basis of assets transferred to AIR. Moreover, this taxable gain allegedly eliminates a net operating loss carryback to the tax return filed for the year ended November 30, 1988. On November 30, 1993, AMS filed a protest contesting the assessment. Management intends to continue contesting the allegations of a deficiency and has not provided for this contingency in the accompanying consolidated financial statements. There can be no assurance, however, that the ultimate resolution of this proceeding will not have a material adverse effect on the Company's future results of operations or financial condition.
8. RELATED PARTY TRANSACTIONS
Notes receivable-affiliate at December 31, 1995 and June 30, 1996 consists of a note receivable of $934,000 and $672,000, respectively, including accrued interest of $434,000 at December 31, 1995 and $172,000 at June 30, 1996, from a partnership in which the Company's Chairman and Chief Executive Officer and the Company's Chief Operating Officer are partners. The note due from the partnership to CMS is collateralized by
F-26

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
certain land owned by the partnership and is payable on demand. Because CMS does not anticipate any additional repayment of this note prior to June 30, 1997, the entire balance has been classified as a noncurrent asset in the accompanying consolidated financial statements.
Amounts payable to affiliated companies at December 31, 1995 and June 30, 1996 of $2,603,000 represents acquisition and other expenses paid on behalf of AMS by Sonic Financial Corporation during recent years. Of such amount, approximately $1.8 million is evidenced by a demand note bearing interest at 3.83% per annum. The remainder of the amount bears interest at prime plus 1%. The entire account balance is classified as long-term based on expected repayment dates.
9. PURCHASE OF BRISTOL MOTOR SPEEDWAY
The total purchase price of the capital stock of BMS was $26,646,000, including $146,000 of direct acquisition costs. The acquisition has been accounted for using the purchase method. In accordance with Accounting Principles Board Opinion No. 16, the purchase price has been allocated to the assets and liabilities acquired at their estimated fair market values at acquisition date. Allocation of the purchase price resulted in goodwill of approximately $19,669,000, which is being amortized over 40 years. The Company is in the process of obtaining an independent appraisal or valuation of the fair value of identifiable intangibles acquired, if any. Based on current information, the Company's management does not expect the final allocation of the purchase price to be materially different from that used herein.
In accordance with the Company's accounting policy for establishing the cut-off date for quarterly financial reporting purposes, the revenues and direct expenses of the BMS NASCAR race events held on the weekend of March 29-31, 1996 have been recognized in the second quarter of fiscal 1996.
The following unaudited pro forma financial data have been prepared giving effect to the acquisition of BMS as if the transaction had taken place as of January 1, 1995 after giving effect to certain adjustments, including amortization of goodwill, interest expense on acquisition debt and related income tax effects. The pro forma results have been prepared for comparative purposes only and do not purport to be indicative of what would have occurred had the acquisition been made on that date, nor are they necessarily indicative of results which may occur in the future.

                                                                     (PRO FORMA)
                                                                   SIX MONTHS ENDED
                                                               JUNE 30,       JUNE 30,
                                                                 1995           1996
Total revenues.............................................   $45,003,000    $53,146,000
Income before extraordinary item...........................     9,691,000     13,539,000
Net income.................................................     9,558,000     13,539,000
Net income per share.......................................          0.27           0.33	

F-27

INDEPENDENT AUDITORS' REPORT
BOARD OF DIRECTORS
BRISTOL MOTOR SPEEDWAY, INC.
 BRISTOL, TENNESSEE
We have audited the balance sheet of Bristol Motor Speedway, Inc. (BMS) as of December 31, 1995, and the related statements of income and retained earnings and of cash flows for the year then ended. These financial statements are the responsibility of BMS' management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material respects, the financial position of BMS at December 31, 1995, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Charlotte, North Carolina
March 1, 1996
F-28

BRISTOL MOTOR SPEEDWAY, INC.
BALANCE SHEET
 DECEMBER 31, 1995

ASSETS
CURRENT ASSETS:
  Cash and cash equivalents (Notes 2 and 4)........................................................   $ 3,862,751
  Accounts receivable (no allowance for doubtful accounts considered necessary)....................       418,100
     Total current assets..........................................................................     4,280,851
PROPERTY AND EQUIPMENT, NET (Note 3)...............................................................     8,071,388
     TOTAL.........................................................................................   $12,352,239
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable.................................................................................   $    40,683
  Amounts due to stockholders (Note 4).............................................................       994,851
  Deferred race event income, net (Note 2).........................................................     7,235,801
  Accrued expenses and other liabilities...........................................................       350,846
     Total current liabilities.....................................................................     8,622,181
DEFERRED INCOME TAXES (Note 2).....................................................................        91,271
STOCKHOLDERS' EQUITY (Notes 1 and 4):
  Common stock; no par value; authorized, issued and outstanding, 2,000 shares.....................        20,000
  Retained earnings................................................................................     3,938,522
  Deduct: Accounts receivable from affiliate.......................................................      (319,735)
     Total stockholders' equity....................................................................     3,638,787
     TOTAL.........................................................................................   $12,352,239	

See notes to financial statements.
F-29

BRISTOL MOTOR SPEEDWAY, INC.
STATEMENT OF INCOME AND RETAINED EARNINGS
YEAR ENDED DECEMBER 31, 1995

REVENUES (Note 2):
  Admissions.......................................................................................   $ 9,079,484
  Event related revenue............................................................................     2,607,957
     Total operating revenues......................................................................    11,687,441
OPERATING EXPENSES:
  Direct expense of events.........................................................................     3,913,982
  General and administrative (Note 4)..............................................................     6,117,074
  Depreciation.....................................................................................       606,380
     Total operating expenses......................................................................    10,637,436
OPERATING INCOME...................................................................................     1,050,005
INTEREST INCOME....................................................................................       132,509
OTHER INCOME.......................................................................................        17,852
INCOME FROM OPERATIONS BEFORE INCOME TAXES.........................................................     1,200,366
PROVISION FOR STATE EXCISE TAXES (Note 2)..........................................................       (70,000)
NET INCOME.........................................................................................     1,130,366
RETAINED EARNINGS, BEGINNING OF YEAR...............................................................     2,808,156
RETAINED EARNINGS, END OF YEAR.....................................................................   $ 3,938,522	

See notes to financial statements.
F-30

BRISTOL MOTOR SPEEDWAY, INC.
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1995

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income.......................................................................................   $ 1,130,366
  Adjustments to reconcile net income to net cash provided by operating activities:
     Depreciation..................................................................................       606,380
     Gain on sale of assets........................................................................       (19,777)
     Deferred income taxes.........................................................................        20,000
     Increase (decrease) in operating assets and liabilities:
       Accounts receivable.........................................................................      (418,100)
       Employee receivables........................................................................        21,675
       Accounts payable............................................................................       (26,791)
       Deferred race event income..................................................................     1,390,827
       Accrued expenses and other liabilities......................................................       264,776
          Net cash provided by operating activities................................................     2,969,356
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from short-term stockholder loans.......................................................     1,359,234
  Principal payments on stockholder loans..........................................................      (888,646)
          Net cash provided by financing activities................................................       470,588
CASH FLOWS FROM INVESTING ACTIVITIES:
  Increase in accounts receivable -- affiliate.....................................................       (36,526)
  Purchases of property and equipment..............................................................    (2,152,688)
          Net cash used in investing activities....................................................    (2,189,214)
NET INCREASE IN CASH AND CASH EQUIVALENTS..........................................................     1,250,730
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR.....................................................     2,612,021
CASH AND CASH EQUIVALENTS AT END OF YEAR...........................................................   $ 3,862,751	

See notes to financial statements.
F-31

BRISTOL MOTOR SPEEDWAY, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1995
1. DESCRIPTION OF BUSINESS AND CHANGE IN OWNERSHIP Bristol Motor Speedway, Inc. (BMS) owns and operates a one-half mile lighted, 36-degree banked concrete oval with 70,905 permanent seats occupying approximately 100 acres in Bristol, Tennessee. BMS currently sponsors four major NASCAR-sanctioned racing events annually, including two Winston Cup and two Busch Grand National events. BMS was originally built in 1961 and has been conducting NASCAR-sanctioned racing events annually since that year. BMS has made numerous expansions and improvements to the facility over the years. On January 22, 1996, Speedway Motorsports, Inc. (SMI), a publicly-held company, acquired 100% of the outstanding capital stock of BMS for $26,583,000, including direct acquisition costs of $83,000. In February 1996, SMI formally changed the name of BMS from National Raceways, Inc. (which had previously done business under the name of Bristol International Raceway) to Bristol Motor Speedway, Inc.
2. SIGNIFICANT ACCOUNTING POLICIES REVENUE RECOGNITION -- Admissions revenue consists of ticket sales, and other event related revenues consist of amounts received from sponsorships, television, concessions, commissions and souvenir sales. In 1995, BMS' major racing events were held in April and August. BMS recognizes admissions and other related revenues when the events are held. Advance revenues and certain related direct expenses pertaining to a specific event are deferred until such time as the event is held. The deferred expenses primarily include race purses and sanctioning fees remitted to NASCAR. Deferred race event income, net, as of December 31, 1995 relates predominantly to the Winston Cup events to be held in 1996. If circumstances prevent a race from being held at any time during the racing season, all advance revenue must be refunded and all direct event expenses deferred would be immediately recognized except for race purses which would be refundable from NASCAR. CASH AND CASH EQUIVALENTS -- BMS classifies as cash equivalents all highly liquid investments with original maturities at date of purchase of three months or less. Cash equivalents at December 31, 1995 principally consist of money market funds. PROPERTY AND EQUIPMENT -- Property and equipment is recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Expenditures for repairs and maintenance are charged to expense when incurred. ADVERTISING EXPENSES -- Advertising costs are expensed as incurred. Advertising expenses amounted to $52,000 in 1995. INCOME TAXES -- BMS had elected to be treated as an S Corporation for federal income tax purposes. Under this election, the income of BMS is taxable to its stockholders. Therefore, no provision for federal income taxes has been included in the accompanying 1995 financial statements. BMS is subject to Tennessee excise tax, which is based on taxable income. Deferred income taxes of $91,271 at December 31, 1995 represents the tax effect of the temporary differences between the book and tax basis of property and equipment for Tennessee excise tax purposes. Excise taxes paid during 1995 amounted to $37,000. Because of the change in BMS' ownership subsequent to December 31, 1995 as described in Note 1, BMS has become a wholly-owned subsidiary of SMI. Accordingly, in 1996 and subsequent years, BMS will be included in SMI's consolidated federal income tax return and, therefore, it will be subject to federal income taxes. USE OF ESTIMATES -- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual future results could differ from those estimates.
F-32

BRISTOL MOTOR SPEEDWAY, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
3. PROPERTY AND EQUIPMENT Property and equipment as of December 31, 1995 is summarized as follows:

                                                                               ESTIMATED
                                                                              USEFUL LIVES
Land and land improvements..................................   $   686,272    5-20 years
Racetrack and grandstands...................................     5,903,426    10-30
Buildings...................................................     2,913,614    5-30
Machinery and equipment.....................................       146,560    5-20
Furniture and fixtures......................................       287,921    5-10
Autos and trucks............................................        92,000    5
Construction in progress....................................       527,599
  Total.....................................................    10,557,392
Less accumulated depreciation...............................     2,486,004
  Total.....................................................   $ 8,071,388	

Construction in progress at December 31, 1995 consists of construction costs incurred through that date related to grandstand, suite and restroom improvements. The estimated costs to complete these projects is approximately $500,000.
4. RELATED PARTY TRANSACTIONS ACCOUNTS RECEIVABLE FROM AFFILIATE -- of $319,735 at December 31, 1995 is due from World Boxing Federation, Inc., a company affiliated through common control of the former stockholders. Under the terms of the purchase agreement, the parties agreed that this receivable would be distributed to the former stockholders. Accordingly, the account receivable from affiliate has been treated as a reduction of stockholders' equity at December 31, 1995. AMOUNTS DUE TO STOCKHOLDERS -- of $994,851 at December 31, 1995 consists principally of a short-term non-interest bearing cash loan made to BMS in 1995 by Mr. Larry Carrier, BMS' president and controlling stockholder prior to SMI's purchase of BMS. These funds were originally received by Mr. Carrier from BMS in the form of 1995 S Corporation salary payments (see below). Subsequent to December 31, 1995, Mr. Carrier received cash payments from BMS totaling $1,175,000 and two other minority stockholders received cash payments from BMS totaling $8,000. Accordingly, at the January 22, 1996 purchase date, BMS has as an aggregate net receivable of $187,149 from the former stockholders. In the opinion of SMI's management, this amount will be collected from the former stockholders. General and administrative expenses in 1995 include $2,600,000 of payments to BMS' former president and controlling stockholder. Consistent with past practice, BMS has designated the entire amount of these payments as salary expense in the 1995 statement of income as well as in BMS' 1995 S Corporation tax return. As of the January 1996 purchase date, the former stockholders are no longer employees of BMS. SMI's management has reviewed BMS' past practices for paying and recording salary costs and distributions to the stockholder officers. In the future, SMI expects to pay its BMS executives salaries that are, in the aggregate, substantially less than the amounts paid to the former S Corporation stockholder officers.
F-33

DESCRIPTION OF UNAUDITED PRO FORMA FINANCIAL STATEMENTS
REFLECTING THE BUSINESS COMBINATION OF
SPEEDWAY MOTORSPORTS, INC. AND BRISTOL MOTOR SPEEDWAY, INC.
The following unaudited pro forma financial statements have been prepared giving effect to the acquisition of Bristol Motor Speedway, Inc. (BMS) as if the transaction had taken place at December 31, 1995 for the pro forma balance sheet, and as of January 1, 1995 for the pro forma statement of income for the year ended December 31, 1995.
The acquisition has been accounted for using the purchase method. In accordance with Accounting Principles Board Opinion No. 16, the purchase price will be allocated to the assets and liabilities acquired at their estimated fair market values at acquisition date. The Company has obtained an independent appraisal of BMS' property and equipment, the fair values of which have been used in the accompanying pro forma financial statements. In the near future, the Company plans to obtain an independent appraisal or valuation of the fair value of other net assets acquired, including identifiable intangibles, if any. Based on current information, the Company's management does not expect the final allocation of the purchase price to be materially different from that used in the following pro forma balance sheet and statement of income.
THE UNAUDITED PRO FORMA FINANCIAL INFORMATION IS NOT NECESSARILY INDICATIVE OF THE RESULTS OF OPERATIONS OR THE FINANCIAL POSITION WHICH WOULD HAVE BEEN ATTAINED HAD THE ACQUISITION BEEN CONSUMMATED AT EITHER OF THE FOREGOING DATES OR WHICH MAY BE ATTAINED IN THE FUTURE. THE PRO FORMA FINANCIAL INFORMATION SHOULD BE READ IN CONJUNCTION WITH THE HISTORICAL FINANCIAL STATEMENTS OF SMI AND BMS.
F-34

PRO FORMA BALANCE SHEET
 DECEMBER 31, 1995
(UNAUDITED)

(IN THOUSANDS)

                                                          HISTORICAL                        PRO FORMA
                                                        SMI         BMS       PRO FORMA     ADJUSTMENT      1995
                                                        1995       1995      ADJUSTMENTS      NOTES       PRO FORMA
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents........................   $ 10,132    $ 3,863      $  (270)          E        $ 13,725
  Restricted cash..................................         86                                                  86
  Trade accounts receivable........................      6,511        418                                    6,929
  Refundable income taxes..........................        727                                                 727
  Inventories......................................      5,372                                               5,372
  Speedway condominiums held for sale..............      3,142                                               3,142
  Prepaid expenses.................................        185                                                 185
     Total current assets..........................     26,155      4,281         (270)                     30,166
PROPERTY AND EQUIPMENT, NET........................     93,105      8,071        6,446           A         107,622
GOODWILL...........................................      6,392                  19,606           B          25,998
OTHER ASSETS:
  Investment in North Wilkesboro Speedway..........      6,283                                               6,283
  Marketable equity securities.....................      1,855                                               1,855
  Note receivable -- affiliate.....................        934                                                 934
  Other assets.....................................      1,722                     187           D           1,909
     Total other assets............................     10,794                     187                      10,981
     TOTAL.........................................   $136,446    $12,352      $25,969                    $174,767
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Current maturities of long-term debt.............   $    348    $            $26,500           C        $ 26,848
  Accounts payable.................................      7,743         40                                    7,783
  Loan payable -- former stockholder of BMS........                   995                                      995
  Deferred race event income, net..................     13,345      7,236                                   20,581
  Accrued expenses and other liabilities...........      5,870        351                                    6,221
  Due to former stockholders.......................        665                                                 665
     Total current liabilities.....................     27,971      8,622       26,500                      63,093
LONG-TERM DEBT.....................................      1,458                                               1,458
PAYABLE TO AFFILIATED COMPANY......................      2,603                                               2,603
DEFERRED MEMBERSHIP INCOME, NET....................      1,563                                               1,563
DEFERRED INCOME TAXES..............................      6,717         91        3,108           G           9,916
OTHER LIABILITIES..................................        754                                                 754
  Total liabilities................................     41,066      8,713       29,608                      79,387
STOCKHOLDERS' EQUITY:
  Common stock.....................................        380                                                 380
  Additional paid-in capital.......................     72,148                                              72,148
  Retained earnings................................     22,944                                              22,944
  Net assets of acquired company...................                 3,639       (3,639)          F
  Unrealized loss on marketable equity
     securities....................................        (92)                                                (92)
     Total stockholders' equity....................     95,380      3,639       (3,639)                     95,380
     TOTAL.........................................   $136,446    $12,352      $25,969                    $174,767	

See notes to pro forma financial data.
F-35

NOTES TO 1995 UNAUDITED PRO FORMA BALANCE SHEET
 (IN THOUSANDS)

A.    Increase in property and equipment:
      To adjust BMS depreciable property and equipment to fair value at date of acquisition based on
        independent appraisal...........................................................................   $ 5,205
      To adjust BMS land to fair value at date of acquisition based on independent appraisal............     1,241
                                                                                                           $ 6,446
B.    Increase in excess of cost over value assigned to net assets acquired (goodwill)..................   $19,606
C.    Increase in short-term bank debt..................................................................   $26,500
D.    To record debt issuance costs.....................................................................   $   187
E.    Cash paid for direct cost of acquisition and debt issuance cost...................................   $  (270)
F.    To eliminate historical equity of BMS.............................................................   $(3,639)
      To record deferred income taxes on the difference between the book and tax basis of property and
G.      equipment due to purchase accounting............................................................   $ 3,108
H.    The following is a computation of the purchase price:	

Cash paid at closing...................................................................   $26,500
Direct costs of acquisition including legal, accounting and independent appraisal
  costs................................................................................        83
  Total purchase price.................................................................   $26,583
Allocation of purchase price:
  Book value of net assets acquired                                                       $ 3,639
  Step-up in fair value of property and equipment......................................     5,205
  Step-up in fair value of land........................................................     1,241
  Deferred income taxes................................................................    (3,108)
  Excess of cost over value assigned (goodwill)........................................    19,606
     Total purchase price..............................................................   $26,583	

F-36

PRO FORMA STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1995
 (UNAUDITED)

(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

                                                         HISTORICAL                           PRO FORMA
                                                     SMI           BMS         PRO FORMA     ADJUSTMENTS      1995
                                                     1995         1995        ADJUSTMENTS       NOTES       PRO FORMA
REVENUES:
  Admissions....................................   $ 36,569      $ 9,079        $                           $ 45,648
  Event related revenue.........................     27,783        2,608                                      30,391
  Other operating revenues......................     11,221                                                   11,221
     Total operating revenues...................     75,573       11,687                                      87,260
OPERATING EXPENSES:
  Direct expense of events......................     19,999        3,914                                      23,913
  Other direct operating expense................      7,611                                                    7,611
  General and administrative....................     13,381        6,117         (2,100)          A           17,398
  Depreciation and amortization.................      4,893          606            750           B            6,249
     Total operating expenses...................     45,884       10,637         (1,350)                      55,171
OPERATING INCOME................................     29,689        1,050          1,350                       32,089
INTEREST EXPENSE, NET...........................        (24)         132         (2,182)          C           (2,074)
OTHER INCOME....................................      3,392           18                                       3,410
EQUITY IN EARNINGS OF NORTH WILKESBORO
  SPEEDWAY......................................        233                                                      233
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME
  TAXES.........................................     33,290        1,200           (832)                      33,658
PROVISION FROM INCOME TAXES.....................    (13,700)         (70)          (264)          D          (14,034)
INCOME FROM CONTINUING OPERATIONS...............     19,590        1,130         (1,096)                      19,624
EXTRAORDINARY ITEM, NET.........................       (133)                                                    (133)
NET INCOME......................................   $ 19,457      $ 1,130        $(1,096)                    $ 19,491
INCOME PER SHARE FROM CONTINUING OPERATIONS.....   $   0.53                                                 $   0.53
WEIGHTED AVERAGE SHARES OUTSTANDING.............     37,275                                                   37,275	

See notes to pro forma financial data.
F-37

NOTES TO 1995 UNAUDITED PRO FORMA STATEMENT OF INCOME
 (IN THOUSANDS)

A.    Decrease in general and administrative expenses:
      Decrease in compensation expense paid to former stockholder officers..............................   $(2,600)
      Increase in salaries related to new general manager, controller and marketing executive that will
        replace the departing stockholder officers......................................................       500
                                                                                                           $(2,100)
B.    Increase in depreciation and amortization:
      Depreciation of step-up in fair value of property and equipment using straight-line basis.........   $   260
      Amortization of goodwill (amortized on a straight-line basis over 40 years).......................       490
                                                                                                           $   750
C.    Increase in interest expense:
      Interest expense on new SMI bank indebtedness used to acquire BMS.................................   $(2,120)
      Amortization of debt issuance costs...............................................................       (62)
                                                                                                           $(2,182)
D.    Increase in provision for income taxes:
      Income tax provision on BMS' pretax income and pro forma adjustments using BMS' statutory rate of
        39%.............................................................................................   $  (264)	

F-38

NO DEALER, SALESPERSON, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, OR ANY SELLING SECURITY HOLDER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
TABLE OF CONTENTS

                                                  PAGE
Prospectus Summary.............................     3
Risk Factors...................................     7
Use of Proceeds................................    10
Dividend Policy................................    10
Capitalization.................................    11
Price Range of Common Stock....................    11
Selected Financial Data........................    12
Management's Discussion and Analysis of
  Financial Condition and Results of
  Operations...................................    14
National Association of Stock Car Auto Racing,
  Inc. (NASCAR)................................    22
Business.......................................    25
Management.....................................    30
Description of Debentures......................    32
Certain United States Federal Income Tax
  Consequences.................................    44
Description of Capital Stock...................    47
Shares Eligible for Future Sale................    49
Plan of Distribution...........................    50
Selling Security Holders.......................    51
Legal Matters..................................    51
Experts........................................    51
Incorporation of Certain Information by
  Reference....................................    52
Available Information..........................    52
Index to Financial Statements..................   F-1	

$70,000,000

(Speedway logo appears here)

ATLANTA, BRISTOL & CHARLOTTE MOTOR SPEEDWAYS
TEXAS INTERNATIONAL RACEWAY
600 RACING
 5 3/4% Convertible
Subordinated
Debentures Due 2003
PROSPECTUS
 , 1996

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses to be borne by the Registrant in connection with the issuance and distribution of the securities being registered hereby other than underwriting discounts and commissions. No portion of such expenses are to be borne by the Selling Security Holders. All expenses other than the SEC registration fee, the NASD filing fee and the NYSE listing fee are estimated.

SEC registration fee........................................................   $21,212.13
NASD filing fee.............................................................       *
NYSE listing fee............................................................       *
Trustee's fees and expenses.................................................       *
Transfer agent's fee and expenses...........................................       *
Accounting fees and expenses................................................       *
Legal fees and expenses.....................................................       *
"Blue Sky" fees and expenses (including legal fees).........................       *
Costs of printing and engraving.............................................       *
Miscellaneous...............................................................       *
     Total..................................................................   $   *	

* To be furnished by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Bylaws effectively provide that the Registrant shall, to the full extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as amended from time to time ("Section 145"), indemnify all persons whom it may indemnify pursuant thereto. In addition, the Registrant's Certificate of Incorporation eliminates personal liability of its directors to the full extent permitted by Section 102(b) (7) of the General Corporation Law of the State of Delaware, as amended from time to time ("Section 102(b) (7)").
Section 145 permits a corporation to indemnify its directors and officers against expenses (including attorney's fees), judgments, fines and amounts paid in settlements actually and reasonably incurred by them in connection with any action, suit or proceeding brought by a third party if such directors or officers acted in good faith and in a manner they 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 no reason to believe their conduct was unlawful. In a derivative action, indemnification may be made only for expenses actually and reasonably incurred by directors and officers in connection with the defense or settlement of an action or suit and only with respect to a matter as to which they shall have acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interest of the corporation, except that no indemnification shall be made if such person shall have been adjudged liable to the corporation, unless and only to the extent that the court in which the action or suit was brought shall determine upon application that the defendant officers or directors are reasonably entitled to indemnity for such expenses despite such adjudication of liability.
Section 102(b) (7) provides that a corporation may eliminate or limit the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for willful or negligent conduct in paying dividends or repurchasing stock out of other than lawfully available funds or (iv) for any transaction from which the director derived an improper personal benefit. No such provision shall eliminate or limit the liability of a director for any act or omission occurring prior to the date when such provision becomes effective.
The Company maintains insurance against liabilities under the Securities Act of 1933 for the benefit of its officers and directors.
Section 9 of the Registration Rights Agreement (filed as Exhibit 4.3 to this Registration Statement) provides that the Holders of Transfer Restricted Securities covered by this Registration Statement severally and not jointly will indemnify and hold harmless the Registrant and each director, officer and controlling person of the Registrant from and against any liability caused by any statement or omission in the Registration Statement, in the Prospectus or in any amendment or supplement thereto, in each case to the extent that the statement or omission
II-1

was made in reliance upon and in conformity with written information furnished to the Registrant by the Holders of Transfer Restricted Securities covered by this Registration Statement expressly for use therein.
ITEM 16. EXHIBITS.
EXHIBIT INDEX

EXHIBIT
NUMBER                                 DESCRIPTION
  *3.1   Certificate of Incorporation of the Company (incorporated by reference
         to Exhibit 3.1 of the Company's Registration Statement on Form S-1, File
         No. 33-87740 (the "Form S-1")).
  *3.2   Bylaws of the Company (incorporated by reference to Exhibit 3.2 of the
         Form S-1).
 **3.3   Amendment to Certificate of Incorporation of the Company.
   4.1   Indenture dated as of September 1, 1996 between the Company and First
         Union National Bank of North Carolina, as Trustee (the "Indenture").
   4.2   Form of 5 3/4% Convertible Subordinated Debenture due 2003 (included in
         the Indenture).
   4.3   Registration Rights Agreement dated as of September 26, 1996 among the
         Company and the Initial Purchasers.
 **5.1   Opinion of Parker, Poe, Adams & Bernstein L.L.P. regarding the legality
         of the securities being registered.
  12.1   Statement regarding computation of ratios.
  23.1   Consent of Parker, Poe, Adams & Bernstein L.L.P. (included in Exhibit
         5.1).
  23.2   Consent of Deloitte & Touche L.L.P.
  24.1   Power of Attorney (included on the signature page of this Registration
         Statement).
  25.1   Form T-1 Statement of Eligibility and Qualification under the Trust
         Indenture Act of 1939 of First Union National Bank of North Carolina.
  99.1   Purchase Agreement dated September 26, 1996 among the Company and the
         Initial Purchasers.
 *99.2   Credit Agreement dated as of March 7, 1996 among the Company and
         Speedway Funding Corp., as borrowers, and the lenders named therein,
         including NationsBank, N.A. as agent for the lenders and a lender
         (incorporated by reference to Exhibit 99.2 of the Company's Registration
         Statement on Form S-3, File No. 333-1856).
  99.3   First Amendment to Credit Agreement dated as of September 24, 1996 among
         the Company and Speedway Funding Corp., as borrowers, and the lenders
         named therein, including NationsBank, N.A. as agent for the lenders and
         a lender.	

* Filed previously. ** To be furnished by amendment.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes that, for purpose of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement 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.
The undersigned Registrant hereby further undertakes:
(1) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
(2) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
II-2

(3) That for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus 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.
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, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the 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 of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
II-3

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 Charlotte, North Carolina, on October 4, 1996.
SPEEDWAY MOTORSPORTS, INC.

By: /s/     WILLIAM R. BROOKS
          WILLIAM R. BROOKS
     VICE PRESIDENT, TREASURER,
     CHIEF FINANCIAL OFFICER AND
               DIRECTOR	

POWER OF ATTORNEY
We, the undersigned directors and officers of Speedway Motorsports, Inc., do hereby constitute and appoint each of Messrs. O. Bruton Smith, H.A. Wheeler and William R. Brooks, each with full power of substitution, our true and lawful attorney-in-fact and agent to do any and all acts and things in our names and in our behalf in our capacities stated below, which acts and things any of them may deem necessary or advisable to enable Speedway Motorsports, Inc. to comply with the Securities Act of 1933, as amended, and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Registration Statement, including specifically, but not limited to, power and authority to sign for any or all of us in our names, in the capacities stated below, any and all amendments (including post-effective amendments) hereto; and we do hereby ratify and confirm all that they shall 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 date indicated:

            SIGNATURE                                        TITLE                        DATE

/s/               O. BRUTON SMITH             Chief Executive Officer               October 4, 1996
         O. BRUTON SMITH                        (principal executive officer)
                                                and Chairman

 /s/                 H.A. WHEELER             President, Chief Operating Officer    October 4, 1996
           H.A. WHEELER                         and Director

/s/              WILLIAM R. BROOKS            Vice President, Treasurer, Chief      October 4, 1996
        WILLIAM R. BROOKS                       Financial Officer (principal
                                                financial and accounting officer)
                                                and Director

 /s/               EDWIN R. CLARK             Executive Vice President and          October 4, 1996
          EDWIN R. CLARK                        Director	

II-4

EXHIBIT INDEX

EXHIBIT
NUMBER   DESCRIPTION
  *3.1   Certificate of Incorporation of the Company (incorporated by reference
         to Exhibit 3.1 of the Company's Registration Statement on Form S-1, File
         No. 33-87740 (the "Form S-1")).
  *3.2   Bylaws of the Company (incorporated by reference to Exhibit 3.2 of the
         Form S-1).
 **3.3   Amendment to Certificate of Incorporation of the Company.
   4.1   Indenture dated as of September 1, 1996 between the Company and First
         Union National Bank of North Carolina, as Trustee (the "Indenture").
   4.2   Form of 5 3/4% Convertible Subordinated Debenture due 2003 (included in
         the Indenture).
   4.3   Registration Rights Agreement dated as of September 26, 1996 among the
         Company and the Initial Purchasers.
 **5.1   Opinion of Parker, Poe, Adams & Bernstein L.L.P. regarding the legality
         of the securities being registered.
  12.1   Statement regarding computation of ratios.
  23.1   Consent of Parker, Poe, Adams & Bernstein L.L.P. (included in Exhibit
         5.1).
  23.2   Consent of Deloitte & Touche L.L.P.
  24.1   Power of Attorney (included on the signature page of this Registration
         Statement).
  25.1   Form T-1 Statement of Eligibility and Qualification under the Trust
         Indenture Act of 1939 of First Union National Bank of North Carolina.
  99.1   Purchase Agreement dated September 26, 1996 among the Company and the
         Initial Purchasers.
 *99.2   Credit Agreement dated as of March 7, 1996 among the Company and
         Speedway Funding Corp., as borrowers, and the lenders named therein,
         including NationsBank, N.A. as agent for the lenders and a lender
         (incorporated by reference to Exhibit 99.2 of the Company's Registration
         Statement on Form S-3, File No. 333-1856).
  99.3   First Amendment to Credit Agreement dated as of September 24, 1996 among
         the Company and Speedway Funding Corp., as borrowers, and the lenders
         named therein, including NationsBank, N.A. as agent for the lenders and
         a lender.	

* Filed previously. ** To be furnished by amendment.
II-5

SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENT SCHEDULE
YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995

II    Valuation and Qualifying Accounts......................................................................    S-2	

Note: All other schedules are omitted because they are not applicable or not required.
S-1

SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
 (IN THOUSANDS)

                                                                                                                BALANCE
                                                                       BALANCE AT     CHARGES                    AT
                                                                      BEGINNING OF       TO                     END OF
                                                                         PERIOD       EXPENSE     DEDUCTIONS    PERIOD
1)    Reserve for bad debts
      December 31, 1993............................................       $264        $    48     $   (79   )(1) 23$3
      December 31, 1994............................................        233             12         (62   )(1) 183
      December 31, 1995............................................        183             30         (67   )(1) 146
2)    Unrealized loss on marketable equity securities
      December 31, 1993............................................        295             --         (11   )(2) 284
      December 31, 1994............................................        284             --        (249   )(2)  35
      December 31, 1995............................................         35             --          57   (3)  92	

(1) Represents actual write-offs of specific accounts receivable.
(2) Represents recovery of previously unrealized losses on marketable equity securities.
(3) Represents an increase in unrealized losses on marketable equity securities.
S-2

Exhibit 4.1

SPEEDWAY MOTORSPORTS, INC.
and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
as Trustee

INDENTURE
Dated as of September 1, 1996

$77,000,000
5 3/4% Convertible Subordinated Debentures due 2003

Reconciliation and tie between the Trust Indenture Act of 1939 and Indenture dated as of September 1, 1996*:

 ss. 310(a)(1) ......................................................................               609
        (a)(2) ......................................................................               609
        (a)(3) ......................................................................         Not Applicable
        (a)(4) ......................................................................         Not Applicable
        (a)(5) ......................................................................               609
           (b) ......................................................................               608
           (c) ......................................................................         Not Applicable
    ss. 311(a) ......................................................................               613
           (b) ......................................................................               613
           (c) ......................................................................         Not Applicable
    ss. 312(a) ......................................................................           701, 702(a)
           (b) ......................................................................               702(b)
           (c) ......................................................................               702(c)
    ss. 313(a) ......................................................................               703(a)
           (b) ......................................................................               703(a)
           (c) ......................................................................               703(a)
           (d) ......................................................................               703(b)
    ss. 314(a) ......................................................................               704
        (a)(4) ......................................................................              1004
           (b) ......................................................................         Not Applicable
        (c)(1) ......................................................................               102
        (c)(2) ......................................................................               102
        (c)(3) ......................................................................         Not Applicable
           (d) ......................................................................         Not Applicable
           (e) ......................................................................               102
           (f) ......................................................................         Not Applicable
    ss. 315(a) ......................................................................               601
           (b) ......................................................................               602
           (c) ......................................................................               601
           (d) ......................................................................               601
           (e) ......................................................................               514
ss. 316(a)(1)(A) ......................................................................            502, 512
     (a)(1)(B) ......................................................................               513
        (a)(2) ......................................................................         Not Applicable
           (b) ......................................................................               508
           (c) ......................................................................             104(c)
 ss. 317(a)(1) ......................................................................               503
        (a)(2) ......................................................................               504
           (b) ......................................................................              1003
    ss. 318(a) ......................................................................               107	

i

*This table shall not, for any purpose, be deemed to be a part of the Indenture.
ii

TABLE OF CONTENTS*

Parties...........................................................................................................1
Recitals of the Company...........................................................................................1

                                   ARTICLE ONE

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

         SECTION 101.               Definitions.................................................................  1
                  "Act"    .....................................................................................  2
                  "Affiliate"...................................................................................  2
                  "Agent Member"................................................................................  2
                  "Authenticating Agent"........................................................................  2
                  "Beneficial Owner"............................................................................  2
                  "Board of Directors"..........................................................................  2
                  "Board Resolution"............................................................................  2
                  "Business Day"................................................................................  2
                  "Cedel"  .....................................................................................  3
                  "Certificated Security" or "Certificated Securities"..........................................  3
                  "Change in Control"...........................................................................  3
                  "Closing Date"................................................................................  3
                  "Commission"..................................................................................  3
                  "Common Stock"................................................................................  3
                  "Company".....................................................................................  3
                  "Company Request" or "Company Order"..........................................................  3
                  "Corporate Trust Office"......................................................................  3
                  "Corporation".................................................................................  4
                  "Current Market Price"........................................................................  4
                  "DTC"    .....................................................................................  4
                  "Defaulted Interest"..........................................................................  4
                  "Depositary"..................................................................................  4
                  "Euroclear"...................................................................................  4
                  "Event of Default"............................................................................  4
                  "Exchange Act"................................................................................  4
- --------
*Note:   This table of contents shall not, for any purposes, be deemed to be a part of the
         Indenture.

                                       iii	

                  "Global Security" or "Global Securities"......................................................  4
                  "Global Securities Legend"....................................................................  4
                  "Holder" .....................................................................................  4
                  "Indenture"...................................................................................  4
                  "Initial Purchasers"..........................................................................  4
                  "Interest Payment Date".......................................................................  4
                  "Material Subsidiary".........................................................................  5
                  "Maturity"....................................................................................  5
                  "Officers' Certificate".......................................................................  5
                  "Opinion of Counsel"..........................................................................  5
                  "Outstanding".................................................................................  5
                  "Paying Agent"................................................................................  6
                  "Person" .....................................................................................  6
                  "Predecessor Security"........................................................................  6
                  "Purchase Agreement"..........................................................................  6
                  "Record Date".................................................................................  6
                  "Redemption Date".............................................................................  6
                  "Redemption Price"............................................................................  6
                  "Registration Rights Agreement"...............................................................  6
                  "Regular Record Date".........................................................................  6
                  "Regulation S"................................................................................  7
                  "Regulation S Permanent Global Security"......................................................  7
                  "Repurchase Date".............................................................................  7
                  "Repurchase Event"............................................................................  7
                  "Repurchase Price"............................................................................  7
                  "Resale Restriction Termination Date".........................................................  7
                  "Responsible Officer".........................................................................  7
                  "Restricted Securities Legend"................................................................  7
                  "Rule 144A Global Security"...................................................................  7
                  "Securities Custodian"........................................................................  7
                  "Security Register" and "Security Registrar"..................................................  8
                  "Senior Indebtedness".........................................................................  8
                  "Shelf Registration Statement"................................................................  8
                  "Special Record Date".........................................................................  8
                  "Stated Maturity".............................................................................  8
                  "Subsidiary"..................................................................................  8
                  "Termination of Trading"......................................................................  9
                  "Trust Indenture Act".........................................................................  9
                  "Trustee".....................................................................................  9
                  "Vice President"..............................................................................  9
         SECTION 102.               Compliance Certificates and Opinions........................................  9
         SECTION 103.               Form of Documents Delivered to Trustee...................................... 10

                                       iv	

         SECTION 104.               Acts of Holders; Record Dates............................................... 10
         SECTION 105.               Notices, Etc., to Trustee and Company....................................... 11
         SECTION 106.               Notice to Holders; Waiver................................................... 12
         SECTION 107.               Conflict with Trust Indenture Act........................................... 12
         SECTION 108.               Effect of Headings and Table of Contents.................................... 13
         SECTION 109.               Successors and Assigns...................................................... 13
         SECTION 110.               Separability Clause......................................................... 13
         SECTION 111.               Benefits of Indenture....................................................... 13
         SECTION 112.               Governing Law............................................................... 13
         SECTION 113.               Legal Holidays.............................................................. 13
         SECTION 115.               Limitation on Individual Liability.......................................... 14

                                   ARTICLE TWO

                                 SECURITY FORMS

         SECTION 201.               Forms Generally............................................................. 14
         SECTION 202.               Form of Face of Security.................................................... 17
         SECTION 203.               Form of Reverse of Global Securities and Certificated
                                     Security................................................................... 19
         SECTION 204.               Form of Trustee's Certificate of Authentication............................. 28

                                  ARTICLE THREE

                                 THE SECURITIES

         SECTION 301.               Title and Terms............................................................. 29
         SECTION 302.               Denominations............................................................... 30
         SECTION 303.               Execution, Authentication, Delivery and Dating.............................. 30
         SECTION 304.               Registration, Transfer and Exchange......................................... 31
         SECTION 305.               Temporary Securities........................................................ 36
         SECTION 306.               Mutilated, Destroyed, Lost and Stolen Securities............................ 37
         SECTION 307.               Payment of Interest; Interest Rights Preserved.............................. 38
         SECTION 308.               Persons Deemed Owners....................................................... 40
         SECTION 309.               Cancellation................................................................ 40
         SECTION 310.               Computation of Interest..................................................... 40
         SECTION 311.               CUSIP Number................................................................ 41

                                        v	

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

         SECTION 401.               Satisfaction and Discharge of Indenture..................................... 41
         SECTION 402.               Repayment to Company........................................................ 41

                                  ARTICLE FIVE

                                    REMEDIES

         SECTION 501.               Events of Default........................................................... 42
         SECTION 502.               Acceleration of Maturity; Rescission and Annulment.......................... 44
         SECTION 503.               Collection of Indebtedness and Suits for Enforcement by
                                    Trustee..................................................................... 46
         SECTION 504.               Trustee May File Proofs of Claim............................................ 46
         SECTION 505.               Trustee May Enforce Claims Without Possession of
                                    Securities.................................................................. 47
         SECTION 506.               Application of Money Collected.............................................. 47
         SECTION 507.               Limitation on Suits......................................................... 48
         SECTION 508.               Unconditional Right of Holders to Receive Principal,
                                    Premium and Interest and to Convert......................................... 49
         SECTION 509.               Restoration of Rights and Remedies.......................................... 49
         SECTION 510.               Rights and Remedies Cumulative.............................................. 49
         SECTION 511.               Delay or Omission Not Waiver................................................ 49
         SECTION 512.               Control by Holders.......................................................... 50
         SECTION 513.               Waiver of Past Defaults..................................................... 50
         SECTION 514.               Undertaking for Costs....................................................... 51

                                   ARTICLE SIX

                                   THE TRUSTEE

         SECTION 601.               Certain Duties and Responsibilities......................................... 51
         SECTION 602.               Notice of Defaults.......................................................... 52
         SECTION 603.               Certain Rights of Trustee................................................... 52
         SECTION 604.               Not Responsible for Recitals or Issuance of Securities...................... 54
         SECTION 605.               May Hold Securities......................................................... 54
         SECTION 606.               Money Held in Trust......................................................... 54
         SECTION 607.               Compensation and Reimbursement.............................................. 54

                                        vi	

         SECTION 608.               Disqualification; Conflicting Interests..................................... 55
         SECTION 609.               Corporate Trustee Required; Eligibility..................................... 56
         SECTION 610.               Resignation and Removal; Appointment of Successor........................... 56
         SECTION 611.               Acceptance of Appointment by Successor...................................... 57
         SECTION 612.               Merger, Conversion, Consolidation or Succession to
                                    Business.................................................................... 58
         SECTION 613.               Preferential Collection of Claims Against Company........................... 58
         SECTION 614.               Appointment of Authenticating Agent......................................... 58

                                  ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

         SECTION 701.               Company to Furnish Trustee Names and Addresses of
                                    Holders..................................................................... 60
         SECTION 702.               Preservation of Information; Communications to Holders...................... 61
         SECTION 703.               Reports by Trustee.......................................................... 61
         SECTION 704.               Reports by Company.......................................................... 62
         SECTION 705.               Rule 144A Information Requirement........................................... 62

                                  ARTICLE EIGHT

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

         SECTION 801.               Company May Consolidate, Etc., Only on Certain Terms........................ 62
         SECTION 802.               Successor Substituted....................................................... 63

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

         SECTION 901.               Supplemental Indentures Without Consent of Holders.......................... 63
         SECTION 902.               Supplemental Indentures With Consent of Holders............................. 64
         SECTION 903.               Execution of Supplemental Indentures........................................ 65
         SECTION 904.               Effect of Supplemental Indentures........................................... 65
         SECTION 905.               Conformity with Trust Indenture Act......................................... 65
         SECTION 906.               Reference in Securities to Supplemental Indentures.......................... 66
         SECTION 907.               Notice of Supplemental Indenture............................................ 66

                                       vii	

                                   ARTICLE TEN

                                    COVENANTS

         SECTION 1001.              Payment of Principal, Premium and Interest.................................. 66
         SECTION 1002.              Maintenance of Office or Agency............................................. 66
         SECTION 1003.              Money for Security Payments to Be Held in Trust............................. 67
         SECTION 1005.              Existence................................................................... 68
         SECTION 1006.              Maintenance of Properties................................................... 68
         SECTION 1007.              Payment of Taxes............................................................ 69
         SECTION 1008.              Limitations on Disposition of Stock of Material
                                    Subsidiaries................................................................ 69
         SECTION 1009.              Waiver of Certain Covenants................................................. 70

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

         SECTION 1101.              Right of Redemption......................................................... 70
         SECTION 1102.              Applicability of Article.................................................... 70
         SECTION 1103.              Election to Redeem; Notice to Trustee....................................... 70
         SECTION 1104.              Selection by Trustee of Securities to be Redeemed........................... 71
         SECTION 1105.              Notice of Redemption........................................................ 71
         SECTION 1106.              Deposit of Redemption Price................................................. 72
         SECTION 1107.              Securities Payable on Redemption Date....................................... 72
         SECTION 1108.              Securities Redeemed in Part................................................. 73

                                 ARTICLE TWELVE

                           SUBORDINATION OF SECURITIES

         SECTION 1201.              Securities Subordinated to Senior Indebtedness.............................. 73
         SECTION 1202.              Payment Over of Proceeds Upon Dissolution, Etc.............................. 73
         SECTION 1203.              Prior Payment to Senior Indebtedness upon Acceleration
                                    of Securities............................................................... 75
         SECTION 1204.              No Payment When Senior Indebtedness in Default.............................. 75
         SECTION 1205.              Payment Permitted If No Default............................................. 76
         SECTION 1206.              Subrogation to Rights of Holders of Senior Indebtedness..................... 76
         SECTION 1207.              Provisions Solely to Define Relative Rights................................. 76

                                       viii	

         SECTION 1208.              Trustee to Effectuate Subordination......................................... 77
         SECTION 1209.              No Waiver of Subordination Provisions....................................... 77
         SECTION 1210.              Notice to Trustee........................................................... 77
         SECTION 1211.              Reliance on Judicial Order or Certificate of Liquidating
                                    Agent....................................................................... 78
         SECTION 1212.              Trustee Not Fiduciary for Holders of Senior Indebtedness.................... 79
         SECTION 1213.              Rights of Trustee as Holder of Senior Indebtedness;
                                    Preservation of Trustee's Rights............................................ 79
         SECTION 1214.              Article Applicable to Paying Agents......................................... 79
         SECTION 1215.              Certain Conversions Deemed Payment.......................................... 79
         SECTION 1216.              No Suspension of Remedies................................................... 80

                                ARTICLE THIRTEEN

                            CONVERSION OF SECURITIES

         SECTION 1301.              Conversion Privilege and Conversion Price................................... 80
         SECTION 1302.              Exercise of Conversion Privilege............................................ 81
         SECTION 1303.              Fractions of Shares......................................................... 81
         SECTION 1304.              Adjustment of Conversion Price.............................................. 82
         SECTION 1305.              Notice of Adjustments of Conversion Price................................... 88
         SECTION 1306.              Notice of Certain Corporate Action.......................................... 89
         SECTION 1307.              Company to Reserve Common Stock............................................. 90
         SECTION 1308.              Taxes on Conversions........................................................ 90
         SECTION 1309.              Covenant as to Common Stock................................................. 90
         SECTION 1310.              Cancellation of Converted Securities........................................ 90
         SECTION 1311.              Effect of Consolidation, Merger or Sale of Assets........................... 91
         SECTION 1312.              Trustee's Disclaimer........................................................ 91

                                ARTICLE FOURTEEN

                           RIGHT TO REQUIRE REPURCHASE

         SECTION 1401.              Right to Require Repurchase................................................. 92
         SECTION 1402.              Notice; Method of Exercising Repurchase Right............................... 92
         SECTION 1403.              Deposit of Repurchase Price................................................. 93
         SECTION 1404.              Securities Not Repurchased on Repurchase Date............................... 93
         SECTION 1405.              Securities Repurchased in Part.............................................. 93
         SECTION 1406.              Certain Definitions......................................................... 94	

ix

INDENTURE, dated as of September 1, 1996, between SPEEDWAY MOTORSPORTS, INC., a corporation duly organized and existing under the laws of the State of Delaware (herein called the "Company"), having its principal executive offices at U.S. Highway 29 North, P.O. Box 600, Concord, North Carolina 28026-0600, and FIRST UNION NATIONAL BANK OF NORTH CAROLINA, a duly organized national association existing under the laws of the United States, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its 5 3/4% Convertible Subordinated Debentures due 2003 (herein called the "Securities") of substantially the tenor and amount hereinafter set forth, and to provide therefor the Company has duly authorized the execution and delivery of this Indenture.
All things necessary to make the Securities, when executed by the Company and authenticated and delivered hereunder and duly issued by the Company, the valid obligations of the Company, and to make this Indenture a valid agreement of the Company, in accordance with their and its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;
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(2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles, and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted and accepted and adopted by the Company at the date of this Indenture; and
(4) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.
Certain terms used in Articles Twelve, Thirteen and Fourteen are defined in such Articles.
"Act", when used with respect to any Holder, has the meaning specified in Section 104.
"Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control", when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Agent Member" has the meaning specified in Section 201.
"Authenticating Agent" means any Person authorized by the Trustee pursuant to Section 614 to act on behalf of the Trustee to authenticate Securities.
The term "Beneficial Owner" is determined in accordance with Rule 13d-3, promulgated by the Commission under the Exchange Act.
"Board of Directors" means either the board of directors of the Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification and delivered to the Trustee.
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"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York, New York or the city in which the Corporate Trust Office is located are authorized or obligated by law to close by law or executive order.
"Cedel" means Cedel Bank societe anonyme.
"Certificated Security" or "Certificated Securities" has the meaning specified in Section 201.
"Change in Control" has the meaning specified in Section 1406.
"Closing Date" means October 1, 1996.
"Commission" means the Securities and Exchange Commission as from time to time constituted, created under the Securities Exchange Act of 1934, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.
"Common Stock" includes any stock of any class of the Company which has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company and which is not subject to redemption by the Company. However, subject to the provisions of Section 1311, shares issuable on conversion of Securities shall include only shares of the class designated as Common Stock of the Company at the date of this Indenture or shares of any class or classes resulting from any reclassification or reclassifications thereof and which have no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company and which are not subject to redemption by the Company; provided, that if at any time there shall be more than one such resulting class, the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications.
"Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor corporation shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order signed in the name of the Company by its Chairman of the Board, its President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee.
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"Corporate Trust Office" means the offices of the Trustee in Charlotte, North Carolina, which initially shall be 230 South Tryon Street, Ninth Floor, Charlotte, North Carolina 28288-1179, at which any particular time its corporate trust business shall principally be administered.
"Corporation" means a corporation, association, company, joint-stock company and business trust.
"Current Market Price" has the meaning specified in Section 1304.
"DTC" has the meaning specified in Section 304.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" has the meaning specified in Section 304.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels office, as operator of the Euroclear System.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Global Security" or "Global Securities" means the Regulation S Temporary Global Security, the Rule 144A Global Security and the Regulation S Permanent Global Security.
"Global Securities Legend" means the legend set forth in
Section 202 under the heading Global Securities Legend.
"Holder" means a Person in whose name a Security is registered in the Security Register.
"Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively.
"Initial Purchasers" means Wheat, First Securities, Inc., Montgomery Securities and J.C. Bradford & Co.
"Interest Payment Date" means the Stated Maturity of an instalment of interest on the Securities.
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"Liquidated Damages" means any and all liquidated damages payable pursuant to Section 5 of the Registration Rights Agreement.
"Material Subsidiary" means a Subsidiary meeting the definition of "significant subsidiary" as defined in Section 1-02(w) of Regulation S-X under the Securities Act.
"Maturity", when used with respect to any Security, means the date on which the principal of such Security becomes due and payable as therein or herein provided, whether at the Stated Maturity thereof or by declaration of acceleration, redemption or otherwise.
"Officers' Certificate" means a certificate, in form reasonably satisfactory to the Trustee, signed by the Chairman of the Board, the Chief Executive Officer, the President or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company, and delivered to the Trustee. One of the officers signing an Officers' Certificate given pursuant to Section 1004 shall be the principal executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion, in form reasonably satisfactory to the Trustee, of counsel, who may be counsel for or an employee of the Company, and who shall be acceptable to the Trustee.
"Outstanding", when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation;
(ii) Securities, or portions thereof, for the payment or redemption of which moneys in the necessary amount have been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided, that if such Securities, or portions thereof, are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision for such notice satisfactory to the Trustee has been made;
(iii) Securities which have been paid pursuant to
Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company;
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provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the principal of and premium, if any, or interest on any Securities on behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof.
"Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Purchase Agreement" means that certain Purchase Agreement dated September 26, 1996 between the Company and the Initial Purchasers.
"Record Date" means either a Regular Record Date or a Special Record Date, as applicable.
"Redemption Date", when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture on the applicable Redemption Date.
"Registration Rights Agreement" means that certain Registration Rights Agreement dated as of September 26, 1996 between the Company and the Initial Purchasers.
"Regular Record Date", for the interest payable on any Interest Payment Date means March 15 or September 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.
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"Regulation S" means Regulation S under the Securities Act of 1933, as amended.
"Regulation S Permanent Global Security" has the meaning specified in Section 304.
"Regulation S Temporary Global Security" has the meaning specified in Section 201.
"Repurchase Date" has the meaning specified in Section 1401.
"Repurchase Event" has the meaning specified in Section 1406.
"Repurchase Price" has the meaning specified in Section 1401.
"Resale Restriction Termination Date" means, with respect to any Security, the date which is three years after the later of (i) the original issue date of such Security and (ii) the last date on which the Company or any Affiliate of the Company was the owner of such Security (or any Predecessor Security).
"Responsible Officer" means, when used with respect to the Trustee, the chairman of the Board of Directors, any vice chairman of the Board of Directors, the chairman of the trust committee, the chairman of the executive committee, any vice chairman of the executive committee, the president, any vice president (whether or not designated by numbers or words added before or after the title "vice president"), the cashier, the secretary, the treasurer, any trust officer, any assistant trust officer, any assistant cashier, any assistant secretary, any assistant treasurer, or any other officers or assistant officers of the Trustee customarily performing functions similar to those performed by the Persons who at the time shall be such officers, respectively.
"Restricted Securities Legend" means the legend set forth in
Section 202 under the heading Restricted Securities Legend.
"Rule 144A" has the meaning specified in Section 201.
"Rule 144A Global Security" has the meaning specified in
Section 201.
"Securities Act" means the Securities Act of 1933, as amended, and all rules and regulations promulgated thereunder.
"Securities Custodian" means the Trustee, as custodian with respect to the Securities in global form, or any successor entity thereto.
"Security Register" and "Security Registrar" have the respective meanings specified in Section 304.
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"Senior Indebtedness" means the principal of and premium, if any, and interest on (a) all indebtedness (whether secured or unsecured) of the Company for money borrowed under the Company's revolving credit and line of credit facilities and any predecessor or successor credit facilities thereto, whether outstanding on the date of execution of this Indenture or thereafter created, incurred or assumed, (b) all indebtedness of the Company for money borrowed, whether outstanding on the date of execution of this Indenture or thereafter created, incurred or assumed, except any such other indebtedness that by the terms of the instrument or instruments by which such indebtedness was created or incurred expressly provides that it (i) is junior in right of payment to the Securities or (ii) ranks pari passu in right of payment with the Securities, and (c) any amendments, renewals, extensions, modifications, refinancings and refundings of the foregoing. For the purposes of this definition, "indebtedness for money borrowed" when used with respect to the Company means (i) any obligation of, or any obligation guaranteed by, the Company for the repayment of borrowed money (including without limitation fees, penalties or other obligations in respect thereof), whether or not evidenced by bonds, debentures, notes or other written instruments and reimbursement obligations for letters of credit, (ii) any deferred payment obligation of, or any such obligation guaranteed by, the Company for the payment of the purchase price of property or assets evidenced by a note or similar instrument, and (iii) any obligation of, or any such obligation guaranteed by, the Company for the payment of rent or other amounts under a lease of property or assets which obligation is required to be classified and accounted for as a capitalized lease on the balance sheet of the Company under generally accepted accounting principles, but such term shall exclude indebtedness to trade creditors.
"Shelf Registration Statement" means the Registration Statement with respect to the Common Stock the Company is required to file pursuant to the Registration Rights Agreement.
"Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any instalment of interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such instalment of interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, "voting stock" means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency.
"Termination of Trading" has the meaning specified in Section 1406.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture
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Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean such successor Trustee.
"Vice President", when used with respect to the Company means any vice president, whether or not designated by a number or a word or words added before or after the title "vice president".
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee such certificate and opinions as may be required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form of an Officers' Certificate, if to be given by an officer of the Company, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual or firm signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual or such firm, he has or they have made such examination or investigation as is necessary to enable him or them to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual or such firm, such condition or covenant has been complied with.
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SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate of public officials or upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.
SECTION 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate
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or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust Indenture Act, fix any day as the record date for the purpose of determining the Holders entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or other action, or to vote on any action, authorized or permitted to be given or taken by Holders. If not set by the Company prior to the first solicitation of a Holder made by any Person in respect of any such action, or, in the case of any such vote, prior to such vote, the record date for any such action or vote shall be the 30th day (or, if later, the date of the most recent list of Holders required to be provided pursuant to Section 701) prior to such first solicitation or vote, as the case may be. With regard to any record date, only the Holders on such date (or their duly designated proxies) shall be entitled to give or take, or vote on, the relevant action. Notwithstanding the foregoing, the Company shall not set a record date for, and the provisions of this paragraph shall not apply with respect to, any Act by the Holders pursuant to Section 501, 502 or 512.
(d) The ownership of Securities shall be proved by the Security Register.
(e) Any Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer therefor or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security.
(f) Without limiting the foregoing, a Holder entitled hereunder to give or take any action hereunder with regard to any particular Security may do so with regard to all or any part of the principal amount of such Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any different part of such principal amount.
SECTION 105. Notices, Etc., to Trustee and Company.
Any Act of Holders or other documents provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, Attention: Corporate Trust Administration, or at any other address previously furnished in writing to the Holders and the Company by the Trustee; or
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(2) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company, addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company.
All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, registered or certified with postage prepaid, if mailed; when answered back if telexed; when receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by nationally recognized overnight air courier guaranteeing next day delivery.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if made, given, furnished or filed in writing to each Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, registered or certified with postage prepaid, if mailed; when answered back if telexed; when receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by nationally recognized overnight air courier guaranteeing next day delivery.
In case, by reason of the suspension of or irregular mail service or by reason of any other cause it shall be impracticable to give notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with the duties imposed by any of Sections 310 through 317, inclusive, of the Trust Indenture Act through the operation of Section 318(c) thereof, the imposed duties shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.
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SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company and the Trustee shall bind each of their successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the Holders of Securities and, with respect to Article Twelve, the holders of Senior Indebtedness, any benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York, without regard to the principles of conflicts of laws thereof.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security or the last date on which a Holder has the right to convert his Securities shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal and premium if any, or conversion of the Securities need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity, or on such last day for conversion; provided, that no interest shall accrue for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be, to the next succeeding Business Day.
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SECTION 114. No Security Interest Created.
Nothing in this Indenture or in the Securities, express or implied, shall be construed to constitute a security interest under the Uniform Commercial Code or similar legislation, as now or hereafter enacted and in effect in any jurisdiction where property of the Company or its Subsidiaries is or may be located.
SECTION 115. Limitation on Individual Liability.
No recourse under or upon any obligation, covenant or agreement contained in this Indenture or in any Security, or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator, shareholder, officer or director, as such, past, present or future, of the Company or any successor corporation, either directly or through the Company, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that this Indenture and the obligations issued hereunder are solely corporate obligations, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, shareholders, officers or directors, as such, of the Company or any successor Person, or any of them, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any Security or implied therefrom; and that any and all such personal liability of every name and nature, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every such incorporator, shareholder, officer or director, as such, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any Security or implied therefrom, are hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issuance of such Security.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities and the Trustee's certificate of authentication shall be in substantially the forms set forth in this Article, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with any organizational document, any applicable law or with the rules of any securities exchange on which the Securities are listed or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution of the Securities.
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(a) Global Securities. The Securities are being offered and sold by the Company pursuant to the Purchase Agreement.
The Securities offered and sold to Qualified Institutional Buyers ("QIBs") in reliance on Rule 144A under the Securities Act ("Rule 144A"), as provided in the Purchase Agreement, shall be issued in the form of one or more permanent global Securities in definitive, fully registered form without interest coupons with the Global Securities Legend and Restricted Securities Legend set forth in Section 202 hereto (each, a "Rule 144A Global Security"), which shall be deposited on behalf of the purchasers of the Securities represented thereby with the Trustee, at its Corporate Trust Office, as custodian for the Depositary, and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of the Rule 144A Global Security may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee, as the case may be, as hereinafter provided.
Securities offered and sold in reliance on Regulation S, as provided in the Purchase Agreement, shall be issued initially in the form of a single, temporary global Security in fully registered form without interest coupons with the Global Securities Legend and Restricted Securities Legend set forth in Section 202 hereto (the "Regulation S Temporary Global Security") which shall be deposited on behalf of the purchasers of the Securities represented thereby with the Trustee, at its Corporate Trust Office, as custodian for the Depositary, and registered in the name of the Depositary or the nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Cedel, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of the Regulation S Temporary Global Security may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee, as the case may be, as hereinafter provided.
Upon effectiveness of the Shelf Registration Statement, the Securities resold or transferred pursuant to the prospectus forming part of the Shelf Registration Statement may be represented by one or more permanent global Securities in definitive, fully registered form without interest coupons with the Global Securities Legend but not the Restricted Securities Legend set forth in Section 202 hereto, registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of such global Securities may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee, as the case may be, to reflect transfers of beneficial interests from the Regulation S Permanent Global Security and the Rule 144A Global Security, subject to the rules and procedures of Euroclear and Cedel, as the case may be, and the Depositary.
(b) Book-Entry Provisions. This Section 201(b) shall apply only to the Regulation S Temporary Global Security, the Rule 144A Global Security and the Regulation S Permanent Global Security (the "Global Securities") deposited with or on behalf of the Depositary.
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The Company shall execute and the Trustee shall, in accordance with this Section 201(b), authenticate and deliver initially one or more Global Securities that (i) shall be registered in the name of Cede & Co. or other nominee of such Depositary and (ii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary's instructions or held by the Trustee as custodian for the Depositary.
Members of, or participants in, the Depositary ("Agent Members") shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depositary or by the Trustee as the custodian of the Depositary or under such Global Security, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices of such Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Security.
(c) Certificated Securities. Except as provided in Section 305, owners of beneficial interests in Global Securities will not be entitled to receive physical delivery of certificated Securities. Purchasers of Securities who are not QIBs and did not purchase Securities sold in reliance on Regulation S under the Securities Act (referred to herein as the "Non-Global Purchasers") will receive certificated Securities bearing the Restricted Securities Legend set forth in Section 202 hereto ("Certificated Securities"). Certificated Securities will bear the Restricted Securities Legend set forth in Section 202 unless removed in accordance with Section 304 hereof and may not be exchanged for a Global Security, or interest therein, at any time.
After a transfer of any Securities during the period of the effectiveness of a Shelf Registration Statement with respect to the Securities, all requirements pertaining to legends on such Securities will cease to apply, the requirements requiring any such Security issued to certain holders be issued in global form will cease to apply, and a certificated Security without legends will be available to the holder of such Securities who transfers such Securities pursuant to a prospectus which is part of such Shelf Registration Statement.
SECTION 202. Form of Face of Security.
GLOBAL SECURITIES LEGEND:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH
16

NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
RESTRICTED SECURITIES LEGEND:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) UNLESS SUCH OFFER, SALE OR OTHER TRANSFER IS (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S
17

RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (C), (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION.
SPEEDWAY MOTORSPORTS, INC.

               5 3/4% Convertible Subordinated Debentures due 2003

No.__________                                                        $__________

                  Speedway Motorsports, Inc., a corporation duly organized and	

existing under the laws of the State of Delaware (herein called the "Company," which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to _________________________, or registered assigns, the principal sum of _____________ Dollars [or such greater or lesser amount as indicated on the Schedule of Exchanges of Securities on the reverse hereof]1 on September 30, 2003, and to pay interest thereon from the date of original issuance of Securities pursuant to the Indenture or from and including the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on March 31 and September 30 in each year, commencing March 31, 1997, at the rate of 5 3/4% per annum, until the principal hereof is paid or made available for payment and promises to pay any Liquidated Damages which may be payable pursuant to Section 5 of the Registration Rights Agreement on the Interest Payment Dates. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be March 15 or September 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. Notice of a Special Record Date shall be given to Holders of Securities not less than 10 days prior to such Special Record Date. Payment of the principal of, premium, if any, interest and Liquidated Damages, if any, on the Securities shall be made (i) in respect of the Global Securities in immediately available funds to the accounts specified by the Global Security Holder on or prior to the respective payment dates and (ii) in respect of Certificated Securities by wire transfer of immediately available funds to the accounts specified by the Holders thereof or, if no such account is specified, by mailing a check to each such Holder's registered address.

1 This phrase should be included only if the Security is issued in global form.

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Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

Dated:_______________                          SPEEDWAY MOTORSPORTS, INC.

                                               By ______________________________

Attest:	

SECTION 203. Form of Reverse of Global Securities and Certificated Security.
This Security is one of a duly authorized issue of Securities of the Company designated as its 5 3/4% Convertible Subordinated Debentures due 2003 (herein called the "Securities"), limited in aggregate principal amount to $77,000,000 (including Securities issuable pursuant to the Initial Purchasers' over-allotment option, as provided for in the Purchase Agreement dated September 26, 1996 between the Company and the Initial Purchasers), issued and to be issued under an Indenture, dated as of September 1, 1996 (herein called the "Indenture"), between the Company and First Union National Bank of North Carolina, as Trustee (herein called the "Trustee," which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, the holders of Senior Indebtedness and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.
Subject to and upon compliance with the provisions of the Indenture, the Holder of this Security is entitled, at his option, at any time on or after the 60th day following the date of original issuance of Securities pursuant to the Indenture and on or before the close of business on September 30, 2003, or in case this Security or a portion hereof is called for redemption, then in respect of this Security or such portion hereof until and including, but (unless the Company defaults in making the payment due upon redemption) not after, the close of business on the second business
19

day preceding the Redemption Date, to convert this Security (or any portion of the principal amount hereof which is $1,000 or an integral multiple thereof), at the principal amount hereof, or of such portion, into fully paid and non-assessable whole shares (calculated as to each conversion to the nearest 1/100th of a share) of Common Stock at a conversion price of $31.11 per share (or at the current adjusted conversion price if an adjustment has been made as provided in the Indenture) by surrender of this Security, duly endorsed or assigned to the Company or in blank, to the Company at its office or agency maintained for that purpose pursuant to Section 1002 of the Indenture, accompanied by written notice to the Company in the form provided in this Security (or such other notice as is acceptable to the Company) that the Holder hereof elects to convert this Security, or if less than the entire principal amount hereof is to be converted, the portion hereof to be converted, and, in case such surrender shall be made during the period from the opening of business on any Regular Record Date next preceding any Interest Payment Date to the close of business on such Interest Payment Date (unless this Security or the portion thereof being converted has been called for redemption), also accompanied by payment in New York Clearing House funds, or other funds acceptable to the Company of an amount equal to the interest payable on such Interest Payment Date on the principal amount of this Security then being converted. Subject to the aforesaid requirement for payment and, in the case of a conversion after the Regular Record Date next preceding any Interest Payment Date and on or before such Interest Payment Date, to the right of the Holder of this Security (or any Predecessor Security) of record at such Regular Record Date to receive an instalment of interest (with certain exceptions provided in the Indenture), no payment or adjustment is to be made upon conversion on account of any interest accrued hereon or on account of any dividends on the Common Stock issued upon conversion. No fractional shares or scrip representing fractions of shares will be issued on conversion, but instead of any fractional share the Company shall pay a cash adjustment as provided in the Indenture. The conversion price is subject to adjustment as provided in the Indenture. In addition, the Indenture provides that in case of certain consolidations or mergers to which the Company is a party or the sale or transfer of all or substantially all of the assets of the Company, the Indenture shall be amended, without the consent of any Holders of Securities, so that this Security, if then outstanding, will be convertible thereafter, during the period this Security shall be convertible as specified above, only into the kind and amount of securities, cash and other property receivable upon the consolidation, merger, sale or transfer by a holder of the number of shares of Common Stock into which this Security might have been converted immediately prior to such consolidation, merger, sale or transfer (assuming such holder of Common Stock failed to exercise any rights of election and received per share the kind and amount received per share by a plurality of non-electing shares).
The Securities are subject to redemption upon not less than 30 and not more than 60 days' notice by mail, at any time on or after September 30, 2000, as a whole or in part, at the election of the Company, at the Redemption Prices set forth below (expressed as percentages of the principal amount), plus accrued interest to the Redemption Date (subject to the right of Holders of record on the relevant Regular Record Date to receive interest due on an Interest Payment Date that is on or prior to the Redemption Date).
20

If redeemed during the 12-month period beginning September 30, in the year indicated, the redemption price shall be:

            Redemption
Year           Price

2000 . . . . 102.46%
2001 . . . . 101.64%
2002 . . . . 100.82%	

In certain circumstances involving the occurrence of a Repurchase Event (as defined in the Indenture), the Holder hereof shall have the right to require the Company to repurchase this Security at 100% of the principal amount hereof, together with accrued interest to the Repurchase Date, but interest instalments whose Stated Maturity is on or prior to such Repurchase Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.
In the event of redemption or conversion of this Security in part only, a new Security or Securities for the unredeemed or unconverted portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.
The indebtedness evidenced by this Security is, in all respects, subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness, and this Security is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination so provided, and (c) appoints the Trustee his attorney- in-fact for any and all such purposes.
If an Event of Default shall occur and be continuing, the principal of all the Securities may be declared due and payable in the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of the Securities at the time Outstanding, and, under certain limited circumstances, by the Company and the Trustee without the consent of the Holders. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities, to waive compliance by the Company with certain
21

provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed or to convert this Security as provided in the Indenture.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
The Securities are issuable only in fully registered form without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities are exchangeable for a like aggregate principal amount of Securities of a different authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or exchange except as provided in the Indenture, and the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, except as provided in this Security, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. The Company will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement.
22

[FORM OF CONVERSION NOTICE]
TO SPEEDWAY MOTORSPORTS, INC.
The undersigned registered owner of this Security hereby irrevocably exercises the option to convert this Security, or the portion hereof (which is $1,000 or a multiple thereof) designated below, into shares of Common Stock in accordance with the terms of the Indenture referred to in this Security, and directs that the shares issuable and deliverable upon the conversion, together with any check in payment for a fractional share and any Security representing any unconverted principal amount hereof, be issued and delivered to the registered owner hereof unless a different name has been provided below. If this Notice is being delivered on a date after the close of business on a Regular Record Date and prior to the close of business on the related Interest Payment Date, this Notice is accompanied by payment in New York Clearing House funds, or other funds acceptable to the Company, of an amount equal to the interest payable on such Interest Payment Date on the principal of this Security to be converted (unless this Security has been called for redemption). If shares or any portion of this Security not converted are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. Any amount required to be paid by the undersigned on account of interest accompanies this Security.

    Dated:                                       ------------------------------

                                                 ------------------------------
                                                            Signature(s)
NOTICE:  Signature(s) must be guaranteed by
an institution which is a participant in the
Securities Transfer Agent Medallion Program
(STAMP) or similar program.

- ---------------------------------
       Signature Guarantee

Fill in for registration of shares of Common
Stock if they are to be delivered, or Securities
if they are to be issued, other than to and in
the name of the registered owner:

- ---------------------------------
(Name)

- ---------------------------------
(Street Address)

- ---------------------------------
(City, State and zip code)	

23

(Please print name and address)
Register: Common Stock
Securities
(Check appropriate line(s)).
Principal amount to be converted (if less than all):

$ ,000

Social Security or other Taxpayer Identification Number of owner

24

[ASSIGNMENT FORM]
If you the holder want to assign this Security, fill in the form below and have your signature guaranteed:
I or we assign and transfer this Security to

(Insert assignee's social security or tax ID number)_________________________

(Print or type assignee's name, address and zip code) and irrevocably appoint

agent to transfer this Security on the books of the Company. The agent may substitute another to act for him.

Date: ____________                     Your Signature:__________________________
                                      (Sign exactly as your name appears on the
                                                   face of this Security)	

Signature Guarantee:
25

[OPTION OF HOLDER TO ELECT PURCHASE]
If you wish to have this Security purchased by the Company pursuant to Section 1401 of the Indenture, check the Box: [ ]
If you wish to have a portion of this Security (which is $1,000 or an integral multiple thereof) purchased by the Company pursuant to
Section 1401 of the Indenture, state the amount you wish to have purchased:

                                                                  $ ____________

Date: _________________                    Your Signature(s): __________________

                                           Tax Identification No.: _____________	

(Sign exactly as your name appears on the face of this Security)
Signature Guarantee: _____________________________
26

[FORM OF SCHEDULE OF EXCHANGES OF CERTIFICATED SECURITIES2]
The following exchanges of a part of this Global Security for Certificated Securities have been made:

                             Amount of             Amount of              Principal            Signature of
                            decrease in           increase in          Amount of this           authorized
                             Principal             Principal           Global Security         signatory of
                          Amount of this        Amount of this         following such           Trustee or
       Date of                Global                Global              decrease (or            Securities
      Exchange               Security              Security               increase)              Custodian

1.

2.

3.

4.

5.	

SECTION 204. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in substantially the following form:
This is one of the Securities referred to in the within-mentioned Indenture.
------------------------, as Trustee
By _______________________ Authorized Signatory

2 This Schedule should be included only if the Security is issued in global form.

27

ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms.
The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is limited to $77,000,000 (including $7,000,000 aggregate principal amount of Securities that may be sold to the Initial Purchasers by the Company upon exercise of the over-allotment option granted pursuant to the Purchase Agreement), except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities pursuant to Section 304, 305, 306, 906, 1108, 1302 or 1405.
The Securities shall be known and designated as the "5 3/4% Convertible Subordinated Debentures due 2003" of the Company. Their Stated Maturity shall be September 30, 2003 and they shall bear interest at the rate of 5 3/4% per annum, from the date of original issuance of Securities pursuant to this Indenture or from the most recent Interest Payment Date to which interest has been paid or duly provided for, as the case may be, payable semi-annually on March 31 and September 30, commencing March 31, 1997, until the principal thereof is paid or made available for payment.
The principal of, premium, if any, interest and Liquidated Damages, if any, on the Securities shall be payable (i) in respect of the Global Securities in immediately available funds to the accounts specified by the Global Security Holder on or prior to the respective payment dates and (ii) in respect of Certificated Securities by wire transfer of immediately available funds to the accounts specified by the Holders thereof or, if no such account is specified, by mailing a check to each such Holder's registered address.
The Securities shall be subject to the transfer restrictions set forth in Section 305.
The Securities shall be redeemable as provided in Article Eleven.
The Securities shall be subordinated in right of payment to Senior Indebtedness as provided in Article Twelve.
The Securities shall be convertible as provided in Article Thirteen.
The Securities shall be subject to repurchase at the option of the Holder as provided in Article Fourteen.
28

SECTION 302. Denominations.
The Securities shall be issuable in fully registered form without coupons and only in denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman of the Board, its Chief Executive Officer, its President or one of its Vice Presidents, under its corporate seal or a facsimile thereof reproduced thereon attested by its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities; and the Trustee in accordance with such Company Order shall either at one time or from time to time pursuant to such instructions as may be described therein shall authenticate and deliver such Securities as in this Indenture provided and not otherwise. Such Company Order shall specify the amount of Securities to be authenticated and the date on which the original issue of Securities is to be authenticated, and shall certify that all conditions precedent to the issuance of such Securities contained in this Indenture have been complied with. The aggregate principal amount of Securities Outstanding at any time may not exceed the amount set forth above except as provided in Section 306.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein duly executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder and is entitled to the benefits of this Indenture. The Trustee may appoint an Authenticating Agent pursuant to the terms of Section 614.
29

SECTION 304. Registration, Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency designated pursuant to Section 1002 being herein sometimes collectively referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed "Security Registrar" for the purpose of registering Securities and transfers of Securities as herein provided. At all reasonable times the Security Register shall be open for inspection by the Company.
The Company initially appoints The Depository Trust Company ("DTC") to act as depositary (the "Depositary") with respect to the Global Security(ies).
The Company initially appoints the Trustee to act as Securities Custodian with respect to the Global Security(ies).
Where Securities are presented to the Security Registrar or a co-registrar with a request to register a transfer or to exchange them for an equal principal amount of Securities of other denominations, the Security Registrar shall register the transfer or make the exchange if its requirements for such transactions are met. To permit registrations of transfers and exchanges, the Company shall issue and deliver to the Trustee and the Trustee shall authenticate Securities at the Security Registrar's request. No service charge shall be made for any registration of transfer or exchange (except as otherwise expressly permitted herein), but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer tax or similar governmental charge payable upon exchanges pursuant to Sections 305, 906 or 1108 hereof).
The Company shall not be required to (i) issue, register the transfer of or exchange Securities during a period beginning at the opening of business fifteen (15) days before the day of any selection of Securities for redemption under Section 1104 and ending at the close of business on the day of selection, (ii) register the transfer or exchange of any Securities so selected for redemption in whole or in part, except the unredeemed portion of any Securities being redeemed in part or (iii) register the transfer of any Securities surrendered for repurchase pursuant to Article Fourteen.
All Securities issued upon any transfer or exchange of Securities in accordance with this Indenture shall be the valid and binding obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture as the Securities surrendered upon such registration of transfer or exchange.
(a) Notwithstanding any provisions to the contrary in this Indenture, so long as a Global Security remains outstanding and is held by or on behalf of the Depositary, transfers of a Global Security, in whole or in part, or of any beneficial interest therein, shall only be made in
30

accordance with Section 201(b) and this Section 304; provided, however, that beneficial interests in a Global Security may be transferred to persons who take delivery thereof in the form of a beneficial interest in the same Global Security in accordance with the transfer restrictions set forth in the Restricted Securities Legend and under the heading "Notice to Investors" in the Offering Memorandum.
(i) Except for transfers or exchanges made in accordance with any of clauses (ii) through (v) of this Section 304(a), transfers of a Global Security shall be limited to transfers of such Global Security in whole, but not in part, to nominees of the Depositary or to a successor of the Depositary or such successor's nominee.
(ii) Rule 144A Global Security to Regulation S Temporary Global Security. If an owner of a beneficial interest in the Rule 144A Global Security deposited with the Depositary or the Trustee as custodian for the Depositary wishes at any time to transfer its interest in such Rule 144A Global Security to a person who is required to take delivery thereof in the form of an interest in the Regulation S Temporary Global Security, such owner may, subject to the rules and procedures of the Depositary, exchange or cause the exchange of such interest for an equivalent beneficial interest in the Regulation S Temporary Global Security. Upon receipt by the Trustee, as Security Registrar, at its Corporate Trust Office of (1) instructions given in accordance with the Depositary's procedures from an Agent Member directing the Trustee to credit or cause to be credited a beneficial interest in the Regulation S Temporary Global Security in an amount equal to the beneficial interest in the Rule 144A Global Security to be exchanged, (2) a written order from an Agent Member given in accordance with the Depositary's procedures containing information regarding the participant account of the Depositary and, in the case of a transfer pursuant to and in accordance with Regulation S, the Euroclear or Cedel account to be credited with such increase and (3) in the case of a transfer, a certificate in the form of Exhibit A attached hereto given by the holder of such beneficial interest stating that the transfer of such interest has been made in compliance with the transfer restrictions applicable to the Global Securities and (A) pursuant to and in accordance with Regulation S, (B) that the Security being transferred is not a "restricted security" as defined in Rule 144 under the Securities Act, or (C) stating that the person transferring such interest reasonably believes that the person acquiring such interest in the Regulation S Temporary Global Security is a QIB and is obtaining such beneficial interest in a transaction meeting the requirements of Rule 144A, then the Trustee, as Security Registrar, shall instruct the Depositary to reduce or cause to be reduced the principal amount at maturity of the Rule 144A Global Security and to increase or cause to be increased the principal amount at maturity of the Regulation S Temporary Global Security by the aggregate principal amount at maturity of the beneficial interest in the Rule 144A Global Security to be exchanged, to credit or cause to be credited to the account of the person specified in such instructions a beneficial interest in the Regulation S Temporary Global Security equal to the reduction in the principal amount at maturity of the Rule 144A Global Security, and to debit
31

or cause to be debited from the account of the person making such exchange or transfer the beneficial interest in the Rule 144A Global Security that is being exchanged or transferred.
(iii) Regulation S Temporary Global Security to Rule 144A Global Security. If an owner of a beneficial interest in the Regulation S Temporary Global Security deposited with the Depositary or with the Trustee as custodian for the Depositary wishes at any time to transfer its interest in such Regulation S Temporary Global Security to a person who is required to take delivery thereof in the form of an interest in the Rule 144A Global Security, such holder may, subject to the rules and procedures of Euroclear or Cedel, as the case may be, and the Depositary, exchange or cause the exchange of such interest for an equivalent beneficial interest in the Rule 144A Global Security. Upon receipt by the Trustee, as Security Registrar, at its Corporate Trust Office of (1) instructions from Euroclear or Cedel, if applicable, and the Depositary, directing the Trustee, as Security Registrar, to credit or cause to be credited a beneficial interest in the Rule 144A Global Security equal to the beneficial interest in the Regulation S Temporary Global Security to be exchanged, such instructions to contain information regarding the participant account with the Depositary to be credited with such increase, (2) a written order from an Agent Member given in accordance with the Depositary's procedures containing information regarding the participant account of the Depositary and (3) a certificate in the form of Exhibit B attached hereto given by the owner of such beneficial interest and stating (a)(i) that the person transferring such interest in the Regulation S Temporary Global Security reasonably believes that the person acquiring such interest in the Rule 144A Global Security is a QIB and is obtaining such beneficial interest in a transaction meeting the requirements of Rule 144A or (ii) such transfer is being made pursuant to another exemption from the registration requirements of the Securities Act (in which case such certificate must be accompanied by an opinion of counsel regarding the availability of such exemption) and (b) such transfer is being made in accordance with all applicable securities laws of any state of the United States or any other jurisdiction, then Euroclear or Cedel or the Trustee, as Security Registrar, as the case may be, will instruct the Depositary to reduce or cause to be reduced the Regulation S Temporary Global Security and to increase or cause to be increased the principal amount at maturity of the Rule 144A Global Security by the aggregate principal amount at maturity of the beneficial interest in the Regulation S Temporary Global Security to be exchanged, and the Trustee, as Security Registrar, shall instruct the Depositary, concurrently with such reduction, to credit or cause to be credited to the account of the person specified in such instructions a beneficial interest in the Rule 144A Global Security equal to the reduction in the principal amount at maturity of the Regulation S Temporary Global Security and to debit or cause to be debited from the account of the person making such transfer the beneficial interest in the Regulation S Temporary Global Security that is being transferred.
(iv) Global Security to Certificated Security. If an owner of a beneficial interest in a Global Security deposited with the Depositary or with the Trustee as custodian for the Depositary wishes at any time to transfer its interest in such Global Security to a person who
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is required to take delivery thereof in the form of a Certificated Security, such owner may, subject to the rules and procedures of Euroclear or Cedel, if applicable, and the Depositary, cause the exchange of such interest for one or more Certificated Securities of any authorized denomination or denominations and of the same aggregate principal amount at maturity. Upon receipt by the Trustee, as Security Registrar, at its Corporate Trust Office of (1) instructions from Euroclear or Cedel, if applicable, and the Depositary directing the Trustee, as Security Registrar, to authenticate and deliver one or more Certificated Securities of the same aggregate principal amount at maturity as the beneficial interest in the Global Security to be exchanged, such instructions to contain the name or names of the designated transferee or transferees, the authorized denomination or denominations of the Certificated Securities to be so issued and appropriate delivery instructions, (2) a certificate in the form of Exhibit C attached hereto given by the owner of such beneficial interest and stating that the person transferring such interest in such Global Security reasonably believes that the person acquiring the Certificated Securities for which such interest is being exchanged is an institutional "accredited investor" (as defined in Rule 501(a)(1),
(2), (3) or (7) of Regulation D under the Securities Act) and is acquiring such Certificated Securities having an aggregate principal amount of not less than $100,000 for its own account or for one or more accounts as to which the transferee exercises sole investment discretion, (3) a certificate in the form of Exhibit D attached hereto given by the person acquiring the Certificated Securities for which such interest is being exchanged, to the effect set forth therein, and
(4) such other certifications, legal opinions or other information as the Company may reasonably require to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, then Euroclear or Cedel, if applicable, or the Trustee, as Security Registrar, as the case may be, will instruct the Depositary to reduce or cause to be reduced such Global Security by the aggregate principal amount at maturity of the beneficial interest therein to be exchanged and to debit, or cause to be debited from the account of the person making such transfer the beneficial interest in the Global Security that is being transferred, and concurrently with such reduction and debit the Company shall execute, and the Trustee shall authenticate and deliver, one or more Certificated Securities of the same aggregate principal amount at maturity in accordance with the instructions referred to above.
(v) Certificated Security to Certificated Security. If a holder of a Certificated Security wishes at any time to transfer such Certificated Security to a person who is required to take delivery thereof in the form of a Certificated Security, such holder may, subject to the restrictions on transfer set forth herein and in such Certificated Security, cause the exchange of such Certificated Security for one or more Certificated Securities of any authorized denomination or denominations and of the same aggregate principal amount at maturity. Upon receipt by the Trustee, as Security Registrar, at its Corporate Trust Office of (1) such Certificated Security, duly endorsed as provided herein, (2) instructions from such holder directing the Trustee, as Security Registrar, to authenticate and deliver one or more Certificated Securities of the same aggregate principal amount at maturity as the Certificated
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Security to be exchanged, such instructions to contain the name or authorized denomination or denominations of the Certificated Securities to be so issued and appropriate delivery instructions, (3) a certificate from the holder of the Certificated Security to be exchanged in the form of Exhibit C attached hereto, (4) a certificate in the form of Exhibit D attached hereto given by the person acquiring the Certificated Securities for which such interest is being exchanged, to the effect set forth therein, and (5) such other certifications, legal opinions or other information as the Company may reasonably require to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, then the Trustee, as Security Registrar, shall cancel or cause to be canceled such Certificated Security and concurrently therewith, the Company shall execute, and the Trustee shall authenticate and deliver, one or more Certificated Securities of the same aggregate principal amount at maturity, in accordance with the instructions referred to above.
(vi) Certificated Security for Global Security. A Certificated Security may not be transferred or exchanged for a beneficial interest in a Global Security.
(vii) Other Exchanges. In the event that a beneficial interest in a Global Security is exchanged for Securities in definitive registered form pursuant to Section 305, prior to the effectiveness of a Shelf Registration Statement with respect to such Securities, such Securities may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of clauses (ii) through (v) above (including the certification requirements intended to ensure that such transfers comply with Rule 144A or Regulation S under the Securities Act, as the case may be) and such other procedures as may from time to time be adopted by the Company.
(viii) Restricted Period. Prior to the termination of the "restricted period" (as defined in Regulation S under the Securities Act) with respect to the issuance of the Securities, transfers of interests in the Regulation S Temporary Global Security to "U.S. persons" (as defined in Regulation S under the Securities Act) shall be limited to transfers made pursuant to the provisions of Section
304(a)(iii). The Company shall advise the Trustee as to the termination of the restricted period and the Trustee may rely conclusively thereon.
(ix) Regulation S Temporary Global Security to Regulation S Permanent Global Security. Following the termination of the "restricted period" (as defined in Regulation S under the Securities Act) with respect to the issuance of the Securities, beneficial interests in the Regulation S Temporary Global Security shall be exchanged for an interest in a Global Security in definitive, fully registered form without interest coupons, with the Global Securities Legend set forth in Section 202 hereto, but without the Restricted Securities Legend (a "Regulation S Permanent Global Security"), pursuant to the rules and procedures of the Depositary; provided, however, that prior to (i) the payment of interest or principal with respect to a holder's beneficial interest in the Regulation S Temporary Global Security
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and (ii) any exchange of such beneficial interest for a beneficial interest in the Regulation S Permanent Global Security, Euroclear or Cedel receives a certificate substantially in the form of Exhibit E hereto from the beneficial owner of such beneficial interest and Euroclear and Cedel deliver a certificate substantially in the form of Exhibit F hereto to the Trustee (or the paying agent if different from the Trustee). Upon proper presentment to the Trustee of a certificate substantially in the form of Exhibit G hereto and subject to the rules and procedures of DTC or its direct or indirect participants, including Euroclear and Cedel, an interest in a Regulation S Permanent Global Security may be exchanged for a Certificated Security that is free from any restriction on transfer (other than such as are solely attributable to any holder's status).
(b) Except in connection with a Shelf Registration Statement contemplated by and in accordance with the terms of the Registration Rights Agreement, if Securities are issued upon the transfer, exchange or replacement of Securities bearing the Restricted Securities Legend set forth in Section 202 hereto, or if a request is made to remove such Restricted Securities Legend on Securities, the Securities so issued shall bear the Restricted Securities Legend, or the Restricted Securities Legend shall not be removed, as the case may be, unless there is delivered to the Company such satisfactory evidence, which may include an opinion of counsel licensed to practice law in the State of New York, as may be reasonably required by the Company, that neither the legend nor the restrictions on transfer set forth therein are required to ensure that transfers thereof comply with the provisions of Rule 144A, Rule 144 or Regulation S under the Securities Act or, with respect to Certificated Securities, that such Securities are not "restricted" within the meaning of Rule 144 under the Securities Act. Upon provision of such satisfactory evidence, the Trustee, at the direction of the Company, shall authenticate and deliver Securities that do not bear the legend.
(c) Neither the Company nor the Trustee shall have any responsibility for any actions taken or not taken by the Depositary.
SECTION 305. Temporary Securities.
(a) Until definitive Securities are ready for delivery, the Company may prepare and the Trustee, upon receipt of a written order of the Company as set forth in Section 303, shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Securities in exchange for temporary Securities. Until so exchanged, the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities.
(b) A Global Security deposited with the Depositary or with the Trustee as custodian for the Depositary pursuant to Section 201 shall be transferred to the beneficial owners thereof in the form of Certificated Securities only if such transfer complies with Section 304 and (i)
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the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for such Global Security or if at any time such Depositary ceases to be a "clearing agency" registered under the Exchange Act and a successor depositary is not appointed by the Company within 90 days of such notice, or
(ii) an Event of Default has occurred and is continuing.
(c) Any Global Security that is transferable to the beneficial owners thereof in the form of Certificated Securities pursuant to this Section 305 shall be surrendered by the Depositary to the Trustee at its drop facility located in the Borough of Manhattan, the City of New York and specified in
Section 1002, to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Security, an equal aggregate principal amount at maturity of Securities of authorized denominations in the form of Certificated Securities. Any portion of a Global Security transferred pursuant to this Section shall be executed, authenticated and delivered only in denominations of $1,000 and any integral multiple thereof and registered in such names as the Depositary shall direct. Any Security in the form of Certificated Securities delivered in exchange for an interest in the Rule 144A Global Security shall, except as otherwise provided by Section 304(b) bear the Restricted Securities Legend set forth in Section 202 hereto. Any Security in the form of Certificated Securities delivered in exchange for an interest in the Regulation S Temporary Global Security shall, except as otherwise provided by
Section 304(b) bear the Restricted Securities Legend set forth in Section 202 hereto.
(d) Subject to the provisions of Section 305(c), the registered holder of a Global Security may grant proxies and otherwise authorize any person, including Agent Members and persons that may hold interests through Agent Members, to take any action which a holder is entitled to take under this Indenture or the Securities.
(e) In the event of the occurrence of either of the events specified in Section 305(b), the Company will promptly make available to the Trustee a reasonable supply of Certificated Securities in definitive, fully registered form without interest coupons.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of like tenor and principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of like tenor and principal amount and bearing
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a number not contemporaneously outstanding. The Trustee may charge the Company for the Trustee's expenses in replacing such Security.
In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Persons in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest. Payment of interest on the Securities shall be made (i) in respect of the Global Securities in immediately available funds to the accounts specified by the Global Security Holder on or prior to the respective payment dates and
(ii) in respect of Certificated Securities by wire transfer of immediately available funds to the accounts specified by the Holders thereof or, if no such account is specified, by mailing a check to each such Holder's registered address.
Any interest on any Security which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the
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payment of such Defaulted Interest which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder at his address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.
In the case of any Security which is converted after any Regular Record Date and on or prior to the next succeeding Interest Payment Date (other than any Security whose Maturity is prior to such Interest Payment Date), interest whose Stated Maturity is on such Interest Payment Date shall be payable on such Interest Payment Date notwithstanding such conversion, and such interest (whether or not punctually paid or duly provided for) shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on such Regular Record Date, provided, however, that Securities so surrendered for conversion shall (except in the case of Securities or portions thereof called for redemption) be accompanied by
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payment in New York Clearing House funds or other funds acceptable to the Company of an amount equal to the interest payable on such Interest Payment Date on the principal amount being surrendered for conversion. Except as otherwise expressly provided in the immediately preceding sentence, in the case of any Security which is converted, interest whose Stated Maturity is after the date of conversion of such Security shall not be payable.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and premium, if any, and (subject to Section 307) interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of transfer, exchange or conversion shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly canceled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Securities so delivered shall be promptly canceled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section, except as expressly permitted by this Indenture. All canceled Securities held by the Trustee shall be disposed of as directed by a Company Order.
SECTION 310. Computation of Interest.
Interest on the Securities of each series shall be computed on the basis of a 360- day year of twelve 30-day months.
SECTION 311. CUSIP Number.
The Company in issuing the Securities may use a "CUSIP" number, and if so, such CUSIP number shall be included in notices of redemption, repurchase or exchange as a convenience to holders of Securities; provided, however, that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP number printed in the notice or on the Securities and that reliance may be placed only on the other identification numbers printed on the Securities. The Company will promptly notify the Trustee of any change in the CUSIP number.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect (except that the Company's obligations under Sections 607 and 402 hereof shall survive), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (A) all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 306 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for cancellation; (B) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and (C) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.
SECTION 402. Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company upon request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of principal of, or interest or Liquidated Damages (if any) on, the Securities that remains unclaimed for two years after the date upon which such payment shall have become due; provided, however, that the Company shall have first caused notice of such payment to the Company to be mailed by first-class mail to each Holder entitled thereto at last known address no less than 30 days prior to such payment. The Company and the Trustee shall have no further liability or obligation to advise Holder. After payment to the Company, the Trustee and the Paying Agent shall have no further liability with respect to such money and Holders entitled to the money must look to the Company for payment as general creditors unless any applicable abandoned property law designates another person.
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ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be occasioned by the provisions of Article Twelve or be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body);
(1) default in the payment of the principal of or premium, if any, on any Security at its Maturity, whether or not such payment is prohibited by the provisions of Article Twelve; or
(2) default in the payment of any interest or Liquidated Damages, if any, on any Security when it becomes due and payable, whether or not such payment is prohibited by the provisions of Article Twelve, and continuance of such default for a period of 30 days; or
(3) failure to provide timely notice of a Repurchase Event as required in accordance with the provisions of Article Fourteen; or
(4) default in the payment of the Repurchase Price in respect of any Security on the Repurchase Date therefor in accordance with the provisions of Article Fourteen, whether or not such payment is prohibited by the provisions of Article Twelve; or
(5) default in the performance, or breach, of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with), and continuance of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25 % in principal amount of the Outstanding Securities a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or
(6) a default under any bond, debenture, note or other evidence of indebtedness for money borrowed by the Company or any Subsidiary or under any mortgage, indenture or instrument under which there may be issued or by which there
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may be secured or evidenced any indebtedness for money borrowed by the Company or any Subsidiary, whether such indebtedness now exists or shall hereafter be created, which default shall constitute a failure to pay the principal of indebtedness in excess of $5,000,000 when due and payable after the expiration of any applicable grace period with respect thereto or shall have resulted in indebtedness in excess of $5,000,000 becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, without such indebtedness having been discharged, or such acceleration having been rescinded or annulled, within a period of 30 days after there shall have been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities a written notice specifying such default and requiring the Company to cause such indebtedness to be discharged or cause such acceleration to be rescinded or annulled and stating that such notice is a "Notice of Default" hereunder; or
(7) the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company or any Material Subsidiary in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company or any Material Subsidiary a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company or any Material Subsidiary under any applicable Federal or State law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any Material Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 90 consecutive days; or
(8) the commencement by the Company or any Material Subsidiary of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company or any Material Subsidiary in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any Material Subsidiary or of any substantial part of its property, or the making by it of a general assignment for the
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benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company or any Material Subsidiary in furtherance of any such action.
Upon receipt by the Trustee of any Notice of Default pursuant to this Section 501, a record date shall automatically and without any other action by any Person be set for the purpose of determining the Holders of Outstanding Securities entitled to join in such Notice of Default, which record date shall be the close of business on the day the Trustee receives such Notice of Default. The Holders of Outstanding Securities on such record date (or their duly appointed agents), and only such Persons, shall be entitled to join in such Notice of Default, whether or not such Holders remain Holders after such record date: provided, that unless such Notice of Default shall have become effective by virtue of the Holders of the requisite principal amount of Outstanding Securities on such record date (or their duly appointed agents) having joined therein on or prior to the 90th day after such record date, such Notice of Default shall automatically and without any action by any Person be canceled and of no further force or effect.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than as specified in subparagraph (7) or (8) of Section 501) occurs and is continuing, then and in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities may declare the principal of all the Securities to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration the principal of, premium, if any, and interest accrued on the Securities to the date of declaration and Liquidated Damages, if any, shall become immediately due and payable. If an Event of Default specified in subparagraph (7) or (8) of
Section 501 occurs and is continuing, then the principal of, premium, if any, and accrued and unpaid interest and Liquidated Damages, if any, on all of the Securities shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder of Securities.
At any time after such a declaration of acceleration has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Securities, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum sufficient to pay
(A) all overdue interest on all Securities,
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(B) the principal of and premium, if any, on any Securities which have become due otherwise than by such declaration of acceleration and interest thereon at the rate borne by the Securities,
(C) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate borne by the Securities, and
(D) all sums paid or advanced by the Trustee and each predecessor Trustee, their respective agents and counsel hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee and each predecessor Trustee, their respective agents and counsel;
and
(2) all Events of Default, other than the nonpayment of the principal of, premium, if any, and interest on the Securities that has become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513.
No such rescission and waiver shall affect any subsequent default or impair any right consequent thereon.
Upon receipt by the Trustee of any declaration of acceleration, or any rescission and annulment of any such declaration, pursuant to this Section 502, a record date shall automatically and without any other action by any Person be set for the purpose of determining the Holders of Outstanding Securities entitled to join in such declaration, or rescission and annulment, as the case may be, which record date shall be the close of business on the day the Trustee receives such declaration, or rescission and annulment, as the case may be. The Holders of Outstanding Securities on such record date (or their duly appointed agents), and only such Persons, shall be entitled to join in such declaration, or rescission and annulment, as the case may be, whether or not such Holders remain Holders after such record date; provided, that unless such declaration, or rescission and annulment, as the case may be, shall have become effective by virtue of Holders of the requisite principal amount of Outstanding Securities on such record date (or their duly appointed agents) having joined therein on or prior to the 90th day after such record date, such declaration, or rescission and annulment, as the case may be, shall automatically and without any action by any Person be canceled and of no further force or effect.
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SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and premium, if any, and interest, and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal and premium, if any, and on any overdue interest, at the rate borne by the Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee and each predecessor Trustee, their respective agents and counsel, and any other amounts due the Trustee or any predecessor Trustee under Section 607.
If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust may institute a judicial proceeding for the collection of the sums so due and unpaid and may prosecute any such proceeding to judgment or final decree, and may enforce the same against the Company (or any other obligor upon such Securities) and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company (or any other obligor upon such Securities), wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have the claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial
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proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it and each predecessor Trustee for the reasonable compensation, expenses, disbursements and advances of the Trustee and each predecessor Trustee and their respective agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and may be a member of the Creditors' Committee.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee and each predecessor Trustee and their respective agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or premium, if any, or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: Subject to Article 12, to the holders of Senior Indebtedness;
SECOND: To payment of all amounts due the Trustee under Section 607;
THIRD: To the payment of the amounts then due and unpaid for principal of and premium, if any, and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and premium, if any, and interest, respectively; and
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FOURTH: The balance, if any, to the Company or to whomsoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.
SECTION 507. Limitation on Suits.
No Holder of any Security shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest and to Convert.
Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and premium, if any, and (subject to Section 307) interest and Liquidated Damages (if any) on such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date or, in the case of a repurchase pursuant to Article Fourteen, on the
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Repurchase Date) and to convert such Security in accordance with Article Thirteen and to institute suit for the enforcement of any such payment and right to convert, and such rights shall not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.
SECTION 512. Control by Holders.
The Holders of at least a majority in principal amount of the Outstanding Securities shall 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, provided, that
(1) such direction shall not be in conflict with any rule of law or with this Indenture; and
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(2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction; and
(3) subject to the provisions of Section 601, the Trustee shall have the right to decline to follow any such direction if the Trustee in good faith shall determine that the action so directed would involve the Trustee in personal liability or would be unduly prejudicial to Holders not joining in such direction.
Upon receipt by the Trustee of any such direction, a record date shall automatically and without any other action by any Person be set for the purpose of determining the Holders of Outstanding Securities entitled to join in such direction, which record date shall be the close of business on the day the Trustee receives such direction. The Holders of Outstanding Securities on such record date (or their duly appointed agents), and only such Persons, shall be entitled to join in such direction, whether or not such Holders remain Holders after such record date; provided, that unless such direction shall have become effective by virtue of Holders of the requisite principal amount of Outstanding Securities on such record date (or their duly appointed agents) having joined therein on or prior to the 90th day after such record date, such direction shall automatically and without any action by any Person be canceled and of no further force or effect.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the Outstanding Securities may on behalf of the Holders of all the Securities waive any past default hereunder and its consequences, except a default
(1) in the payment of the principal of or premium, if any, or interest on any Security, or
(2) in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess costs against any such party litigant, in the manner and to the extent provided in the Trust Indenture Act;
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provided, that neither this Section nor the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Company, in any suit instituted by the Trustee, a suit by a Holder pursuant to Section 508, or a suit by a Holder or Holders of more than 10% in principal amount of the outstanding Securities.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by this Indenture and the Trust Indenture Act for securities issued pursuant to indentures qualified thereunder. Except as otherwise provided herein, notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability or risk in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. The Trustee shall not be liable (x) for any error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts or
(y) with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of not less than a majority in aggregate principal amount of the Securities at the time Outstanding relating to the time, method and place of conducting any proceeding or any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this indenture. Prior to the occurrence of an Event of Default and after the curing or waiving of all Events of Default which may have occurred: (i) the duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture and in the Trust Indenture Act, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture and in the Trust Indenture Act, and no implied covenants or obligations shall be read in to this Indenture against the Trustee; and (ii) in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions therein, upon any statements, certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture and believed by the Trustee to be genuine and to have been signed or presented by the proper party or parties; but in the case of any such statements, certificates or options which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform on their face to the requirements of this Indenture. If a default or an Event of Default has occurred and is continuing, the Trustee shall exercise the rights
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and powers vested in it by this Indenture and use the same degree of care and skill in its exercise thereof as a prudent person would exercise or use under the circumstances in the conduct of his own affairs.
SECTION 602. Notice of Defaults.
The Trustee shall give the Holders notice of any default hereunder known to it as and to the extent provided by the Trust Indenture Act; provided, however, that in the case of any default of the character specified in
Section 501(5), no such notice to Holders shall be given until at least 30 days after the occurrence thereof. For the purpose of this Section, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default. For purposes of this Section 602, the Trustee shall not be deemed to have knowledge of an Event of Default hereunder unless an officer of the Trustee has actual knowledge thereof, or unless written notice of any event which is an Event of Default is received by the Trustee and such notice references the Securities or this Indenture.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;
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(e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;
(f) before the Trustee acts or refrains from acting with respect to any matter contemplated by this Indenture, it may require an Officers' Certificate or an Opinion of Counsel, which shall conform to the provisions of Section 102, and the Trustee shall be protected and shall not be liable for any action it takes or omits to take in good faith and without gross negligence in reliance on such certificate or opinion;
(g) the Trustee shall not be required to give any bond or surety in respect of the performance of its power and duties hereunder;
(h) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; and
(i) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's certificate of authentication, shall be taken as the statements of the Company, and the Trustee or any Authenticating Agent assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. The Trustee or any Authenticating Agent shall not be accountable for the use or application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
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The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee or any Paying Agent in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee or any Paying Agent shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (including its services as Security Registrar or Paying Agent, if so appointed by the Company) as may be mutually agreed upon in writing by the Company and the Trustee (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the Trustee and each predecessor Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by or on behalf of it in connection with the performance of its duties under any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel and all other persons not regularly in its employ) except to the extent any such expense, disbursement or advance may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee and each predecessor Trustee (each an "indemnitee") for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this Indenture or the trusts hereunder and its duties hereunder (including its services as Security Registrar or Paying Agent, if so appointed by the Company), including enforcement of this
Section 607 and including the costs and expenses of defending itself against or investigating any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The Company shall defend any claim or threatened claim asserted against an indemnitee for which it may seek indemnity, and the indemnitee shall cooperate in
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the defense unless, in the reasonable opinion of the indemnitee's counsel, the indemnitee has an interest adverse to the Issuer or a potential conflict of interest exists between the indemnitee and the Company, in which case the indemnitee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel; provided that the Company shall only be responsible for the reasonable fees and expenses of one law firm (in addition to local counsel) in any one action or separate substantially similar actions in the same jurisdiction arising out of the same general allegations or circumstances, such law firm to be designated by the indemnitee.
As security for the performance of the obligations of the Company under this Section 607, the Trustee shall have a lien prior to the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the Holders of particular Securities, and the Securities are hereby subordinated to such prior lien. The obligations of the Company under this Section to compensate and indemnify the Trustee and any predecessor Trustee and to pay or reimburse the Trustee and any predecessor Trustee for expenses, disbursements and advances, and any other amounts due the Trustee or any predecessor Trustee under Section 607, shall constitute an additional obligation hereunder and shall survive the satisfaction and discharge of this Indenture.
When the Trustee or any predecessor Trustee incurs expenses or renders services in connection with the performance of its obligations hereunder (including its services as Security Registrar or Paying Agent, if so appointed by the Company) after an Event of Default specified in Section 501(7) or (8) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any applicable bankruptcy, insolvency or other similar federal or state law to the extent provided in
Section 503(b)(5) of Title 11 of the United States Code, as now or hereafter in effect.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a Person that (i) is eligible pursuant to the Trust Indenture Act to act as such, (ii) has (or, in the case of a corporation included in a bank holding company system, whose related bank holding company has) a combined capacity and surplus of at least $50,000,000 and (iii) has a Corporate Trust Office in the Borough of Manhattan, The City of New York, or a designated agent. If such Person publishes reports of conditions at least annually, pursuant to law or to the requirements of a Federal or state supervising
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or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 611.
(b) The Trustee may resign at any time by giving written notice thereof to the Company. If an instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the resigning Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by an Act of the Holders of a majority in principal amount of the Outstanding Securities delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for the last six months, or
(2) the Trustee shall cease to be eligible under
Section 609 and shall fail to resign after written request therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
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(e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Trustee and such successor Trustee shall comply with the applicable requirements of Section 611. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 611 become the successor Trustee and supersede the successor Trustee appointed by the Company. If no successor Trustee shall have been so appointed by the Company or the Holders and accepted appointment in the manner required by Section 611, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee to all Holders in the manner provided in Section 106. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such
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corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of such claims against the Company (or any such other obligor).
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents acceptable to and at the expense of the Company which shall be authorized to act on behalf of the Trustee to authenticate Securities issued upon original issue and upon exchange, registration of transfer, partial conversion or partial redemption or pursuant to Section 306, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a Person organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.
Any Person into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any Person succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such Person shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.
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An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall mail notice of such appointment by first-class mail, postage prepaid, to all Holders as their names and addresses appear in the Security Register. Any successor Authenticating Agent upon acceptance of its appointment under this Section shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible to act as such under the provisions of this Section.
Any Authenticating Agent by the acceptance of its appointment shall be deemed to have represented to the Trustee that it is eligible for appointment as Authenticating Agent under this Section and to have agreed with the Trustee that: it will perform and carry out the duties of an Authenticating Agent as herein set forth, including among other things the duties to authenticate Securities when presented to it in connection with the original issuance and with exchanges, registrations of transfer or redemptions or conversions thereof or pursuant to Section 306; it will keep and maintain, and furnish to the Trustee from time to time as requested by the Trustee, appropriate records of all transactions carried out by it as Authenticating Agent and will furnish the Trustee such other information and reports as the Trustee may reasonably require; and it will notify the Trustee promptly if it shall cease to be eligible to act as Authenticating Agent in accordance with the provisions of this Section. Any Authenticating Agent by the acceptance of its appointment shall be deemed to have agreed with the Trustee to indemnify the Trustee against any loss, liability or expense incurred by the Trustee and to defend any claim asserted against the Trustee by reason of any acts or failures to act of such Authenticating Agent, but such Authenticating Agent shall have no liability for any action taken by it in accordance with the specific written direction of the Trustee.
The Trustee shall not be liable for any act or any failure of the Authenticating Agent to perform any duty either required herein or authorized herein to be performed by such person in accordance with this Indenture.
The Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section.
If an appointment is made pursuant to this Section, the Securities may have endorsed thereon, in addition to the Trustee's certificate of authentication, an alternative certificate of authentication in the following form:
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This is one of the Securities described in the within-mentioned Indenture.

As Trustee
By_________________________________
As Authenticating Agent
By_________________________________
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each Regular Record Date, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders as of such Regular Record Date, and
(b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished.
Notwithstanding the foregoing, so long as the Trustee is the Security Registrar, no such list shall be required to be furnished.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 701 and the names and addresses of
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Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and duties of the Trustee, shall be as provided by the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to the names and addresses of the Holders made pursuant to the Trust Indenture Act or otherwise in accordance with this Indenture.
SECTION 703. Reports by Trustee.
(a) Not later than 60 days following each September 15, the Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which the Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when any Securities are listed on any stock exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant to such Act; provided, that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within 15 days after the same is so required to be filed with the Commission.
SECTION 705. Rule 144A Information Requirement.
If at any time prior to the Resale Restriction Termination Date the Company is no longer subject to Section 13 or 15(d) of the Exchange Act, the Company will furnish to the Holders or beneficial holders of the Securities and prospective purchasers of the Securities designated by the Holders of the Securities, upon their request, information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act until the earlier of (i) the date on which the Securities and the
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underlying Common Stock are registered under the Securities Act or (ii) the Resale Restriction Termination Date.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, unless:
(1) in case the Company shall consolidate with or merge into another Person or convey, transfer or lease all or substantially all of its properties and assets to any Person, the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, all or substantially all of the properties and assets of the Company shall be a corporation, partnership or trust, shall be organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of and premium, if any, and interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed and shall have provided for conversion rights in accordance with Section 1311;
(2) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing; and
(3) such consolidation, merger, conveyance, transfer or lease does not adversely affect the validity or enforceability of the Securities; and
(4) the Company or the successor Person has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.
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SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company into, any other Person or any conveyance, transfer or lease of all or substantially all of the properties and assets of the Company in accordance with
Section 801, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to cause this Indenture to be qualified under the Trust Indenture Act; or
(2) to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company herein and in the Securities; or
(3) to add to the covenants of the Company for the benefit of the Holders or an additional Event of Default, or to surrender any right or power conferred herein or in the Securities upon the Company; or
(4) to secure the Securities; or
(5) to make provision with respect to the conversion rights of Holders pursuant to the requirements of Section 1311; or
(6) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities; or
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(7) to cure any ambiguity, to correct or supplement any provision herein or in the Securities which may be defective or inconsistent with any other provision herein or in the Securities, or to make any other provisions with respect to matters or questions arising under this Indenture which shall not be inconsistent with the provisions of this Indenture; provided, that such action pursuant to this Clause
(7) shall not adversely affect the interests of the Holders in any material respect and the Trustee may rely upon an opinion of counsel to that effect.
SECTION 902. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or modifying in any manner the rights of the Holders under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any installment of interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or change the place of payment where, or the coin or currency in which, any Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or adversely affect the right to convert any Security as provided in Article Thirteen (except as permitted by Section 901(5)), or modify the provisions of Article Fourteen, or the provisions of this Indenture with respect to the subordination of the Securities, in a manner adverse to the Holders, or
(2) reduce the percentage in principal amount of the Outstanding Securities, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences provided for in this Indenture, or
(3) make any change in Section 513, Section 508 or
Section 902 hereof (including this sentence), or
(4) modify any of the provisions of this Section or
Section 513, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; provided, however, that this Clause shall not
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be deemed to require the consent of any Holder with respect to changes in the references to "the Trustee" and concomitant changes in this Section, or the deletion of this proviso, in accordance with the requirements of Section 901(6).
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and (at the specific direction of the Company) authenticated and delivered by the Trustee in exchange for Outstanding Securities.
SECTION 907. Notice of Supplemental Indenture.
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Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to Section 902, the Company shall transmit to the Holders a notice setting forth the substance of such supplemental indenture.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the principal of and premium, if any, interest, Liquidated Damages (if any) on the Securities in accordance with the terms of the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in New York, New York an office or agency (which may be a drop facility) where Securities may be presented or surrendered for payment, where Securities may be surrendered for registration of transfer, where Securities may be surrendered for exchange or conversion and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of any such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, or the offices of its Agent, DTC, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in New York, New York for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. The Company hereby designates the Trustee c/o 40 Broad Street, Fifth Floor, Suite 550, Suite 550, New York, New York 10604 as such drop facility in compliance with this Section 1002.
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SECTION 1003. Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will, on or before each due date of the principal of and premium, if any, or interest on any of the Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal and premium, if any, or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, on or prior to 11:00 a.m. (New York City time) on each due date of the principal of and premium, if any, or interest on any Securities, deposit with a Paying Agent a sum in same day funds sufficient to pay the principal and any premium and interest so becoming due, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee or the Company to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will (i) comply with the provisions of the Trust Indenture Act and this Indenture applicable to it as a Paying Agent and hold all sums held by it for the payment of principal of or any premium or interest on the Securities in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (ii) give the Trustee notice of any default by the Company (or any other obligor upon the Securities) in the making of any payment in respect of the Securities; and (iii) at any time during the continuance of any default by the Company (or any other obligor upon the Securities) in the making of any payment in respect of the Securities, upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Securities, and account for any funds disbursed.
The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of and premium, if any, or interest on any Security and remaining unclaimed for two years after such principal and premium, if any, or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the
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Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in New York, New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers' Certificate stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge.
SECTION 1005. Existence.
Subject to Article Eight, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises and the existence, rights (charter and statutory) and franchises of each Subsidiary; provided, however, that the Company shall not be required to preserve any such right or franchise if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and that the loss thereof is not disadvantageous in any material respect to the Holders.
SECTION 1006. Maintenance of Properties.
The Company will cause all buildings and equipment owned by it to be maintained and kept in such condition, repair and working order as in the judgment of the Company may be necessary in the interest of its business and that of its Subsidiaries; provided, however, that nothing in this Section shall prevent the Company from selling, abandoning or otherwise disposing of, or discontinuing the operation or maintenance of, any of such properties if such action is, in the judgment of the Company, desirable in the conduct of its business or the business of any Subsidiary and in compliance with Article Eight.
SECTION 1007. Payment of Taxes.
The Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, all taxes, assessments and governmental charges levied or imposed upon the
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Company or any Subsidiary or upon the income, profits or property of the Company or any Subsidiary, which, if unpaid, might by law become a lien upon the property of the Company or any Subsidiary; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment or governmental charge whose amount, applicability or validity is being contested in good faith by appropriate proceedings.
SECTION 1008. Limitations on Disposition of Stock of Material Subsidiaries
Except in a transaction governed by Article Eight hereof, so long as Securities of any series are Outstanding, the Company will not issue, sell, transfer or otherwise dispose of any shares of, securities convertible into or warrants, rights or options to subscribe for or purchase shares of, capital stock (other than preferred stock having no voting rights of any kind) of any of its Material Subsidiaries nor will it permit any of its Material Subsidiaries to issue (other than to the Company) any shares (other than directors' qualifying shares) of, or securities convertible into, or warrants, rights or options to subscribe for or purchase shares of, capital stock (other than preferred stock having no voting rights of any kind) of any of its Material Subsidiaries if, after giving effect to any such transaction and the issuances of the maximum number of shares issuable upon the conversion or exercise of all such convertible securities, warrants, rights or options, the Company would own, directly or indirectly, less than 80% of the shares of any of its Material Subsidiaries (other than preferred stock having no voting rights of any kind); provided, however, that (i) any issuance, sale, transfer or other disposition permitted by the foregoing may only be made for at least a fair market value consideration, as determined by the Board of Directors pursuant to a Board Resolution adopted in good faith, and (ii) the foregoing shall not prohibit any such issuance or disposition of securities if required by any law or any regulation or order of any governmental authority. Notwithstanding the foregoing, (iii) the Company may merge or consolidate any of the Company's Material Subsidiaries into or with another direct wholly-owned Subsidiary of the Company and (iv) the Company may, subject to the provisions of Article Eight, sell, transfer or otherwise dispose of the entire capital stock of any of its Material Subsidiaries at one time for at least a fair market value consideration, as determined by the Board of Directors pursuant to a Board Resolution adopted in good faith.
SECTION 1009. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any covenant or condition set forth in Sections 1005 to 1008 inclusive, if before the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such covenant or condition, but no such waiver shall extend to or affect such covenant or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such covenant or condition shall remain in full force and effect.
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ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Right of Redemption.
The Securities may be redeemed at the election of the Company, in whole or from time to time in part, at any time on or after September 30, 2000, at the Redemption Prices specified in the form of Security hereinbefore set forth, together with accrued interest, to the Redemption Date.
SECTION 1102. Applicability of Article.
Redemption of Securities at the election of the Company as permitted by any provision of this Indenture shall be made in accordance with such provision and this Article.
SECTION 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant to Section 1101 shall be evidenced by a Board Resolution. In case of any redemption at the election of the Company of less than all the Securities, the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter period shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities to be redeemed. In case of any redemption at the election of the Company of all of the Securities, the Company shall, at least 45 days prior to the Redemption Date fixed by the Company (unless a shorter period shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date.
SECTION 1104. Selection by Trustee of Securities to be Redeemed.
If less than all the Securities are to be redeemed, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities not previously called for redemption, by lot or pro rata or by such other method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to $1,000 or any integral multiple thereof) of the principal amount of Securities of a denomination larger than $1,000.
If any Security selected for partial redemption is converted in part before termination of the conversion right with respect to the portion of the Security so selected, the converted portion of such Security shall be deemed (so far as may be) to be the portion selected for redemption. Securities which have been converted during a selection of Securities to be redeemed shall be treated by the Trustee as Outstanding for the purpose of such selection. In any case where more than one
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Security is registered in the same name, the Trustee in its discretion may treat the aggregate principal amount so registered as if it were represented by one Security.
The Trustee shall promptly notify the Company and each Security Registrar in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed.
SECTION 1105. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to the Trustee and to each Holder of Securities to be redeemed, at his address appearing in the Security Register.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) if less than all the Outstanding Securities are to be redeemed, the identification (and, in the case of partial redemption of any Securities, the principal amounts) of the particular Securities to be redeemed,
(d) that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and that (unless the Company shall default in payment of the Redemption Price) interest thereon will cease to accrue on and after said date,
(e) the conversion price, the date on which the right to convert the Securities to be redeemed will terminate and the place or places where such Securities may be surrendered for conversion, and
(f) the place or places where such Securities are to be surrendered for payment of the Redemption Price.
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Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request received by the Trustee at least 45 days prior to the Redemption Date, by the Trustee in the name and at the expense of the Company.
SECTION 1106. Deposit of Redemption Price.
At or prior to 9:00 a.m. (New York City time) on any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money in same day funds sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities or portions thereof which are to be redeemed on that date other than any Securities called for redemption on that date which have been converted prior to the date of such deposit.
If any Security called for redemption is converted, any money deposited with the Trustee or with any Paying Agent or so segregated and held in trust for the redemption of such Security shall (subject to any right of the Holder of such Security or any Predecessor Security to receive interest as provided in the last paragraph of Section 307) be paid to the Company upon Company Request or, if then held by the Company, shall be discharged from such trust.
SECTION 1107. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest to the Redemption Date; provided, however, that installments of interest whose Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal and premium, if any, shall, until paid, bear interest from the Redemption Date at the rate borne by the Security.
SECTION 1108. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at an office or agency of the Company maintained for that purpose pursuant to Section 1002 (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form
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satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
SUBORDINATION OF SECURITIES
SECTION 1201. Securities Subordinated to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Security, by his acceptance thereof, likewise covenants and agrees, that, at all times and in all respects, the indebtedness represented by the Securities and the payment of the principal of and premium, if any, interest and Liquidated Damages, if any, on each and all of the Securities are hereby expressly made subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness.
SECTION 1202. Payment Over of Proceeds Upon Dissolution, Etc.
In the event of (a) any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding, relative to the Company or to its creditors, as such, or to a substantial part of its assets, or (b) any proceeding for the liquidation, dissolution or other winding up of the Company, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy, or (c) any general assignment for the benefits of creditors or any other marshalling of assets and liabilities of the Company, then and in any such event the holders of Senior Indebtedness shall be entitled to receive payment in full of all amounts due or to become due on or in respect of all Senior Indebtedness; or provision shall be made for such payment in money or money's worth, before the Holders of the Securities are entitled to receive any payment or distribution of any kind or character, whether in cash, property or securities, on account of principal of or premium, if any, interest or Liquidated Damages, if any, on the Securities, and to that end the holders of Senior Indebtedness shall be entitled to receive, for application to the payment thereof, any payment or distribution of any kind or character, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other indebtedness of the Company being subordinated to the payment of the Securities, which may be payable or deliverable in respect of the Securities in any such case, proceeding, dissolution, liquidation or other winding up or event.
In the event that, notwithstanding the foregoing provisions of this Section, the Trustee or the Holder of any Security shall have received any payment or distribution of assets of the
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Company of any kind or character, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other indebtedness of the Company being subordinated to the payment of the Securities, before all Senior Indebtedness is paid in full or payment thereof provided for, and if such fact shall, at or prior to the time of such payment or distribution, have been made known to the Trustee or such Holder, as the case may be, then and in such event such payment or distribution shall be paid over or delivered forthwith to the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other Person making payment or distribution of assets of the Company for application to the payment of all Senior Indebtedness remaining unpaid, to the extent necessary to pay all Senior Indebtedness in full, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness.
For purposes of this Article only, the words "cash, property or securities" shall not be deemed to include securities of the Company as reorganized or readjusted, or securities of the Company or any other corporation provided for by a plan of reorganization or readjustment, which are subordinated in right of payment to all Senior Indebtedness which may at the time be outstanding to substantially the same extent as, or to a greater extent than, the Securities are so subordinated as provided in this Article. The consolidation of the Company with, or the merger of the Company into, another Person or the liquidation or dissolution of the Company following the conveyance or transfer of its properties and assets substantially as an entirety to another Person upon the terms and conditions set forth in Article Eight shall not be deemed a dissolution, winding up, liquidation, reorganization, general assignment for the benefit of creditors or marshalling of assets and liabilities of the Company for the purposes of this Section if the Person formed by such consolidation or into which the Company is merged or which acquires by conveyance or transfer such properties and assets substantially as an entirety, as the case may be, shall, as a part of such consolidation, merger, conveyance or transfer, comply with the conditions set forth in Article Eight.
SECTION 1203. Prior Payment to Senior Indebtedness upon Acceleration of Securities.
In the event that any Securities are declared due and payable before their Stated Maturity, then and in such event the holders of Senior Indebtedness outstanding at the time such Securities so become due and payable shall be entitled to receive payment in full of all amounts due on or in respect of such Senior Indebtedness, or provision shall be made for such payment in money or money's worth, before the Holders of the Securities are entitled to receive any payment (including any payment which may be payable by reason of the payment of any other indebtedness of the Company being subordinated to the payment of the Securities) by the Company on account of the principal of or premium, if any, interest on Liquidated Damages, if any, on the Securities or on account of the purchase or other acquisition of Securities.
In the event that, notwithstanding the foregoing, the Company shall make any payment to the Trustee or the Holder of any Security prohibited by the foregoing provisions of this Section, and if such fact shall, at or prior to the time of such payment, have been made known to the Trustee
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or such Holder, as the case may be, then and in such event such payment shall be paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with respect to which Section 1202 would be applicable.
SECTION 1204. No Payment When Senior Indebtedness in Default.
(a) In the event and during the continuation of any default in the payment of principal of or premium, if any, or interest on any Senior Indebtedness beyond any applicable grace period with respect thereto, or in the event that any event of default with respect to any Senior Indebtedness shall have occurred and be continuing and shall have resulted in such Senior Indebtedness becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, unless and until such event of default shall have been cured or waived or shall have ceased to exist and such acceleration shall have been rescinded or annulled, or (b) in the event any judicial proceeding shall be pending with respect to any such default in payment or event of default, then no payment (including any payment which may be payable by reason of the payment of any other indebtedness of the Company being subordinated to the payment of the Securities) shall be made by the Company on account of the principal of or premium, if any, interest or Liquidated Damages, if any, on the Securities or on account of the purchase or other acquisition of Securities.
In the event that, notwithstanding the foregoing, the Company shall make any payment to the Trustee or the Holder of any Security prohibited by the foregoing provisions of this Section, and if such fact shall, at or prior to the time of such payment, have been made known to the Trustee or such Holder, as the case may be, then and in such event such payment shall be paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with respect to which Section 1202 would be applicable.
SECTION 1205. Payment Permitted If No Default.
Nothing contained in this Article or elsewhere in this Indenture or in any of the Securities shall prevent (a) the Company, at any time except during the pendency of any case, proceeding, dissolution, liquidation or other winding up, general assignment for the benefit of creditors or other marshalling of assets and liabilities of the Company referred to in Section 1202 or under the conditions described in Section 1203 or 1204, from making payments at any time of principal of and premium, if any, or interest on the Securities, or (b) the application by the Trustee of any money deposited with it hereunder to the payment of or on account of the principal of and premium, if any, or interest on the Securities or the retention of such payment by the Holders, if, at
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the time of such application by the Trustee, it did not have knowledge that such payment would have been prohibited by the provisions of this Article.
SECTION 1206. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all amounts due on or in respect of Senior Indebtedness, the Holders of the Securities shall be subrogated to the extent of the payments or distributions made to the holders of such Senior Indebtedness pursuant to the provisions of this Article (equally and ratably with the holders of all indebtedness of the Company which by its express terms is subordinated to other indebtedness of the Company to substantially the same extent as the Securities are subordinated and is entitled to like rights of subrogation) to the rights of the holders of such Senior Indebtedness to receive payments and distributions of cash, property and securities applicable to the Senior Indebtedness until the principal of and premium, if any, and Interest on the Securities shall be paid in full. For purposes of such subrogation, no payments or distributions to the holders of the Senior Indebtedness of any cash, property or securities to which the Holders of the Securities or the Trustee would be entitled except for the provisions of this Article, and no payments over pursuant to the provisions of this Article to the holders of Senior Indebtedness by Holders of the Securities or the Trustee, shall, as among the Company, its creditors other than holders of Senior Indebtedness and the Holders of the Securities, be deemed to be a payment or distribution by the Company to or on account of the Senior Indebtedness.
SECTION 1207. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the purpose of defining the relative rights of the Holders of the Securities on the one hand and the holders of Senior Indebtedness on the other hand. Nothing contained in this Article or elsewhere in this Indenture or in the Securities is intended to or shall (a) impair, as among the Company, its creditors other than holders of Senior Indebtedness and the Holders of the Securities, the obligation of the Company, which is absolute and unconditional, to pay to the Holders of the Securities the principal of and premium, if any, and interest on the Securities as and when the same shall become due and payable in accordance with their terms; or (b) affect the relative rights against the Company or the Holders of the Securities and creditors of the Company other than the holders of Senior Indebtedness; or (c) prevent the Trustee or the Holder of any Security from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article of the holders of Senior Indebtedness to receive cash, property and securities otherwise payable or deliverable to the Trustee or such Holder.
SECTION 1208. Trustee to Effectuate Subordination.
Each holder of a Security by his acceptance thereof authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in this Article and appoints the Trustee his attorney-in-fact for any and all such purposes.
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SECTION 1209. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Indebtedness to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders of the Securities, without incurring responsibility to the Holders of the Securities and without impairing or releasing the subordination provided in this Article or the obligations hereunder of the Holders of the Securities to the holders of Senior Indebtedness, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Indebtedness, or otherwise amend or supplement in any manner Senior Indebtedness or any instrument evidencing the same or any agreement under which Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness; (iii) release any Person liable in any manner for the collection of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights against the Company and any other Person.
SECTION 1210. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any fact known to the Company which would prohibit the making of any payment to or by the Trustee in respect of the Securities. Notwithstanding the provisions of this Article or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment to or by the Trustee in respect of the Securities, unless and until the Trustee shall have received written notice thereof from the Company or a holder of Senior Indebtedness or from any trustee therefor; and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section 601, shall be entitled in all respects to assume that no such facts exist; provided, however, that if the Trustee shall not have received the notice provided for in this Section at least four Business Days prior to the date upon which by the terms hereof any money may become payable for any purpose (including, without limitation, the payment of the principal of and premium, if any, or interest on any Security), then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by it within four Business Days prior to such date.
Subject to the provisions of Section 601, the Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself to be a holder of Senior
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Indebtedness (or a trustee therefor) to establish that such notice has been given by a holder of Senior Indebtedness (or a trustee therefor). In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this Article, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.
SECTION 1211. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to in this Article, the Trustee, subject to the provisions of Section 601, and the Holders of the Securities shall be entitled to rely upon any order or decree entered by any court of competent jurisdiction in which such insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution, winding up or similar case or proceeding is pending, or a certificate of the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit of creditors, agent or other person making such payment or distribution, delivered to the Trustee or to the Holders of Securities, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article.
SECTION 1212. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall not be liable to any such holders if it shall in good faith mistakenly pay over or distribute to Holders of Securities or to the Company or to any other Person cash, property or securities to which holders of Senior Indebtedness shall be entitled by virtue of this Article or otherwise. With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article, and no implied covenants or obligations with respect to the holders of Senior Indebtedness shall be read into this Article against the Trustee.
SECTION 1213. Rights of Trustee as Holder of Senior Indebtedness; Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article with respect to any Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder.
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Nothing in this Article shall apply to claims of, or payments to, the Trustee under or pursuant to Section 607.
SECTION 1214. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term "Trustee" as used in this Article shall in such case (unless the context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article in addition to or in place of the Trustee; provided, however, that Section 1213 shall not apply to the Company or any Affiliate of the Company if it or such Affiliate acts as Paying Agent.
SECTION 1215. Certain Conversions Deemed Payment.
For the purposes of this Article only, (1) the issuance and delivery of junior securities upon conversion of Securities in accordance with Article Thirteen shall not be deemed to constitute a payment or distribution on account of the principal of or premium or interest on Securities or on account of the purchase or other acquisition of Securities, and (2) the payment, issuance or delivery of cash, property or securities (other than junior securities) upon conversion of a Security shall be deemed to constitute payment on account of the principal of such Security. For the purposes of this Section, the term "junior securities" means (a) shares of any class of capital stock of the Company and (b) securities of the Company which are subordinated in right of payment to all Senior Indebtedness which may be outstanding at the time of issuance or delivery of such securities to substantially the same extent as, or to a greater extent than, the Securities are so subordinated as provided in this Article. Nothing contained in this Article or elsewhere in this Indenture or in the Securities is intended to or shall impair, as among the Company, its creditors other than holders of Senior Indebtedness and the Holders of the Securities, the right, which is absolute and unconditional, of the Holder of any Security to convert such Security in accordance with Article Thirteen.
SECTION 1216. No Suspension of Remedies.
Nothing contained in this Article shall limit the right of the Trustee or the Holders of the Securities to take any action to accelerate the maturity of the Securities pursuant to the provisions described under Article Five and as set forth in this Indenture or to pursue any rights or remedies hereunder or under applicable law, subject to the rights, if any, under this Article of the holders, from tune to time, of Senior Indebtedness to receive the cash, property or securities receivable upon the exercise of such rights or remedies.
ARTICLE THIRTEEN
CONVERSION OF SECURITIES
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SECTION 1301. Conversion Privilege and Conversion Price.
Subject to and upon compliance with the provisions of this Article, at the option of the Holder thereof, any Security or any portion of the principal amount thereof which equals $1,000 or any integral multiple thereof may be converted at any time after the 60th day following the date of original issuance of Securities under this Indenture at the principal amount thereof, or of such portion thereof, into fully paid and nonassessable shares (calculated as to each conversion to the nearest 1/100 of a share) of Common Stock, at the conversion price, determined as hereinafter provided, in effect at the time of conversion. Such conversion right shall expire at the close of business on September 30, 2003. In case a Security or portion thereof is called for redemption, such conversion right in respect of the Security or portion so called shall expire at the close of business on the second business day preceding the applicable Redemption Date, unless the Company defaults in making the payment due upon redemption.
The price at which shares of Common Stock shall be delivered upon conversion (herein called the "conversion price") shall be initially $31.11 per share of Common Stock. The conversion price shall be adjusted in certain instances as provided in paragraphs (a), (b), (c), (d), (e), (f) and (i) of
Section 1304.
SECTION 1302. Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the Holder of any Security shall surrender such Security, duly endorsed or assigned to the Company or in blank, at any office or agency of the Company maintained pursuant to Section 1002, accompanied by written notice to the Company in the form provided in the Security (or such other notice as is acceptable to the Company) at such office or agency that the Holder elects to convert such Security or, if less than the entire principal amount thereof is to be converted, the portion thereof to be converted. Securities surrendered for conversion during the period from the opening of business on any Regular Record Date next preceding any Interest Payment Date to the close of business on such Interest Payment Date shall (except in the case of Securities or portions thereof which have been called for redemption) be accompanied by payment in New York Clearing House funds or other funds acceptable to the Company of an amount equal to the interest payable on such Interest Payment Date on the principal amount being surrendered for conversion. Except as provided in the immediately preceding sentence and subject to the fourth paragraph of Section 307, no payment or adjustment shall be made upon any conversion on account of any interest accrued on the Securities surrendered for conversion or on account of any dividends on the Common Stock issued upon conversion.
Securities shall be deemed to have been converted immediately prior to the close of business on the day of surrender of such Securities for conversion in accordance with the foregoing provisions, and at such time the rights of the Holders of such Securities as Holders shall cease, and
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the Person or Persons entitled to receive the Common Stock issuable upon conversion shall be treated for all purposes of the record holder or holders of such Common Stock as and after such time. As promptly as practicable on or after the conversion date, the Company shall issue and shall deliver at such office or agency a certificate or certificates for the number of full shares of Common Stock issuable upon conversion, together with payment in lieu of any fraction of a share, as provided in Section 1303.
In the case of any Security which is converted in part only, upon such conversion the Company shall execute and the Trustee shall authenticate and deliver to the Holder thereof, at the expense of the Company, a new Security or Securities of authorized denominations in aggregate principal amount equal to the unconverted portion of the principal amount of such Security.
SECTION 1303. Fractions of Shares.
No fractional share of Common Stock shall be issued upon conversion of Securities. If more than one Security shall be surrendered for conversion at one time by the same Holder, the number of full shares which shall be issuable upon conversion thereof shall be computed on the basis of the aggregate principal amount of the Securities (or specified portions thereof) so surrendered. Instead of any fractional share of Common Stock which would otherwise be issuable upon conversion of any Security or Securities (or specified portions thereof), the Company shall pay a cash adjustment in respect of such fraction in an amount equal to the same fraction of the Closing Price (as hereinafter defined) at the close of business on the day of conversion (or, if such day is not a Trading Day (as hereafter defined), on the Trading Day immediately preceding such day).
SECTION 1304. Adjustment of Conversion Price.
(a) In case the Company shall pay or make a dividend or other distribution on the Common Stock exclusively in Common Stock or shall pay or make a dividend or other distribution on any other class of capital stock of the Company which dividend or distribution includes Common Stock, the conversion price in effect at the opening of business on the day following the date fixed for the determination of shareholders entitled to receive such dividend or other distribution shall be reduced by multiplying such conversion price by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination and the denominator shall be the sum of such number of shares and the total number of shares constituting such dividend or other distribution, such reduction to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purpose of this paragraph (a), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company. The Company shall not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company.
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(b) Subject to paragraph (g) of this Section, in case the Company shall pay or make a dividend or other distribution on the Common Stock consisting exclusively of, or shall otherwise issue to all holders of the Common Stock, rights or warrants entitling the holders thereof to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price (determined as provided in paragraph (h) of this Section) on the date fixed for the determination of shareholders entitled to receive such rights or warrants, the conversion price in effect at the opening of business on the day following the date fixed for such determination shall be reduced by multiplying such conversion price by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock which the aggregate of the offering price of the total number of shares of Common Stock so offered for subscription or purchase would purchase at such Current Market Price and the denominator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock so offered for subscription or purchase, such reduction to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this paragraph (b), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company. The Company shall not issue any rights or warrants in respect of shares of Common Stock held in the treasury of the Company.
(c) In case outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock, the conversion price in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately reduced, and, conversely, in case outstanding shares of Common Stock shall be combined into a smaller number of shares of Common Stock, the conversion price in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately increased, such reduction or increase, as the case may be, to become effective immediately after the opening of business on the day following the day upon which subdivision or combination becomes effective.
(d) Subject to the last sentence of this paragraph (d) and to paragraph (g) of this Section, in case the Company shall, by dividend or otherwise, distribute to all holders of the Common Stock evidences of its indebtedness, shares of any class of its capital stock or other assets (including securities, but excluding any rights or warrants referred to in paragraph (b) of this Section, excluding any dividend or distribution paid exclusively in cash and excluding any dividend or distribution referred to in paragraph (a) of this Section), the conversion price shall be reduced by multiplying the conversion price in effect immediately prior to the close of business on the date fixed for the determination of shareholders entitled to such distribution by a fraction of which the numerator shall be the Current Market Price (determined as provided in paragraph (h) of this Section) on such date less the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) on such date of the portion of the evidences of indebtedness, shares of capital stock and other assets to be distributed applicable to one share of
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Common Stock and the denominator shall be such Current Market Price, such reduction to become effective immediately prior to the opening of business on the day following such date. If the Board of Directors determines the fair market value of any distribution for purposes of this paragraph (d) by reference to the actual or when-issued trading market for any securities comprising part or all of such distribution, it must in doing so consider the prices in such market over the same period used in computing the Current Market Price pursuant to paragraph (h) of this Section, to the extent possible. For purposes of this paragraph (d), any dividend or distribution that includes shares of Common Stock, rights or warrants to subscribe for or purchase shares of Common Stock or securities convertible into or exchangeable for shares of Common Stock shall be deemed to be (x) a dividend or distribution of the evidences of indebtedness, assets or shares of capital stock other than such shares of Common Stock, such rights or warrants or such convertible or exchangeable securities (making any conversion price reduction required by this paragraph (d)) immediately followed by (y) in the case of such shares of Common Stock or such rights or warrants, a dividend or distribution thereof (making any further conversion price reduction required by paragraph (a) and (b) of this Section, except any shares of Common Stock included in such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determination" within the meaning of paragraph (a) of this Section), or (z) in the case of such convertible or exchangeable securities, a dividend or distribution of the number of shares of Common Stock as would then be issuable upon the conversion or exchange thereof, whether or not the conversion or exchange of such securities is subject to any conditions (making any further conversion price reduction required by paragraph (a) of this Section, except the shares deemed to constitute such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determination" within the meaning of paragraph (a) of this Section).
(e) In case the Company shall, by dividend or otherwise, at any time distribute to all holders of the Common Stock cash (excluding any cash that is distributed as part of a distribution resulting in an adjustment pursuant to paragraph (d) of this Section or in connection with a transaction to which Section 1311 applies) in an aggregate amount that, together with (i) the aggregate amount of any other distributions to all holders of the Common Stock of cash within the 12 months preceding the date fixed for the determination of shareholders entitled to such distribution and in respect of which no conversion price adjustment pursuant to this paragraph (e) has been made previously and
(ii) the aggregate of any cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) as of such date of determination of consideration payable in respect of any tender offer by the Company or a Subsidiary for all or any portion of the Common Stock consummated within the 12 months preceding such date of determination and in respect of which no conversion price adjustment pursuant to paragraph (f) of this Section has been made previously, exceeds 12.5% of the product of the Current Market Price (determined as provided in paragraph (h) of this Section) on such date of determination times the number of shares of Common Stock outstanding on such date, the conversion price shall be reduced by multiplying the conversion price in effect immediately prior to the close of business on such date of determination by a fraction of which the numerator shall be the Current Market Price (determined as provided in paragraph (h) of this Section) on such date less the amount of cash to be
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distributed at such time applicable to one share of Common Stock and the denominator shall be such Current Market Price, such reduction to become effective immediately prior to the opening of business on the day after such date.
(f) In case a tender offer made by the Company or any Subsidiary for all or any portion of the Common Stock shall be consummated and such tender offer shall involve an aggregate consideration having a fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) as of the last time (the "Expiration Time") that tenders may be made pursuant to such tender offer (as it shall have been amended) that, together with (i) the aggregate of the cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) as of the Expiration Time of the other consideration paid in respect of any other tender offer by the Company or a Subsidiary for all or any portion of the Common Stock consummated within the 12 months preceding the Expiration Time and in respect of which no conversion price adjustment pursuant to this paragraph (f) has been made previously and (ii) the aggregate amount of any distributions to all holders of the Common Stock made exclusively in cash within the 12 months preceding the Expiration Time and in respect of which no conversion price adjustment pursuant to paragraph (e) of this Section has been made previously, exceeds 12.5% of the product of the Current Market Price (determined as provided in paragraph (h) of this Section) immediately prior to the Expiration Time times the number of shares of Common Stock outstanding (including any tendered shares) at the Expiration Time, the conversion price shall be reduced by multiplying the conversion price in effect immediately prior to the Expiration Time by a fraction of which the numerator shall be (x) the product of the Current Market Price (determined as provided in paragraph (h) of this Section) immediately prior to the Expiration Time times the number of shares of Common Stock outstanding (including any tendered shares) at the Expiration Time minus (y) the fair market value (determined as aforesaid) of the aggregate consideration payable to shareholders upon consummation of such tender offer and the denominator shall be the product of (A) such Current Market Price times (B) such number of outstanding shares at the Expiration Time minus the number of shares accepted for payment in such tender offer (the "Purchased Shares"), such reduction to become effective immediately prior to the opening of business on the day following the Expiration Time; provided, that if the number of Purchased Shares or the aggregate consideration payable therefor have not been finally determined by such opening of business, the adjustment required by this paragraph (f) shall, pending such final determination, be made based upon the preliminarily announced results of such tender offer, and, after such final determination shall have been made, the adjustment required by this paragraph
(f) shall be made based upon the number of Purchased Shares and the aggregate consideration payable therefor as so finally determined.
(g) The reclassification of Common Stock into securities which include securities other than Common Stock (other than any reclassification upon a consolidation or merger to which Section 1311 applies) shall be deemed to involve (i) a distribution of such securities other than Common Stock to all holders of Common Stock (and the effective date of such reclassification shall be deemed to be "the date fixed for the determination of shareholders entitled to such distribution"
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within the meaning of paragraph (d) of this Section), and (ii) a subdivision or combination, as the case may be, of the number of shares of Common Stock outstanding immediately prior to such reclassification into the number of shares of Common Stock outstanding immediately thereafter (and the effective date of such reclassification shall be deemed to be "the day upon which such subdivision becomes effective" or "the day upon which such combination becomes effective", as the case may be, and "the day upon which such subdivision or combination becomes effective" within the meaning of paragraph (c) of this Section).
Rights or warrants issued by the Company to all holders of the Common Stock entitling the holders thereof to subscribe for or purchase shares of Common Stock (either initially or under certain circumstances), which rights or warrants (i) are deemed to be transferred with such shares of Common Stock,
(ii) are not exercisable and (iii) are also issued in respect of future issuances of Common Stock, in each case in clauses (i) through (iii) until the occurrence of a specified event or events ("Trigger Event"), shall for purposes of this Section 1304 not be deemed issued until the occurrence of the earliest Trigger Event. If any such rights or warrants, including any such existing rights or warrants distributed prior to the date of this Indenture are subject to subsequent events, upon the occurrence of each of which such rights or warrants shall become exercisable to purchase different securities, evidences of indebtedness or other assets, then the occurrence of each such event shall be deemed to be such date of issuance and record date with respect to new rights or warrants (and a termination or expiration of the existing rights or warrants without exercise by the holder thereof). In addition, in the event of any distribution (or deemed distribution) of rights or warrants, or any Trigger Event with respect thereto, that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Price under this
Section 1304 was made, (1) in the case of any such rights or warrant which shall all have been redeemed or repurchased without exercise by any holders thereof, the Conversion Price shall be readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or repurchase price received by a holder or holders of Common Stock with respect to such rights or warrants (assuming such holder had retained such rights or warrants), made to all holders of Common Stock as of the date of such redemption or repurchase, and (2) in the case of such rights or warrants which shall have expired or been terminated without exercise by any holders thereof, the Conversion Price shall be readjusted as if such rights and warrants had not been issued.
Notwithstanding any other provision of this Section 1304 to the contrary, rights, warrants, evidences of indebtedness, other securities, cash or other assets (including, without limitation, any rights distributed pursuant to any stockholder rights plan) shall be deemed not to have been distributed for purposes of this Section 1304 if the Company makes proper provision so that each holder of Securities who converts a Security (or any portion thereof) after the date fixed for determination of stockholders entitled to receive such distribution shall be entitled to receive upon such conversion, in addition to the shares of Common Stock issuable upon such conversions, the amount and kind of such distributions that such holder would have been entitled to receive if such
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holder had, immediately prior to such determination date, converted such Security into Common Stock.
(h) For the purpose of any computation under this paragraph and paragraphs (b), (d) and (e) of this Section, the current market price per share of Common Stock (the "Current Market Price") on any date shall be deemed to be the average of the daily Closing Prices for the 5 consecutive Trading Days selected by the Company commencing not more than 20 Trading Days before, and ending not later than, the date in question; provided, however, that (i) if the "ex" date for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the conversion price pursuant to paragraph (a), (b), (c), (d), (e) or (f) above occurs on or after the 20th Trading Day prior to the date in question and prior to the "ex" date for the issuance or distribution requiring such computation, the Closing Price for each Trading Day prior to the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the same fraction by which the conversion price is so required to be adjusted as a result of such other event, (ii) if the "ex" date for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the conversion price pursuant to paragraph (a), (b), (c), (d), (e) or (f) above occurs on or after the "ex" date for the issuance or distribution requiring such computation and on or prior to the date in question, the Closing Price for each Trading Day on and after the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the reciprocal of the fraction by which the conversion price is so required to be adjusted as a result of such other event, and (iii) if the "ex" date for the issuance or distribution requiring such computation is on or prior to the date in question, after taking into account any adjustment required pursuant to clause (ii) of this proviso, the Closing Price for each Trading Day on or after such "ex" date shall be adjusted by adding thereto the amount of any cash and the fair market value on the date in question (as determined by the Board of Directors in a manner consistent with any determination of such value for purposes of paragraph (d) or (e) of this Section, whose determination shall be conclusive and described in a Board Resolution) of the evidences of indebtedness, shares of capital stock or assets being distributed applicable to one share of Common Stock as of the close of business on the day before such "ex" date. For the purpose of any computation under paragraph (f) of this Section, the Current Market Price on any date shall be deemed to be the average of the daily Closing Prices for the 5 consecutive Trading Days selected by the Company commencing on or after the latest (the "Commencement Date") of (i) the date 20 Trading Days before the date in question, (ii) the date of commencement of the tender offer requiring such computation and (iii) the date of the last amendment, if any, of such tender offer involving a change in the maximum number of shares for which tenders are sought or a change in the consideration offered, and ending not later than the Expiration Time of such tender offer; provided, however, that if the "ex" date for any event (other than the tender offer requiring such computation) that requires an adjustment to the conversion price pursuant to paragraph (a), (b), (c), (d), (e) or (f) above occurs on or after the Commencement Date and prior to the Expiration Time for the tender offer requiring such computation, the Closing Price for each Trading Day prior to the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the same fraction by which the conversion price is so required to be adjusted as a result of such other event. The closing price for any Trading Day (the "Closing Price") shall be the last reported sales price regular way or, in case
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no such reported sale takes place on such day, the average of the reported closing bid and asked prices regular way, in either case on the New York Stock Exchange or, if the Common Stock is not listed or admitted to trading on such exchange, on the principal national securities exchange on which the Common Stock is listed or admitted to trading or, if not listed or admitted to trading on any national securities exchange, on the Nasdaq Stock Market's National Market or, if the Common Stock is not listed or admitted to trading on any national securities exchange or quoted on such National Market, the average of the closing bid and asked prices in the over-the-counter market as furnished by any New York Stock Exchange member firm selected from time to time by the Company for that purpose. For purposes of this paragraph, the term "Trading Day" means each Monday, Tuesday, Wednesday, Thursday and Friday, other than any day on which securities are generally not traded on the applicable securities exchange or in the applicable securities market and the term "'ex' date," (i) when used with respect to any issuance or distribution, means the first date on which the Common Stock trades regular way on the relevant exchange or in the relevant market from which the Closing Prices were obtained without the right to receive such issuance or distribution, (ii) when used with respect to any subdivision or combination of shares of Common Stock, means the first date on which the Common Stock trades regular way on such exchange or in such market after the time at which such subdivision or combination becomes effective, and
(iii) when used with respect to any tender offer means the first date on which the Common Stock trades regular way on such exchange or in such market after the last time that tenders may be made pursuant to such tender offer (as it shall have been amended).
(i) The Company may make such reductions in the conversion price, in addition to those required by paragraphs (a), (b), (c), (d), (e) and
(f) of this Section, as it considers to be advisable (as evidenced by a Board Resolution) in order that any event treated for federal income tax purposes as a dividend of stock or stock rights shall not be taxable to the recipients or, if that is not possible, to diminish any income taxes that are otherwise payable because of such event.
(j) No adjustment in the conversion price shall be required unless such adjustment (plus any other adjustments not previously made by reason of this paragraph (j) would require an increase or decrease of at least 1% in the conversion price; provided, however, that any adjustments which by reason of this paragraph (j) are not required to be made shall be carried forward and taken into account in any subsequent adjustment.
(k) Notwithstanding any other provision of this Section 1304, no adjustment to the conversion price shall reduce the conversion price below the then par value per share of the Common Stock, and any such purported adjustment shall instead reduce the conversion price to such par value. The Company hereby covenants not to take any action to increase the par value per share of the Common Stock.
SECTION 1305. Notice of Adjustments of Conversion Price.
Whenever the conversion price is adjusted as herein provided:
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(a) the Company shall compute the adjusted conversion price in accordance with Section 1304 and shall prepare an Officers' Certificate signed by the Treasurer of the Company setting forth the adjusted conversion price and showing in reasonable detail the facts upon which such adjustment is based, and such certificate shall forthwith be filed (with a copy to the Trustee) at each office or agency maintained for the purpose of conversion of Securities pursuant to Section 1002; and
(b) a notice stating that the conversion price has been adjusted and setting forth the adjusted conversion price shall forthwith be prepared, and as soon as practicable after it is prepared, such notice shall be mailed by the Company to all Holders at their last addresses as they shall appear in the Security Register.
SECTION 1306. Notice of Certain Corporate Action.
In case:
(a) the Company shall declare a dividend (or any other distribution) on its Common Stock payable (i) otherwise than exclusively in cash or (ii) exclusively in cash in an amount that would require a conversion price adjustment pursuant to paragraph (e) of Section 1304; or
(b) the Company shall authorize the granting to the holders of its Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any other rights (excluding shares of capital stock or option for capital stock issued pursuant to a benefit plan for employees, officers or directors of the Company); or
(c) of any reclassification of the Common Stock (other than a subdivision or combination of the outstanding shares of Common Stock), or of any consolidation, merger or share exchange to which the Company is a party and for which approval of any shareholders of the Company is required, or of the sale or transfer of all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or winding up of the Company; or
(e) the Company or any Subsidiary shall commence a tender offer for all or a portion of the outstanding shares of Common Stock (or shall amend any such tender offer to change the maximum number of shares being sought or the amount or type of consideration being offered therefor);
87

then the Company shall cause to be filed at each office or agency maintained pursuant to Section 1002, and shall cause to be mailed to all Holders at their last addresses as they shall appear in the Security Register, at least 21 days (or 11 days in any case specified in clause (a), (b) or (e) above) prior to the applicable record, effective or expiration date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution or granting of rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record who will be entitled to such dividend, distribution, rights or warrants are to be determined, (y) the date on which such reclassification, consolidation, merger, share exchange, sale, transfer, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, share exchange, sale, transfer, dissolution, liquidation or winding up, or (z) the date on which such tender offer commenced, the date on which such tender offer is scheduled to expire unless extended, the consideration offered and the other material terms thereof (or the material terms of any amendment thereto). Neither the failure to give any such notice nor any defect therein shall affect the legality or validity of any action described in clauses (a) through (e) of this Section 1306.
SECTION 1307. Company to Reserve Common Stock.
The Company shall at all times reserve and keep available, free from preemptive rights, out of the authorized but unissued Common Stock or out of the Common Stock held in treasury, for the purpose of effecting the conversion of Securities, the full number of shares of Common Stock then issuable upon the conversion of all outstanding Securities. Shares of Common Stock issuable upon conversion of outstanding Securities shall be issued out of the Common Stock held in Treasury to the extent available.
SECTION 1308. Taxes on Conversions.
The Company will pay any and all documentary, stamp or similar issue or transfer taxes that may be payable in respect of the issue or delivery of shares of Common Stock on conversion of Securities pursuant hereto. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock in a name other than that of the Holder of the Security or Securities to be converted, and no such issue or delivery shall be made unless and until the Person requesting such issue has paid to the Company the amount of any such tax, or has established to the satisfaction of the Company that such tax has been paid.
88

SECTION 1309. Covenant as to Common Stock.
The Company covenants that all shares of Common Stock which may be issued upon conversion of Securities will upon issue be fully paid and nonassessable and, except as provided in Section 1308, the Company will pay all taxes, liens and charges with respect to the issue thereof.
SECTION 1310. Cancellation of Converted Securities.
All Securities delivered for conversion shall be delivered to the Trustee to be canceled by or at the direction of the Trustee, which shall dispose of the same as provided in Section 309.
SECTION 1311. Effect of Consolidation, Merger or Sale of Assets.
In case of any consolidation of the Company with, or merger of the Company into, any other Person, any merger of another Person into the Company (other than a merger which does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock) or any sale or transfer of all or substantially all of the assets of the Company, the Person formed by such consolidation or resulting from such merger or which acquires such assets, as the case may be, shall execute and deliver to the Trustee a supplemental indenture providing that the Holder of each Security then Outstanding shall have the right thereafter, during the period such Security shall be convertible as specified in Section 1301, to convert such Security only into the kind and amount of securities, cash and other property, if any, receivable upon such consolidation, merger, sale or transfer by a holder of the number of shares of Common Stock into which such Security might have been converted immediately prior to such consolidation, merger, sale or transfer, assuming such holder of Common Stock (i) is not a Person with which the Company consolidated or into which the Company merged or which merged into the Company or to which such sale or transfer was made, as the case may be (a "Constituent Person"), or an Affiliate of a Constituent Person and (ii) failed to exercise his rights of election, if any, as to the kind or amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer (provided that if the kind or amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer is not the same for each share of Common Stock held immediately prior to such consolidation, merger, sale or transfer by other than a Constituent Person or an Affiliate thereof and in respect of which such rights of election shall not have been exercised ("nonelecting share"), then for the purpose of this Section the kind and amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer by each nonelecting share shall be deemed to be the kind and amount so receivable per share by a plurality of the nonelecting shares). Such supplemental indenture shall provide for adjustments which, for events subsequent to the effective date of such supplemental indenture, shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article. The above provisions of this Section shall similarly apply to successive consolidations, mergers, sales or transfers.
SECTION 1312. Trustee's Disclaimer.
89

The Trustee has no duty to determine when an adjustment under this Article 13 should be made, how it should be made or what such adjustment should be, but may accept as conclusive evidence of the correctness of any such adjustment, and shall be protected in relying upon, the Officers' Certificate with respect thereto which the Company is obligated to file with the Trustee pursuant to Section 1305. The Trustee makes no representation as to the validity or value of any securities or assets issued upon conversion of Securities, and the Trustee shall not be responsible for the Company's failure to comply with any provisions of this Article 13.
The Trustee shall not be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture executed pursuant to Section 1311, but may accept as conclusive evidence of the correctness thereof, and shall be protected in relying upon, the Officers' Certificate with respect thereto which the Company is obligated to file with the Trustee pursuant to Section 1311.
ARTICLE FOURTEEN
RIGHT TO REQUIRE REPURCHASE
SECTION 1401. Right to Require Repurchase.
In the event that there shall occur a Repurchase Event (as defined in Section 1406), then each Holder shall have the right, at such Holder's option, to require the Company to purchase, and upon the exercise of such right, the Company shall, subject to the provisions of Section 1203, purchase, all or any part of such Holder's Securities on the date (the "Repurchase Date") that is 30 days after the date the Company gives notice of the Repurchase Event as contemplated in Section 1402(a) at a price (the "Repurchase Price") equal to 100% of the principal amount thereof, together with accrued and unpaid interest to the Repurchase Date.
SECTION 1402. Notice; Method of Exercising Repurchase Right.
(a) On or before the 15th day after the occurrence of a Repurchase Event, the Company, or at the request of the Company received by the Trustee at least 45 days prior to the Repurchase Date, the Trustee (in the name and at the expense of the Company), shall give notice of the occurrence of the Repurchase Event and of the repurchase right set forth herein arising as a result thereof by first-class mail, postage prepaid, to the Trustee and to each Holder of the Securities at such Holder's address appearing in the Security Register. The Company shall also deliver a copy of such notice of a repurchase right to the Trustee.
Each notice of a repurchase right shall state:
90

(1) the event constituting the Repurchase Event and the date thereof,
(2) the Repurchase Date,
(3) the date by which the repurchase right must be exercised,
(4) the Repurchase Price, and
(5) the instructions a Holder must follow to exercise a repurchase right.
No failure of the Company to give the foregoing notice shall limit any Holder's right to exercise a repurchase right. The Trustee shall have no affirmative obligation to determine if there shall have occurred a Repurchase Event.
(b) To exercise a repurchase right, a Holder shall deliver to the Company (or an agent designated by the Company for such purpose in the notice referred to in (a) above) and to the Trustee on or before the close of business on the Repurchase Date (i) written notice of the Holder's exercise of such right, which notice shall set forth the name of the Holder, the principal amount of the Security or Securities (or portion of a Security) to be repurchased, and a statement that an election to exercise the repurchased right is being made thereby, and (ii) the Security or Securities with respect to which the repurchase right is being exercised, duly endorsed for transfer to the Company. Such written notice shall be irrevocable. If the Repurchase Date falls between any Regular Record Date and the next succeeding Interest Payment Date, Securities to be repurchased must be accompanied by payment from the Holder of an amount equal to the interest thereon which the registered Holder thereof is to receive on such Interest Payment Date.
(c) In the event a repurchase right shall be exercised in accordance with the terms hereof, the Company shall on the Repurchase Date pay or cause to be paid in cash to the Holder thereof the Repurchase Price of the Security or Securities as to which the repurchase right had been exercised. In the event that a repurchase right is exercised with respect to less than the entire principal amount of a surrendered Security, the Company shall execute and deliver to the Trustee and the Trustee shall authenticate for issuance in the name of the Holder a new Security or Securities in the aggregate principal amount of the unrepurchased portion of such surrendered security.
SECTION 1403. Deposit of Repurchase Price.
On or prior to the Repurchase Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money in same day funds sufficient to pay the Repurchase Price of the Securities which are to be repaid on the Repurchase Date.
SECTION 1404. Securities Not Repurchased on Repurchase Date.
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If any Security surrendered for repurchase shall not be so paid on the Repurchase Date, the principal shall, until paid, bear interest to the extent permitted by applicable law from the Repurchase Date at the rate per annum borne by such Security.
SECTION 1405. Securities Repurchased in Part.
Any Security which is to be repurchased only in part shall be surrendered at any office or agency of the Company designated for that purpose pursuant to Section 1002 (with, if the Company or the Trustee so requires, due endorsement by, or written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unrepurchased portion of the principal of the Security so surrendered.
SECTION 1406. Certain Definitions.
For purposes of this Article:
(a) A "Repurchase Event" shall have occurred upon the occurrence of a Change in Control or Termination of Trading after the date of this Indenture and on or prior to the earlier of final Maturity or the redemption of all Outstanding Securities.
(b) A "Change in Control" shall occur when:
(i) all or substantially all of the Company's assets are sold as an entirety to any person or related group of persons;
(ii) there shall be consummated any consolidation or merger of the Company (A) in which the Company is not the continuing or surviving corporation (other than a consolidation or merger with a wholly owned subsidiary of the Company in which all shares of Common Stock outstanding immediately prior to the effectiveness thereof are changed into or exchanged for the same consideration) or (B) pursuant to which the Common Stock would be converted into cash, securities or other property, except in the case of (A) and (B), a consolidation or merger of the Company in which the holders of the Common Stock immediately prior to the consolidation or merger have, directly or indirectly, at least a majority of the total voting power of all classes of capital stock entitled to vote generally in the election of directors of the continuing or surviving corporation immediately after such consolidation or merger in substantially the same proportion as their ownership of Common Stock immediately before such transaction;
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(iii) any person, or any persons acting together which would constitute a "group" for purposes of Section 13(d) of the Exchange Act (a "Group"), together with any Affiliates thereof, excluding for purposes of this clause, 0. Bruton Smith, Sonic Financial Corporation and their affiliates, shall beneficially own (as defined in Rule 13d- 3 under the Exchange Act) at least 50% of the total voting power of all classes of capital stock of the Company entitled to vote generally in the election of directors of the Company;
(iv) at any time during any consecutive two-year period, individuals who at the beginning of such period constituted the Board of Directors of the Company (together with any new directors whose election by such Board of Directors or whose nomination for election by the stockholders of the Company was approved by a vote of 66-2/3% of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of the Company then in office; or
(v) the Company is liquidated or dissolved or adopts a plan of liquidation or dissolution.
(c) A "Termination of Trading" shall occur if the Common Stock (or other common stock into which the Securities are then convertible) is neither listed for trading on a U.S. national securities exchange nor approved for trading on an established automated over-the- counter trading market in the United States.

This instrument may be executed in any number of counterparts, each of which when so executed, shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written.
SPEEDWAY MOTORSPORTS, INC.

                                     By /s/ O. Bruton Smith
                                        --------------------------------------
                                            O. Bruton Smith
                                            Chief Executive Officer and Chairman

Attest:

/s/ Marylaurel E. Wilks
- ---------------------------
Marylaurel E. Wilks
Corporate Secretary	

FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
as Trustee

                                     By /s/ Dan Ober
                                        --------------------------------------
                                              Name: Dan Ober
                                              Title: Vice President

Attest:	

Assistant Secretary
94

State of North Carolina                     )
                                            )        ss.
County of ____________                      )	

On the _______ day of ___________________, 1996, before me personally came O. Bruton Smith, to me known, who, being by me duly sworn, did depose and say that he is Chief Executive Officer and Chairman of Speedway Motorsports, Inc., a Delaware corporation, one of the corporations described in and which extended the foregoing instrument; that he knows the seal of the corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority by the Board of Directors of said corporation; and that he signed his name thereto by like authority.

State of North Carolina                     )
                                            )        ss.
County of _______________                   )	

On the _____ day of ________________, _______, before me personally came ___________________, to me known, who, being by me duly sworn, did depose and say that he is __________ of First Union National Bank of North Carolina, a duly organized national association existing under the laws of the United States described in and which executed the foregoing instrument; that he knows the seal of the corporation; that the seal affixed to said instrument is such seal; that it was so affixed by authority of the Board of Directors of said corporation; and that he signed his name thereto by like authority.

95

EXHIBIT A
FORM OF TRANSFER CERTIFICATE
FOR TRANSFER FROM
RULE 144A GLOBAL SECURITY
TO REGULATIONS S TEMPORARY GLOBAL SECURITY
 (Transfers pursuant to ss. 304(a)(ii)

of the Indenture)
First Union National Bank
of North Carolina
230 South Tryon Street, Ninth Floor
Charlotte, North Carolina 28288-1179
Attention: Corporate Trust Administration
Re: Speedway Motorsports, Inc. 5 3/4% Convertible Subordinated Securities due 2003

(the "Securities")
Reference is hereby made to the Indenture dated as of September 1, 1996 (the "Indenture") between Speedway Motorsports, Inc., as Issuer, and First Union National Bank of North Carolina, as Trustee. Capitalized terms used but not defined herein shall have the meanings given them in the Indenture.
This letter relates to U.S. $____________________ aggregate principal amount of Securities which are held in the form of the Rule 144A Global Security (CUSIP No. 847788AA4) with the Depositary in the name of _____________________
[name of transferor] (the "Transferor") to effect the transfer of the Securities in exchange for an equivalent beneficial interest in the Regulation S Temporary Global Security.
In connection with such request, the Transferor does hereby certify that such transfer has been effected in accordance with the transfer restrictions set forth in the Securities and (i) with respect to transfers made in reliance on Regulation S, does certify that:
(1) the offer of the Securities was not made to a person in the United States;
(2) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither the Transferor nor any person acting on its behalf knows that the transaction was pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or 904(b) of Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the registration requirements of the United States Securities Act of 1933 (the "Securities Act");
A-1

(ii) with respect to transfers made in reliance on Rule 144 certify that the Securities are being transferred in a transaction permitted by Rule 144 under the Securities Act; and (iii) with respect to transfers made in reliance on Rule 144A, that such Securities are being transferred in accordance with Rule 144A under the Securities Act to a transferee that the Transferor reasonably believes is purchasing the Securities for its own account or an account with respect to which the transferee exercises sole investment discretion and the transferee and any such account is a "qualified institutional buyer" within the meaning of Rule 144A, in a transaction meeting the requirements of Rule 144A and in accordance with applicable securities laws of any state of the United States or any other jurisdiction.
In addition, if the sale is made during a restricted period and the provisions of Rule 903(c)(2) or (3) or Rule 904(c)(1) of Regulation S are applicable thereto, we confirm that such sale has been made in accordance with the applicable provisions of Rule 903(c)(2) or (3) or Rule 904(c)(1), as the case may be.
You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S.
[Name of Transferor]
By: ___________________________________ Name:

Title:
Date:
A-2

EXHIBIT B
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM REGULATION S TEMPORARY GLOBAL SECURITY
TO RULE 144A GLOBAL SECURITY
 (Transfers pursuant to ss. 304(a)(iii)

of the Indenture)
First Union National Bank
of North Carolina
230 South Tryon Street, Ninth Floor
Charlotte, North Carolina 28288-1179
Attention: Corporate Trust Administration
Re: Speedway Motorsports, Inc. 5 3/4% Convertible Subordinated Debentures due 2003

(the "Securities")
Reference is hereby made to the Indenture dated as of September 1, 1996 (the "Indenture") between Speedway Motorsports, Inc., as Issuer, and First Union National Bank of North Carolina, as Trustee. Capitalized terms used but not defined herein shall have the meanings given them in the Indenture.
This letter relates to U.S. $_________________ aggregate principal amount of Securities which are held in the form of the Regulation S Temporary Global Security with the Depositary (CINS No. U84570AA5) in the name of ______________________ [name or transferor] (the "Transferor") to effect the transfer of the Securities in exchange for an equivalent beneficial interest in the Rule 144A Global Security.
In connection with such request, and in respect of such Securities, the Transferor does hereby certify that such Securities are being transferred in accordance with (i) the transfer restrictions set forth in the Securities and
(ii) Rule 144A under the United States Securities Act of 1933 to a transferee that the Transferor reasonably believes is purchasing the Securities for its own account or an account with respect to which the transferee exercises sole investment discretion and the transferee and any such account is a "qualified institutional buyer" within the meaning of Rule 144A, in a transaction meeting the requirements of Rule 144A and in accordance with applicable securities laws of any state of the United States or any other jurisdiction. You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.
[Name of Transferor]
By: ___________________________________ Name:

Title:
Date:
B-1

EXHIBIT C
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM GLOBAL SECURITY OR CERTIFICATED
SECURITY TO CERTIFICATED SECURITY
 (Transfers pursuant to ss. 304(a)(iv)

or ss. 304(a)(v) of the Indenture)
First Union National Bank
of North Carolina
230 South Tryon Street, Ninth Floor
Charlotte, North Carolina 28288-1179
Attention: Corporate Trust Administration
Re: Speedway Motorsports, Inc. 5 3/4% Convertible Subordinated Debentures due 2003

(the "Securities")
Reference is hereby made to the Indenture dated as of September 1, 1996 (the "Indenture") between Speedway Motorsports, Inc., as Issuer, and First Union National Bank of North Carolina, as Trustee. Capitalized terms used but not defined herein shall have the meanings given them in the Indenture.
This letter relates to U.S. $_________________ aggregate principal amount of Securities which are held [in the form of the [Rule 144A Global]
[Regulation S Global] [Certificated] Security (CUSIP No. 847788AA4/CINS No. U84570AA5/CUSIP No. 847788AB2) with the Depositary]1 in the name of _____________________ [name of transferor] (the "Transferor") to effect the transfer of the Securities.
In connection with such request, and in respect of such Securities, the Transferor does hereby certify that such Securities are being transferred in accordance with (i) the transfer restrictions set forth in the Securities and
(ii) to a transferee that the Transferor reasonably believes is an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act of 1933) and is acquiring at least $100,000 principal amount of Securities for its own account or for one or more accounts as to which the transferee exercises sole investment discretion and
(iii) in accordance with applicable securities laws of any state of the United States or any other jurisdiction. You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.

[Name of Transferor]
By: ___________________________________
Name:
Title:
Date:
 1 Insert, if appropriate.

C-1

EXHIBIT D
FORM OF ACCREDITED INVESTOR TRANSFEREE CERTIFICATE
 (Transfers pursuant to ss. 304(a)(iv) and ss. 304(a)(v))
First Union National Bank
of North Carolina
230 South Tryon Street, Ninth Floor
Charlotte, North Carolina 28288-1179
Attention: Corporate Trust Administration
Re: Speedway Motorsports, Inc. 5 3/4% Convertible Subordinated Debentures due 2003

(the "Securities")
Reference is hereby made to the Indenture dated as of September 1, 1996 (the "Indenture") between Speedway Motorsports, Inc., as Issuer, and First Union National Bank of North Carolina, as Trustee. Capitalized terms used but not defined herein shall have the meanings given them in the Indenture.
This letter relates to U.S. $_________________ aggregate principal amount of Securities which are held [in the form of the [Rule 144A Global]
[Regulation S Global] [Certificated] Security (CUSIP No. 847788AA4/CINS No. U84570AA5/CUSIP No. 847788AB2) with the Depositary]1 in the name of ______________________ [name of transferor] (the "Transferor") to effect the transfer of the Securities to the undersigned.
In connection with such request, and in respect of such Securities we confirm that:
1. We understand that the Securities were originally offered in a transaction not involving any public offering in the United States within the meaning of the United States Securities Act of 1933, as amended (the "Securities Act"), that the Securities have not been registered under the Securities Act and that (A) the Securities may be offered, resold, pledged or otherwise transferred only (i) to a person who the seller reasonably believes is a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act) in a transaction meeting the requirements of Rule 144A under the Securities Act, outside the United States to a foreign person in a transaction meeting the requirements of Rule 904 under the Securities Act or in accordance with another exemption from the registration requirements of the Securities Act (and based upon an opinion of counsel if the Company so requests),
(ii) to the Company or (iii) pursuant to an effective registration statement, and, in each case, in accordance with any applicable securities laws of any State of the United States or any other applicable jurisdiction and (B) the purchaser will, and each subsequent holder is required to, notify any subsequent purchaser from it of the resale restrictions set forth in (A) above. 1 Insert and modify, if appropriate.

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2. We are a corporation, partnership or other entity having 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 as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, able to bear the economic risk of our proposed investment in the Securities.
3. 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 shall at all times be and remain within our control.
4. We are, and each account (if any) for which we are purchasing Securities is, purchasing Securities having an aggregate principal amount of not less than $100,000.
5. We understand that (a) the Securities will be delivered to us in registered form only and that the certificate delivered to us in respect of the Securities will bear a legend substantially to the following effect:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) UNLESS SUCH OFFER, SALE OR OTHER TRANSFER IS (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR (E) PURSUANT TO
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ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (C), (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE THEN HOLDER OF THIS SECURITY AFTER THE RESALE RESTRICTION TERMINATION DATE.
and (b) such certificates will be reissued without the foregoing legend only in accordance with the terms of the Indenture.
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:
(a) the Securities are sold to the Company or any Subsidiary thereof;
(b) the Securities are sold to a qualified institutional buyer in compliance with Rule 144A under the Securities Act;
(c) the Securities are sold to an institutional accredited investor, as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, acquiring at least $100,000 principal amount of the Securities that, prior to such transfer, furnishes to the Trustee a signed letter containing certain representations and agreements relating to the restrictions on transfer of the Securities (the form of which letter can be obtained from such Trustee);
(d) the Securities are sold to non-U.S. persons outside the United States in compliance with Rule 903 or Rule 904 under the Securities Act;
(e) the Securities are sold by us pursuant to Rule 144 under the Securities Act; or
(f) the Securities are sold pursuant to an effective registration statement under the Securities Act.
Very truly yours,
[PURCHASER]
By: ___________________________________
Name:
Title:
Date:
D-3

EXHIBIT E
FORM OF CERTIFICATE FOR TRANSFERS OF
REGULATION S TEMPORARY GLOBAL SECURITY
FOR REGULATION S PERMANENT GLOBAL SECURITY
 (Transfers pursuant to ss. 304(a)(viii))

(Transferor)
[MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, BRUSSELS OFFICE AS
OPERATOR OF THE EUROCLEAR SYSTEM]
[CEDEL BANK, SOCIETE ANONYME]
Re: Speedway Motorsports, Inc.
5 3/4% Convertible Subordinated Debentures due 2003

(the "Securities")
Reference is hereby made to the Indenture dated as of September 1, 1996 (the "Indenture") between Speedway Motorsports, Inc., as Issuer, and First Union National Bank of North Carolina, as Trustee. Capitalized terms used but not defined herein shall have the meanings given them in the Indenture.
This certificate relates to U.S. $_____________________ aggregate principal amount of Securities which are held in the form of the Regulation S Temporary Global Security (CINS No. U84570AA5) with the Depositary in the name of ___________________ [name of transferor] (the "Transferor") to effect the transfer of the beneficial interest in such Regulation S Temporary Global Security for a beneficial interest in an equivalent aggregate principal amount of the Regulation S Permanent Global Security.
In connection with such request, and in respect of such Securities we confirm that:
1. We are either not a U.S. person (as defined below) or we have purchased our beneficial interest in the above referenced Regulation S Temporary Global Security in a transaction that is exempt from the registration requirements under the Securities Act.
2. We are delivering this certificate in connection with obtaining a beneficial interest in the Regulation S Permanent Global Security in exchange for our beneficial interest in the Regulation S Temporary Global Security.
For purposes of this certificate, "U.S. person" means (i) any individual resident in the United States, (ii) any partnership or corporation organized or incorporated under the laws of the United States, (iii) any estate of which an executor or administrator is a U.S. person (other than an estate governed by foreign law and of which at least one executor or administrator is a non-U.S. person who has sole or shared investment discretion with respect to it assets), (iv) any trust of which any trustee
E-1

is a U.S. person (other than a trust of which at least one trustee is a non-U.S. person who has sole or shared investment discretion with respect to its assets and no beneficiary of the trust (and no settlor if the trust is revocable) is a U.S. person), (v) any agency or branch of a foreign entity located in the United States, (vi) any non-discretionary or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. person, (vii) any discretionary or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated or (if an individual) resident in the United States (other than such an account held for the benefit or account of a non-U.S. person), (viii) any partnership or corporation organized or incorporated under the laws of a foreign jurisdiction and formed by a U.S. person principally for the purpose of investing in securities not registered under the Securities Act (unless it is organized or incorporated, and owned, by accredited investors within the meaning of Rule 501(a) under the Securities Act who are not natural persons, estates or trusts); provided, however, that the term "U.S. person" shall not include (A) a branch or agency of a U.S. person that is located and operating outside the United States for valid business purposes as a locally regulated branch or agency engaged in the banking or insurance business, (B) any employee benefit plan established and administered in accordance with the law, customary practices and documentation of a foreign country and (C) the international organizations set forth in
Section 902(o)(7) of Regulation S under the Securities Act and any other similar international organizations, and their agencies, affiliates and pension plans.
We irrevocably authorize you to produce this certificate or a copy hereof to any interested party in any administrative or other proceedings with respect to the matters covered by this certificate.
Very truly yours,
[TRANSFEROR]
By:____________________________
Name:
Title:
To be completed by the account
holder as, or as agent for, the
beneficial owner(s) of the
Securities to which this
certificate relates.
Dated:
E-2

EXHIBIT F
FORM OF CERTIFICATE FOR TRANSFERS OF
REGULATION S TEMPORARY GLOBAL SECURITY
FOR REGULATION S PERMANENT GLOBAL SECURITY
 (Transfers pursuant to ss. 304(a)(viii))

(Euroclear or Cedel)
First Union National Bank of North Carolina 230 South Tryon Street, Ninth Floor
Charlotte, North Carolina 28288-1179
Attention: Corporate Trust Administration
Re: Speedway Motorsports, Inc. 5 3/4% Convertible Subordinated Debentures due 2003

(the "Securities")
Reference is hereby made to the Indenture dated as of September 1, 1996 (the "Indenture") between Speedway Motorsports, Inc., as Issuer, and First Union National Bank of North Carolina, as Trustee. Capitalized terms used but not defined herein shall have the meanings given them in the Indenture.
This certificate relates to U.S. $____________________ aggregate principal amount of Securities which are held in the form of the Regulation S Temporary Global Security (CINS No. U84570AA5) with the Depositary to effect the transfer of beneficial interest in such Regulation S Temporary Global Security for a beneficial interest in an equivalent aggregate principal amount of the Regulation S Permanent Global Security.
In connection with such request, this is to certify that, based solely on certificates we have received in writing, by tested telex or by electronic transmission from member organizations appearing in our records as persons being entitled to a portion of the principal amount of the Regulation S Temporary Global Security set forth above (our "Member Organizations") substantially to the effect set forth in the Indenture, U.S. $__________________ aggregate principal amount of the Securities is owned by persons that are not citizens or residents of the United States, domestic partnerships, domestic corporations or any estate or trust the income of which is subject to United States federal income taxation regardless of its source or any other person deemed a "U.S. person" under Regulation S under the Securities Act of 1933, as amended.
We further certify (i) that we are not making available herewith for exercise (or if relevant, exercise of any rights of collection of any interest) any portion of the Regulation S Global Security excepted in such certificates and (ii) that, as of the date hereof, we have not received any notification from any of our Member Organizations to the effect that the statements made by such Member Organizations with respect to any portion of the part submitted herewith for exchange (or,
F-1

if relevant, exercise or any rights of collection of any interest) are no longer true and cannot be relied upon as of the date hereof.
We understand that this certificate is required in connection with certain laws, and, if applicable, certain securities laws of the United States. In connection therewith, if administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we irrevocably authorize you to produce this certification to any interested party in such proceedings.
Very truly yours,
[MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, BRUSSELS OFFICE AS
OPERATOR OF THE EUROCLEAR SYSTEM]
[CEDEL BANK, SOCIETE ANONYME]
By:
Name:
Title:
Dated:
F-2

EXHIBIT G
FORM OF CERTIFICATE FOR TRANSFERS OF
REGULATION S PERMANENT GLOBAL SECURITY
FOR CERTIFICATED SECURITIES
 (Transfers pursuant to ss. 304(a)(ix))

(Transferor)
First Union National Bank of North Carolina 230 South Tryon Street, Ninth Floor
Charlotte, North Carolina 28288-1179
Attention: Corporate Trust Administration
Re: Speedway Motorsports, Inc. 5 3/4% Convertible Subordinated Debentures due 2003

(the "Securities")
Reference is hereby made to the Indenture dated as of September 1, 1996 (the "Indenture") between Speedway Motorsports, Inc., as Issuer, and First Union National Bank of North Carolina, as Trustee. Capitalized terms used but not defined herein shall have the meanings given them in the Indenture.
This certificate relates to U.S. $____________________ aggregate principal amount of Securities which are held in the form of the Regulation S Permanent Global Security (CINS No. U84570AA5) with the Depositary in the name of ______________________________ [name of transferor] (the "Transferor") to effect the transfer of the beneficial interest in such Regulation S Permanent Global Security for a beneficial interest in an equivalent aggregate principal amount of Certificated Securities.
In connection with such request, and in respect of such Securities, we confirm that:
1. We are either not a U.S. person (as defined below) or we have purchased our beneficial interest in the above referenced Regulation S Permanent Global Security in a transaction that is exempt from the registration requirements under the Securities Act.
2. We are delivering this certificate in connection with obtaining a beneficial interest in Certificated Securities in exchange for our benefit interest in the Regulation S Permanent Global Security.
For purposes of this certificate, "U.S. person" means (i) any individual resident in the United States, (ii) any partnership or corporation organized or incorporated under the laws of the United States, (iii) any estate or which an executor or administrator is a U.S. person (other than an estate governed by foreign law and of which at least one executor or administrator is a non-U.S.
G-1

person who has sole or shared investment discretion with respect to its assets),
(iv) any trust of which any trustee is a U.S. person (other than a trust of which at least one trustee is a non-U.S. person who has sole or shared investment discretion with respect to its assets and no beneficiary of the trust (and no settlor if the trust is revocable) is a U.S. person), (v) any agency or branch of a foreign entity located in the United States, (vi) any non-discretionary or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. person, (vii) any discretionary or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated or (if an individual) resident in the United States (other than such an account held for the benefit or account of a non-U.S. person), (viii) any partnership or corporation organized or incorporated under the laws of a foreign jurisdiction and formed by a U.S. person principally for the purpose of investing in securities not registered under the Securities Act (unless it is organized or incorporated, and owned, by accredited investors within the meaning of Rule 501(a) under the Securities Act who are not natural persons, estates or trusts); provided, however, that the term "U.S. person" shall not include (A) a branch or agency of a U.S. person that is located and operating outside the United States for valid business purposes as a locally regulated branch or agency engaged in the banking or insurance business, (B) any employee benefit plan established and administered in accordance with the law, customary practices and documentation of a foreign country and (C) the international organizations set forth in Section 902(o)(7) of Regulation S under the Securities Act and any other similar international organizations, and their agencies, affiliates and pension plans.
We irrevocably authorize you to produce this certificate or a copy hereof to any interested party in any administrative or other proceedings with respect to the matters covered by this certificate.
Very truly yours,
[TRANSFEROR]
By: _______________________________
Name:
Title:
To be completed by the account
holder as, or the agent for, the
beneficial owner(s) of the
Convertible Securities to which this
certificate relates.
Dated:
G-2

Exhibit 4.3 $77,000,000
5 3/4% Convertible Subordinated Debentures due 2003
REGISTRATION RIGHTS AGREEMENT
Dated as of September 26, 1996
by and among
Speedway Motorsports, Inc.
and
Wheat, First Securities, Inc.,
Montgomery Securities
and
J.C. Bradford & Co.

THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered into as of September 26, 1996 by and among Speedway Motorsports, Inc., a Delaware corporation (the "Company"), and Wheat, First Securities, Inc., Montgomery Securities and J. C. Bradford & Co., as initial purchasers (the "Initial Purchasers").
The Company proposes to issue and sell to the Initial Purchasers (the "Initial Placement") $70,000,000 aggregate principal amount (plus up to an additional $7,000,000 principal amount to cover over-allotments, if any) of its 5 3/4% Convertible Subordinated Debentures due 2003 (the "Debentures"), pursuant to the terms of a Purchase Agreement, dated as of September 26, 1996 (the "Purchase Agreement"). As an inducement to the Initial Purchasers to enter into the Purchase Agreement, and in satisfaction of a condition to the Initial Purchasers' obligations thereunder, the Company agrees with the Initial Purchasers, (i) for the benefit of the Initial Purchasers and (ii) for the benefit of the holders from time to time of the Transfer Restricted Securities (as defined) whose names appear in the register maintained by the Company's registrar in accordance with the provisions of the Indenture (as defined in
Section 1 hereof) (including the Initial Purchasers) (each of the foregoing a "Holder," and collectively 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 terms shall have the following meanings:
"Affiliate" of any specified person means any other person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such specified person. For purposes of this definition, control of a person means 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" have meanings correlative to the foregoing.
"Business Day" means any day other than a Saturday, a Sunday or a day on which banking institutions in the State of New York are not required to be open.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the voting common stock, $0.01 par value per share, of the Company.
"Damages Payment Date" means with respect to the Debentures or the underlying Common Stock, as applicable, each regular interest payment date provided for in the Indenture.
"Debentures" means the 5 3/4% Convertible Subordinated Debentures due 2003 of the Company.
"Effectiveness Target Date" has the meaning set forth in Section 3(a) hereto.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations of the Commission promulgated thereunder.
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"Exchange Offer Registration Statement" has the meaning set forth in
Section 4 hereof.
"First Delivery Date" has the meaning set forth in the Purchase Agreement.
"Holder" has the meaning set forth in the preamble hereto.
"Indenture" means the Indenture dated as of September 1, 1996, between the Company and First Union National Bank of North Carolina, as trustee, pursuant to which the Debentures are to be issued, as the same may be amended, modified or supplemented from time to time in accordance with the terms thereof.
"Initial Purchasers" has the meaning set forth in the preamble hereto.
"Initial Placement" has the meaning set forth in the preamble hereto.
"Liquidated Damages" shall have the meaning set forth in Section 5 hereof.
"Losses" has the meaning set forth in Section 9(d) hereof.
"Majority Holders" means the Holders of a majority of the aggregate principal amount of securities registered under a Shelf Registration Statement (provided that Holders of Common Stock issued upon conversion of Debentures shall be deemed to be Holders of the aggregate principal amount of Debentures from which such Common Stock was converted).
"New Debentures" means debt securities of the Company identical in all material respects to the Debentures (except that the New Debentures shall not be subject to restrictions on transfer), to be issued pursuant to Section 4 hereof.
"Offering Memorandum" has the meaning set forth in the Purchase Agreement.
"Person" means any individual, partnership, corporation, limited liability company, trust or unincorporated organization, or a government or agency or political subdivision thereof.
"Prospectus" means the prospectus included in any Shelf 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 Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of Transfer Restricted Securities, covered by such Shelf Registration Statement, and all amendments and supplements to the Prospectus, including post- effective amendments, and all material incorporated by reference into such Prospectus.
"Registration Default" has the meaning set forth in Section 5 hereto.
"Securities Act" means the Securities Act of 1933, as amended from time to time, and the rules and regulations of the Commission promulgated thereunder.
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"Shelf Registration Period" has the meaning set forth in Section 3(b) hereof.
"Shelf Registration Statement" means a "shelf" registration statement of the Company pursuant to the provisions of Section 3 hereof which covers the Transfer Restricted Securities, on an appropriate form subject to Rule 415 under the Securities 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.
"Supplement Delay Period" means any period commencing on the date of receipt by a Holder of Transfer Restricted Securities of any notice from the Company of the existence of any fact or event of the kind described in Section 6(c)(2) hereof and ending on the date of receipt by such Holder of an amended or supplemented Shelf Registration Statement or Prospectus, as contemplated by
Section 6(i) hereof, or the receipt by such Holder of written notice from the Company (the "Advice") that the use of the Prospectus may be resumed, and receipt of copies of any additional or supplemental filings that are incorporated by reference in the Prospectus.
"Transfer Restricted Securities" means each Debenture and the Common Stock issuable upon conversion thereof until the earlier of (i) the date on which such Debenture or the Common Stock issuable upon conversion thereof has been effectively registered under the Securities Act and disposed of pursuant to an effective registration statement or exchanged for a New Debenture pursuant to
Section 4 hereof, (ii) the date on which such Debenture or the Common Stock issuable upon conversion thereof is distributed to the public pursuant to Rule 144 under the Securities Act (or any similar provision then in effect) or is saleable pursuant to Rule 144(k) under the Securities Act and all legends thereon relating to transfer restrictions have been removed, or (iii) the date on which such Debenture or the Common Stock issuable upon conversion thereof ceases to be outstanding.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Trustee" means the trustee with respect to the Debentures under the Indenture.
2. Securities Subject to This Agreement. The securities entitled to the benefits of this Agreement are the Transfer Restricted Securities.
3. Shelf Registration.
(a) The Company shall, within 60 days after the First Delivery Date, file with the Commission and thereafter shall use its best efforts to cause to be declared effective under the Securities Act by the 150th day after the First Delivery Date (the "Effectiveness Target Date"), a Shelf Registration Statement relating to the offer and sale of the Transfer Restricted Securities by the Holders from time to time in accordance with the methods of distribution elected by such Holders and set forth in such Shelf Registration Statement.
(b) The Company shall use its best efforts to keep the Shelf Registration Statement continuously effective in order to permit the Prospectus forming a part thereof to be usable by Holders for a period of three years from the First Delivery Date or such shorter period that will
3

terminate when (i) all the Transfer Restricted Securities covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement, (ii) such Transfer Restricted Securities are distributed to the public pursuant to Rule 144 under the Securities Act (or any similar provision then in effect) or are saleable pursuant to Rule 144(k) under the Securities Act, or (iii) the date on which there ceases to be outstanding any Transfer Restricted Securities (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 Transfer Restricted Securities covered thereby not being able to offer and sell such securities during that period, unless (i) such action is required by applicable law, (ii) 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 6(i) hereof, if applicable or (iii) such action is taken because of any fact or circumstance giving rise to a Supplement Delay Period.
(c) The Company shall prepare and file with the Commission such amendments, including post-effective amendments, to the Shelf Registration Statement as may be necessary to keep such Registration Statement continuously effective for the applicable time period; cause the related Prospectus to be supplemented by any required Prospectus supplement and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act; and comply with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all securities covered by such Shelf Registration Statement during the applicable period in accordance with the intended methods of disposition by the sellers thereof set forth in such Shelf Registration Statement as so amended or in such Prospectus as so supplemented.
4. Registered Exchange Offer. If the Company determines that it is permissible to do so, in lieu of filing the Shelf Registration Statement or maintaining the effectiveness of the Shelf Registration Statement as contemplated herein, the Company, in its discretion, may file with the Commission a registration statement on Form S-4 or other applicable form with respect to the New Debentures (the "Exchange Offer Registration Statement") and upon the Exchange Offer Registration Statement becoming effective, offer the holders of Debentures the opportunity to exchange their Debentures for an equal principal amount of New Debentures. Upon the effectiveness of an Exchange Offer Registration Statement, the holders of Debentures constituting Transfer Restricted Securities shall not be entitled to include any such Debentures in a Shelf Registration Statement hereunder; provided, however, the effectiveness of an Exchange Offer Registration Statement shall not affect the Company's obligations hereunder with respect to any Holder's Common Stock constituting Transfer Restricted Securities. Notwithstanding the foregoing, in no event shall the Company have any obligation to file a registration statement with respect to, or to register any Debentures pursuant to an Exchange Offer Registration Statement.
5. Liquidated Damages. Subject to Section 6(m), if (a) the Company fails to file the Shelf Registration Statement required by Section 3 of this Agreement on or before the date specified for such filing under Section 3(a) hereof, (b) such Shelf Registration Statement is not declared effective by the Commission on or prior to the Effectiveness Target Date or (c) the Shelf Registration Statement is declared effective but thereafter ceases to be continuously effective in connection with resales of Transfer Restricted Securities during the Shelf Registration Period (each such event
4

referred to in clauses (a) through (c) above a "Registration Default"), then the Company will pay liquidated damages (the "Liquidated Damages") to each Holder of Transfer Restricted Securities, with respect to the first 90-day period immediately following the occurrence of such Registration Default in an amount equal to $0.05 per week per $1,000 aggregate principal amount of the Transfer Restricted Securities held by such Holder and, if applicable, $0.01 per week per share (subject to adjustment in the event of stock splits, stock consolidations, stock dividends, and the like) of Common Stock constituting Transfer Restricted Securities to be registered under the Shelf Registration Statement. The amount of the Liquidated Damages will increase by an additional $0.05 per week per $1,000 aggregate principal amount of the Transfer Restricted Securities held by each Holder and $0.01 per week per share (subject to adjustment as set forth above) of Common Stock constituting Transfer Restricted Securities to be registered under the Self Registration Statement with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of Liquidated Damages of $0.25 per week per $1,000 aggregate principal amount of the Transfer Restricted Securities held by each Holder and $0.05 per week per share (subject to adjustment as set forth above) of Common Stock constituting Transfer Restricted Securities to be registered under the Shelf Registration Statement. In no event shall the Company pay Liquidated Damages in excess of such maximum amount set forth in the preceding sentence, regardless of whether one or multiple Registration Defaults exist. A Registration Default under clause (a) above shall be cured on the date that the Shelf Registration Statement is filed with the Commission; a Registration Default under clause (b) above shall be cured on the date that the Shelf Registration Statement is declared effective by the Commission; and a Registration Default under clause
(c) above shall be cured on the date of the Shelf Registration Statement is declared effective. All accrued Liquidated Damages will be paid by the Company on each Damages Payment Date in cash. Such payment will be made to the Holder of the Global Securities by wire transfer of immediately available funds and to Holders of Transfer Restricted Securities represented by Certificated Securities, if any, by wire transfer to the accounts specified by them or, if no such accounts have been specified, by mailing checks to their registered addresses. Following the cure of all Registration Defaults, the accrual of Liquidated Damages will cease. For purposes of this Section, Debentures which have been converted into shares of Common Stock constituting Transfer Restricted Securities shall be deemed to bear the principal amount at which such securities were converted.
The parties hereto agree that the Liquidated Damages provided for in this Section 5 constitute a reasonable estimate of the damages that may be incurred by Holders of Transfer Restricted Securities by reason of the failure of the Shelf Registration Statement to be filed, declared effective or maintained effective, as the case may be, in accordance with the provisions hereof.
6. Registration Procedures. In connection with any Shelf Registration Statement, the following provisions shall apply:
(a) The Company shall furnish to the Initial Purchasers and their counsel, not less than five Business Days prior to the filing thereof with the Commission, a copy of any Shelf Registration Statement and each amendment thereof, and each amendment or supplement, if any, to the Prospectus included therein, and shall use its best efforts to reflect in each such document, when so filed with the Commission, such comments as the Initial Purchasers or their counsel may reasonably propose.
5

(b) The Company shall use its best efforts to ensure that (i) any Shelf 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 Securities Act and the rules and regulations thereunder, (ii) except for information provided by holders of Transfer Restricted Securities for inclusion in any Shelf Registration Statement pursuant to Section 6(m), as to which the Company makes no representation, warranty, or undertaking, any Shelf Registration Statement and any amendment or supplement 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 and (iii) except for information provided by holders of Transfer Restricted Securities for inclusion in any Shelf Registration Statement pursuant to Section 6(m), as to which the Company makes no representation, warranty, or undertaking, any Prospectus forming part of any Shelf Registration Statement, and any amendment or supplement to such Prospectus, does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements, in the light of the circumstances under which they were made, not misleading.
(c) (1) The Company shall advise the Initial Purchasers, and, if requested by the Initial Purchasers, confirm such advice in writing, when a Shelf Registration Statement and any amendment thereto has been filed with the Commission and when the Shelf Registration Statement or any post-effective amendment thereto has become effective.
(2) The Company shall advise the Initial Purchasers and their counsel and, if requested by the Initial Purchasers, confirm such advice in writing:
(i) of any request by the Commission for amendments or supplements to the Shelf Registration Statement or the Prospectus included therein;
(ii) of the initiation by the Commission of proceedings relating to a stop order suspending the effectiveness of the Shelf Registration Statement;
(iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Shelf Registration Statement;
(iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of the securities included in the Shelf Registration Statement for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and
(v) of the existence of any fact and the happening of any event (including, without limitation, pending negotiations relating to, or the consummation of, a transaction or the occurrence of any event which would require additional disclosure of material non-public information by the Company in the Shelf Registration Statement as to which the Company has a bona fide business purpose for preserving confidential or which renders the Company unable to comply with Commission requirements) that, in the opinion of the Company, makes untrue any statement of a material fact made in its Shelf Registration Statement, the Prospectus or any
6

amendment or supplement thereto or any document incorporated by reference therein or requires the making of any changes in the Shelf 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 light of the circumstances under which they were made) not misleading.
Such Advice may be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made.
(d) The Company shall use its best efforts to obtain the withdrawal of any order suspending the effectiveness of the Shelf Registration Statement, or the lifting of any suspension of the qualification (or exemption from qualification) of the Transfer Restricted Securities for sale in any jurisdiction, at the earliest possible time.
(e) The Company shall furnish to each selling Holder named in the Shelf Registration Statement, without charge, at least one conformed copy of such Shelf Registration Statement and any post-effective amendment thereto, including financial statements and all exhibits and schedules (including those incorporated by reference).
(f) The Company shall, during the Shelf Registration Period, deliver to each Holder of Transfer Restricted Securities named in the 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; and, subject to any notice by the Company in accordance with Section 7(b), the Company consents to the use of the Prospectus or any amendment or supplement thereto by each of the selling Holders for the purposes of offering and resale of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto.
(g) Prior to the offering of Transfer Restricted Securities pursuant to the Shelf Registration Statement, the Company shall use its best efforts to: (i) register or qualify or cooperate with the Initial Purchasers acting on behalf of the Holders, and their counsel, in connection with the registration or qualification (or exemption from such registration or qualification) of such Transfer Restricted Securities for offer and sale under the securities or blue sky laws of such jurisdictions of the United States as any such Holders reasonably request in writing; (ii) keep each such registration or qualification (or exemption therefrom) effective during the period the Shelf Registration Statement is required to be kept effective; and (iii) do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities covered by the Shelf Registration Statement; provided, however, that the Company will not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to general service of process or to taxation in any such jurisdiction where it is not then so subject.
(h) The Company shall cooperate with the Holders of Transfer Restricted Securities to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities to be sold pursuant to the Shelf Registration Statement free of any restrictive legends and in such
7

denominations and registered in such names as such Holders may request in writing at least two Business Days prior to sales of securities pursuant to such Shelf Registration Statement.
(i) Upon the occurrence of any event contemplated by paragraph
(c)(2)(v) hereof, the Company shall promptly prepare a post-effective amendment to the Shelf Registration Statement or an amendment or supplement to the related Prospectus or any document incorporated therein by reference or file any other required document so that as thereafter delivered to purchasers of the Transfer Restricted Securities covered thereby, 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.
(j) Not later than the effective date of any such Shelf Registration Statement hereunder, the Company shall cause to be provided CUSIP numbers for the Transfer Restricted Securities registered under such Shelf Registration Statement, and provide the Trustee with printed certificates for such Transfer Restricted Securities where necessary, in a form eligible for deposit with The Depository Trust Company.
(k) The Company shall use its best efforts to comply with all applicable rules and regulations of the Commission and shall make generally available to its security holders in a regular filing on Form 10-Q or Form 10-K an earnings statement satisfying the provisions of Rule 158 (which need not be audited) for the twelve-month period commencing after effectiveness of the Shelf Registration Statement.
(l) The Company shall cause the Indenture to be qualified under the Trust Indenture Act in a timely manner not later than the effective date of the Registration Statement.
(m) The Company may require each Holder of Transfer Restricted Securities to be sold pursuant to the Shelf Registration Statement to furnish to the Company within 10 Business Days after written request for such information has been made by the Company, such customary information regarding the Holder and the distribution of such securities as the Company may from time to time reasonably require for inclusion in such Shelf Registration Statement and such other information as may be necessary or advisable in the reasonable opinion of the Company and its counsel, in connection with such Shelf Registration Statement. No Holder of Transfer Restricted Securities shall be entitled to the benefit of any Liquidated Damages under Section 5 of this Agreement or be entitled to use the Prospectus unless and until such Holder shall have furnished the information required by this Section 6(m) and all such information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading.
(n) The Company shall, if requested, promptly incorporate in the Shelf Registration Statement or Prospectus, if necessary, pursuant to a supplement or post-effective amendment to the Shelf Registration Statement, such information as the Initial Purchasers acting on behalf of the Holders reasonably request to have included therein and shall make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after the Company is notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment.
8

(o) The Company shall (i) make reasonably available at reasonable time for inspection by the Holders of Transfer Restricted Securities to be registered thereunder, and the counsel or other agent retained by the Initial Purchasers on behalf of the Holders, at the office where normally kept during normal business hours, all financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries, and cause the Company's office, directors and employees to supply all relevant information reasonably requested by the Holders, attorney, accountant or other agent in connection with the Shelf Registration Statement as is customary for similar due diligence examinations, provided, however, that such persons shall first agree in writing with the Company that any information that is reasonably and in good faith designated by the Company in writing as confidential at the time of delivery of such information shall be kept confidential by such persons; (ii) obtain opinions of counsel to the Company and updates thereof (which counsel, if different from counsel to the Company referred to in the Purchase Agreement, shall be reasonably satisfactory to the Majority Holders of Transfer Restricted Securities to be registered thereunder, and their counsel) addressed to each selling Holder covering such matters (in form, scope and substance) as those matters set forth in Section 7(c)(ix) of the Purchase Agreement; and (iii) deliver such documents and certificates as may be reasonably requested by the Initial Purchasers acting on behalf of the Holders, including those to evidence compliance with Section 6(i). The foregoing actions set forth in clauses (ii) and (iii) of this Section 6(o) shall be performed at the effectiveness of such Shelf Registration Statement and each post-effective amendment thereto.
(p) The Company shall list all Debentures and Common Stock covered by such Shelf Registration Statement on the New York Stock Exchange and on any securities exchange on which the Common Stock is then listed.
7. Holders' Agreements. Each Holder of Transfer Restricted Securities, by the acquisition of such Transfer Restricted Securities agrees:
(a) To furnish the information required to be furnished pursuant to
Section 6(m) hereof within the time period set forth therein. The Company may exclude from any Shelf Registration Statement the Transfer Restricted Securities of any Holder who does not furnish such information. Each Holder of Transfer Restricted Securities shall promptly furnish to the Company all such information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading.
(b) That upon receipt of a notice of the commencement of a Supplement Delay Period, it will keep the fact of such notice confidential, forthwith discontinue disposition of its Transfer Restricted Securities, as the case may be, pursuant to the Shelf Registration Statement, and will not deliver any Prospectus forming a part thereof until receipt of the amended or supplemented Shelf Registration Statement or Prospectus, as applicable, as contemplated by
Section 6(i) hereof, or until receipt of the Advice.
(c) If so directed by the Company in a notice of the commencement of a Supplement Delay Period, each Holder of Transfer Restricted Securities, as the case may be, will deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in such Holder's possession, of the Prospectus covering the Transfer Restricted Securities, as the case may be.
9

(d) Sales of such Transfer Restricted Securities pursuant to a Shelf Registration Statement shall only be made in the manner set forth in such currently effective Shelf Registration Statement.
8. Registration Expenses. The Company shall bear its own expenses incurred in connection with the performance of its obligations under Sections 3, 5 and 6 hereof and will reimburse the Holders for the cost of qualifying the Transfer Restricted Securities for sale pursuant to the various state "blue sky" laws (including reasonable attorney's fees in connection therewith). The Holders will otherwise bear their own expenses, including the fees and disbursements of their counsel designated by the Initial Purchasers to act as counsel for the Holders in connection therewith.
9. Indemnification and Contribution.
(a) In connection with the Shelf Registration Statement, the Company will indemnify and hold harmless each Holder of Transfer Restricted Securities covered thereby, the directors, officers, employees and agents of each such Holder and each person who controls any such Holder within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, liabilities, expenses and damages, joint or several (including any and all investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted), to which they, or any of them, may become subject under the Securities Act, the Exchange Act or other federal, state or foreign statutory law or regulation, at common law or otherwise, insofar as such losses, claims, liabilities, expenses and damages arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Shelf Registration Statement as originally filed or in any amendment thereof, or in any preliminary Prospectus or Prospectus, or in any amendment thereof or supplement thereto, or the omission or alleged omission to state in such documents a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, that the Company will not be liable to the extent that any such loss, claim, liability expense or damage arises out of or is based on any such untrue statement or omission or alleged untrue statement or omission made therein in reliance on and in conformity with information relating to any Holder of Transfer Restricted Securities furnished in writing to the Company by any such Holder expressly for inclusion therein. This indemnity agreement will be in addition to any liability which the Company might otherwise have.
(b) Each Holder of Transfer Restricted Securities covered by the Shelf Registration Statement will severally indemnify and hold harmless the Company, each person who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, each director of the Company and each officer of the Company to the same extent as the foregoing indemnity from the Company to each such Holder, but only insofar as losses, claims, liabilities, expenses or damages arise out of or are based on any untrue statement or omission or alleged untrue statement or omission made in reliance on and in conformity with information relating to such Holder furnished to the Company by or on behalf of such Holder expressly for use in the Shelf Registration Statement as originally filed or in any amendment thereof, or in any preliminary Prospectus or Prospectus, or in any amendment thereof or supplement thereto. This indemnity agreement will be in addition to any liability that such Holder might otherwise have.
10

(c) Any party that proposes to assert the right to be indemnified under this Section 9 will, promptly after receipt of notice of commencement of any action against such party in respect of which a claim is to be made against an indemnifying party or parties under this Section 9, notify each indemnifying party of the commencement of such action, enclosing a copy of all papers served, but the omission so to notify such indemnifying party (i) will not relieve it from any liability that it may have to any indemnified party under the foregoing provisions of this Section 9 unless, and only to the extent that, it did not otherwise learn of such action and such omission results in the forfeiture of substantive rights or defenses by the indemnifying party and (ii) will not, in any event relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligations in Sections 9(a) and 9(b) hereof. If any such action is brought against any indemnified party and it notifies the indemnifying party of its commencement, the indemnifying party will be entitled to participate in and, to the extent that it elects by delivering written notice to the indemnified party promptly after receiving notice of the commencement of the action from the indemnified party, jointly with any other indemnifying party similarly notified, to assume the defense of the action, with counsel satisfactory to the indemnified party, and after notice from the indemnifying party to the indemnified party of its election to assume the defense, the indemnifying party will not be liable to the indemnified party for any legal or other expenses except as provided below and except for the reasonable costs of investigation subsequently incurred by the indemnified party in connection with the defense. The indemnified party will have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (2) the indemnified party has reasonably concluded (based on advice of counsel to the indemnified party that there may be legal defense available to it or other available indemnified parties that are different from or in addition to those available to the indemnifying party), (3) a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party) or (4) the indemnifying party has not in fact employed counsel to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm admitted to practice in such jurisdiction at any one time for all such indemnified party or parties. Such firm shall be designated in writing by the Majority Holders in the case of parties indemnified pursuant to Section 9(a) and by the Company, in the case of parties indemnified pursuant to Section 9(b). All such fees, disbursements and other charges will be reimbursed by the indemnifying party promptly as they are incurred. No indemnifying party shall, without the prior written consent of each indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated by this Section
9 (whether or not any indemnified party is a party thereto), unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising or that may arise out of such claim, action or proceeding.
(d) In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the foregoing paragraphs of this Section 9 is applicable in accordance
11

with its terms but for any reason is held to be unavailable from the Company or the Holders of Transfer Restricted Securities, or insufficient, the Company and such Holders will contribute to the total losses, claims, liabilities, expenses and damages (including any investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted, but after deducting any contribution received by the Company from persons other than such Holders and any contribution received by any of the Holders from persons other than the Company, such as persons who control the Company or a Holder within the meaning of the Securities Act or the Exchange Act and officers and directors of the Company, who also may be liable for contribution) (collectively, "Losses") to which the Company and any one or more of such Holders of Transfer Restricted Securities may be subject in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and such Holders on the other. The relative benefits received by the Company shall be deemed to be equal to the total net proceeds from the Initial Placement (before deducting expenses) as set forth on the cover page of the Offering Memorandum. 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 Offering Memorandum, and benefits received by any other Holders shall be deemed to be equal to the value of receiving Debentures or Common Stock issuable upon conversion thereof, as applicable, registered under the Securities Act. If, but only if, the allocation provided by this Section is not permitted by applicable law, the allocation of contribution shall be made in such proportion as is appropriate to reflect not only the relative benefits referred to in this
Section but also the relative fault of the Company, on the one hand, and the Holders, on the other, with respect to the statements or omissions which resulted in such loss, claim, liability, expense or damage, or action in respect thereof, as well as any other relevant equitable considerations with respect to such offering. Such relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a fact relates to information supplied by the Company or the Holders, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Holders agree that it would not be just and equitable if contributions pursuant to this Section 9(d) were to be determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation which does not take into account the equitable considerations referred to herein. The amount paid or payable by any party as a result of the loss, claim, liability, expense or damage, or action in respect thereof, referred to above in this Section 9(d) shall be deemed to include, for purpose of this Section 9(d), any legal or other expenses reasonably incurred by such party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 9(d), in no case shall any Initial Purchaser be responsible, in the aggregate, for any amount in excess of the purchase discount or commission applicable to such Debentures, as set forth on the cover page of the Offering Memorandum. No person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Holders' obligations to contribute as provided in this Section 9(d) are several and not joint. For purposes of this Section 9(d), any person who controls the Company or a Holder within the meaning of the Securities Act will have the same rights to contribution as that party, and each officer or director of the Company or such Holder will have the same rights to contribution, as the Company or such Holder, as applicable, subject in each case to the provisions hereof. Any party entitled to contribution promptly after receipt of notice of commencement of any action against such party in respect of which a claim for contribution may be made under this Section 9(d), will notify any such party or parties
12

from whom contribution may be sought, but the omission so to notify will not relieve the party or parties from whom contribution may be sought from any other obligation it or they may have under this Section 9(d). No party will be liable for contribution with respect to any action or claim settled without its written consent (which consent will not be unreasonably withheld or delayed).
(e) The indemnity and contribution agreements contained in this Section 9 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 9, and will survive the sale by a Holder of securities covered by the Shelf Registration Statement.
10. Rules 144 and 144A. The Company shall use its best efforts to file the reports required to be filed by it under the Securities Act and the Exchange Act in a timely manner and, if at any time it is not required to file such reports but in the past had been required to or did file such reports, it will, upon the request of any holder of Transfer Restricted Securities, make available other information as reasonably required by, and so long as reasonably necessary to permit, sales of its Transfer Restricted Securities pursuant to Rule 144 and Rule 144A. The Company covenants that, for so long as a sale of Transfer Restricted Securities is not permitted pursuant to a Shelf Registration Statement, it will take such further action as any Holder of Transfer Restricted Securities may reasonably request, all to the extent required from time to time, to enable such Holder to sell securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 and 144A (including the requirements of Rule 144A(d)(4)). Notwithstanding the foregoing, nothing in this Section 10 shall be deemed to require the Company to register any of its securities pursuant to the Exchange Act.
11. Miscellaneous.
(a) Remedies. In the event of a breach by the Company of its obligations under this Agreement, each Holder, in addition to being entitled to execute all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company agrees that monetary damages (including the Liquidated Damages contemplated hereby) would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. The remedies provided herein are cumulative and not exclusive of any remedies provided by law.
(b) 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 conflicts with the provisions hereof.
(c) 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 Holders of at least a majority of the then outstanding aggregate principal amount of Transfer Restricted Securities; 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
13

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 are being sold pursuant to a Shelf Registration Statement as that does not directly or indirectly affect the rights of other Holders may be given by the Majority Holders, determined on the basis of Debentures being sold rather than registered under such Shelf Registration Statement.
(d) Notices. All statements, requests, notices and agreements hereunder shall be in writing or by telegram if promptly confirmed in writing, and shall be sufficient in all respects if delivered or sent by reliable courier, first-class mail, telex, or facsimile transmission:
(1) if to a Holder, at the most current address given by such Holder to the Company in accordance with the provisions of this Section
11(d), which address initially is, with respect to each Holder, the address of such Holder maintained by the registrar under the Indenture, with a copy in like manner to Wheat, First Securities, Inc.;
(2) if to the Initial Purchasers, initially at the address set forth in the Purchase Agreement; and
(3) if to the Company, initially at its address set forth in the Purchase Agreement.
Any such statements, requests, notices or agreements shall take effect upon receipt.
The Initial Purchasers or the Company by notice to the other may designate additional or different addresses for subsequent notices or communications.
(e) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto, including, without the need for an express assignment or any consent by the Company thereto, subsequent Holders of Debentures. The Company hereby agrees to extend the benefits of this Agreement to any Holder of Debentures and any such Holder may specifically enforce the provisions of this Agreement as if an original party hereto. The Company may not assign its rights or obligations hereunder without the prior written consent of the Majority Holders of Transfer Restricted Securities.
(f) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. All references made in this Agreement to "Section" and "paragraph" refer to such
Section or paragraph of this Agreement, unless expressly stated otherwise.
(h) Governing Law. This Agreement shall be construed in accordance with the laws of the State of New York without regard to the conflict of law provisions thereof.
14

(i) Submission to Jurisdiction. The Company hereby irrevocably submits to the non-exclusive jurisdiction of any New York state court sitting in the Borough of Manhattan in the City of New York or any federal court sitting in the Borough of Manhattan in the City of New York in respect of any suit, action or proceeding arising out of or relating to this Agreement, and irrevocably accepts for itself and in respect of its property, generally and unconditionally, jurisdiction of the aforesaid courts. The Company irrevocably waives, to the fullest extent it may effectively do so under applicable law any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
(j) 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.
(k) Attorneys' Fees. In any action or proceeding brought to enforce any provision of this Agreement, or where any provision hereof is validly asserted as a defense, the prevailing party, as determined by the court, shall be entitled to recover its reasonable attorneys' fees in addition to any other available remedy.
(l) Approval of Holders. Whenever the consent or approval of holders of a specified percentage of Transfer Restricted Securities is required hereunder, Transfer Restricted Securities held by the Company or its affiliates (as such term is defined in Rule 405 under the Securities Act) shall not be counted in determining whether such consent or approval was given by the holders of such required percentage. For purposes of calculating the consent or approval of holders of a majority of the then outstanding aggregate principal amount of Transfer Restricted Securities, Transfer Restricted Securities which have been converted into shares of Common Stock shall be deemed to bear the principal amount at which such securities were converted.
(m) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement relating to the registration under the Securities Act of the Transfer Restricted Securities and is intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and the registration rights granted by the Company with respect to the Debentures sold pursuant to the Purchase Agreement and the Common Stock issuable upon conversion of the Debentures. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein, with respect to the registration rights granted by the Company with respect to the Debentures or the Common Stock issuable upon conversion of the Debentures. This Agreement supersedes all prior agreements and understandings among the parties with respect to such registration rights.
(n) Further Assurances. Each of the parties hereto shall use all reasonable efforts to take, or cause to be taken, all appropriate action, do or cause to be done all things reasonably necessary, proper or advisable under applicable law, and execute and deliver such documents and other papers,
15

as may be required to carry out the provisions of this Agreement and the other documents contemplated hereby and consummate and make effective the transactions contemplated hereby.
16

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
SPEEDWAY MOTORSPORTS, INC.
By: ______________________________
Name:
Title:
WHEAT, FIRST SECURITIES, INC.
MONTGOMERY SECURITIES
J. C. BRADFORD & CO.
The Initial Purchasers
By: WHEAT, FIRST SECURITIES, INC.
By: ___________________________
Name:
Title:
17

EXHIBIT 12.1
STATEMENT REGARDING
COMPUTATION OF RATIOS
Speedway Motorsports, Inc.
Actual and Pro Forma Ratios of Income to Fixed Charges

                                                                                                            For the six months
                                                                 For the year ended December 31,              ended June 30,
                                                             1991      1992      1993      1994      1995      1995      1996
                                                            ------    ------    ------    ------    ------    ------    ------
Actual Ratio of Income to Fixed Charges
Income from continuing operations before income taxes      9,069      11,099     15,378   18,525    33,290    16,088    22,677
Less: Equity in earnings of North Wilkesboro Speedway                                                 (233)               (185)
                                                           -----      ------     ------   ------    ------    ------    ------
Adjusted income from continuing operations before
    income taxes                                           9,069      11,099     15,378   18,525    33,057    16,088    22,492
Fixed charges:
     Interest expense                                      4,676       4,527      4,520    4,282       917       917       566
     Amortization of financing costs                          91         161         99      101        24        24        54
                                                           -----      ------     ------   ------    ------    ------    ------
Income as defined                                         13,836      15,787     19,997   22,908     33,998   17,029    23,112

Fixed charges:
     Interest expense                                      4,676       4,527      4,520    4,282       917       917       566
     Capitalized interest                                                                                                  546
     Amortization of financing costs                          91         161         99      101        24        24        54
                                                           -----      ------     ------   ------    ------    ------    ------
Fixed charges                                              4,767       4,688      4,619    4,383       941       941     1,166

Ratio of income to fixed charges                            2.90        3.37       4.33     5.23     36.13     18.10     19.82	

                                                               Year ended                          Year ended
                                                              December 31,       Pro Forma      December 31, 1995
                                                                  1995         Adjustments(1)       Adjusted
                                                               ---------       -------------    --------------

Pro Forma Ratio of Income to Fixed Charges
Income from continuing operations before income taxes            33,290           (1,904)           31,386
Less: Equity in earnings of North Wilkesboro Speedway              (233)                              (233)
                                                               ---------       -------------    --------------
Adjusted income from continuing operations before
    income taxes                                                 33,057           (1,904)           31,153
Fixed charges:
     Interest expense                                               917            1,762             2,679
     Amortization of financing costs                                 24              142               166
                                                               ---------       -------------    --------------
     Income as defined                                           33,998                0            33,998

Fixed charges:
     Interest expense                                               917            1,762             2,679
     Amortization of financing costs                                 24              142               166
                                                               ---------       -------------    --------------
Fixed charges:                                                      941            1,904             2,845

Actual Ratio of income to fixed charges                           36.13
Pro Forma Ratio of income to fixed charges                                                           11.95	

-1-

                                                               Six months                          Six months
                                                                 ended                               ended
                                                                June 30,         Pro Forma       June 30, 1996
                                                                  1996         Adjustments(1)       Adjusted
                                                               ---------       -------------    --------------

Pro Forma Ratio of Income to Fixed Charges
Income from continuing operations before income taxes           22,677              (55)           22,622
Less: Equity in earnings of North Wilkesboro Speedway             (185)                              (185)
                                                               ---------       -------------    --------------
Adjusted income from continuing operations before
    income taxes                                                 22,492              (55)           22,437
Fixed charges:
     Interest expense                                               566               38               604
     Amortization of financing costs                                 54               17                71
                                                               ---------       -------------    --------------
Income as defined                                                23,112                0            23,112

Fixed charges:
     Interest expense                                               566               38               604
     Capitalized interest                                           546                                546
     Amortization of financing costs                                 54               17                71
                                                               ---------       -------------    --------------
Fixed charges                                                     1,166               55             1,221

Actual Ratio of income to fixed charges                           19.82
Pro Forma Ratio of income to fixed charges                                                           18.92	

(1) Pro forma ratio of income to fixed charges assumes that all bank debt outstanding during 1995 and the six months ended June 30, 1996 was refinanced with the proceeds of the Debentures and such portion of the Debentures allocated to the refinancing of bank debt remained outstanding for the pro forma periods presented. The effect of such refinancing is an increase in interest expense and amortization of financing costs of approximately $1.9 million for 1995 and $55,000 for the six month period ended June 30, 1996. These increases resulted primarily from the portion of the Debentures used to refinance the bank debt being considered outstanding for the entire pro forma periods presented, whereas the actual bank debt was repaid in March 1995. The pro forma ratio of income to fixed charges does not reflect any income earned from the proceeds of this Offering in excess of the refinanced bank debt amounts.
-2-

Speedway Motorsports, Inc.
Actual and Pro Forma Ratios of EBITDA to Interest Expense
Actual Ratio of EBITDA to Interest Expense

                                                                                                            For the six months
                                                                 For the year ended December 31,              ended June 30,
                                                             1991      1992      1993      1994      1995      1995      1996
                                                            ------    ------    ------    ------    ------    ------    ------

Income from continuing operations before income taxes      9,069      11,099     15,378   18,525    33,290    16,088    22,677
     Interest expense                                      4,676       4,527      4,520    4,282       917       917       566
     Depreciation and amortization                         3,759       4,289      4,375    4,500     4,893     2,330     3,796
                                                           -----      ------     ------   ------    ------    ------    ------
EBITDA                                                    17,504      19,915     24,273   27,307    39,100    19,335    27,039

Interest expense                                           4,676       4,527      4,520    4,282       917       917       566

Ratio of EBITDA to interest expense                         3.74        4.40       5.37     6.38     42.64     21.09     47.77	

                                                               Year ended                          Year ended
                                                              December 31,       Pro Forma      December 31, 1995
                                                                  1995         Adjustments(1)       Adjusted
                                                               ---------       -------------    --------------

Pro Forma Ratio of EBITDA to interest expense
Income from continuing operations before income taxes            33,290           (1,904)           31,386
     Interest expense                                               917            1,762             2,679
     Depreciation and amortization                                4,893              142             5,035
                                                               ---------       -------------    --------------
EBITDA                                                           39,100                0            39,100

Interest expense                                                    917            1,762             2,679

Actual Ratio of EBITDA to interest expense                        42.64

Pro Forma Ratio of EBITDA to interest expense                                                        14.59	

                                                               Six months                          Six months
                                                                 ended                               ended
                                                                June 30,         Pro Forma       June 30, 1996
                                                                  1996         Adjustments(1)       Adjusted
                                                               ---------       -------------    --------------

Pro Forma Ratio of EBITDA to interest expense
Income from continuing operations before income taxes            22,677              (55)           22,622
     Interest expense                                               566               38               604
     Depreciation and amortization                                3,796               17             3,813
                                                               ---------       -------------    --------------
EBITDA                                                           27,039                0            27,039

Interest expense                                                    566               38               604

Actual Ratio of EBITDA to interest expense                        47.77

Pro Forma Ratio of EBITDA to interest expense                                                        44.77	

(1) Pro forma ratio of EBITDA to interest expense assumes that all bank debt outstanding during 1995 and the six months ended June 30, 1996 was refinanced with the proceeds of the Debentures and such portion of the Debentures allocated to the refinancing of bank debt remained outstanding for the pro forma periods presented. The effect of such refinancing is an increase in interest expense and amortization of financing costs of approximately $1.9 million for 1995 and $55,000 for the six month period ended June 30, 1996. These increases resulted primarily from the portion of the Debentures used to refinance the bank debt being considered outstanding for the entire pro forma periods presented, whereas the actual bank debt was repaid in March 1995. The pro forma ratio of EBITDA to interest expense does not reflect any income earned from the proceeds of this Offering in excess of the refinanced bank debt amounts.
-3-

EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULE
We consent to the use in this Registration Statement of Speedway Motorsports, Inc. on Form S-3 of our reports on Speedway Motorsports, Inc. and Subsidiaries and on Bristol Motor Speedway, Inc., both of which are dated March 1, 1996, appearing in the Prospectus, which is part of this Registration Statement, and to the reference to us under the headings "Selected Financial Data" and "Experts" in such Prospectus. We also consent to the incorporation by reference in this Registration Statement of our report dated March 1, 1996 appearing in the Annual Report on Form 10-K of Speedway Motorsports, Inc. for the year ended December 31, 1995, and to the incorporation by reference of our report dated March 1, 1996 on Bristol Motor Speedway, Inc. for the year ended December 31, 1995 appearing in Form 8-K/A of Speedway Motorsports, Inc. dated March 1, 1996.
Our audits of the consolidated financial statements referred to in our aforementioned report on Speedway Motorsports, Inc. and Subsidiaries (which report expresses an unqualified opinion and includes an explanatory paragraph relating to significant tax adjustments proposed by the Internal Revenue Service for additional income taxes and penalties, plus interest, at Atlanta Motor Speedway, Inc.) also included the financial statement schedule of Speedway Motorsports, Inc. and Subsidiaries required by Regulation S-X. This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, such financial statement schedule, when considered in relation to the consolidated basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
DELOITTE & TOUCHE LLP
 Charlotte, North Carolina
October 4, 1996

Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT FOR 1939, AS AMENDED,
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
(Exact name of Trustee as specified in its charter)
230 SOUTH TRYON STREET, 9TH FLOOR
CHARLOTTE, NORTH CAROLINA 28288-1179 56-0900030
 (Address of principal executive office) (Zip Code) (I.R.S. Employer Identification No.)
Speedway MotorSports, Inc.
 (Exact name of obligor as specified in its charter)

Delaware                                                      51-0363307
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                              Identification No.)

U.S. Highway 29 North
P.O. Box 600
Concord, North Carolina                                       28026-0600
(Address of principal executive offices)                      (Zip Code)	

5 3/4% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2003
 (Title of the indenture securities)

1. General information.
(a) The following are the names and addresses of each examining or supervising authority to which the Trustee is subject:
The Comptroller of the Currency, Washington, D.C. Federal Reserve Bank of Richmond, Virginia. Federal Deposit Insurance Corporation, Washington, D.C. Securities and Exchange Commission, Division of Market Regulation, Washington, D.C.
(b) The Trustee is authorized to exercise corporate trust powers.
2. Affiliations with obligor.
The obligor is not an affiliate of the Trustee. (See Note 2 on Page 5)
3. Voting Securities of the Trustee.
The following information is furnished as to each class of voting securities of the Trustee:
As of August 31, 1996

          Column A                                         Column B

          Title of Class                                   Amount Outstanding

          Common Stock, par value $3.33-1/3 a share        270,469,128 shares
          (See Note 1 on Page 5)

4.       Trusteeships under other indentures.	

The Trustee is not a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the obligor are outstanding.
5. Interlocking directorates and similar relationships with the obligor or underwriters.
Neither the Trustee nor any of the directors or executive officers of the Trustee is a director, officer, partner, employee, appointee or representative of the obligor or of any underwriter for the obligor.
(See Note 2 on Page 5)
6. Voting securities of the Trustee owned by the obligor or its officials.
Voting securities of the Trustee owned by the obligor and its directors, partners, executive officers, taken as a group, do not exceed one percent of the outstanding voting securities of the Trustee.
(See Notes 1 and 2 on Page 5)
2

7. Voting securities of the Trustee owned by underwriters or their officials.
Voting securities of the Trustee owned by any underwriter and its directors, partners, and executive officers, taken as a group, do not exceed one percent of the outstanding voting securities of the Trustee.
(See Note 2 on Page 5)
8. Securities of the obligor owned or held by the Trustee.
The amount of securities of the obligor which the Trustee owns beneficially or holds as collateral security for obligation in default does not exceed one percent of the outstanding securities of the obligor.
(See Note 2 on Page 5)
9. Securities of underwriters owned or held by the Trustee.
The Trustee does not own beneficially or hold as collateral security for obligations in default any securities of an underwriter for the obligor.
(See Note 2 on Page 5)
10. Ownership or holdings by the Trustee of voting securities of certain affiliates or security holders of the obligor.
The Trustee does not own beneficially or hold as collateral security for obligations in default voting securities of a person, who, to the knowledge of the Trustee (1) owns 10% or more of the voting securities of the obligor or (2) is an affiliate, other than a subsidiary, of the obligor.
(See Note 2 on Page 5)
11. Ownership of holders by the Trustee of any securities of a person owning 50 percent or more of the voting securities of the obligor.
The Trustee does not own beneficially or hold as collateral security for obligations in default any securities of a person who, to the knowledge of Trustee, owns 50 percent or more of the voting securities of the obligor. (See Note 2 on Page 5)
12. Indebtedness of the obligor to the Trustee.
The obligor has $25MM line with Trustee.
13. Defaults by the obligor.
Not applicable.
3

14. Affiliations with the underwriters.
No underwriter is an affiliate of the Trustee.
15. Foreign trustee.
Not applicable.
16. List of Exhibits.
(1) Articles of Association of the Trustee as now in effect. Incorporated to Exhibit (1) filed with Form T-1 Statement included in Registration Statement No. 33-45946.
(2) Certificate of Authority of the Trustee to commence business. Incorporated by reference to Exhibit (2) filed with Form T-1 Statement included in Registration Statement No. 33-45946.
(3) Authorization of the Trustee to exercise corporate trust powers, if such authorization is not contained in the documents specified in exhibits (1) and (2) above.
(4) By-Laws of the Trustee. Incorporated by reference to Exhibit
(4) filed with Form T-1 Statement included in Registration Statement No. 33-45946.
(5) Inapplicable.
(6) Consent by the Trustee required by Section 321(b) of the Trust Indenture Act of 1939. Included at Page 6 of this Form T-1 Statement.
(7) Report of condition of Trustee. Incorporated to Exhibit (7)
filed with Form T-1 Statement included in Registration
Statement No. 33-45946.
(8) Inapplicable.
(9) Inapplicable.
4

NOTES
1. Since the Trustee is a member of First Union Corporation, a bank holding company, all of the voting securities of the Trustee are held by First Union Corporation. The securities of First Union Corporation are described in Item 3.
2. Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee of all facts on which to base responsive answers to Items 2, 5, 6, 7, 8, 9, 10 and 11, the answers to said Items are based on incomplete information. Items 2, 5, 6, 7, 8, 9, 10 and 11 may, however by considered as correct unless amended by an amendment to this Form T-1.
5

SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the Trustee, FIRST UNION NATIONAL BANK OF NORTH CAROLINA, a national association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Charlotte, and State of North Carolina on the 4th day of October, 1996.
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
 (Trustee)

BY: /s/ Terry W. Baker
   Terry W. Baker	

EXHIBIT T-1 (6)
CONSENT OF TRUSTEE
Under section 321(b) of the Trust Indenture Act of 1939 and in connection with the proposed issuance by Speedway Motorsports, Inc of its 5 3/4%
Convertible Subordinated Debentures due 2003, First Union National Bank of North Carolina, as the Trustee herein named, hereby consents that reports of examinations of said Trustee by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon requests therefor.
FIRST UNION NATIONAL BANK OF NORTH CAROLINA

                   BY: /s/ Daniel J. Ober
                      Daniel J. Ober, Vice President

Dated: October 4, 1996	

6

Exhibit 99.1
SPEEDWAY MOTORSPORTS, INC.
$70,000,000 5 3/4% Convertible Subordinated Debentures due 2003
PURCHASE AGREEMENT
WHEAT, FIRST SECURITIES, INC.
MONTGOMERY SECURITIES
J.C. BRADFORD & CO.
 c/o Wheat, First Securities, Inc.
Riverfront Plaza
901 East Byrd Street
Richmond, Virginia 23219 September 26, 1996
Ladies and Gentlemen:
Speedway Motorsports, Inc., a Delaware corporation (the "Company"), proposes, subject to the terms and conditions stated herein, to issue and sell to Wheat, First Securities, Inc., Montgomery Securities and J.C. Bradford & Co. (collectively, the "Initial Purchasers," which term shall also include any Initial Purchaser substituted as hereinafter provided in Section 9 hereof), the respective principal amounts set forth in Schedule I hereto of $70,000,000 in aggregate principal amount of the Company's 5 3/4% Convertible Subordinated Debentures due 2003 (the "Debentures") with such terms as are set forth in Schedule II. The Company also proposes to grant to the Initial Purchasers, acting severally and not jointly, an option to purchase all or any part of an additional $7,000,000 principal amount of Debentures to cover over- allotments, if any. Such $70,000,000 aggregate principal amount of Debentures are herein called the "Firm Securities," and the $7,000,000 aggregate principal amount of Debentures are herein called the "Optional Securities." The Firm Securities and the Optional Securities that the Initial Purchasers elect to purchase pursuant to Section 2 hereof are collectively called the "Securities."

The Debentures are to be issued pursuant to an indenture, dated as of September 1, 1996 (the "Indenture"), between the Company and First Union National Bank of North Carolina, as trustee (the "Trustee"). The Debentures are convertible into shares of common stock, par value $.01 per share, of the Company (the "Common Stock") in accordance with the terms of the Securities and the Indenture, at the conversion price specified in Schedule II hereto. The shares of Common Stock issuable upon conversion of the Debentures are herein referred to as the "Underlying Stock."
The Securities will be offered and sold to the Initial Purchasers pursuant to an exemption from the registration requirements under the Securities Act of 1933, as amended (the "Securities Act"), and the Initial Purchasers propose to resell the Securities to qualified institutional buyers (as defined in Rule 144A ("Rule 144A") under the Securities Act) ("Qualified Institutional Buyers") in compliance with Rule 144A, to institutional "accredited investors"
(as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act)
("Institutional Accredited Investors"), and to certain persons outside the United States in reliance on Regulation S under the Securities Act ("Regulation S") (collectively, "Subsequent Purchasers"). Upon original issuance of the Securities and until such time as the Company deems that it is no longer required under the Securities Act, the certificates representing the Debentures and the Underlying Stock issuable upon conversion of the Debentures (and all securities issued in exchange of any therefor or in substitution of any thereof) shall bear the legend set forth on Exhibit A.
The Company has prepared and delivered to each Initial Purchaser copies of a preliminary offering memorandum dated September 12, 1996 (the "Preliminary Offering Memorandum") and has prepared and will deliver to each Initial Purchaser, on the date hereof copies of a final offering memorandum dated September 26, 1996 (the "Final Offering Memorandum"), each to be used by such Initial Purchaser in connection with its solicitation of purchases of, or offering of, the Securities. "Offering Memorandum" means, with respect to any date or time referred to in this Agreement, the most recent offering memorandum (whether the Preliminary Offering Memorandum or the Final Offering Memorandum, or any amendment or supplement to either such document), including exhibits thereto and any documents incorporated therein by reference, which has been prepared and delivered by the Company to the Initial Purchasers in connection with their solicitation of purchases of, or offering of, the Securities.
Holders (including subsequent transferees) of the Debentures will have the registration rights set forth in the Registration Rights Agreement (the "Registration Rights Agreement"), dated concurrently herewith. Pursuant to the Registration Rights Agreement, the Company has agreed to file with the Securities and Exchange Commission (the "Commission") a shelf registration statement pursuant to Rule 415 under the Securities Act (the "Shelf Registration Statement") to cover public resales of the Debentures and the Underlying Stock by the Holders thereof.
All references in this Agreement to financial statements and other information which is "contained," "included" or "stated" in the Offering Memorandum (or other references of like import) shall be deemed to mean and include all such financial statements and other information which is incorporated by reference in the Offering Memorandum; and all references in this Agreement to amendments or supplements to the Offering Memorandum shall be deemed to mean and include the filing of any document under the Securities Exchange Act of 1934 (the "Exchange Act") which is
-2-

incorporated by reference in the Offering Memorandum. Capitalized terms used herein without definition have the respective meanings specified therefor in the Offering Memorandum. For purposes hereof, "Rules and Regulations" means the rules and regulations adopted by the Commission under the Securities Act, the Exchange Act or the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), as applicable.
1. Representations and Warranties.
The Company represents and warrants to, and agrees with, the Initial Purchasers that:
(a) The Offering Memorandum, as of its date, together with each amendment or supplement thereto, as of its date, contains all the information that, if requested by a prospective purchaser, would be required to be provided pursuant to Rule 144A(d)(4) under the Securities Act. The Offering Memorandum does not, and at each Delivery Date will not, and any amendment or supplement thereto, if any, as of its date, will not, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to information related to the terms of the Securities omitted from the Preliminary Offering Memorandum due to the preliminary nature thereof or information contained in or omitted from the Offering Memorandum (or any supplement or amendment thereto) in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Initial Purchaser specifically for use therein (the "Initial Purchasers' Information"). The parties acknowledge and agree that the Initial Purchasers' Information consists solely of the last paragraph at the bottom of the front cover page covering the terms of the offering by the Initial Purchasers, the legend concerning over-allotment on page 3 and the third, fourth and sixth paragraphs under the caption "Plan of Distribution" in the Offering Memorandum. The Company is subject to Section 13 or 15(d) of the Exchange Act.
(b) The Offering Memorandum as delivered from time to time shall incorporate by reference the most recent Annual Report of the Company on Form 10-K filed with Securities and Exchange Commission (the "Commission") and each Quarterly Report of the Company on Form 10-Q and each Current Report of the Company on Form 8-K filed with the Commission since the filing of the then most recent Annual Report of the Company on Form 10-K. The documents incorporated or deemed to be incorporated by reference in the Offering Memorandum at the time they were or hereafter are filed with the Commission comply, and will comply, in all material respects as to both form and substance with the requirements of the Exchange Act and the rules and regulations of the Commission thereunder, when read together with the other information in the Offering Memorandum, at the date of the Offering Memorandum and at each Delivery Date, and will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
-3-

(c) If the Offering Memorandum were a prospectus included in a registration statement on Form S-3 under the Securities Act, the Offering Memorandum and any amendments or supplements thereto would comply as to form in all material respects to the requirements of the Securities Act and the Rules and Regulations thereunder.
(d) Exhibit B hereto contains a complete and correct list of all active subsidiaries of the Company (the "Subsidiaries"). The Company and the Subsidiaries do not own more than 5% of the equity interests of any other business entities other than shares of publicly-held companies held solely for investment and other than 50% of the outstanding capital stock of North Wilkesboro Speedway, Inc., a North Carolina corporation ("NWS"), owned by the Company. For purposes hereof, "Material Subsidiaries" means Atlanta Motor Speedway, Inc., Bristol Motor Speedway, Inc., Charlotte Motor Speedway, Inc., Texas Motor Speedway, Inc. d/b/a/ Texas International Raceway, Inc., and 600 Racing Inc.
(e) Neither the Company nor any of the Material Subsidiaries nor, to the Company's knowledge, NWS have sustained since the date of the latest audited financial statements included in the Offering Memorandum any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Offering Memorandum. Since the respective dates as of which information is given in the Offering Memorandum, there has not been any change in the outstanding capital stock or long-term debt of the Company or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, shareholders' equity or results of operations of the Company, otherwise than as set forth or contemplated in the Offering Memorandum.
(f) The Company, each of the Material Subsidiaries and, to the Company's knowledge, NWS have good and marketable title in fee simple to all real property and good and marketable title to all material items of personal property owned by them, free and clear of all liens, encumbrances and defects except such as are described in the Offering Memorandum or such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and the Material Subsidiaries. Any real property and buildings held under lease by the Company or any of the Material Subsidiaries are held by it under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company or such Material Subsidiaries.
(g) The Company, each of the Subsidiaries and, to the Company's knowledge, NWS have been duly incorporated and are validly existing as corporations in good standing under the laws of their respective jurisdictions of incorporation, with power and authority (corporate and other) to own or lease their respective properties and conduct their respective businesses as described in the Offering Memorandum, and each has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, except where the failure to so qualify would not result in a material adverse effect on the consolidated financial position,
-4-

shareholders' equity or results of operations of the Company and the Subsidiaries and NWS taken as a whole.
(h) The Company has an authorized capitalization as set forth in the Offering Memorandum and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued, are fully paid and nonassessable and conform to the description of the capital stock of the Company contained in the Offering Memorandum; except as described in the Offering Memorandum, there are no preemptive or other similar rights to subscribe for or to purchase any securities of the Company; except as described in the Offering Memorandum, there are no warrants, options or other similar rights to purchase any securities of the Company.
(i) Except as described in the Offering Memorandum, all outstanding shares of capital stock of each of the Subsidiaries and all outstanding shares of capital stock of NWS owned by the Company are owned by the Company, either directly or through wholly-owned subsidiaries, free and clear of any perfected security interest and any other security interest, claim, lien or encumbrance.
(j) The Debentures will be issued pursuant to the terms and conditions of the Indenture, and the Indenture and the Registration Rights Agreement will each conform to the description thereof contained in the Offering Memorandum. At each Delivery Date, the Indenture will conform in all material respects to the requirements of the Trust Indenture Act and the Rules and Regulations applicable to an indenture which is qualified thereunder. The Debentures have been duly authorized and, when validly authenticated, issued, delivered and paid for in the manner contemplated by the Indenture, will be duly authorized, validly issued and outstanding obligations of the Company entitled to the benefits of the Indenture. The shares of Common Stock issuable upon conversion of the Debentures will, upon such issuance, be duly authorized, validly issued, fully paid and non-assessable, and the Company has duly authorized and reserved for issuance upon conversion of the Debentures the shares of Common Stock issuable upon such conversion. The Debentures and the Underlying Stock are not and will not be subject to any preemptive or other similar rights of any securityholder of the Company or any of the Subsidiaries; all corporate action required to be taken for the authorization, issue and sale of the Debentures and the Underlying Stock has been duly and validly taken; and the form of certificates evidencing the Debentures and the Underlying Stock complies with all formal requirements of Delaware law. Upon the issuance and delivery pursuant to the terms of this Agreement and the Indenture of the Debentures to be sold by the Company hereunder and thereunder, the Initial Purchasers will acquire good and marketable title thereto free and clear of any lien, charge, claim, encumbrance, pledge, security interest, defect or other restriction or equity of any kind whatsoever.
(k) The Company has full legal right, power and authority to authorize, issue, deliver and sell the Debentures and the Underlying Stock upon conversion of the Debentures, to enter into this Agreement, the Indenture and the Registration Rights Agreement and to consummate the transactions provided for in such agreements. This Agreement has been duly and properly authorized, executed and delivered by the Company and when the Company has duly executed and delivered the Registration Rights Agreement and the Indenture (and assuming the due execution and delivery thereof by the other parties thereto), each such agreement will constitute a legal, valid and binding agreement of the Company enforceable against the Company in accordance with its terms. None of
-5-

the Company's issue and sale of the Debentures and the Underlying Stock upon the conversion of the Debentures, the execution or delivery of this Agreement, the Indenture and the Registration Rights Agreement, its performance hereunder and thereunder, its consummation of the transactions contemplated herein and therein or the conduct by it and the Material Subsidiaries of their businesses as described in the Offering Memorandum or any amendments or supplements thereto will conflict with or result in a breach or violation of any terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of the Material Subsidiaries is a party or by which any of the property or assets of the Company or any of the Material Subsidiaries is bound or to which any of the property or assets of the Company or any of the Material Subsidiaries is subject, nor will such action result in any violation of the provisions of the Certificate of Incorporation or bylaws of the Company (each as amended to date the "Charter" and "Bylaws", respectively) or the articles of incorporation or bylaws of any of the Material Subsidiaries or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of the Material Subsidiaries or any of their properties.
(l) No consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body having jurisdiction over the Company or any of the Material Subsidiaries or any of the properties is required for the issue and sale of the Debentures, and the Underlying Stock upon conversion of the Debentures, or the consummation by the Company of the transactions contemplated by this Agreement, the Indenture, or the Registration Rights Agreement, except such consents, approvals, authorizations, registrations or qualifications as may be required under the Securities Act and under state securities or Blue Sky laws in connection with the purchase and distribution of the Securities by the Initial Purchasers.
(m) There are no legal or governmental proceedings pending to which the Company or any of its Subsidiaries or, to the Company's knowledge, NWS is a party or of which any property of the Company or any of its Subsidiaries or NWS is the subject, other than as set forth or contemplated in the Offering Memorandum, which (i) if determined adversely to the Company or any of its Subsidiaries or NWS, would individually or in the aggregate, have a material adverse effect on the financial position, shareholders' equity or results of operations of the Company, the Subsidiaries and NWS taken as a whole or (ii) questions the validity of the capital stock of the Company or any of the Subsidiaries or NWS, this Agreement, the Indenture, the Registration Rights Agreement or of any action taken or to be taken by the Company or any of the Subsidiaries pursuant to or in connection with this Agreement, the Indenture or the Registration Rights Agreement and, to the best of the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or by others.
(n) Deloitte & Touche LLP, who have certified certain financial statements of the Company and the Subsidiaries, are independent public accountants as required by the Securities Act and the Rules and Regulations thereunder.
(o) All employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) established, maintained or contributed to by the Company comply in all material respects with the requirements of ERISA and no employee
-6-

pension benefit plan (as defined in Section 3(2) of ERISA) has incurred or assumed an "accumulated funding deficiency" within the meaning of Section 302 of ERISA or has incurred or assumed any material liability (other than for the payment of premiums) to the Pension Benefit Guaranty Corporation.
(p) The combined financial statements of the Company and the Subsidiaries, together with related notes, as set forth in the Offering Memorandum present fairly the financial position and the results of operations of the Company and the Subsidiaries at the indicated dates and for the indicated periods; such financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied throughout the periods presented except as noted in the notes thereon, and all adjustments necessary for a fair presentation of results for such periods have been made; and the selected financial information included in the Offering Memorandum presents fairly the information shown therein and has been compiled on a basis consistent with the financial statements presented therein.
(q) The Company, each of the Material Subsidiaries and, to the Company's knowledge, NWS has filed all federal, state and foreign income tax returns which have been required to be filed (or has received an extension with respect thereto), and has paid, or made adequate reserves for, all taxes indicated by said returns and all assessments received by them to the extent that such taxes have become due and are not being contested in good faith.
(r) Neither the Company nor any of the Material Subsidiaries nor, to the Company's knowledge, NWS is in violation of any international, federal or state law, regulation, or treaty relating to the storage, handling, transportation, treatment or disposal of hazardous substances (as defined in 42 U.S.C. Section 9601) or hazardous materials (as defined by any international, federal or state law or regulation) or other waste products, which violation is reasonably likely to result in a material adverse effect on the financial condition or business operations or properties of the Company, the Subsidiaries and NWS taken as a whole. The Company, each of the Material Subsidiaries and, to the Company's knowledge, NWS have received all material permits, licenses or other approvals as may be required of them under applicable international, federal and state environmental laws and regulations to conduct their business as described in the Offering Memorandum. The Company, each of the Material Subsidiaries and, to the Company's knowledge, NWS are in compliance in all material respects with the terms and conditions of any such permit, license or approval. Neither the Company nor any of the Material Subsidiaries nor, to the Company's knowledge, NWS has received any notices or claims that it is a responsible party or a potentially responsible party in connection with any claim or notice asserted pursuant to 42 U.S.C. Section 9601 et seq. or any state superfund law. The disposal by the Company or any Subsidiary or, to the Company's knowledge, NWS of any of the Company's, each Material Subsidiary's and, to the Company's knowledge, NWS's hazardous substances, hazardous materials and other waste products has been lawful.
(s) No relationship, direct or indirect, exists between or among the Company or any of the Material Subsidiaries, on the one hand, and the directors, officers, shareholders, customers or suppliers of the Company or any of the Material Subsidiaries on the other hand, that would be required by the Securities Act or the Exchange Act, or by the Rules and Regulations thereunder to be described in the Offering Memorandum, if the Offering Memorandum were a prospectus included
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in a registration statement on Form S-3 under the Securities Act, or documents incorporated by reference therein that is not so described.
(t) Neither the Company nor any of the Material Subsidiaries has taken and none of such entities will take, directly or indirectly, any action that is designed to or that has constituted or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Debentures or otherwise.
(u) Each of the Company and the Material Subsidiaries owns or possesses, or can acquire on reasonable terms, adequate licenses, copyrights, trademarks, service marks and trade names (collectively, "intellectual property") necessary to carry on its business as presently operated by it, except where the failure to own or possess or have the ability to acquire any such intellectual property would not, individually or in the aggregate, have a material adverse effect on the Company and the Subsidiaries taken as a whole, and neither the Company nor any of the Material Subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any intellectual property or of any facts which would render any intellectual property invalid or inadequate to protect the interest of the Company or any of the Material Subsidiaries therein and which infringement or conflict could have a material adverse effect on the Company and the Subsidiaries taken as a whole.
(v) Except as described in the Offering Memorandum, the Company and the Material Subsidiaries maintain insurance of the types and in the amounts that are reasonable or required for the business operated by them, all of which insurance is in full force and effect.
(w) The Company and each of the Material Subsidiaries holds and are operating in compliance, in all material respects, with all franchises, grants, authorizations, licenses, permits, easements, consents, certificates and orders of any governmental or self-regulatory body (except with respect to environmental matters which are governed by Section 1(r) hereof) required for the conduct of their respective businesses as presently being conducted ("licenses") and all licenses are valid and in full force and effect, and the Company, and each of the Material Subsidiaries are in compliance, in all material respects, with all laws, regulations, orders and decrees applicable to them.
(x) The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (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 existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(y) There is no document or contract of a character required to be described in the Offering Memorandum, if the Offering Memorandum were a prospectus included in a registration statement on Form S-3 under the Securities Act, which is not described as required. All such
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documents and contracts to which the Company or a Material Subsidiary is a party constitute valid and binding agreements of the Company.
(z) The Securities satisfy the eligibility requirements of Rule 144A(d)(3) under the Securities Act and will not be, at each Delivery Date, of the same class as securities listed on a National Securities Exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated interdealer quotation system. The Debentures are eligible for trading in the Private Offerings, Resale and Trading through Automated Linkages ("PORTAL") Market (and, after the Shelf Registration Statement, will be eligible for trading on the New York Stock Exchange) and the Underlying Stock has been approved for listing on the New York Stock Exchange. The Common Stock is listed on the New York Stock Exchange.
(aa) The Company is not, and upon the issuance and sale of the Securities as herein contemplated and the application of the net proceeds therefrom as described in the Offering Memorandum will not be, an "investment company," a company controlled by an "investment company" or an "affiliated person" of, or "promoter" or "principal underwriter" for, an "investment company" as such terms are defined in the Investment Company Act of 1940, as amended.
(ab) None of the proceeds of the sale of the Debentures will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the Debentures to be considered a "purpose credit" within the meanings of Regulation G, T, U or X of the Board of Governors of the Federal Reserve Board.
(ac) Neither the Company nor any affiliate (as such term is defined in Rule 501(b) under the Securities Act) of the Company has, directly or through any agent, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any "security" (as defined in the Securities Act), which is or will be integrated with the sale of the Debentures in a manner that would require the registration of the Debentures under the Securities Act.
(ad) With respect to those Securities sold in reliance on Regulation S,
(i) none of the Company, its affiliates or any person acting on its or their behalf (other than the Initial Purchasers, as to whom the Company makes no representations) has engaged or will engage in any directed selling efforts as that term is defined in Regulation S, and (ii) each of the Company and its affiliates and any person acting on its or their behalf (other than the Initial Purchasers, as to whom the Company makes no representations) has complied and will comply with the offering restrictions requirements of Regulation S. There is no "substantial U.S. Market interest" as defined in Regulation S for the Securities or any security of the same class as the Securities.
(ae) None of the Company, any affiliate (as such term is defined in Rule 501(b) under the Securities Act) of the Company and any other person acting on its or their behalf (other than the Initial Purchasers, as to whom the Company makes no representations) has engaged, in connection with the offering of the Debentures, in any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act.
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(af) Assuming the accuracy of the Initial Purchasers' representations in Section 3 hereof and their compliance with the agreements set forth therein, it is not necessary, in connection with the issuance and sale of the Debentures to the Initial Purchasers and to each Subsequent Purchaser in the manner contemplated by this Agreement and the Offering Memorandum, to register the Debentures under the Securities Act, or to qualify the Indenture under the Trust Indenture Act.
2. Purchase and Sale.
On the basis of the representations, warranties and agreements contained herein, and subject to the terms and conditions herein set forth, the Company agrees to issue and sell to the Initial Purchasers, and each of the Initial Purchasers agrees, severally and not jointly, to purchase from the Company the Firm Securities in the respective principal amounts set forth on Schedule I at the purchase price equal to 97.5% of the principal amount thereof.
In addition, on the basis of the representations, warranties and agreements contained herein, and subject to the terms and conditions set forth herein, the Company hereby grants to the Initial Purchasers the right to purchase at their election any or all of the Optional Securities in the respective principal amounts set forth on Schedule I at a purchase price equal to 97.5% of the principal amount thereof plus accrued interest from the First Delivery Date to the Second Delivery Date, for the sole purpose of covering over-allotments in the sale of the Firm Securities. Any such election to purchase Optional Securities may be exercised no more than once by written notice from you to the Company, given within a period of 30 days after the date of this Agreement, setting forth the aggregate amount of Optional Securities to be purchased and the date on which such Optional Securities are to be delivered, as determined by you but in no event earlier than the First Delivery Date (as defined in Section 4 hereof) or, unless you otherwise agree in writing, earlier than two or later than 10 business days after the date of such notice.
3. Subsequent Offers and Resales of the Securities.
(a) The Initial Purchasers have advised the Company that they propose to offer the Securities for resale upon the terms and conditions set forth in this Agreement. Each Initial Purchaser hereby severally represents and warrants to, and agrees with, the Company that (i) such Initial Purchaser is a Qualified Institutional Buyer and (ii) will solicit offers for such Securities only from, and will offer such Securities only (x) to persons who it reasonably believes are Qualified Institutional Buyers in transactions meeting the requirements of Rule 144A, (y) to a limited number of persons reasonably believed by such Initial Purchaser to be Institutional Accredited Investors, or (z) outside the United States to certain persons in reliance on Regulation S under the Securities Act, as more fully set forth in the case of clauses (x) and (y) in
Section 3(b)(i) below.
(b) Each Initial Purchaser further severally represents and warrants to, and agrees with, the Company that:
(i) Such Initial Purchaser acknowledges that the Securities have not been registered under the Securities 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
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or pursuant to an exemption from the registration requirements of the Securities Act; that it has offered and sold the Securities, and will offer and sell the Securities, (x) as part of their distribution at any time and (y) otherwise until 40 days after the later of the commencement of the offering of the Securities and the First Delivery Date, only, in the case of either (x) or (y) above, in accordance with Rule 903 under the Securities Act or Rule 144A or to a limited number of Institutional Accredited Investors in accordance with subsection
(ii) and accordingly, (A) neither the Initial Purchasers nor their affiliates, nor any persons acting on their behalf, have engaged or will engage in any directed selling efforts within the meaning of Rule 901(b) of Regulation S with respect to the Securities, (B) the Initial Purchasers, their affiliates and all persons acting on their behalf have complied and will comply with the offering restrictions requirements of Regulation S at or prior to confirmation of sale of the Securities, other than a sale pursuant to Rule 144A or a sale to an Institutional Accredited Investor in accordance with subsection (ii), and (C) the Initial Purchasers will have sent to each distributor, dealer or other person receiving a selling concession, fee or other remuneration that purchases the Securities from the Initial Purchasers during the restricted period a confirmation or notice substantially to the following effect:
"The Securities covered hereby have not been registered under the U.S. Securities Act of 1933 (the "Securities 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 date of the commencement of the offering and the closing date, except in either case in accordance with Regulation S (or Rule 144A if available) under the Securities Act. Terms used above have the meanings given to them by Regulation S."
Terms used in this paragraph have the meanings given to them by Regulation S.
(ii) Such Initial Purchaser has offered, or may offer and sell, Securities to institutions, each of which is reasonably believed by such Initial Purchaser to be an "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act or an entity in which all of the equity owners are accredited investors within the meaning of Rule 501(a)(1), (2), (3), or (7) under the Securities Act; provided that each such Institutional Accredited Investor executes and delivers to the Initial Purchasers and the Company, prior to the consummation of any sale of Securities to such Institutional Accredited Investor, an Initial Purchaser's Letter in substantially the form attached as Exhibit A to the Offering Memorandum (an "Initial Purchaser's Letter").
(iii) Such Initial Purchaser will not offer or sell the Securities purchased from the Company hereunder in the United States by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act, including, but not limited to (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising; provided, however, that such limitation shall not preclude the Initial Purchasers
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from placing any tombstone announcement with respect to the resale by the Initial Purchasers of the Securities, provided that such announcement is not prohibited by Regulation S.
(iv) With respect to resales made in reliance on Rule 144A, other than through PORTAL, of any of the Securities purchased from the Company hereunder, the Initial Purchasers will deliver either with the confirmation of such resale or otherwise prior to settlement of such resale a notice to the effect that the resale of such Securities has been made in reliance upon the exemption from the registration requirements of the Securities Act provided by Rule 144A.
(v) The Initial Purchasers (A) have not offered or sold, and will not offer or sell in the United Kingdom, by means of any document, any Securities other than (1) to persons whose ordinary business it is to buy or sell shares or debentures, whether as a principal or agent, or (2) in circumstances which do not constitute an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995, (B) have complied and will comply with all applicable provisions of the Financial Services Act 1986 with respect to anything done by it in relation to the Securities in, from or otherwise involving the United Kingdom, and (C) have only issued or passed on and will only issue or pass on to any person in the United Kingdom any document received by it in connection with the issue of the Securities if the person is of a kind described in Article 11(3) of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995 or is a person to whom the document may otherwise lawfully be issued or passed on.
(c) Each Initial Purchaser severally warrants and agrees that it has not entered, and will not enter, into any contractual arrangement with respect to the distribution of the Securities other than the Agreement Among Initial Purchasers between the Initial Purchasers dated the date hereof, except with its affiliates or with the prior written consent of the Company.
4. Delivery and Payment.
Certificates in definitive form for the Securities to be purchased by each Initial Purchaser hereunder, and in such denominations and registered in such names as Wheat, First Securities, Inc. may request upon at least two business days' prior notice to the Company shall be delivered by or on behalf of the Company to Wheat, First Securities, Inc., for the account of each Initial Purchaser, against payment by such Initial Purchaser or on its behalf of the purchase price therefor. Payment of the purchase price for the Securities shall be made by wire transfer of immediately available funds all at the offices of Wheat, First Securities, Inc., Riverfront Plaza, 901 East Byrd Street, Richmond, Virginia. The time and date of such delivery and payment shall be, with respect to the Firm Securities, 10:00 a.m., Richmond, Virginia time, on October 1, 1996 or at such other time and date as you and the Company may agree upon in writing, and, with respect to the Optional Securities, 10:00 a.m., Richmond, Virginia time, on the date specified by you in the written notice given by you (consistent with Section 2 hereof) of the Initial Purchasers' election to purchase such Optional Securities, or at such other time and date as you and the Company may agree upon in writing. Such time and date for delivery of the Firm Securities is herein called the "First Delivery Date," such time and date for delivery of the Optional Securities, if not the First Delivery Date, is herein called the
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"Second Delivery Date," and each such time and date for delivery is herein called a "Delivery Date." At least twenty- four hours prior to each Delivery Date, the Company shall deliver to The Depository Trust Company ("DTC") a global certificate or certificates registered in the name of Cede & Co., the nominee of DTC, and representing all Securities the beneficial interests in which are to be sold to Qualified Institutional Buyers (collectively, the "Global Security"). The interests of such beneficial owners will be represented by book entries on the records of DTC and participating members thereof. Any Securities sold to Institutional Accredited Investors that are not Qualified Institutional Buyers or outside the United States to a non-U.S. person within the meaning of Regulation S under the Securities Act in a transaction meeting the requirements of Rule 904 under the Securities Act shall be issued in definitive fully registered form (collectively, the "Certificated Security"), and in such denominations ($1,000 or integral multiples thereof) and registered in such names as the Initial Purchasers may request upon at least forty-eight hours' prior written notice to the Company, and shall bear the legend relating thereto set forth on Exhibit A. The Global Security and the Certificated Securities shall be made available for examination by the Initial Purchasers in The City of New York at 10:00 A.M. on the business day immediately preceding the First Delivery Date or the Second Delivery Date, as the case may be.
5. Agreements of the Company.
The Company agrees with the Initial Purchasers as follows:
(a) During the period ending 90 days after the date hereof to advise the Initial Purchasers promptly and, if requested, confirm such advice in writing, of the happening of any event which makes any statement of a material fact made in the Offering Memorandum untrue or that requires the making of any additions to or changes in the Offering Memorandum (as amended or supplemented from time to time) in order to make the statements therein, in light of the circumstances under which they were made, not misleading; to advise the Initial Purchasers promptly of any order preventing or suspending the use of the Preliminary Offering Memorandum or the Offering Memorandum, of the suspension of the qualification of the Debentures for offering or sale in any jurisdiction and of the initiation or threatening of any proceeding for any such purpose; and to use its reasonable best efforts to prevent the issuance of any such order preventing or suspending the use of the Preliminary Offering Memorandum or of the Offering Memorandum or suspending any such qualification and, if any such suspension is issued, to use its reasonable best effort to obtain the lifting thereof at the earliest possible time.
(b) To furnish promptly to the Initial Purchasers and counsel for the Initial Purchasers, without charge, as many copies of the Preliminary Offering Memorandum and the Offering Memorandum (and of any amendments or supplements thereto) as may be reasonably requested; to furnish to the Initial Purchasers on the date hereof a copy of the independent accountants' report included in the Offering Memorandum signed by the accountants rendering such report; and the Company hereby consents to the use of the Preliminary Offering Memorandum and the Offering Memorandum, and any amendments and supplements thereto, in connection with resales of the Debentures to the Subsequent Purchasers.
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(c) If the delivery of the Offering Memorandum is required at any time in connection with the sale of the Debentures and if at such time any events shall have occurred as a result of which the Offering Memorandum as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when the Offering Memorandum is delivered, not misleading, or if for any other reason it shall be necessary at such time to amend or supplement the Offering Memorandum in order to comply with any law, to notify the Initial Purchasers immediately thereof, and to promptly prepare and furnish to the Initial Purchasers an amended Offering Memorandum or a supplement to the Offering Memorandum so that statements in the Offering Memorandum, as so amended or supplemented, will not, in light of the circumstances under which they were made when it is so delivered, be misleading, or so that the Offering Memorandum will comply with applicable law. The Initial Purchasers' delivery of any such amendment or supplement shall not constitute a waiver of any of the conditions set forth in
Section 7 hereof.
(d) During the three-year period following the First Delivery Date, for so long as and at any time that it is not subject to Section 13 or 15(d) of the Exchange Act, upon request of any holder of the Debentures, to furnish to such holder, and to any prospective purchaser or purchasers of the Debentures designated by such holder, information satisfying the requirements of Rule 144A(d)(4) under the Securities Act. This covenant is intended to be for the benefit of the holders from time to time of the Debentures, and prospective purchasers of the Debentures designated by such holders.
(e) In connection with the offering of the Debentures, to make its officers, employees, independent accountants and legal counsel reasonably available upon request by the Initial Purchasers.
(f) To use its reasonable best efforts to do and perform all things required to be done and performed under this Agreement by it that are within its control prior to or after the First Delivery Date and to use reasonable efforts to satisfy all conditions precedent on its part to the delivery of the Debentures.
(g) Except following the effectiveness of the Shelf Registration Statement, to not authorize or knowingly permit any person acting on its or their behalf to, solicit any offer to buy or offer to sell the Debentures by means of any form of general solicitation or general advertising (as such terms are used in Regulation D under the Securities Act) or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act.
(h) To not, and to use its reasonable best efforts to ensure that no affiliate (as such term is defined in Rule 501(b) under the Securities Act) of the Company will, offer, sell or solicit offers to buy or otherwise negotiate in respect of any "security" (as defined in the Securities Act) which could be integrated with the sale of the Debentures in a manner that would require the registration of the Debentures under the Securities Act.
(i) To not, so long as the Debentures are outstanding, be or become, or be or become owned by, an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under
Section 8 of the Investment Company Act, or be or become, or
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be or become owned by, a closed-end investment company required to be registered under Section 8 of the Investment Company Act, but not registered thereunder.
(j) To cooperate with the Initial Purchasers and counsel for the Initial Purchasers to qualify the Debentures for offering and sale under the securities laws of such jurisdictions as the Initial Purchasers may reasonably request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Debentures; provided, however, that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process or to subject it to taxation in any jurisdiction where it is not so qualified or so subject.
(k) To use its reasonable best efforts to comply with the Registration Rights Agreement and all agreements set forth in the representation letters of the Company to The Depository Trust Company relating to the approval of the Debentures for "book-entry" transfers.
(l) In connection with the offering, until the Initial Purchasers shall have notified the Company of the completion of the resale of the Debentures, to not and to use its reasonable best efforts to not permit any affiliated purchasers (as defined in Rule 10b-6 under the Exchange Act), either alone or with one or more other persons, to bid for or purchase, for any account in which it or any of its affiliated purchasers has a beneficial interest, any Debentures, or attempt to induce any person to purchase any Debentures; and to not and to use its reasonable best efforts to not permit any of its affiliated purchasers to make bids or purchases for the purpose of creating actual, or apparent, active trading in or of raising the price of the Debentures.
(m) Prior to the First Delivery Date, to not issue any press release or other communication directly or indirectly or hold any press conference with respect to the Company, its condition, financial or otherwise, or earnings, or business prospects, without the prior consent of the Initial Purchasers, unless in the judgment of the Company and its counsel, and after notification to the Initial Purchasers, such press release or communication is required by law.
(n) To not take any action prior to the execution and delivery of the Indenture which, if taken after such execution and delivery, would have violated any of the covenants contained in the Indenture.
(o) To not take any action prior to the First Delivery Date which in the Company's reasonable judgment would require the Offering Memorandum to be amended or supplemented pursuant to Section 5(c) hereof.
(p) To maintain a transfer agent and, if necessary under the laws of the jurisdiction of incorporation of the Company, a registrar (which may be the same entity as the transfer agent) for the Common Stock.
(q) For a period of five (5) years from the date hereof, to use its best efforts to maintain the PORTAL (or after the Shelf Registration Statement, New York Stock Exchange listing) listing
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of the Debentures, to the extent outstanding, and the New York Stock Exchange listing of the Common Stock.
(r) For a period of 120 days from the date of the Offering Memorandum, not to offer, sell, contract to sell or otherwise dispose of any securities of the Company (other than the Securities or pursuant to employee stock option plans or pursuant to options, warrants or rights outstanding on the date of this Agreement), without your prior written consent.
(s) During a period of five years from the date hereof, to furnish to you copies of all reports or other communications (financial or other) furnished to shareholders, and deliver to you (i) as soon as they are available, copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange on which any class of securities of the Company is listed; and (ii) such additional information concerning the business and financial condition of the Company as you may from time to time reasonably request.
(t) To apply the net proceeds from the sale of the Securities for the purposes set forth in the Offering Memorandum.
6. Payment of Expenses.
The Company covenants and agrees with the Initial Purchasers that the Company will pay or cause to be paid all of the following expenses and fees incident to the performance of the obligations of the Company under this Agreement, the Indenture and the Registration Rights Agreement including: (i) the fees, disbursements and expenses of the Company's counsel and accountants and all other expenses in connection with the preparation and printing of any Preliminary Offering Memorandum and the Offering Memorandum and amendments and supplements thereto and the mailing and delivering of copies thereof to the Initial Purchasers; (ii) the cost of reproducing this Agreement, the Indenture, the Registration Rights Agreement, the Blue Sky Survey and any other documents in connection with the offering, purchase, sale and delivery of the Securities;
(iii) all expenses in connection with the qualification of the Securities for offering and sale under state securities laws as provided in Section 5(j) hereof, including the fees and disbursements of counsel for the Initial Purchasers in connection with such qualification and in connection with the Blue Sky Survey; (iv) the cost of printing, engraving, issuance and delivery of the Debentures; (v) the costs or expenses of any transfer agent or registrar; (vi) fees and expenses of the Trustee, including the Trustee's counsel, in connection with the Indenture and the Debentures; (vii) the fees payable to the New York Stock Exchange incurred in connection with the listing of the Debentures and the Underlying Stock for trading in the PORTAL Market and the New York Stock Exchange, respectively; and (viii) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section. It is understood, however, that except as provided in Section 8 and Section 11 hereof, the Initial Purchasers will pay all their own costs and expenses, including the fees of their counsel and any advertising expenses connected with any offers they may make.
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7. Conditions to Obligations of the Initial Purchasers.
The obligations of the Initial Purchasers hereunder, as to the Securities to be delivered at each Delivery Date, shall be subject, in their discretion, to the condition that all representations and warranties and other statements of the Company herein are, at and as of such Delivery Date, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions:
(a) The Initial Purchasers shall not have advised the Company that the Offering Memorandum, or any supplement or amendment thereto, contains an untrue statement of fact which is material, or omits to state a fact which is material and is required to be stated therein or is necessary to make the statements, in light of the circumstances under which they were made, not misleading. No order suspending the sale of the Securities in any jurisdiction shall have been issued on the Delivery Date and no proceeding for that purpose shall have been initiated or threatened by the Commission.
(b) Hunton & Williams, counsel for the Initial Purchasers, shall have furnished to you such opinion or opinions, dated such Delivery Date, with respect to the incorporation of the Company, the validity of the Debentures being issued at such Delivery Date and the Underlying Stock, the Offering Memorandum, and other related matters as you may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters.
(c) Parker, Poe, Adams & Bernstein L.L.P., counsel for the Company, shall have furnished to you their written opinion, dated such Delivery Date, in form reasonably satisfactory to you, to the effect that:
(i) The Company and the Material Subsidiaries have been duly incorporated and are validly existing as corporations in good standing under the laws of their respective jurisdictions of incorporation, with corporate power and authority to own or lease their respective properties and conduct their respective businesses as described in the Offering Memorandum.
(ii) The Company and each of the Material Subsidiaries have been duly qualified as foreign corporations for the transaction of business and are in good standing under the laws of every other jurisdiction in which they own or lease properties, or conduct any business, so as to require such qualification, except where the failure to so qualify will not result in a material adverse effect on the Company or the Company and the Subsidiaries taken as a whole.
(iii) The Company has an authorized capitalization as set forth in the Offering Memorandum, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued, are fully paid and nonassessable and conform to the description of the capital stock contained in the Offering Memorandum. Except as described in the Offering Memorandum there are no preemptive or other similar rights to subscribe for
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or to purchase any securities of the Company. To such counsel's knowledge, except as described in the Offering Memorandum, there are no warrants or options to purchase any securities of the Company.
(iv) All of the issued shares of capital stock of the Material Subsidiaries have been duly and validly authorized and issued and are fully paid and nonassessable. Except as otherwise set forth in the Offering 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, to such counsel's knowledge, of any security interests, claims, liens or encumbrances.
(v) The Indenture and the Registration Rights Agreement each conform to the description thereof contained in the Offering Memorandum. At the Delivery Date, the Indenture conforms in all material respects to the requirements of the Trust Indenture Act and the Rules and Regulations applicable to an indenture which is qualified thereunder. The Debentures have been duly authorized and, when validly authenticated, issued, delivered and paid for in the manner contemplated by the Indenture, will be duly authorized, validly issued and outstanding obligations of the Company entitled to the benefits of the Indenture. The shares of Common Stock issuable upon conversion of the Debentures will, upon such issuance in accordance with the terms thereof, be duly authorized, validly issued, fully paid and non-assessable, and the Company has duly authorized and reserved for issuance upon conversion of the Debentures the shares of Common Stock issuable upon such conversion. The Debentures and the Underlying Stock are not and will not be subject to any preemptive or other similar rights of any securityholder of the Company or any of the Subsidiaries. All corporate action required to be taken for the authorization, issue and sale of the Debentures and the Underlying Stock has been duly and validly taken; and the form of certificates evidencing the Debentures and the Underlying Stock complies with all formal requirements of Delaware law.
(vi) To such counsel's knowledge, there is no legal or governmental proceeding pending or threatened to which the Company or any of the Subsidiaries is a party or of which any property of the Company or any of the Subsidiaries is the subject, other than as set forth or contemplated in the Offering Memorandum that would be required to be described in the Offering Memorandum, if the Offering Memorandum were a prospectus included in a registration statement on Form S-3 under the Securities Act, and is not so described.
(vii) The Company has full corporate right, power and authority to authorize, issue, deliver and sell the Debentures and the Underlying Stock upon conversion of the Debentures, to enter into this Agreement, the Indenture and the Registration Rights Agreement and to consummate the transactions provided for in such agreements. This Agreement has been duly and properly authorized, executed and delivered by the Company. When the Company has duly executed and delivered the Registration Rights Agreement and the Indenture (assuming the due authorization, execution and delivery thereof by the other parties thereto), each such agreement will constitute a legal, valid and binding agreement of the Company enforceable against the Company in accordance with its terms, subject to
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bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws affecting the rights and remedies of creditors generally and to the general principles of equity, regardless of whether the application of such principles is considered in a proceeding in equity or at law. In addition, rights to indemnification and contribution contained in the Registration Rights Agreement may be limited by federal and state securities laws or public policy relating thereto. None of the Company's: (i) issue and sale of the Debentures and the Underlying Stock upon the conversion of the Debentures; (ii) the execution or delivery of this Agreement, the Indenture and the Registration Rights Agreement; (iii) its performance hereunder and thereunder, or consummation of the transactions contemplated herein and therein will result in a breach or violation of any terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of the Subsidiaries is a party or by which the Company or any of the Subsidiaries is bound or to which any of the property or assets of the Company or any of the Subsidiaries is subject and which is, in any case, identified on the Certificate of the Chief Financial Officer of the Company attached thereto, nor will such action result in any violation of the provisions of the Charter or Bylaws of the Company or the articles of incorporation or the bylaws of any of the Subsidiaries or of any statute, order, rule or regulation known to such counsel of any court or governmental agency or body having jurisdiction over the Company or any of the Subsidiaries or any of their properties.
(viii) No consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body having jurisdiction over the Company or any of the Subsidiaries or any of their properties is required for the issue and sale of the Debentures and the Underlying Stock by the Company or the consummation by the Company of the other transactions contemplated by this Agreement, the Indenture, or the Registration Rights Agreement except such as have been obtained under the Securities Act and such as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Securities by the Initial Purchasers.
(ix) If the Offering Memorandum were a prospectus included in a registration statement on Form S-3 under the Securities Act, the Offering Memorandum and any further amendments and supplements thereto made by the Company prior to such Delivery Date (other than the financial statements and related schedules and data, as to which such counsel need express no opinion) comply as to form in all material respects with the requirements of the Securities Act and the Rules and Regulations thereunder; such counsel has no reason to believe that, as of such Delivery Date, the Offering Memorandum (other than the financial statements and related schedules and data as to which such counsel need express no opinion) (or, as of its date, any further amendment or supplement thereto made by the Company prior to such Delivery Date) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and such counsel does not know of any contracts or other documents of a character required to be described in the Offering Memorandum, if the Offering Memorandum were a prospectus included in a registration statement on Form S-3 under the Securities Act, which are not described as required.
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(x) The documents incorporated by reference in the Offering Memorandum (other than the financial statements and the related schedules therein, as to which such counsel need express no opinion), when they were filed with the Commission, complied on their face as to form in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission thereunder.
(xi) The portions of the Offering Memorandum (other than the financial statements and related schedules and data as to which such counsel need express no opinion) that purport to provide summaries of material statutes, legal and governmental proceedings and contracts are fair summaries of such statutes, proceedings and contracts.
Such opinion may be furnished subject to such stated assumptions, limitations and qualifications as shall be acceptable to Hunton & Williams, counsel for the Initial Purchasers.
(d) At 10:00 a.m., Richmond, Virginia, time, on the date of this Agreement and also at each Delivery Date, Deloitte & Touche LLP shall have furnished to you a letter or letters, dated the respective date of delivery thereof, in form and substance reasonably satisfactory to you, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information relating to the Company and its Subsidiaries contained in the Offering Memorandum.
(e) (i) Neither the Company nor any of the Material Subsidiaries, nor, to the Company's knowledge, NWS shall have sustained, since the date of the latest audited financial statements included in the Offering Memorandum, any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Offering Memorandum, and (ii) since the respective dates as of which information is given in the Offering Memorandum there shall not have been any change in the outstanding capital stock or long-term debt of the Company or any of the Subsidiaries or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, shareholders' equity or results of operations of the Company or any of the Subsidiaries otherwise than as set forth or contemplated in the Offering Memorandum, the effect of which, in any such case described in clause (i) or
(ii) is in your reasonable judgment so material and adverse as to make it impracticable or inadvisable to proceed with the offering or the delivery of the Securities being delivered at such Delivery Date on the terms and in the manner contemplated by the Offering Memorandum.
(f) On or after the date hereof there shall not have occurred any of the following: (i) a suspension or material limitation in trading of any of the securities of the Company on the New York Stock Exchange; (ii) any United States federal or state statute, regulation, rule or order of any court, legislative body, agency or other governmental authority shall have been enacted, published, decreed or promulgated or any proceeding or investigation shall have been commenced which, in your reasonable judgment, materially and adversely affects the business or operations of the Company; (iii) a suspension or material limitation in trading in securities generally on the New York Stock Exchange;
(iv) a general moratorium on commercial banking activities in New York or North Carolina declared by either federal or New York or North Carolina authorities;
(v) the outbreak or
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escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war, if any such event specified in this clause (v) would have such a materially adverse effect, in your reasonable judgment, as to make it impracticable or inadvisable to proceed with the offering or the delivery of the Securities being delivered at such Delivery Date on the terms and in the manner contemplated in the Offering Memorandum; or (vi) such a material adverse change in general economic, political, financial or international conditions affecting financial markets in the United States having a material adverse impact on trading prices of securities in general, as, in your reasonable judgment, makes it inadvisable to proceed with the payment for and delivery of the Securities.
(g) The Company shall have furnished to you copies of agreements between the Company and the directors and executive officers and certain stockholders of the Company, in form and content reasonably satisfactory to you, pursuant to which such persons agree not to offer, sell, or contract to sell, or otherwise dispose of, any shares of Common Stock beneficially owned by them or any securities convertible into, or exchangeable for, Common Stock, on or before the 120th day after the date of this Agreement without your prior written consent.
(h) The Company shall have furnished or caused to be furnished to you at such Delivery Date certificates of officers of the Company reasonably satisfactory to you as to the accuracy of the respective representations and warranties of the Company herein at and as of such Delivery Date, as to the performance by the Company of all of its obligations hereunder to be performed at or prior to such Delivery Date, as to the matters set forth in subsections
(a) and (e) of this Section and as to such other matters as you may reasonably request.
(i) On each Delivery Date there shall have been duly tendered to the Initial Purchasers the appropriate principal amount of Debentures.
(j) The Securities shall have been approved by the National Association of Securities Dealers, Inc. for trading in the PORTAL market.
(k) The Company and the Initial Purchasers shall have executed and delivered the Registration Rights Agreement on the date of this Agreement.
(l) The Indenture shall have been duly executed and delivered by the Company and the Trustee, and the Debentures shall have been duly executed and delivered by the Company and duly authenticated by the Trustee.
(m) If any event shall have occurred that requires the Company under
Section 5(c) hereof to prepare an amendment or supplement to the Offering Memorandum, such amendment or supplement shall have been prepared, the Initial Purchasers shall have been given a reasonable opportunity to comment thereon, and copies thereof delivered to the Initial Purchasers.
(n) There shall not have occurred any invalidation of Rule 144A under the Securities Act by any court or any withdrawal or proposed withdrawal of any rule or regulation under the Securities Act or the Exchange Act by the Commission or any amendment or proposed amendment thereof by
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the Commission which in the judgment of the Initial Purchasers would materially impair the ability of the Initial Purchasers to purchase, hold or effect resales of the Debentures as contemplated hereby.
8. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each Initial Purchaser against any losses, claims, damages or liabilities, joint or several, to which such Initial Purchaser may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum, the Offering Memorandum, any document incorporated by reference therein, or any amendment 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 will promptly reimburse each Initial Purchaser for any legal or other expenses reasonably incurred by such Initial Purchaser in connection with investigating, preparing to defend or defending, or appearing as a third-party witness in connection with, any such action or claim; provided, however, that the Company shall 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 an untrue statement or alleged untrue statement or omission or alleged omission made in the Preliminary Offering Memorandum, Offering Memorandum, any document incorporated by reference therein, or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by the Initial Purchasers through you expressly for use therein; provided, further, that the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any Initial Purchaser from whom the person asserting any such losses, claims, damages or liabilities purchased Securities, or any person controlling such Initial Purchaser, if a copy of the Offering Memorandum (as then amended or supplemented if the Company shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of such Initial Purchaser to such person, at or prior to the written confirmation of the sale of the Securities to such person, and if the Offering Memorandum (as so amended or supplemented) would have cured the defect giving rise to such losses, claims, damages or liabilities.
(b) Each Initial Purchaser will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum or the Offering Memorandum, or any amendment 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, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in Preliminary Offering Memorandum or the Offering Memorandum or any such amendment or supplement in reliance upon and in conformity with the Initial Purchaser's Information; and each such Initial Purchaser will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating, preparing to defend or defending, or appearing as a third-party witness in connection with, any such action or claim. The Company acknowledges that the Initial Purchasers' Information
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constitutes the only information furnished in writing by or on behalf of the Initial Purchasers for inclusion in the Preliminary Offering Memorandum or the Offering Memorandum, and you confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party; provided, however, that if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have been advised by counsel that representation of such indemnified party and the indemnifying party may be inappropriate under applicable standards of professional conduct due to actual or potential differing interests between them, the indemnified party or parties shall have the right to select separate counsel to defend such action on behalf of such indemnified party or parties. It is understood that the indemnifying party shall, in connection with any such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of only one separate firm of attorneys together with appropriate local counsel at any time for all indemnified parties unless such firm of attorneys shall have reasonably concluded that one or more indemnified parties has actual differing interests with other indemnified parties. Upon receipt of notice from the indemnifying party to such indemnified party of its election so to appoint counsel to defend such action and approval by the indemnified party of such counsel, the indemnifying party will not be liable for any settlement entered into without its written consent and will not be liable to such indemnified party under this Section 8 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the next preceding sentence, (ii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action or (iii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party; and except that, if clause (i) or (iii) is applicable, such liability shall be only in respect of the counsel referred to in such clause (i) or (iii). Notwithstanding the immediately preceding sentence and the first sentence of this paragraph, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement.
(d) If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims,
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damages or liabilities (or actions or proceedings in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Initial Purchasers on the other from the offering of the Securities. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party 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 the Initial Purchasers on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions or proceedings in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Initial Purchasers on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (after deducting the total discount and commissions, but before deducting expenses) received by the Company bear to the total discounts and commissions received by the Initial Purchasers, in each case as set forth in the table on the cover page of the Offering Memorandum. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Initial Purchasers on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Initial Purchasers agree that it would not be just and equitable if contributions pursuant to this subsection (d) were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take into account the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Initial Purchaser shall be required to contribute any amount in excess of the amount by which the total price at which the Securities purchased by it and distributed by it were offered to the Subsequent Purchasers exceeds the amount of damages which such Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Initial Purchasers' obligations under this subsection (e) are several in proportion to their respective obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Initial Purchasers within the meaning of the Securities Act; and the obligations of the Initial Purchaser under this Section 8 shall be in addition to any liability which the Initial Purchasers may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company and to each person, if any, who controls the Company within the meaning of the Securities Act.
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(f) The Initial Purchasers acknowledge that the Company and, for purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Section 7 hereof, counsel to the Company and counsel to the Initial Purchasers, will rely upon the accuracy and truth of the foregoing representations and the Initial Purchasers hereby consent to such reliance.
9. Substitution of Initial Purchasers.
(a) If any Initial Purchaser shall default in its obligation to purchase the Securities that it has agreed to purchase hereunder at a Delivery Date, you may in your discretion arrange for you or another party or other parties to purchase such Securities on the terms contained herein. If within 36 hours after such default by any Initial Purchaser you do not arrange for the purchase of such Securities, then the Company shall be entitled to a further period of 36 hours within which to procure another party or other parties satisfactory to you to purchase such Securities on such terms. In the event that, within the respective prescribed periods, you notify the Company that you have so arranged for the purchase of such Securities, or the Company notifies you that they have so arranged for the purchase of such Securities, you or the Company shall have the right to postpone such Delivery Date for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Preliminary Offering Memorandum or the Offering Memorandum, or in any other documents or arrangements. The term "Initial Purchaser" as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Initial Purchaser or Initial Purchasers by you and the Company as provided in subsection (a) above, the aggregate number of such Securities that remains unpurchased does not exceed one-eleventh of the aggregate number of all the Securities to be purchased at such Delivery Date, then the Company shall have the right to require each non-defaulting Initial Purchaser to purchase the number of Securities that such Initial Purchaser agreed to purchase hereunder at such Delivery Date and, in addition, to require each non-defaulting Initial Purchaser to purchase its pro rata share (based on the number of Securities that such Initial Purchaser agreed to purchase hereunder at such Delivery Date) of the share of such defaulting Initial Purchaser or Initial Purchasers for which such arrangements have not been made; but nothing herein shall relieve a defaulting Initial Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Initial Purchaser or Initial Purchasers by you and the Company as provided in subsection (a) above, the aggregate number of such Securities that remains unpurchased exceeds one-eleventh of the aggregate number of all the Securities to be purchased at such Delivery Date, or if the Company shall not exercise the right described in subsection (b) above to require non- defaulting Initial Purchaser to purchase Securities of a defaulting Initial Purchaser or Initial Purchasers, then this Agreement (or, with respect to the Second Delivery Date, the obligation of the Initial Purchasers to purchase and of the Company to sell the Optional Securities) shall thereupon terminate, without liability on the part of any non-defaulting Initial Purchasers or the Company, except for the expenses to be borne by the Company and the Initial Purchasers as provided in Section 6 hereof and the
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indemnity and contribution agreements in Section 8 hereof; but nothing herein shall relieve a defaulting Initial Purchaser from liability for its default.
10. Representations and Indemnities to Survive.
The respective indemnities, agreements, representations, warranties and other statements of the Company and the several Initial Purchasers, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation (or any statement as to the results thereof) made by or on behalf of the Initial Purchasers or any controlling person of any Initial Purchaser, or the Company, or any officer or director or controlling person of the Company, and shall survive delivery of and payment for the Securities.
11. Termination and Payment of Expenses.
If this Agreement shall be terminated pursuant to Section 9 hereof, the Company shall not be under any liability to any Initial Purchaser except as provided in Section 6 and Section 8 hereof; but if for any other reason any Securities are not delivered by or on behalf of the Company as provided herein, the Company will reimburse the Initial Purchasers through you for all out-of-pocket expenses, including fees and disbursements of counsel, reasonably incurred by the Initial Purchasers in making preparations for the purchase, sale and delivery of the Securities not so delivered, but the Company shall not then be under further liability to any Initial Purchaser except as provided in
Section 6 and Section 8 hereof.
12. Notices.
In all dealings hereunder, you shall act on behalf of each of the Initial Purchasers, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Initial Purchaser made or given by you.
All statements, requests, notices and agreements hereunder shall be in writing or by telegram if promptly confirmed in writing, and if to the Initial Purchasers shall be sufficient in all respects if delivered or sent by reliable courier, first-class mail, telex or facsimile transmission to Wheat, First Securities, Inc., at Riverfront Plaza, 901 East Byrd Street, Richmond, Virginia 23219, Attention: Corporate Finance Department; if to the Company shall be sufficient in all respects if delivered or sent by reliable courier, first-class mail, telex, or facsimile transmission to the address of the Company set forth in the Offering Memorandum, Attention: O. Bruton Smith, with a copy (which shall not constitute notice) to Parker, Poe, Adams & Bernstein L.L.P.; provided, however, that any notice to any Initial Purchaser pursuant to Section 8 hereof shall be delivered or sent by reliable courier, first-class mail, telex or facsimile transmission to such Initial Purchaser at its address set forth in Exhibit C, which address will be supplied to the Company by you upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.
13. Action by Initial Purchasers.
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Any action required or permitted to be taken by the Initial Purchasers under this Agreement may be taken by them jointly or by Wheat, First Securities, Inc. individually.
14. Successors.
This Agreement shall be binding upon, and inure solely to the benefit of, the Initial Purchasers and the Company and, to the extent provided in Sections 3 and 10 hereof, the officers and directors of the Company and each person who controls the Company or any Initial Purchasers, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Securities from any Initial Purchaser shall be deemed a successor or assign by reason merely of such purchase.
15. Time of the Essence.
Time shall be of the essence in this Agreement.
16. Business Day.
As used herein, the term "business day" shall mean any day when the Commission's office in Washington, D.C. is open for business.
17. Applicable Law.
This Agreement shall be construed in accordance with the laws of the State of New York without regard to the conflicts of law provisions thereof.
18. Captions.
The captions included in this Agreement are included solely for convenience of reference and shall not be deemed to be a part of this Agreement.
19. Counterparts.
This Agreement may be executed by any one or more of the parties in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument.
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If the foregoing is in accordance with your understanding, please sign and return to us four counterparts hereof, and upon the acceptance hereof by you, this letter and such acceptance hereof shall constitute a binding agreement among each of the Initial Purchasers and the Company.
Very truly yours,
SPEEDWAY MOTORSPORTS, INC.
By: _________________________________
Name:
Title:
Accepted as of the date hereof at Richmond, Virginia:
WHEAT, FIRST SECURITIES, INC.
MONTGOMERY SECURITIES
J.C. BRADFORD & CO.
The Initial Purchasers
WHEAT, FIRST SECURITIES, INC.
By: ________________________
Name:
Title:
MONTGOMERY SECURITIES
By: ________________________
Name:
Title:
J.C. BRADFORD & CO.
By: ________________________
Name:
Title:
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SCHEDULE I

                                                                                            Principal Amount of
                                                                                            Optional Securities
                                                              Principal Amount of             to be Purchased
    Name of                                                     Firm Securities                 if Maximum
Initial Purchaser                                               to be Purchased              Option Exercised

Wheat, First Securities, Inc..................................    31,500,000                      3,150,000
Montgomery Securities.........................................    21,000,000                      2,100,000
J.C. Bradford & Co............................................    17,500,000                      1,750,000
                                                                 -----------                     ----------

   Total......................................................   $70,000,000                     $7,000,000
                                                                  ==========                      =========	

SCHEDULE II
SPEEDWAY MOTORSPORTS, INC.
 (a Delaware corporation)

Convertible Subordinated Notes due 2003
1. The price of the Securities to be resold to Subsequent Purchasers shall be 100% of the principal amount thereof, plus accrued interest, if any, from the date of issuance.
2. The purchase price to be paid by the Initial Purchasers for the Securities shall be 97.5% of the principal amount thereof.
3. The interest rate on the Securities shall be 5 3/4% per annum.
4. The Securities shall be convertible into shares of voting common stock, par value $.01 per share, of the Company at an initial conversion price of $31.11 per share.
5. The redemption price for Securities redeemed at the option of the Company (expressed as percentages of principal amount), if redeemed during the 12-month period beginning on September 30 of the years indicated, shall be:

Year                                             Percentage

2000........................................       102.46%
2001........................................       101.64%
2002........................................       100.82%	

The amount payable upon redemption of Securities shall include the redemption price shown above, together with accrued and unpaid interest to the date fixed for redemption.

EXHIBIT A
LEGEND
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) UNLESS SUCH OFFER, SALE OR OTHER TRANSFER IS (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (C), (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION.

EXHIBIT B
SUBSIDIARIES
Atlanta Motor Speedway, Inc., a Georgia corporation
Bristol Motor Speedway, Inc., a Tennessee corporation
Charlotte Motor Speedway, Inc., a North Carolina corporation
Oil-Chem Research Corp., an Illinois corporation
Tecni Flyte Corporation, an Illinois corporation
Texas Motor Speedway, Inc., a Texas corporation
Texas International Raceway, Inc., a Texas corporation
600 Racing Inc., a North Carolina corporation
Speedway Funding Corp., a Delaware corporation
The Speedway Club, Inc., a North Carolina corporation

EXHIBIT C
Wheat, First Securities, Inc.
Riverfront Plaza-West Tower
901 East Byrd Street
Richmond, Virginia 23219
Attention: William L. Tyson
Phone: (804) 649-2311
Fax: (804) 782-3440
Montgomery Securities
600 Montgomery Street
San Francisco, California 94111
Attention: Ken Lang
Phone: (804) 627-2000
Fax: (804) 249-5545
J.C. Bradford & Co.
330 Commerce Plaza
Nashville, Tennessee 27201
Attention: David Jones
Phone: (615) 748-9000
Fax: (615) 271-1096

Exhibit 99.3
FIRST AMENDMENT TO
CREDIT AGREEMENT
This First Amendment to Credit Agreement (this "Amendment") is entered into as of September 24, 1996 among SPEEDWAY MOTORSPORTS, INC., a Delaware corporation ("Speedway Motorsports"), SPEEDWAY FUNDING CORP., a Delaware corporation ("Speedway Funding" - each a Borrower and collectively the "Borrowers"), certain of Speedway Motorsports' Subsidiaries and related parties (individually a "Guarantor" and collectively the "Guarantors"), NATIONSBANK, N.A., as Agent, and the Lenders party to the Credit Agreement (as defined below). All capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Credit Agreement.
RECITALS
1. The Borrowers, the Guarantors, the Agent and the Lenders entered into that certain Credit Agreement dated as of March 7, 1996 (as amended, modified or supplemented from time to time, the "Credit Agreement").
2. The Borrowers have requested, and the Lenders have agreed, to amend certain terms of the Credit Agreement as set forth below.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as amended as follows:
A. Amendments. The Credit Agreement is amended as follows:
1. The definition of "Applicable Percentage" in Section 1.1 is amended to read as follows:
"Applicable Percentage" means
for purposes of calculating the applicable interest rate for any day for any Loan, the applicable Standby Letter of Credit Fee for any day for purposes of Section 3.5 (b) or the applicable Trade Letter of Credit Fee for any day for purposes of Section 3.5 (b) or the appropriate applicable percentage set forth below corresponding to the Consolidated Debt Ratio in effect as of the most recent Calculation Date:

============ ----------------------- --------------- -------------- --------------- ================
   Pricing        Consolidated         Applicable      Applicable   Applicable        Applicable
   Level           Debt Ratio          Percentage      Percentage   Percentage       Percentage
                                           for            for       for Standby        for Trade
                                       Eurodollar         Base      Letter of          Letter of
                                          Loans        Rate Loans   Credit Fee        Credit Fee
============ ----------------------- --------------- -------------- --------------- ================
       I     Less than or equal to        1.00%            0%            1.00%           0.25%
             1.00 to 1.00
============ ----------------------- --------------- -------------- --------------- ================
      II     Less than or equal to        1.25%            0%            1.25%           0.25%
             2.00 to 1.00 but
             greater than 1.00 to
             1.00
============ ----------------------- --------------- -------------- --------------- ================
    III      Less than or equal to        1.50%           0.25%          1.50%           0.25%
             3.00 to 1.00 but
             greater than 2.00 to
             1.00
============ ======================= =============== ============== =============== ================
     IV      Greater than 3.00 to         1.75%           0.50%          1.75%           0.25%
             1.00
============ ======================= =============== ============== =============== ================	

Determination of the appropriate Applicable Percentages shall be made as of each Calculation Date. The Consolidated Debt Ratio in effect as of a Calculation Date shall establish the Applicable Percentages for the Loans, the Standby Letter of Credit Fee and the Trade Letter of Credit Fee that shall be effective as of the date designated by the Agent as the Applicable Percentage Change Date. The Agent shall determine the Applicable Percentages as of each Calculation Date and shall promptly notify the Borrowers and the Lenders of the Applicable Percentages so determined and of the Applicable Percentage Change Date. Such determinations by the Agent of the Applicable Percentages shall be conclusive absent demonstrable error. The initial Applicable Percentage[s] shall be based on Pricing Level I until the first Applicable Percentage Change Date occurring after the Closing Date."
2. The definition of "Consolidated Debt Ratio" in Section 1.1 is renamed "Consolidated Total Debt Ratio" and is moved to the correct alphabetical order.
3. Two new definitions are added to Section 1.1. in the correct alphabetical order:
"Senior Debt Ratio" means, as of any Calculation Date, the ratio of (i) Senior Funded Indebtedness of Speedway Motorsports and its Subsidiaries on a consolidated basis as of such Calculation Date, to (ii) Consolidated EBITDA for the four-quarter period ended as of such Calculation Date.
-2-

"Senior Funded Indebtedness" means Funded Indebtedness that is not subordinated."
4. Section 3.3 (b)(iv) is amended to read as follows:
"(iv) Application. All prepayments made pursuant to this Section 3.3(b) shall be subject to Section 3.11 and shall be applied first to Base Rate Loans and then to Eurodollars Loans in direct order of Interest Period maturities. Prepayments under this Section 3.3(b)(ii) and (iii) shall permanently reduce the Committed Amount; provided, however, that no such reduction in the Committed Amount shall be required in connection with the issuance by Speedway Motorsports of up to $77,000,000 convertible subordinated debentures due 2003."
5. Section 7.11(c) is amended to read as follows:
"(c) Consolidated Total Debt Ratio. The Consolidated Total Debt Ratio at each Calculation Date shall be no greater than (i) 4.0 to 1.0 through and including December 31, 1997 and (ii) 3.0 to 1.0 at each Calculation Date thereafter."
6. A new Section 7.11(e) is added to the Credit Agreement to read as follows:
"(e) Consolidated Senior Debt Ratio. The Consolidated Senior Debt Ratio at each Calculation Date shall be no greater than 3.0 to 1.0."
7. Section 8.13 is amended to read as follows:
"8.13 Capital Expenditures. Consolidated Capital Expenditures (exclusive of acquisitions permitted by Section 8.4(c) and exclusive of capital expenditures incurred in connection with Texas Motor Speedway through the period ending December 31, 1997) during any fiscal year shall not exceed (i) $80,000,000 in the aggregate for fiscal years 1996 and 1997; and (ii) $40,000,000 for fiscal year 1998 and for each fiscal year thereafter."
B. Representations and Warranties. The Borrowers hereby represent and warrant to the Agent and the Lenders that (a) no Default or Event of Default exists under the Credit Agreement or any of the other Credit Documents; (b) all of the provisions of the Credit Documents, except as amended hereby, are in full force and effect; (c) the liens created and evidenced by the Credit Documents are valid and existing liens of the recited priority; and (d) since the date of the last financial statements of the Borrowers delivered to the Lenders, no Material Adverse Effect has occurred in the business, financial or other conditions of the Borrowers.
-3-

C. Acknowledgement of Guarantors. The Guarantors acknowledge and consent to all of the terms and conditions of this Amendment and agree that this Amendment and all documents executed in connection herewith do not operate to reduce or discharge the Guarantors' obligations under the Credit Agreement.
D. Effect of Amendment. Except as expressly modified and amended in this Amendment, all of the terms, provisions and conditions of the Credit Agreement are and shall remain in full force and effect and are incorporated herein by reference. The Credit Agreement and any and all other documents heretofore, now or hereafter executed and delivered pursuant to the terms of the Credit Agreement are hereby amended so that any reference to the Credit Agreement shall mean a reference to the Credit Agreement as amended hereby.
E. Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument.
F. Entirety. This Amendment and the other Credit Documents embody the entire agreement between the parties and supersede all prior agreements and understandings, if any, relating to the subject matter hereof. These Credit Documents represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties. There are no oral agreements between the parties.
G. Governing Law. This Amendment shall be governed by, and construed and interpreted in accordance with, the laws of the State of North Carolina.
-4-

The parties below have executed this Amendment as of the day and year first above written.
BORROWERS:
SPEEDWAY MOTORSPORTS, INC., a Delaware corporation

By /s/ William R. Brooks
   ___________________________________

Title Vice President
      ________________________________	

SPEEDWAY FUNDING CORP., a Delaware corporation

By /s/ William R. Brooks
   ___________________________________

Title President
      ________________________________	

GUARANTORS:
ATLANTA MOTOR SPEEDWAY, INC., a Georgia corporation

By /s/ William R. Brooks
  ___________________________________

Title Vice President
     ________________________________	

CHARLOTTE MOTOR SPEEDWAY, INC., a North Carolina corporation

By /s/ William R. Brooks
  ___________________________________

Title Vice President
     ________________________________	

TEXAS MOTOR SPEEDWAY, INC., a Texas corporation

By /s/ William R. Brooks
  ___________________________________

Title Vice President
     ________________________________	

600 RACING, INC., a North Carolina corporation

By /s/ William R. Brooks
   ___________________________________

Title Vice President
     ________________________________	

BRISTOL MOTOR SPEEDWAY, INC., a Tennessee
 corporation

By /s/ William R. Brooks
  ___________________________________

Title Vice President
     ________________________________	

[SIGNATURES CONTINUE]

LENDERS:
BANK ONE, TEXAS, N.A.

By /s/
  ___________________________________

Title Vice President
     ________________________________	

FIRST AMERICAN NATIONAL BANK

By /s/ Russell S. Rogers
   ___________________________________

Title Vice President
     ________________________________	

FIRST UNION NATIONAL BANK
OF NORTH CAROLINA

By /s/
  ___________________________________

Title Sr. Vice President
     ________________________________	

FLEET BANK OF MASSACHUSETTS

By /s/
  ___________________________________

Title Vice President
     ________________________________	

NATIONSBANK, N.A.

By /s/ James E. Nash Jr.
  ___________________________________

Title SVP
     ________________________________	

SOUTHTRUST BANK

By /s/
  ___________________________________

Title Group Vice President
     ________________________________	

AGENT:
NATIONSBANK, N.A.

By /s/ James E. Nash Jr.
  ___________________________________

Title SVP
     ________________________________