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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 
FORM 10-Q
 
(Mark One)
x 	 	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
 
For the quarterly period ended June 30, 2003
 
OR
 
¨	 	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
 
For the transition period from                      to                     
 
Commission File Number 1-13582

 
SPEEDWAY MOTORSPORTS, INC.
(Exact name of registrant as specified in its charter)
 
Delaware	 	51-0363307	
(State or other jurisdiction of
incorporation or organization)	 	(I.R.S. Employer
Identification No.)	
		
5555 Concord Parkway South, Concord, North Carolina	 	28027	
(Address of principal executive offices)	 	(Zip Code)	
 
(704) 455-3239
(Registrant’s telephone number, including area code)

 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   x   No   ¨
 
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes   x   No   ¨
 
As of August 5, 2003, there were 42,487,475 shares of common stock outstanding.

Table of Contents
 INDEX TO FORM 10-Q
 
 	  	 	  	PAGE
	
PART I—FINANCIAL INFORMATION	  	 	
			
ITEM 1.	  	Consolidated Financial Statements—Unaudited	  	3	
			
ITEM 2.	  	Management’s Discussion and Analysis of Financial Condition and Results of Operations	  	20	
			
ITEM 3.	  	Quantitative and Qualitative Disclosures About Market Risk	  	32	
			
ITEM 4.	  	Controls and Procedures	  	33	
		
PART II—OTHER INFORMATION	  	 	
			
ITEM 1.	  	Legal Proceedings	  	34	
			
ITEM 4.	  	Submission of Matters to a Vote of Security Holders	  	35	
			
ITEM 6.	  	Exhibits and Reports on Form 8-K	  	36	
		
Signatures	  	38	
		
Executive Officer Certifications Pursuant To Section 302 Of The Sarbanes-Oxley Act Of 2002	  	Ex 31.1 and Ex 31.2	
		
Executive Officer Certifications Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002	  	Ex 32.1 and Ex 32.2	
 
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PART I—FINANCIAL INFORMATION
 Item 1. Consolidated Financial Statements.
 
SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
 
 	  	June 30,
2003
	 	 	December 31,
2002
	 	
ASSETS	  	 	 	 	 	 	 	 	
Current Assets:	  	 	 	 	 	 	 	 	
Cash and cash equivalents	  	$	142,314	 	 	$	112,638	 	
Accounts receivable	  	 	35,124	 	 	 	21,950	 	
Inventories	  	 	17,507	 	 	 	16,755	 	
Prepaid expenses	  	 	5,190	 	 	 	2,223	 	
 	  				 				
Total Current Assets	  	 	200,135	 	 	 	153,566	 	
 	  				 				
Property and Equipment, Net	  	 	875,047	 	 	 	861,107	 	
Goodwill and Other Intangible Assets, Net	  	 	51,908	 	 	 	51,990	 	
Notes and Other Receivables:	  	 	 	 	 	 	 	 	
Affiliates	  	 	11,104	 	 	 	16,454	 	
Other	  	 	2,808	 	 	 	202	 	
Other Assets	  	 	24,983	 	 	 	22,421	 	
 	  				 				
TOTAL	  	$	1,165,985	 	 	$	1,105,740	 	
 	  				 				
LIABILITIES AND STOCKHOLDERS’ EQUITY	  	 	 	 	 	 	 	 	
Current Liabilities:	  	 	 	 	 	 	 	 	
Current maturities of long-term debt	  	$	143	 	 	$	156	 	
Accounts payable	  	 	11,275	 	 	 	15,902	 	
Deferred race event income, net	  	 	61,001	 	 	 	85,565	 	
Accrued income taxes	  	 	27,771	 	 	 	1,540	 	
Accrued interest	  	 	2,174	 	 	 	7,979	 	
Accrued expenses and other liabilities	  	 	25,214	 	 	 	20,098	 	
 	  				 				
Total Current Liabilities	  	 	127,578	 	 	 	131,240	 	
Long-Term Debt (Note 4)	  	 	360,023	 	 	 	342,069	 	
Payable to Affiliate	  	 	2,594	 	 	 	2,594	 	
Deferred Income, Net	  	 	12,221	 	 	 	14,090	 	
Deferred Income Taxes	  	 	121,676	 	 	 	122,604	 	
Other Liabilities	  	 	2,049	 	 	 	1,971	 	
 	  				 				
Total Liabilities	  	 	626,141	 	 	 	614,568	 	
 	  				 				
Commitments and Contingencies (Note 7)	  	 	 	 	 	 	 	 	
Stockholders’ Equity:	  	 	 	 	 	 	 	 	
Preferred stock, $.10 par value, shares authorized—3,000,000, no shares issued	  	 	—  	 	 	 	—  	 	
Common stock, $.01 par value, shares authorized—200,000,000, issued and outstanding—42,480,000 in 2003 and 42,307,000 in 2002	  	 	425	 	 	 	423	 	
Additional paid-in capital	  	 	174,436	 	 	 	171,414	 	
Retained earnings	  	 	364,988	 	 	 	319,357	 	
Accumulated other comprehensive loss—unrealized loss on marketable equity securities	  	 	(5	)	 	 	(22	)	
 	  				 				
Total Stockholders’ Equity	  	 	539,844	 	 	 	491,172	 	
 	  				 				
TOTAL	  	$	1,165,985	 	 	$	1,105,740	 	

See notes to consolidated financial statements.
 
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SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
 
 	  	Three Months Ended
June 30,
	 	
 	  	2003
	 	 	2002
	 	
REVENUES:	  	 	 	 	 	 	 	 	
Admissions	  	$	54,487	 	 	$	55,889	 	
Event related revenue	  	 	49,579	 	 	 	48,148	 	
NASCAR broadcasting revenue	  	 	38,589	 	 	 	33,211	 	
Other operating revenue	  	 	8,252	 	 	 	10,693	 	
 	  				 				
Total Revenues	  	 	150,907	 	 	 	147,941	 	
 	  				 				
EXPENSES AND OTHER:	  	 	 	 	 	 	 	 	
Direct expense of events	  	 	26,399	 	 	 	27,699	 	
NASCAR purse and sanction fees	  	 	28,877	 	 	 	25,154	 	
Other direct operating expense	  	 	6,667	 	 	 	8,522	 	
General and administrative	  	 	16,501	 	 	 	15,922	 	
Depreciation and amortization	  	 	8,473	 	 	 	7,884	 	
Interest expense, net (Note 4)	  	 	6,472	 	 	 	4,996	 	
Loss on early debt redemption and refinancing (Note 4)	  	 	12,800	 	 	 	1,237	 	
FTC refund claims settlement (Note 7)	  	 	1,141	 	 	 	—  	 	
Other income, net	  	 	(58	)	 	 	(268	)	
 	  				 				
Total Expenses and Other	  	 	107,272	 	 	 	91,146	 	
 	  				 				
Income From Continuing Operations Before Income Taxes	  	 	43,635	 	 	 	56,795	 	
Income Tax Provision	  	 	17,149	 	 	 	22,333	 	
 	  				 				
NET INCOME	  	$	26,486	 	 	$	34,462	 	
 	  				 				
Basic Earnings Per Share (Note 5)	  	$	0.62	 	 	$	0.82	 	
 	  				 				
Weighted Average Shares Outstanding	  	 	42,379	 	 	 	42,117	 	
			
Diluted Earnings Per Share (Note 5)	  	$	0.62	 	 	$	0.80	 	
 	  				 				
Weighted Average Shares Outstanding	  	 	42,670	 	 	 	43,109	 	
 
See notes to consolidated financial statements.
 
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SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
 
 	  	Six Months Ended
June 30,
	 	
 	  	2003
	  	2002
	 	
REVENUES:	  	 	 	  	 	 	 	
Admissions	  	$	97,527	  	$	94,998	 	
Event related revenue	  	 	77,683	  	 	74,212	 	
NASCAR broadcasting revenue	  	 	63,628	  	 	54,786	 	
Other operating revenue	  	 	17,063	  	 	20,513	 	
 	  			  				
Total Revenues	  	 	255,901	  	 	244,509	 	
 	  			  				
EXPENSES AND OTHER:	  	 	 	  	 	 	 	
Direct expense of events	  	 	44,262	  	 	42,582	 	
NASCAR purse and sanction fees	  	 	47,760	  	 	41,975	 	
Other direct operating expense	  	 	14,736	  	 	16,746	 	
General and administrative	  	 	31,250	  	 	30,277	 	
Depreciation and amortization	  	 	16,926	  	 	15,807	 	
Interest expense, net (Note 4)	  	 	11,578	  	 	10,792	 	
Loss on early debt redemption and refinancing (Note 4)	  	 	12,800	  	 	1,237	 	
FTC refund claims settlement (Note 7)	  	 	1,141	  	 	—  	 	
Other expense (income), net	  	 	253	  	 	(277	)	
 	  			  				
Total Expenses and Other	  	 	180,706	  	 	159,139	 	
 	  			  				
Income From Continuing Operations Before Income Taxes and Cumulative Effect of Accounting Change	  	 	75,195	  	 	85,370	 	
Income Tax Provision	  	 	29,564	  	 	33,550	 	
 	  			  				
Income From Continuing Operations Before Cumulative Effect of Accounting Change	  	 	45,631	  	 	51,820	 	
Loss From Operations and Disposal of Discontinued Business (Note 1)	  	 	—  	  	 	(686	)	
 	  			  				
Income Before Cumulative Effect of Accounting Change	  	 	45,631	  	 	51,134	 	
Cumulative Effect of Accounting Change for Goodwill Impairment (Note 2)	  	 	—  	  	 	(4,273	)	
 	  			  				
NET INCOME	  	$	45,631	  	$	46,861	 	
 	  			  				
BASIC EARNINGS PER SHARE (Note 5):	  	 	 	  	 	 	 	
Continuing Operations Before Accounting Change	  	$	1.08	  	$	1.23	 	
Discontinued Operations	  	 	—  	  	 	(0.01	)	
Accounting Change	  	 	—  	  	 	(0.10	)	
 	  			  				
Basic Earnings Per Share	  	$	1.08	  	$	1.12	 	
 	  			  				
Weighted Average Shares Outstanding	  	 	42,369	  	 	42,000	 	
			
DILUTED EARNINGS PER SHARE (Note 5):	  	 	 	  	 	 	 	
Continuing Operations Before Accounting Change	  	$	1.07	  	$	1.19	 	
Discontinued Operations	  	 	—  	  	 	(0.01	)	
Accounting Change	  	 	—  	  	 	(0.10	)	
 	  			  				
Diluted Earnings Per Share	  	$	1.07	  	$	1.08	 	
 	  			  				
Weighted Average Shares Outstanding	  	 	42,643	  	 	43,725	 	
 
See notes to consolidated financial statements.
 
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SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)
 
 	  	Common Stock
	  	Additional
Paid-In
Capital
	  	Retained
Earnings
	  	Accumulated
Other
Comprehensive
Loss
	 	 	Total
Stock-
holders’
Equity

	  	Shares
	  	Amount
	  		  		  			 		
BALANCE—JANUARY 1, 2003	  	42,307	  	$	423	  	$	171,414	  	$	319,357	  	$	(22	)	 	$	491,172	
Net income	  	—  	  	 	—  	  	 	—  	  	 	45,631	  	 	—  	 	 	 	45,631	
Net unrealized gain on marketable equity securities	  	—  	  	 	—  	  	 	—  	  	 	—  	  	 	17	 	 	 	17	
Issuance of stock under employee stock purchase plan	  	24	  	 	—  	  	 	559	  	 	—  	  	 	—  	 	 	 	559	
Exercise of stock options	  	149	  	 	2	  	 	1,523	  	 	—  	  	 	—  	 	 	 	1,525	
Tax benefit from exercise of stock options	  	—  	  	 	—  	  	 	940	  	 	—  	  	 	—  	 	 	 	940	
 	  		  			  			  			  				 			
BALANCE—JUNE 30, 2003	  	42,480	  	$	425	  	$	174,436	  	$	364,988	  	$	(5	)	 	$	539,844	

See notes to consolidated financial statements.
 
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SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
 
 	  	Six Months Ended
June 30,
	 	
 	  	2003
	 	 	2002
	 	
CASH FLOWS FROM OPERATING ACTIVITIES:	  	 	 	 	 	 	 	 	
Net income	  	$	45,631	 	 	$	46,861	 	
Adjustments to reconcile net income to net cash provided by operating activities:	  	 	 	 	 	 	 	 	
Loss from operations and disposal of discontinued business	  	 	—  	 	 	 	686	 	
Cumulative effect of accounting change	  	 	—  	 	 	 	4,273	 	
Loss on early debt redemption and refinancing	  	 	12,800	 	 	 	1,237	 	
Loss on disposal of equipment	  	 	180	 	 	 	266	 	
Depreciation and amortization	  	 	16,926	 	 	 	15,807	 	
Amortization of deferred income	  	 	(1,162	)	 	 	(1,345	)	
Changes in operating assets and liabilities:	  	 	 	 	 	 	 	 	
Accounts receivable	  	 	(11,974	)	 	 	(13,856	)	
Inventories	  	 	(1,152	)	 	 	(992	)	
Prepaid expenses	  	 	(2,567	)	 	 	(2,254	)	
Accounts payable	  	 	1,575	 	 	 	4,311	 	
Deferred race event income	  	 	(24,564	)	 	 	(13,384	)	
Accrued income taxes	  	 	26,231	 	 	 	26,827	 	
Accrued expenses and other liabilities	  	 	(689	)	 	 	2,288	 	
Deferred income	  	 	419	 	 	 	619	 	
Other assets and liabilities	  	 	(311	)	 	 	1,442	 	
 	  				 				
Net Cash Provided By Operating Activities	  	 	61,343	 	 	 	72,786	 	
 	  				 				
CASH FLOWS FROM FINANCING ACTIVITIES:	  	 	 	 	 	 	 	 	
Borrowings under long-term debt	  	 	360,000	 	 	 	232	 	
Principal payments on long-term debt	  	 	(340,112	)	 	 	(54,652	)	
Payments of debt redemption premium and debt issuance costs (Note 4)	  	 	(19,215	)	 	 	—  	 	
Exercise of common stock options	  	 	2,465	 	 	 	3,978	 	
Issuance of stock under employee stock purchase plan	  	 	559	 	 	 	181	 	
 	  				 				
Net Cash Provided (Used) By Financing Activities	  	 	3,697	 	 	 	(50,261	)	
 	  				 				
CASH FLOWS FROM INVESTING ACTIVITIES:	  	 	 	 	 	 	 	 	
Capital expenditures	  	 	(37,782	)	 	 	(37,393	)	
Proceeds from sales of property and equipment and property held for sale	  	 	685	 	 	 	10,003	 	
Proceeds from sales of marketable equity securities and distribution from equity method investee	  	 	189	 	 	 	300	 	
Increase in notes and other receivables:	  	 	 	 	 	 	 	 	
Affiliates	  	 	(344	)	 	 	(4,755	)	
Other	  	 	(3,806	)	 	 	—  	 	
Repayment of notes and other receivables from affiliates	  	 	5,694	 	 	 	1,132	 	
 	  				 				
Net Cash Used By Investing Activities	  	 	(35,364	)	 	 	(30,713	)	
 	  				 				
Net Increase (Decrease) In Cash and Cash Equivalents	  	 	29,676	 	 	 	(8,188	)	
Cash and Cash Equivalents At Beginning Of Period	  	 	112,638	 	 	 	93,980	 	
 	  				 				
Cash and Cash Equivalents At End Of Period	  	$	142,314	 	 	$	85,792	 	
 	  				 				
Supplemental Cash Flow Information:	  	 	 	 	 	 	 	 	
Cash paid for interest, net of amounts capitalized	  	$	18,314	 	 	$	12,512	 	
Cash paid for income taxes	  	 	3,275	 	 	 	7,342	 	
Supplemental Information Of Noncash Investing And Financing Activities:	  	 	 	 	 	 	 	 	
Increase (decrease) in accounts payable for capital expenditures	  	 	(6,202	)	 	 	9,371	 	
 
See notes to consolidated financial statements.
 
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The following Notes to Unaudited Consolidated Financial Statements, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Legal Proceedings contain “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements may include 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 relating to the Company’s future capital projects, hosting of races, broadcasting rights or sponsorships, and legal proceedings. Words such as “expects”, “anticipates”, “approximates”, “believes”, “estimates”, “hopes”, “intends”, “may”, and “plans”, and variations of such words and similar expressions are intended to identify such forward-looking statements. 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 other factors noted with such forward-looking statements, include those discussed in Exhibit 99.1 filed with the SEC as an exhibit to the Company’s fiscal 2002 Annual Report on Form 10-K.
 
Notes to Unaudited Consolidated Financial Statements
 
1. DESCRIPTION OF BUSINESS
 
The consolidated financial statements include the accounts of Speedway Motorsports, Inc. (SMI) and all of its wholly-owned subsidiaries, Atlanta Motor Speedway, Inc. (AMS), Bristol Motor Speedway, Inc. (BMS), Charlotte Motor Speedway LLC and subsidiaries a/k/a Lowe’s Motor Speedway (LMS), Nevada Speedway LLC d/b/a Las Vegas Motor Speedway (LVMS), Speedway Sonoma LLC a/k/a Infineon Raceway (IR), Texas Motor Speedway, Inc. (TMS), Speedway Systems LLC d/b/a SMI Properties and subsidiaries (SMIP), Motorsports By Mail LLC (MBM), Oil-Chem Research Corp. (Oil-Chem), SMI Trackside LLC (SMIT), Speedway Funding LLC, Speedway Properties LLC d/b/a Performance Racing Network (PRN) and Speedway Media LLC d/b/a Racing Country USA (RCU), (collectively, the Company).
 
Discontinued Operations and Disposal of Business —In March 2002, the Company committed to a formal plan to discontinue and dispose of the operations of SoldUSA, Inc., then a wholly-owned subsidiary, due to difficult market conditions for internet auction and e-commerce companies. Disposal occurred in the second quarter 2002. Certain SoldUSA net assets, which totaled approximately $1,514,000 as of March 31, 2002, were transferred to the previous owner in exchange primarily for elimination of a $1,069,000 note payable owed by the Company for acquiring SoldUSA. In the three months ended June 30, 2002, there were no SoldUSA revenues and losses from SoldUSA’s discontinued operations were insignificant. In the six months ended June 30, 2002, losses from SoldUSA’s discontinued operations were $99,000, after income taxes of $64,000, and total SoldUSA revenues were $249,000. Losses on disposal of $587,000, after income taxes of $381,000, were recognized in the first quarter 2002 and the six months ended June 30, 2002. See Note 2 on goodwill impairment recognition in the first quarter 2002 associated with SoldUSA. The Company accounted for the disposal of SoldUSA using Statement of Financial Accounting Standards (SFAS) No. 144 “Accounting for the Impairment or Disposal of Long-lived Assets”. There were no losses or revenues pertaining to SoldUSA in the three and six months ended June 30, 2003.
 
See Note 1 to the December 31, 2002 consolidated financial statements for further description of the Company’s business operations, properties and scheduled events.
 
2. SIGNIFICANT ACCOUNTING POLICIES
 
These unaudited consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the fiscal year ended December 31, 2002 included in its 2002 Annual Report on Form 10-K.
 
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 nature of the Company’s motorsports business.
 
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Revenue Recognition —The Company recognizes admissions, NASCAR broadcasting and event related revenues when an event is held. Advance revenues and certain related direct expenses pertaining to specific events are deferred until the event is held. Deferred expenses primarily include race purses and sanctioning fees remitted to NASCAR or other sanctioning bodies and sales and admission taxes and credit card processing fees on advance revenues. Deferred race event income relates to scheduled events to be held in upcoming periods. If circumstances prevent a race from being held during the racing season: (1) generally advance revenue is refundable and (2) all deferred direct event expenses would be immediately recognized except for race purses and sanction fees which would be refundable from NASCAR or other sanctioning bodies, and for sales and admission taxes which would be refundable from taxing authorities. Management believes this accounting policy results in appropriate matching of revenues and expenses associated with the Company’s racing events and helps ensure comparability and consistency between its financial statements.
 
Quarterly Reporting —The Company currently recognizes revenues and operating expenses for all events in the calendar quarter in which conducted except for major NASCAR and other sanctioned racing events which occur on the last full weekend of a calendar quarter. When major racing events occur on the last full weekend of a calendar quarter, the race event revenues and operating expenses are recognized in the current or immediately succeeding calendar quarter that corresponds to the calendar quarter of the prior year in which the same major racing event was conducted. A major NASCAR-sanctioned racing event, consisting principally of one NASCAR Winston Cup and one Busch Series race, occurred at TMS on the weekend of March 29-30, 2003 which was held last year on the weekend of April 6-7, 2002. As such, the revenues and operating expenses of the 2003 race event were recognized in the second quarter 2003 corresponding with those of the 2002 race event recognized in the second quarter 2002.
 
Beginning in 2004, the Company intends to recognize revenues and operating expenses for all events in the calendar quarter in which conducted—including major NASCAR and other sanctioned racing events—because of the frequency of changes in race schedules in recent years. This change will have no impact on the reporting of full year operating results.
 
Changes in race schedules at the Company’s speedways from time to time lessen the comparability of operating results between quarterly financial statements of successive years.
 
Naming Rights —The Company presently has two long-term ten-year naming rights agreements which renamed Sears Point Raceway as Infineon Raceway and Charlotte Motor Speedway as Lowe’s Motor Speedway for combined gross fees aggregating approximately $69,000,000 over the respective ten-year agreement terms. Annual contracted fee revenues, net of associated expenses, are recognized as associated events are held each year in accordance with the respective agreement terms.
 
Long-Term Management Contract and Asset Sale —Certain Company subsidiaries and Levy Premium Foodservice Limited Partnership and Compass Group USA, Inc. (collectively, the Levy Group) executed a long-term food and beverage management agreement and an asset purchase agreement which closed in February 2002. The Levy Group has exclusive rights to provide on-site food, beverage, and hospitality catering services for essentially all events and operations of the Company’s six speedways and other outside venues. These services were previously provided by the Company’s subsidiary SMIP. The agreements provide for, among other items, specified annual fixed and periodic gross revenue based commission payments to the Company over the contract period. The management contract period is initially ten years with a renewal option for an additional ten-year period. The Levy Group also purchased certain food and beverage machinery and equipment of SMIP for approximately $10,003,000 in cash, which approximated net book value as of December 31, 2001. The Company’s operating profits associated with food, beverage and hospitality catering activities provided by the Levy Group are reported as net event related commission revenue and net other operating commission revenue.
 
Accounting Change in 2002 For Goodwill and Other Intangible Assets —The Company adopted Statement of Financial Accounting Standards (SFAS) No. 142 “Goodwill and Other Intangible Assets” as of January 1, 2002. SFAS No. 142 specifies, among other things, that goodwill and other intangible assets with indefinite useful lives will no longer be amortized, but instead evaluated for possible impairment at least annually. Under SFAS No. 142, the Company ceased amortizing goodwill as of January 1, 2002, including goodwill from past business combinations, and now periodically assesses goodwill at the reporting unit level for possible impairment. Such assessment is performed annually as of April 1 or when events or circumstances indicate possible impairment may have occurred.
 
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In the first quarter 2002, the Company evaluated the effects of SFAS No. 142 for possible initial goodwill impairment under transitional rules. The fair value of goodwill and other intangibles for each reporting unit of the Company was assessed primarily using expected present value of future cash flows and corroborated by quoted market prices or comparable transactions where available or applicable. Such impairment assessment indicated that goodwill associated with Oil-Chem of $3,815,000 and SoldUSA of $755,000, both non-motorsports related reporting units of the Company, was impaired under the new accounting guidelines. In accordance with SFAS No. 142, the Company recorded these impairments as a change in accounting principle as of January 1, 2002. The non-cash cumulative effect of the accounting change reduced net income in the first quarter 2002 and the six months ended June 30, 2002 by $4,273,000, after income taxes of $297,000, and basic and diluted earnings per share by $0.10. Goodwill associated with Oil-Chem is not deductible for tax reporting purposes and represents a permanent difference for which current or deferred income tax liabilities are appropriately not recognized. As such, no income tax benefit was recognized upon impairment writeoff.
 
All remaining goodwill and other intangible assets, after the impairment loss recognition, are associated with the Company’s motorsports related operating segment and are not subject to amortization. As of June 30, 2003 and December 31, 2002, these intangible assets had carrying values aggregating approximately $51,900,000, including other intangible assets of approximately $2,900,000 associated with race event sanctioning arrangements and relationships. Management’s annual assessment of goodwill as of April 1, 2003 indicated there has been no impairment, and there have been no events or circumstances which might indicate possible impairment of goodwill and other intangible assets as of June 30, 2003.
 
Recently Issued Accounting Standards —In December 2002, SFAS No. 148 “Accounting for Stock-Based Compensation—Transition and Disclosure – an amendment of FASB No. 123” was issued to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The transition guidance and annual disclosure provisions of SFAS No. 148 are effective for financial statements issued for fiscal years ending after December 15, 2002. The interim disclosure provisions are effective for financial reports containing financial statements for interim periods beginning after December 15, 2002. As further discussed in “Stock-Based Compensation” below, the Company applied the disclosure provisions of SFAS No. 148 in these financial statements and accompanying notes.
 
In January 2003, Financial Accounting Standards Board (FASB) Interpretation No. 46 (FIN 46), “Consolidation of Variable Interest Entities” was issued which, among other things, provides guidance on identifying variable interest entities (VIE) and determining when assets, liabilities, noncontrolling interests, and operating results of a VIE should be included in a company’s consolidated financial statements, and also requires additional disclosures by primary beneficiaries and other significant variable interest holders. The provisions of FIN 46 became effective upon issuance, and did not impact the Company’s financial statements or disclosures.
 
In April 2003, SFAS No. 149 “Amendment of Statement 133 on Derivative Instruments and Hedging Activities” was issued which amends and clarifies the accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and hedging activities under SFAS No. 133. It requires, among other things, that contracts with comparable characteristics be accounted for similarly and clarifies under what circumstances a contract with an initial net investment meets the characteristic of a derivative and when a derivative contains a financing component that warrants special reporting in the statement of cash flows. SFAS No. 149 is effective generally for contracts entered into and modified after June 30, 2003. The Company had no derivative instruments at June 30, 2003, and will assess the impact, if any, adoption would have on its financial statements or disclosures upon entering into any derivative instruments.
 
In May 2003, SFAS No. 150 “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” was issued to improve the accounting for certain financial instruments that, under previous guidance, issuers could account for as equity, and requires classification of those instruments as liabilities in statements of financial position. It affects, among other things, the accounting for generally three types of freestanding financial instruments: mandatory redeemable shares, put options and forward purchase contracts, and obligations that can be settled with shares, the monetary value of which is fixed,
 
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tied solely or predominately to a variable such as a market index, or varies inversely with the value of a company’s shares. SFAS No. 150 does not apply to features embedded in financial instruments that are not derivatives in entirety. SFAS No. 150 is effective generally for all financial instruments entered into or modified after May 31, 2003, and otherwise is effective for the first interim period beginning after June 15, 2003. The Company had no freestanding financial instruments at June 30, 2003, and will assess the impact, if any, adoption would have on its financial statements or disclosures upon entering into any such instruments.
 
Stock-Based Compensation and Formula Stock Option Plan —The Company continues to account for stock-based employee compensation using Accounting Principles Board (APB) Opinion No. 25 “Accounting for Stock Issued to Employees” which recognizes compensation cost based on the intrinsic value of equity instruments awarded as permitted under SFAS No. 123 “Accounting for Stock-Based Compensation”. Effective January 2, 2003, the Company granted options to purchase 10,000 shares to each of its four outside directors at an exercise price per share of $26.06 at award date which equaled fair value at grant date. All stock options granted under the Company’s 1994 Stock Option Plan and the Formula Stock Option Plan for Directors have an exercise price equal to the market value of the underlying common stock at grant date. As such, no compensation cost has been reflected in net income for these plans. See Note 10 to the Company’s audited December 31, 2002 Consolidated Financial Statements for additional information on its stock option plans.
 
As discussed above in “Recently Issued Accounting Standards”, the Company has applied the disclosure provisions of SFAS No. 148 “Accounting for Stock-Based Compensation – Transition and Disclosure – an amendment of FASB No. 123”.
 
The following schedule illustrates the pro forma effect on net income and earnings per share had compensation cost for stock options been determined using the fair value recognition provisions of SFAS No. 123 (in thousands, except per share amounts):

 	  	Three Months
Ended June 30:
	  	Six Months
Ended June 30:
	 	
 	  	2003
	  	2002
	  	2003
	 	 	2002
	 	
Net income as reported	  	$	26,486	  	$	34,462	  	$	45,631	 	 	$	46,861	 	
Less: Stock-based compensation expense determined using fair value method, net of taxes	  	 	—  	  	 	—  	  	 	(143	)	 	 	(189	)	
 	  			  			  				 				
Pro forma net income	  	$	26,486	  	$	34,462	  	$	45,488	 	 	$	46,672	 	

Basic Earnings Per Share:	  	 	 	  	 	 	  	 	 	 	 	 	 	 	
As reported	  	$	0.62	  	$	0.82	  	$	1.08	 	 	$	1.12	 	
 	  			  			  				 				
Pro forma	  	$	0.62	  	$	0.82	  	$	1.07	 	 	$	1.11	 	

Diluted Earnings Per Share:	  	 	 	  	 	 	  	 	 	 	 	 	 	 	
As reported	  	$	0.62	  	$	0.80	  	$	1.07	 	 	$	1.08	 	
 	  			  			  				 				
Pro forma	  	$	0.62	  	$	0.80	  	$	1.07	 	 	$	1.08	 	

The fair value of each option grant for both stock option plans is estimated on grant date using the Black-Scholes option-pricing model using the following assumptions:
 
 	  	Three Months
Ended June 30:
	  	Six Months
Ended June 30:
	 	
 	  	2003
	  	2002
	  	2003
	 	 	2002
	 	
Options granted	  	—  	  	—  	  	 	40,000	 	 	 	50,000	 	
Weighted average grant-date fair values	  	—  	  	—  	  	$	26.06	 	 	$	25.65	 	
Expected volatility	  	—  	  	—  	  	 	33.3	%	 	 	33.3	%	
Risk-free interest rates	  	—  	  	—  	  	 	2.2	%	 	 	3.8	%	
Expected lives (in years)	  	—  	  	—  	  	 	3.0	 	 	 	3.0	 	
Dividend yield	  	—  	  	—  	  	 	1.2	%	 	 	1.2	%	
 
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Reclassifications —Certain prior year accounts were reclassified to conform with current year presentation. Property held for sale previously reported at December 31, 2002, consisting of land for development of $12,252,000 was reclassified to noncurrent other assets, and condominiums located at two company speedways of $3,961,000 were reclassified to property and equipment, in the accompanying June 30, 2003 and December 31, 2002 balance sheets. Such land for development represents property foreclosed on by management in December 2001 which previously collateralized past due notes receivable. Independent appraised fair value less estimated selling costs supported reflecting the property based on note carrying values at foreclosure. Management is in the process of developing and marketing the property, which is adjacent to a regional outlet mall in the Charlotte metropolitan area. The speedway condominiums represent two condominiums at AMS and ten substantially completed condominiums at TMS which are being marketed. These assets were reclassified under SFAS No. 144 “Accounting for the Impairment or Disposal of Long-lived Assets” as management is presently unable to determine if sale of these assets is probable within one year.
 
3. INVENTORIES —Inventories as of June 30, 2003 and December 31, 2002 consist of the following components (in thousands):
 
 	  	June 30,
2003
	  	December 31,
2002
	
Souvenirs and apparel	  	$	11,087	  	$	10,217	
Finished vehicles, parts and accessories	  	 	4,501	  	 	4,523	
Oil lubricant and other	  	 	1,919	  	 	2,015	
 	  			  			
Total	  	$	17,507	  	$	16,755	

4. LONG-TERM DEBT AND LOSS ON EARLY DEBT REDEMPTION AND REFINANCING
 
Replacement of Bank Credit Facility and Redemption of Senior Subordinated Notes —At March 31, 2003 and December 31, 2002, the Company had borrowings under a revolving bank credit facility (the Former Credit Facility) of $90,000,000 and outstanding 8½% senior subordinated notes in the aggregate principal amount of $250,000,000 (the Former Senior Subordinated Notes).
 
As further described below, in May 2003, the Company refinanced the Former Credit Facility with proceeds from issuance of new 6¾% senior subordinated notes and execution of a replacement credit facility, and in June 2003, redeemed and retired all outstanding Former Senior Subordinated Notes. The Company’s management, including the Board of Directors, believes such debt redemption and replacement transactions are in the Company’s long-term interest based on a current favorable interest rate environment and scheduled maturity of the Former Credit Facility in May 2004, and provides additional financial and operational flexibility. All borrowings outstanding under the Former Credit Facility and Former Senior Subordinated Notes were replaced and funded with the issuance of new long-term debt. Proceeds from the new debt arrangements were also used to fund the redemption premium and accrued interest of the Former Senior Subordinated Notes and loan and other transaction costs for the new senior subordinated notes and new credit facility. See “Loss on Early Debt Redemption and Refinancing in 2003” below for additional information on the related charge to earnings reflected in the three and six months ended June 30, 2003.
 
Former Credit Facility —The Company’s former long-term, senior revolving credit facility with a syndicate of banks led by Bank of America, N.A. as an agent and lender, had an overall borrowing limit of $250,000,000, with a sub-limit of $10,000,000 for standby letters of credit, was scheduled to mature in May 2004, and was secured by a pledge of the capital stock and other equity interests of all operative Company subsidiaries except Oil-Chem. Interest was based, at the Company’s option, upon LIBOR plus 0.75% to 1.25% or (ii) the greater of Bank of America’s prime rate or the Federal Funds rate plus 0.5%.
 
Former Senior Subordinated Notes —The Company’s 8½% Former Senior Subordinated Notes were scheduled to mature in August 2007, had semi-annual interest payments due February 15 and August 15, and were redeemable at varying prices at the Company’s option.
 
Bank Credit Facility Replacement —In May 2003, the Company obtained, from a syndicate of banks led by Bank of America, N.A. as an agent and lender, a long-term, senior revolving credit facility and term loan (the 2003 Credit Facility) to replace its Former Credit Facility (see “Former Credit Facility” above). The 2003 Credit Facility was used to repay outstanding
 
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borrowings under the Former Credit Facility, redeem a portion of the Former Senior Subordinated Notes, fund capital expenditures and for working capital needs. The 2003 Credit Facility consists of a revolving credit facility with an overall borrowing limit of $250,000,000, and separate sub-limits of $10,000,000 for standby letters of credit and for 15-day swing line loans, a $50,000,000 five-year term loan, an unused commitment fee of 0.375%, matures in May 2008, and is secured by pledged capital stock and other equity interests of all operative Company subsidiaries except Oil-Chem (Guarantors). The Company also agreed not to pledge its assets to any third party. At June 30, 2003, outstanding borrowings under the revolving credit facility amounted to $80,000,000 and under the term loan amounted to $50,000,000, and outstanding letters of credit amounted to $814,000. As of June 30, 2003, the Company could borrow up to an additional $170,000,000 under the 2003 Credit Facility. The Company was in compliance with all applicable covenants as of June 30, 2003.
 
Interest is based, at the Company’s option, upon (i) LIBOR plus 1.5% to 2.5% or (ii) the greater of Bank of America’s prime rate or the Federal Funds rate plus 0.5%. The margin applicable to LIBOR borrowings is adjustable periodically based upon certain ratios of funded debt to earnings before interest, taxes, depreciation and amortization (EBITDA). Also, among other items, the Company is required to meet certain financial covenants, including specified levels of net worth and ratios of (i) funded senior debt to EBITDA, (ii) funded debt to EBITDA and (iii) earnings before interest and taxes (EBIT) to interest expense and dividends. The 2003 Credit Facility also contains certain limitations on cash expenditures to acquire additional motor speedways without lender consent, and limits annual and aggregate consolidated capital expenditures over the loan term, and allows for payment of dividends and repurchase of SMI securities up to $17.5 million annually. The Company also agreed to certain other limitations or prohibitions concerning the incurrence of other indebtedness, transactions with affiliates, guarantees, asset sales, investments, dividends, distributions and redemptions.
 
New Senior Subordinated Notes —In May 2003, the Company completed a private placement of 6¾% senior subordinated notes (the 2003 Senior Subordinated Notes) in the aggregate principal amount of $230,000,000. The 2003 Senior Subordinated Notes mature in 2013, are redeemable at the Company’s option at varying prices after June 1, 2008, and are guaranteed by all operative Company subsidiaries except Oil-Chem. Interest payments are due semi-annually on June 1 and December 1, commencing December 1, 2003. The 2003 Senior Subordinated Notes are subordinated to all present and future senior secured indebtedness of the Company, including the 2003 Credit Facility (see “Bank Credit Facility Replacement” above). The Company plans to file a registration statement to register these notes within 90 days after issuance. The 2003 Senior Subordinated Notes were issued at par, and net proceeds, after commissions and fees, approximated $224,200,000. Such proceeds, along with expected borrowings under the 2003 Credit Facility, were used to fully redeem the Former Senior Subordinated Notes in June 2003. The Company was in compliance with all applicable covenants as of June 30, 2003.
 
The Indenture governing the 2003 Senior Subordinated Notes (the 2003 Senior Subordinated Notes Indenture) contains certain restrictive and required financial covenants. The Company agreed not to pledge its assets to any third party except under certain limited circumstances, and to certain other limitations or prohibitions concerning the incurrence of other indebtedness, issuance of capital stock, guarantees, asset sales, investments, dividends, distributions and redemptions. The 2003 Senior Subordinated Note Indenture and 2003 Credit Facility agreements contain cross-default provisions.
 
Loss on Early Debt Redemption and Refinancing in 2003 —In May 2003, as further described above, the Company refinanced the Former Credit Facility with proceeds from issuance of new 2003 Senior Subordinated Notes and execution of a replacement 2003 Credit Facility, and in June 2003, redeemed and retired all outstanding Former Senior Subordinated Notes at 104.25% of par value. The net redemption premium, associated unamortized net deferred loan costs, unamortized original issuance premium and gain recognition of a previously deferred cash flow hedge interest rate swap termination and settlement payment and transaction costs, all associated with the former debt arrangements, and aggregating approximately $12,800,000, before income taxes of $5,030,000, were reflected as a charge to earnings in the second quarter 2003. The charge reduced basic and diluted earnings per share for the three and six months ended June 30, 2003 by $0.18.
 
Loss on Early Debt Redemption in 2002 —In April 2002, the Company redeemed all then outstanding 5¾% convertible subordinated debentures aggregating $53.7 million at 101.64% of par value. At March 31, 2002, 1,726,000 shares of common stock would have been issuable upon conversion. Redemption reduced future interest expense and eliminated the associated dilution effect on earnings per share, and was funded entirely from available cash and cash investments on hand. The net redemption premium,
 
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associated unamortized net deferred loan costs, and transaction costs totaling approximately $1,237,000, before income taxes, were reflected as a charge to earnings in the second quarter 2002. The charge reduced basic and diluted earnings per share for the three and six months ended June 30, 2002 by $0.02.
 
The losses on early debt redemption for both 2003 and 2002 were reflected as a charge to earnings applying the provisions of SFAS No. 145 “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB No. 13, and Technical Corrections”.
 
Deferred Financing Costs —Deferred financing costs are included in other noncurrent assets and amortized over the associated debt terms. Deferred financing costs of $8,590,000 and $12,811,000, are reported net of accumulated amortization of $141,000 and $6,948,000, at June 30, 2003 and December 31, 2002. As discussed above in “Loss on Early Debt Redemption and Refinancing in 2003”, previously deferred loan costs associated with the Former Credit Facility and Former Senior Subordinated Notes were written off as a charge to earnings in the second quarter 2002 upon replacement and redemption.
 
Subsidiary Guarantees —Amounts outstanding under the 2003 Credit Facility and 2003 Senior Subordinated Notes are guaranteed by all of the Company’s operative subsidiaries except for one minor wholly-owned subsidiary, Oil-Chem. These guarantees are full and unconditional and joint and several. The parent company has no independent assets or operations.
 
Interest Expense, Net —Interest expense, net for the three months ended June 30, 2003 and 2002 includes interest expense of $7,013,000 and $5,507,000, and interest income of $541,000 and $511,000. The Company capitalized interest costs of $422,000 and $1,006,000 during the three months ended June 30, 2003 and 2002. The weighted-average interest rate on borrowings under the bank revolving credit facilities during the three months ended June 30, 2003 and 2002 was 2.5% and 2.7%.
 
Interest expense, net for the six months ended June 30, 2003 and 2002 includes interest expense of $12,510,000 and $11,932,000, and interest income of $932,000 and $1,140,000. The Company capitalized interest costs of $1,079,000 and $1,654,000 during the six months ended June 30, 2003 and 2002. The weighted-average interest rate on borrowings under the bank revolving credit facilities during the six months ended June 30, 2003 and 2002 was 2.3% and 2.7%.
 
The 2003 Senior Subordinated Notes aggregating $230,000,000 in principal were issued on May 16, 2003, and the Former Senior Subordinated Notes aggregating $250,000,000 in principal were fully redeemed on June 15, 2003. The new notes were issued before redemption of the former notes because of a favorable interest rate environment and required notice of redemption to note holders by the Company. Interest expense of $1,486,000, net of interest income earned on proceeds received of $180,000, hereafter referred to as “interim interest expense on debt redeemed, net”, was incurred on the Former Senior Subordinated Notes from May 16, 2003 through June 15, 2003, along with interest expense on the 2003 Senior Subordinated Notes. Until the Former Senior Subordinated Notes were redeemed, the Company utilized net proceeds from the sale of the 2003 Senior Subordinated Notes to repay outstanding borrowings and accrued interest under the Former Credit Facility and invested in short-term, fixed income securities.
 
As such, interest expense, net for the three and six months ended June 30, 2003 includes interim interest expense on debt redeemed, net of $1,486,000 or $902,000 after taxes, reducing basic and diluted earnings per share by $.02.
 
5. PER SHARE DATA —Diluted earnings per share assumes conversion of the convertible debentures into common stock and elimination of associated interest expense, net of taxes, on such debt prior to redemption on April 19, 2002 (see Note 4). Anti-dilutive common stock equivalents for stock options of 169,000 and 175,000 in the three months ended June 30, 2003 and 2002, and 233,000 and 216,000 in the six months ended June 30, 2003 and 2002 were excluded in computing diluted earnings per share.
 
The following schedule reconciles basic and diluted earnings per share (dollars and shares in thousands):
 
 	  	Three Months
Ended June 30:
	  	Six Months
Ended June 30:
	
 	  	2003
	  	2002
	  	2003
	  	2002
	
Income from continuing operations before accounting change	  	$	26,486	  	$	34,462	  	$	45,631	  	$	51,820	
 
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Loss from operations and disposal of discontinued business, net of taxes (Note 1)	  	 	—  	  	 	—  	  	 	—  	  	 	(686	)	
 	  			  			  			  				
Income from before accounting change	  	 	26,486	  	 	34,462	  	 	45,631	  	 	51,134	 	
Cumulative effect of accounting change for goodwill impairment, net of taxes (Note 2)	  	 	—  	  	 	—  	  	 	—  	  	 	(4,273	)	
 	  			  			  			  				
Net income available to common stockholders	  	 	26,486	  	 	34,462	  	 	45,631	  	 	46,861	 	
Adjustment to interest expense for assumed conversions—5  3 / 4 % Convertible debentures (Note 4)	  	 	—  	  	 	86	  	 	—  	  	 	506	 	
 	  			  			  			  				
Net income available to common stockholders and assumed conversions	  	$	26,486	  	$	34,548	  	$	45,631	  	$	47,367	 	

Weighted average common shares outstanding	  	 	42,379	  	 	42,117	  	 	42,369	  	 	42,000	 	
Dilution effect of assumed conversions:	  	 	 	  	 	 	  	 	 	  	 	 	 	
Common stock equivalents—stock options	  	 	291	  	 	688	  	 	274	  	 	711	 	
5  3 / 4 % Convertible debentures (Note 4)	  	 	—  	  	 	304	  	 	—  	  	 	1,014	 	
 	  			  			  			  				
Weighted average common shares outstanding and assumed conversions	  	 	42,670	  	 	43,109	  	 	42,643	  	 	43,725	 	

Basic Earnings Per Share:	  	 	 	  	 	 	  	 	 	  	 	 	 	
Continuing operations before accounting change	  	$	0.62	  	$	0.82	  	$	1.08	  	$	1.23	 	
Discontinued operations (Note 1)	  	 	—  	  	 	—  	  	 	—  	  	 	(0.01	)	
Accounting change (Note 2)	  	 	—  	  	 	—  	  	 	—  	  	 	(0.10	)	
 	  			  			  			  				
Basic earnings per share	  	$	0.62	  	$	0.82	  	$	1.08	  	$	1.12	 	

Diluted Earnings Per Share:	  	 	 	  	 	 	  	 	 	  	 	 	 	
Continuing operations before accounting change	  	$	0.62	  	$	0.80	  	$	1.07	  	$	1.19	 	
Discontinued operations (Note 1)	  	 	—  	  	 	—  	  	 	—  	  	 	(0.01	)	
Accounting change (Note 2)	  	 	—  	  	 	—  	  	 	—  	  	 	(0.10	)	
 	  			  			  			  				
Diluted earnings per share	  	$	0.62	  	$	0.80	  	$	1.07	  	$	1.08	 	

6. RELATED PARTY TRANSACTIONS
 
Notes and other receivables from affiliates at June 30, 2003 and December 31, 2002 include $967,000 and $954,000 due from a partnership in which the Company’s Chairman and Chief Executive Officer is a partner, including accrued interest. The note is collateralized by certain partnership land. The Board of Directors, including SMI’s independent directors, have reviewed this transaction and determined it an appropriate use of available Company funds based on interest rates at the original transaction date, underlying note collateral and creditworthiness of the Company’s Chairman and his partnership.
 
Notes and other receivables from affiliates at June 30, 2003 and December 31, 2002 include $3,700,000 and $8,980,000 due from the Company’s Chairman and Chief Executive Officer. The amount due represents premiums paid by the Company before July 30, 2002 under a split-dollar life insurance trust arrangement on behalf of the Chairman, cash advances and expenses paid by the Company on behalf of the Chairman, and accrued interest. The Board of Directors, including SMI’s independent directors, have reviewed this compensatory arrangement and determined it an appropriate use of available Company funds based on interest rates at the time of transaction and creditworthiness of the Chairman. As of July 30, 2002, the Company indicated to Mr. Smith that it would no longer make payments under the split-dollar life insurance trust arrangements for his benefit.
 
The Company has made loans to, and paid certain expenses on behalf of, Sonic Financial Corporation (Sonic Financial), a Company affiliate through common ownership by the Company’s Chairman and Chief Executive Officer for various corporate purposes. Notes and other receivables from affiliates at June 30, 2003 and December 31, 2002 include $6,142,000 and $6,224,000 due from Sonic Financial. The Board of Directors, including SMI’s independent directors, have reviewed these transactions and determined them to be an appropriate use of available Company funds based on interest rates at the time of transaction and creditworthiness of Sonic Financial and the Company’s Chairman.
 
The amounts due from affiliates discussed in the preceding three paragraphs all bear interest at 1% over prime, are payable on
 
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demand, and because the Company does not anticipate or require repayment before June 30, 2004, have been classified as noncurrent assets in the accompanying consolidated balance sheet. Changes reflected in the preceding paragraphs from December 31, 2002 primarily reflect increases in amounts due for accrued interest on outstanding balances, and decreases in amounts due from repayments by affiliates.
 
Notes and other receivables from affiliates at June 30, 2003 and December 31, 2002 include $295,000 due from a corporation which is a Company affiliate through common ownership by the Company’s Chairman and Chief Executive Officer. From time to time, the Company makes cash advances for various corporate purposes on behalf of the affiliate. The amount due is payable on demand, is collateralized by certain personal property, and because the Company does not anticipate or require repayment before June 30, 2004, has been classified as noncurrent assets in the accompanying consolidated balance sheet. The Board of Directors, including SMI’s independent directors, have reviewed these transactions and determined them to be an appropriate use of available Company funds based on the underlying collateral and creditworthiness of the Company’s Chairman and affiliate.
 
Amounts payable to affiliate at June 30, 2003 and December 31, 2002 consists of $2,594,000 for acquisition and other expenses paid on behalf of AMS by Sonic Financial prior to 1996. Of this amount, approximately $1,800,000 bears interest at 3.83% per annum. The remainder of the amount bears interest at prime plus 1%. The entire amount is classified as long-term based on expected repayment dates. The Company believes the terms of these loans and advances are more favorable than those that could be obtained in an arm’s-length transaction with an unrelated third party.
 
600 Racing and SMIP each lease an office and warehouse facility from Chartown, a Company affiliate through common ownership by the Company’s Chairman and Chief Executive Officer, under annually renewable lease agreements. Rent expense for 600 Racing approximated $49,000 each period for the three months ended June 30, 2003 and 2002, and $98,000 each period for the six months ended June 30, 2003 and 2002. Rent expense for SMIP approximated $48,000 each period for the three months ended June 30, 2003 and 2002, and $97,000 each period for the six months ended June 30, 2003 and 2002. The leases contain terms more favorable to the Company than would be obtained from unaffiliated third parties. Additionally, a special committee of independent and disinterested SMI directors on the Company’s behalf evaluated these leases, assisted by independent counsel and real estate experts, and concluded the leases are in the best interests of the Company and its stockholders. The economic terms of the leases were based on several factors, including projected earnings capacity of 600 Racing and SMIP, the quality, age, condition and location of the facilities, and rent paid for comparable commercial properties.
 
LVMS purchased new vehicles for employee use from Nevada Dodge, a subsidiary of Sonic Automotive, Inc. (SAI), an entity in which the Company’s Chairman and Chief Executive Officer is a controlling stockholder, for approximately $314,000 in the three months ended June 30, 2002, and $245,000 and $734,000 in the six months ended June 30, 2003 and 2002. No vehicles were purchased in the three months ended June 30, 2003. The Company believes the purchase terms approximate market value and are no less favorable than could be obtained in an arm’s-length transaction from an unrelated third party.
 
Oil-Chem sold zMax oil lubricant product to certain SAI dealerships for resale to service customers of the dealerships in the ordinary course of business. Total purchases from Oil-Chem by SAI dealerships approximated $473,000 and $635,000 for the three months ended June 30, 2003 and 2002, and $1,041,000 and $833,000 for the six months ended June 30, 2003 and 2002. At June 30, 2003 and December 31, 2002, Oil-Chem had $205,000 and $180,000 due from SAI. These sales occurred on terms no less favorable than could be obtained in an arm’s-length transaction with an unrelated third party.
 
SAI and its dealerships frequently purchase various apparel items, which are screenprinted or embroidered with SAI and dealership logos, for its employees as part of internal marketing and sales promotions. SAI and its dealerships purchase such items from several companies similar to SMIP and SMIT. Total purchases from SMIP and SMIT by SAI and its dealerships approximated $96,000 and $270,000 for the three months ended June 30, 2003 and 2002, and $664,000 and $644,000 for the six months ended June 30, 2003 and 2002. At June 30, 2003 and December 31, 2002, SMIP and SMIT had $79,000 and $18,000 due from SAI. The Company believes these sales occurred on terms no less favorable than could be obtained in an arm’s-length transaction with an unrelated third party.
 
Interest income of $149,000 and $228,000 for the three months ended June 30, 2003 and 2002, and $345,000 and $431,000 for
 
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the six months ended June 30, 2003 and 2002, was earned on amounts due from related parties. Interest expense of $28,000 and $29,000 for the three months ended June 30, 2003 and 2002, and $56,000 and $57,000 for the six months ended June 30, 2003 and 2002, was accrued on amounts payable to an affiliate.
 
7. LEGAL PROCEEDINGS AND CONTINGENCIES
 
The Company is involved in various lawsuits in the normal course of business, some of which involve material claims. The more significant of these lawsuits are described below. Management does not believe the outcome of any of these lawsuits or incidents will have a material adverse effect on the Company’s financial position or future results of operations.
 
On May 1, 1999, during the running of an IRL Series racing event at LMS, an on-track accident occurred that caused race debris to enter the spectator seating area. On February 13, 2001, the parents of Haley A. McGee filed a personal injury action related to this accident against SMI, LMS and IRL in the Superior Court of Mecklenburg County, North Carolina. This lawsuit seeks unspecified damages and punitive damages related to the injuries of their daughter, as well as the medical expenses incurred and wages lost by her parents. On April 23, 2001, the Company filed its answer in this action. The parties agreed to settle this case for an undisclosed amount, and management expects the court to approve the settlement terms in August 2003. Management does not expect this settlement to have a material adverse effect on the Company’s financial position or future results of operations. On April 24, 2002, Rodney Pyatte filed a personal injury action related to this accident against SMI, LMS and IRL in the Superior Court of Mecklenburg County, North Carolina. This lawsuit sought unspecified damages and punitive damages related to the injuries of Rodney Pyatte, as well as the medical expenses incurred and wages lost. On June 24, 2002, the Company filed its answer in this action. The court dismissed this lawsuit with prejudice on July 14, 2003.
 
On February 8, 2000, a lawsuit by Robert L. “Larry” Carrier against SMI and BMS was filed in the Chancery Court for Sullivan County, Tennessee. This suit alleges that SMI and BMS interfered with the use of a leasehold property rented to the plaintiff by BMS. The complaint sought $15 million in compensatory and $60 million in punitive damages as well as injunctive relief. On October 11, 2002, the trial court entered a judgment against SMI and BMS for approximately $1.4 million in damages plus costs. On February 19, 2003, the court entered into an amended judgment awarding approximately $2.4 million to the plaintiff, and awarding BMS exclusive possession of the leased premises. A charge to earnings of approximately $2.4 million was reflected in the six months ended December 31, 2002 for the litigation. The plaintiff and the Company have appealed this judgment. The Company believes that the plaintiff’s claim is without merit and intends to pursue its rights to appeal vigorously.
 
On May 20, 2000, near the end of a NASCAR-sanctioned event hosted at LMS, a portion of a pedestrian bridge leading from its track facility to a parking area failed. In excess of 100 people were injured to varying degrees. Preliminary investigations indicate the failure resulted from excessive interior corrosion resulting from improperly manufactured bridge components. Tindall Corporation designed, manufactured and constructed the portion of the pedestrian bridge that failed. Tindall contends that a product that Tindall purchased from Anti-Hydro International, Inc. and that Tindall incorporated into the bridge caused the corrosion.
 
To date, 102 individuals claiming injuries from the bridge failure on May 20, 2000, have filed a total of 48 separate lawsuits, and of these, 41 plaintiffs’ cases have been resolved by the defendants. Generally, the plaintiffs filed these negligence lawsuits and a wrongful death lawsuit against SMI, LMS, Tindall Corporation and Anti-Hydro International, Inc., in the North Carolina Superior Courts of Cabarrus, Mecklenburg, Rowan, Union and Wake Counties, and in the United States District Courts for the Middle District and Western District of North Carolina, seeking unspecified compensatory and punitive damages. The following lawsuits were filed during the second quarter of 2003: James Mann and Shelly Mann on May 12, 2003; Joyce Million on May 12, 2003; Joel Kennedy on May 15, 2003; Mark Nash on May 15, 2003; David Prosser and Denise Prosser on May 15, 2003; Jerry Stephens on May 15, 2003; Roger Dunham on May 16, 2003; and John Taylor on May 19, 2003.
 
Fifteen plaintiffs in eight lawsuits previously filed in North Carolina state court settled in August 2002, four plaintiffs in two lawsuits settled in December 2002, two plaintiffs in a single lawsuit settled in January 2003, one plaintiff in a single lawsuit settled in February 2003, two plaintiffs in a single lawsuit settled in May 2003, eleven plaintiffs in seven lawsuits settled in June 2003 and three plaintiffs in two lawsuits settled in July 2003 with the claims being dismissed as to all defendants, including SMI
 
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and LMS. On January 20, 2003, the trial of the first of these cases (three plaintiffs) began. This trial resulted in a directed verdict and dismissal of SMI at the close of all of the evidence. On March 27, 2003, the jury returned a verdict finding that LMS was not negligent in connection with the collapse of the pedestrian bridge. However, LMS was determined by the Court to be responsible for the acts and omissions of Tindall and therefore LMS will be jointly and severally liable for future verdicts. Discovery is proceeding in the remaining cases. All of the state court lawsuits were consolidated before one judge and are pending in Mecklenburg County. The remaining federal lawsuit is progressing under the same discovery plan that the parties are following in the consolidated state court lawsuits. The Company is vigorously defending itself and denies the allegations of negligence as well as the related claims for punitive damages. Management believes that neither the dispositions that have occurred, nor dispositions that may occur in the future, in this matter will have a material adverse effect on the Company’s financial position or future results of operations.
 
On May 24, 2000, a Petition for Writ of Mandate, Declaratory Relief and Injunctive Relief was filed in the Superior Court of California, Sonoma County by Yellow Flag Alliance, Tony Lilly and Nancy Lilly against Sonoma County and Sonoma County Board of Supervisors. This action challenges the Sonoma County Board of Supervisors’ authorization of an IR renovation project. In particular, the petitioners claim that the County board failed to follow California statutes requiring environmental assessments of the IR project on issues such as noise, traffic, visual impairments, land use and zoning. Although neither SMI nor IR is named in the action, an adverse outcome could impact the Company’s ability to expand the IR facility to the extent previously planned. Management has been advised that settlement negotiations are ongoing which, if successful, would have no material impact on IR’s operations and would not require any payments by SMI or IR to the parties to the action.
 
On August 23, 2000, a shareholder derivative complaint was filed against SMI and its directors in the Delaware Chancery Court for New Castle County. The complaint, styled Crandon Capital Partners v. O. Bruton Smith, H.A. “Humpy” Wheeler, William R. Brooks, Edwin R. Clark, William P. Benton, Mark M. Gambill, Jack F. Kemp and Speedway Motorsports, Inc., alleges that in February 2000, SMI sold the Las Vegas Industrial Park – R&D Industrial Campus and approximately 300 acres of undeveloped adjacent land to O. Bruton Smith, SMI’s Chief Executive Officer, Chairman and majority stockholder, at less than these properties’ fair market value, which transaction allegedly constituted a breach of fiduciary duties and corporate waste. Plaintiffs are seeking unspecified damages, the establishment of a system of internal controls and procedures, rescission of the transaction with Mr. Smith or, alternatively, unspecified rescissory damages from Mr. Smith, and plaintiffs’ costs and attorney fees. The defendants filed an answer denying the allegations of the complaint. On July 16, 2003, the defendants filed a motion for summary judgment. Management believes that the complaint has no basis and is defending the action vigorously.
 
On January 31, 2001, the Federal Trade Commission (FTC) filed a complaint against SMI and Oil-Chem in the United States District Court, Middle District of North Carolina. The FTC sought to enjoin SMI and Oil-Chem from advertising zMax Power System for use in motor vehicles and to award equitable relief to address alleged injury to customers. On March 20, 2003, a settlement was reached resolving all FTC claims against SMI and Oil-Chem without any admission of liability by SMI and Oil-Chem. The FTC staff has confirmed the advertising claims SMI and Oil-Chem may make going forward and indicated that no compliance action would be merited as a result of such advertising claims. In order to avoid protracted litigation with the FTC, SMI and Oil-Chem, as a part of the settlement, are offering a pro rata purchase price refund to certain customers who purchased zMax Power System before January 31, 2001, not to exceed $1,000,000 in the aggregate. Based on customer refund requests received to date, management believes such requests will likely exceed the maximum settlement payment. As such, the Company expects to refund payments aggregating $1,000,000 once the customers 180-day deadline for affirmative acceptance of the Company’s offer has expired. The Company recorded a charge to earnings in the second quarter 2003 of $1,141,000 pre-tax, or $693,000 after income taxes, for the FTC refund claims settlement and associated costs of refund processing.
 
On April 18, 2001, Cracker Barrel Old Country Store, Inc. filed a complaint against AMS, SMI, NASCAR and Fox Entertainment Group, Inc., in the United States District Court for the Middle District of Tennessee. Cracker Barrel alleged that AMS breached its sponsorship contract for the March 11, 2001 Cracker Barrel 500 Winston Cup event at AMS, and alleged that SMI tortiously interfered with this contract. Cracker Barrel contended that as a result of the sponsorship contract, it was entitled to receive certain exposure from the national broadcast of the race. The complaint sought unspecified compensatory, treble and punitive damages, costs and attorney fees. On April 16, 2002, Cracker Barrel amended its complaint to include allegations of conspiracy. SMI and AMS denied the allegations. On November 22, 2002, the Court entered summary judgment in favor of all
 
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defendants and dismissed the case. The plaintiff then appealed to the United States Court of Appeals for the Sixth Circuit. On July 25, 2003, the Sixth Circuit dismissed the appeal. However, Cracker Barrel thereafter moved to dismiss its own appeal with prejudice, and AMS and SMI did not make any payment to Cracker Barrel.
 
On February 13, 2002, Francis Ferko, as a shareholder of SMI, filed a lawsuit in the United States Federal Court for the Eastern District of Texas against NASCAR and International Speedway Corporation (ISC) alleging, among other things, that NASCAR and ISC unlawfully refused to award SMI a NASCAR Winston Cup Series race date at TMS. The plaintiff demands judgment against defendants NASCAR and ISC for a Winston Cup race date at TMS, monetary damages and other relief. The Company was named as a necessary party to the lawsuit, since the lawsuit is being brought on behalf of the Company by a shareholder. The Company has not asserted any claim in this matter, which is currently in discovery.
 
LMS’s property includes areas used as solid waste landfills for many years. Landfilling of general categories of municipal solid waste on the LMS property ceased in 1992, but LMS currently allows certain property to be used for land clearing and inert debris landfilling (LCID). Landfilling for construction and demolition debris (C&D) has ceased on the LMS property. The Company believes that its operations, including the landfills on its property, comply with all applicable federal, state and local environmental laws and regulations. The Company is not aware of any situation related to landfill operations which would adversely affect its financial position or future results of operations.
 
The Company is a party to other litigation incidental to its business. Management does not believe that the resolution of any or all of such litigation is likely to have a material adverse effect on the Company’s financial condition or future results of operations.
 
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 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
 
The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements and associated Notes.
 
Overview
 
The Company classifies its revenues as admissions, event related revenue, NASCAR broadcasting revenue, and other operating revenue. “Admissions” includes ticket sales for all of the Company’s events. “Event related revenue” includes amounts received from sponsorship fees, naming rights fees, commissions from food and beverage sales, souvenir sales, promotional and hospitality revenues, luxury suite rentals, broadcasting rights other than NASCAR broadcasting revenue, track rentals, and other event and speedway related revenue. “NASCAR broadcasting revenue” includes rights fees obtained for domestic television broadcasts of NASCAR-sanctioned events held at the Company’s speedways. “Other operating revenue” includes revenues from The Speedway Club at LMS and The Texas Motor Speedway Club (together the “Speedway Clubs”), dining and entertainment facilities located at the respective speedways; from Legends Car operations of 600 Racing, Inc., a wholly-owned subsidiary of LMS; and industrial park rentals. The Company also derives additional revenue from Oil-Chem, which produces an environmentally-friendly micro-lubricant; and from SMIP and it wholly-owned subsidiaries, MBM, a wholesale and retail mail-order distributor of racing and other sports related souvenir merchandise and apparel, and SMIT, which provides event souvenir merchandising services at the Company’s and third-party speedway venues.
 
The Company classifies its expenses to include direct expense of events, NASCAR purse and sanction fees, and other direct operating expense, among other categories. “Direct expense of events” principally includes cost of souvenir sales, non-NASCAR race purses and sanctioning fees, property and event insurance, compensation of certain employees, advertising, sales and admission taxes, and outside event support services. “NASCAR purse and sanction fees” includes payments to NASCAR for associated events held at the Company’s speedways. “Other direct operating expense” includes the cost of Speedway Clubs’, Legends Car, industrial park rental, MBM, Oil-Chem, SMIP and SMIT revenues.
 
The Company sponsors and promotes outdoor motorsports events. Weather conditions surrounding these events affect sales of tickets, concessions and souvenirs, among other things. Although the Company sells a substantial number of tickets well in advance of its larger events, poor weather conditions can have a negative effect on the Company’s results of operations.
 
The Company does not believe that its financial performance has been materially affected by inflation. The Company has generally been able to mitigate the effects of inflation by increasing prices.
 
Seasonality and Quarterly Results
 
The Company plans to promote 17 major annual racing events in 2003 sanctioned by NASCAR, including ten Winston Cup and seven Busch Series racing events. The Company is also sponsoring two Indy Racing League (IRL) racing events, five NASCAR Craftsman Truck Series racing events, four major National Hot Rod Association (NHRA) racing events, and six World of Outlaws (WOO) racing events. As a result, the Company’s business has been, and is expected to remain, highly seasonal. In 2002, we derived a substantial portion of our total revenues from admissions, event related and NASCAR broadcasting revenue attributable to 17 major NASCAR-sanctioned racing events, two IRL racing events, three NASCAR Craftsman Truck Series racing events, four major NHRA racing events, and six WOO racing events.
 
The Company sometimes produces minimal operating income or losses during its third quarter when it hosts only one major NASCAR race weekend. Concentration of racing events in any particular quarter, and the growth in the Company’s operations with attendant increases in overhead expenses, may tend to increase operating losses or minimize operating income in respective future quarters. Racing schedules may change from time to time which can lessen the comparability of operating results between quarters of successive years and increase or decrease the seasonal nature effect of the Company’s motorsports business.
 
The results of operations for the three and six months ended June 30, 2003 and 2002 are not indicative of results that may be
 
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expected for the entire year because of the seasonality discussed above.
 
Set forth below is certain comparative summary information with respect to the Company’s scheduled major NASCAR-sanctioned racing events for 2003 and 2002:
 
 	  	Number of scheduled major
NASCAR-sanctioned events
	
 	  	2003
	  	2002
	
1st Quarter	  	5	  	5	
2nd Quarter	  	6	  	6	
3rd Quarter	  	2	  	2	
4th Quarter	  	4	  	4	
 	  		  		
Total	  	17	  	17	

RESULTS OF OPERATIONS
 
The Company currently recognizes revenues and operating expenses for all events in the calendar quarter in which conducted except for major NASCAR and other sanctioned racing events which occur on the last full weekend of a calendar quarter. When major racing events occur on the last full weekend of a calendar quarter, the race event revenues and operating expenses are recognized in the current or immediately succeeding calendar quarter that corresponds to the calendar quarter of the prior year in which the same major racing event was conducted.
 
A major NASCAR-sanctioned racing event, consisting principally of one NASCAR Winston Cup and one Busch Series race, held at TMS on the weekend of March 29-30, 2003 was held last year on the weekend of April 6-7, 2002. Accordingly, the revenues and operating expenses of the 2003 race event were recognized in the second quarter 2003 corresponding with those of the 2002 race event recognized in the second quarter 2002.
 
Beginning in 2004, the Company intends to recognize revenues and operating expenses for all events in the calendar quarter in which conducted – including major NASCAR and other sanctioned racing events – because of the frequency of changes in race schedules in recent years. This change will have no impact on the reporting of full year operating results.
 
Non-GAAP Financial Information . The following financial information is presented below using other than generally accepted accounting principles (“non-GAAP”), and is reconciled to comparable information presented using GAAP. Non-GAAP net income and diluted earnings per share below are derived by adjusting GAAP basis amounts for certain items presented on the consolidated income statement net of income taxes based on applicable effective rates. The non-GAAP financial information below is presented nowhere else in this Quarterly Report on Form 10-Q. As the adjustments relate to charges for refinancing essentially all of the Company’s long-term debt and the FTC settlement, management believes such information is useful and meaningful, and is used by management to assess the Company’s core operations. This non-GAAP financial information may not be comparable to similarly titled measures used by other entities and should not be considered as alternatives to operating income, net income or diluted earnings per share, which are determined in accordance with GAAP.
 
 	  	Three Months
Ended June 30:
	  	Six Months
Ended June 30:
	
 	  	2003
	  	2002
	  	2003
	  	2002
	
 	  	(in thousands, except per share data)	
Net income	  	$	26,486	  	$	34,462	  	$	45,631	  	$	46,861	
Cumulative effect of accounting change for goodwill impairment, net of taxes (1)	  	 	—  	  	 	—  	  	 	—  	  	 	4,273	
Loss from operations and disposal of discontinued business, net of taxes (2)	  	 	—  	  	 	—  	  	 	—  	  	 	686	
 	  			  			  			  			
Income from continuing operations	  	 	26,486	  	 	34,462	  	 	45,631	  	 	51,820	
Adjustments (net of taxes):	  	 	 	  	 	 	  	 	 	  	 	 	
Interim interest expense on debt redeemed (3)	  	 	902	  	 	—  	  	 	902	  	 	—  	
 
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Loss on early debt redemption and refinancing (4)	  	 	7,770	  	 	751	  	 	7,770	  	 	751	
FTC refund claims settlement (5)	  	 	693	  	 	—  	  	 	693	  	 	—  	
 	  			  			  			  			
Non-GAAP net income	  	$	35,851	  	$	35,213	  	$	54,996	  	$	52,571	
 	  			  			  			  			
Diluted earnings per share	  	$	0.62	  	$	0.80	  	$	1.07	  	$	1.08	
Accounting change (1)	  	 	—  	  	 	—  	  	 	—  	  	 	0.10	
Discontinued operations (2)	  	 	—  	  	 	—  	  	 	—  	  	 	0.01	
 	  			  			  			  			
Diluted earnings per share from continuing operations	  	 	0.62	  	 	0.80	  	 	1.07	  	 	1.19	
Non-GAAP adjustments (net of taxes):	  	 	 	  	 	 	  	 	 	  	 	 	
Interim interest expense on debt redeemed (3)	  	 	0.02	  	 	—  	  	 	0.02	  	 	—  	
Loss on early debt redemption and refinancing (4)	  	 	0.18	  	 	0.02	  	 	0.18	  	 	0.02	
FTC refund claims settlement (5)	  	 	0.02	  	 	—  	  	 	0.02	  	 	—  	
 	  			  			  			  			
Non-GAAP diluted earnings per share	  	$	0.84	  	$	0.82	  	$	1.29	  	$	1.21	

(1)	 	The Company adopted SFAS No. 142 “Goodwill and Other Intangible Assets” as of January 1, 2002, under which amortization of goodwill and other intangible assets ceased and initial impairment under transitional rules was assessed as of January 1, 2002. The cumulative effect of the accounting change for goodwill impairment associated with certain non-motorsports related reporting units was reflected in the first quarter 2002 and six months ended June 30, 2002. See Note 2 to the Consolidated Financial Statements for additional information.	
(2)	 	Loss from operations and disposal of discontinued business represents the accounting for the discontinued operations and disposal of SoldUSA in April 2002. See Note 1 to the Consolidated Financial Statements for additional information.	
(3)	 	Interim interest expense on debt redeemed, net represents interest expense incurred on the Former Senior Subordinated Notes between May 16, 2003, issuance date of the 2003 Senior Subordinated Notes, and June 15, 2003, redemption date of the Former Senior Subordinated Notes, net of interest income earned on associated invested proceeds during this period. See Note 4 to the Consolidated Financial Statements for additional information.	
(4)	 	Loss on early debt redemption and refinancing for the three and six months ended June 30, 2003 represents a charge associated with replacement of the Former Credit Facility and issuance of the 2003 Senior Subordinated Notes in May 2003, and redemption of the Former Senior Subordinated Notes in June 2003. The second quarter 2003 charge consisted of net redemption premium, associated unamortized net deferred loan costs, unamortized original issuance premium and gain recognition of a previously deferred cash flow hedge interest rate swap termination and settlement payment and transaction costs, all associated with the former debt arrangements. Loss on early debt redemption for the three and six months ended June 30, 2002 represents a charge associated with redemption of all outstanding Convertible Subordinated Debentures totaling approximately $53.7 million in April 2002. The second quarter 2002 charge consists of redemption premium, associated unamortized net deferred financing costs, and transaction costs. See Note 4 to the Consolidated Financial Statements for additional information.	
(5)	 	FTC refund claims settlement represents a charge to earnings in the second quarter 2003 for refund claims to be paid under a litigation settlement reached between the FTC, SMI and Oil-Chem and associated costs of refund processing. As part of the settlement, SMI and Oil-Chem are offering a pro rata purchase price refund to certain customers who purchased zMax Power System before January 31, 2001, not to exceed $1.0 million in the aggregate. Based on customer refund requests received to date, management believes such requests will likely exceed the maximum settlement payment. As such, the Company expects to refund payments aggregating $1.0 million or $693,000 after income taxes. See Note 7 to the Consolidated Financial Statements for additional information.	
 
Three Months Ended June 30, 2003 Compared To Three Months Ended June 30, 2002
 
Total Revenues for the three months ended June 30, 2003 increased by $3.0 million, or 2.0%, over such revenues for the same period in 2002 for the factors discussed below.
 
Admissions for the three months ended June 30, 2003 decreased by $1.4 million, or 2.5%, from such revenue for the same period in 2002. This decrease was due primarily to lower attendance at NASCAR sanctioned racing events held at LMS, other than “The Winston”, and IR during the current period. The overall decrease was partially offset by increased attendance at LMS’s NASCAR-
 
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sanctioned “The Winston” and to LMS hosting a new NASCAR-sanctioned Craftsman Truck Series race in the current period.
 
The current period was negatively impacted by poor weather surrounding certain LMS, IR, and TMS racing events, as well as continuing challenges of economic conditions, the Iraq war and code orange terrorism alerts.
 
Event Related Revenue for the three months ended June 30, 2003 increased by $1.4 million, or 3.0%, over such revenue for the same period in 2002. The increase is due to increased sponsorship, track rentals, motorsports-related merchandise sales and other event related revenues, and to event related revenues associated with LMS hosting a new NASCAR-sanctioned Craftsman Truck Series race in the current period. The overall increase was partially offset by decreased event related revenues associated with lower attendance at NASCAR-sanctioned racing events held at LMS and IR.
 
The current period reflects lower corporate suite, hospitality, and other event related revenues as compared to the same period in 2002. Challenging economic conditions, the Iraq war, and code orange terrorism alerts continued to negatively impact event related revenues.
 
NASCAR Broadcasting Revenue for the three months ended June 30, 2003 increased by $5.4 million, or 16.2%, over such revenue for the same period in 2002. This increase is due to increases in annual contractual broadcast rights fees for NASCAR-sanctioned racing events held in the current period.
 
Other Operating Revenue for the three months ended June 30, 2003 decreased by $2.4 million, or 22.8%, from such revenue for the same period in 2002. This decrease is due primarily to lower Oil-Chem and non-motorsports related souvenir and merchandising SMIP revenues in the current period. The overall decrease was partially offset by current period revenues of SMIT acquired in November 2002.
 
Direct Expense of Events for the three months ended June 30, 2003 decreased by $1.3 million, or 4.7%, from such expense for the same period in 2002. This decrease is due to lower operating costs associated with lower attendance at NASCAR-sanctioned racing events held at LMS and IR. The decrease also reflects initial costs associated with IR’s expanded speedway facilities and new naming rights agreement obtained in the same period in 2002. The overall decrease was partially offset by increased operating costs associated with higher motorsports-related merchandise sales and with LMS hosting a new NASCAR-sanctioned Craftsman Truck Series race in the current period.
 
NASCAR Purse and Sanction Fees for the three months ended June 30, 2003 increased by $3.7 million, or 14.8%, over such expense for the same period in 2002. This increase is due primarily to higher annual contractual race purses and sanctioning fees for NASCAR-sanctioned racing events in the current period.
 
Other Direct Operating Expense for the three months ended June 30, 2003 decreased by $1.9 million, or 21.8%, from such expense for the same period in 2002. This decrease is due primarily to decreased advertising and operating costs associated with lower Oil-Chem and non-event SMIP souvenir and merchandising sales. The overall decrease was partially offset by operating costs associated with current period revenues of SMIT acquired in November 2002.
 
General and Administrative Expense for the three months ended June 30, 2003 increased by $579,000, or 3.6%, over such expense for the same period in 2002. This increase is due primarily to increased operating costs associated with growth and expansion at the Company’s speedways and operations, and with SMIT acquired in November 2002. The overall increase was partially offset by decreased legal costs associated with the FTC litigation with Oil-Chem, which was settled in March 2003, and with other legal matters.
 
Depreciation and Amortization Expense for the three months ended June 30, 2003 increased by $589,000, or 7.5%, over such expense for the same period in 2002. This increase is due primarily to increased depreciation expense from additions to property and equipment at the Company’s speedways, particularly at BMS and IR.
 
Interest Expense, Net for the three months ended June 30, 2003 was $6.5 million compared to $5.0 million for the same period in
 
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2002. As discussed further below, interest expense, net for the three months ended June 30, 2003 includes $1.5 million of net interim interest expense on debt redeemed. Excluding such amount, interest expense, net between periods was similar due primarily to the lower interest rate on the 2003 Senior Subordinated Notes issued in May 2003 compared to the Former Senior Subordinated Notes and lower average outstanding borrowings under the bank revolving credit facility during the current period, which were offset by lower capitalized interest and lower outstanding notes receivable during the current period The lower capitalized interest reflects property and equipment related to IR’s expansion and modernization being placed into service in 2002.
 
Interim interest expense on debt redeemed, net represents interest expense incurred on the Former Senior Subordinated Notes between May 16, 2003, issuance date of the 2003 Senior Subordinated Notes, and June 15, 2003, redemption date of the Former Senior Subordinated Notes, net of interest income earned on invested proceeds during the interim period. The new notes were issued before redemption of the former notes because of a favorable interest rate environment and required notice of redemption to Former Senior Subordinated Note holders by the Company. See Note 4 to the Consolidated Financial Statements for additional information.
 
Loss on Early Debt Redemption and Refinancing of $12.8 million for the three months ended June 30, 2003 represents a charge associated with replacement of the Company’s bank credit facility and issuance of the 2003 Senior Subordinated Notes in May 2003, and redemption of the Former Senior Subordinated Notes in June 2003 at 104.25% of par value. The net redemption premium, associated unamortized net deferred loan costs, unamortized original issuance premium and gain recognition of a previously deferred cash flow hedge interest rate swap termination and settlement payment, and transaction costs, all associated with the former debt arrangements, and aggregating approximately $12.8 million, before income taxes of $5.0 million, were reflected as a charge to earnings in the second quarter 2003. The charge reduced basic and diluted earnings per share for the three months ended June 30, 2003 by $0.18. See Note 4 to the Consolidated Financial Statements for additional information.
 
Loss on early debt redemption of $1.2 million for the three months ended June 30, 2002 represents a charge associated with the Company’s redemption of all outstanding 5 3/4% convertible subordinated debentures totaling $53,694,000 in April 2002 at 101.64% of par value. The charge consists of redemption premium, associated unamortized net deferred loan costs, and transaction costs. The charge reduced basic and diluted earnings per share for the three months ended June 30, 2002 by $0.02. See Note 4 to the Consolidated Financial Statements for additional information.
 
FTC Refund Claims Settlement for the three months ended June 30, 2003 represents a charge to earnings for refund claims to be paid under a litigation settlement reached between the FTC, SMI and Oil-Chem on March 20, 2003, and associated costs of refund processing. As part of the settlement, SMI and Oil-Chem are offering a pro rata purchase price refund to certain customers who purchased zMax Power System before January 31, 2001. Under the settlement terms, aggregate refunds payable by SMI and Oil-Chem are not to exceed $1.0 million. Based on customer refund requests received to date, management believes such requests will likely exceed the maximum settlement payment. As such, the Company expects to refund payments aggregating $1.0 million once the customers 180-day deadline for affirmative acceptance of the Company’s offer has expired. See Note 7 to the Consolidated Financial Statements for additional information.
 
Other Income, Net. Other income, net for the three months ended June 30, 2003 was $58,000 compared to $268,000 for the same period in 2002. Other income, net for the same period in 2002 reflects a gain on disposal of property at TMS. No such gains were recognized in the current period. The remainder of the change was due to a combination of individually insignificant items.
 
Income Tax Provision. The Company’s effective income tax rate for the three months ended June 30, 2003 and 2002 was 39.3%.
 
Net Income for the three months ended June 30, 2003 decreased by $8.0 million, or 23.1%, from such income for the same period in 2002. This decrease is due to the factors discussed above.
 
Six Months Ended June 30, 2003 Compared To Six Months Ended June 30, 2002
 
Total Revenues for the six months ended June 30, 2003 increased by $11.4 million, or 4.7%, over such revenues for the same period in 2002 for the factors discussed below.
 
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Admissions for the six months ended June 30, 2003 increased by $2.5 million, or 2.7%, over such revenue for the same period in 2002. This increase is due primarily to continued growth in attendance at NASCAR-sanctioned racing events held at BMS and LVMS in the current period, and to LMS hosting a new NASCAR-sanctioned Craftsman Truck Series race in the current period. The overall increase was partially offset by lower attendance at NASCAR-sanctioned racing events held at LMS, other than “The Winston”, and IR during the current period.
 
The current period was negatively impacted by poor weather surrounding certain LMS, IR, and TMS racing events, as well as continuing challenges of economic conditions, the Iraq war and code orange terrorism alerts.
 
Event Related Revenue for the six months ended June 30, 2003 increased by $3.5 million, or 4.7%, over such revenue for the same period in 2002. This increase is due to increased event related revenues associated with the growth in attendance at NASCAR-sanctioned racing events held at BMS and LVMS in the current period, to increased sponsorship, track rentals, motorsports-related merchandise sales and other event related revenues, and to event related revenues associated with LMS hosting a new NASCAR-sanctioned Craftsman Truck Series race in the current period. The overall increase was partially offset by decreased event related revenues associated with lower attendance at NASCAR-sanctioned racing events held at LMS and IR.
 
The current period reflects lower corporate suite, hospitality, and other event related revenues as compared to the same period in 2002. Challenging economic conditions, the Iraq war and code orange terrorism alerts continued to negatively impact event related revenues.
 
NASCAR Broadcasting Revenue for the six months ended June 30, 2003 increased by $8.8 million, or 16.1%, over such revenue for the same period in 2002. This increase is due to increases in annual contractual broadcast rights fees for NASCAR-sanctioned racing events held in the current period.
 
Other Operating Revenue for the six months ended June 30, 2003 decreased by $3.5 million, or 16.8%, from such revenue for the same period in 2002. This decrease is due primarily to lower non-motorsports related souvenir and merchandising SMIP and Oil-Chem revenues in the current period. The overall decrease was partially offset by current period revenues of SMIT acquired in November 2002.
 
Direct Expense of Events for the six months ended June 30, 2003 increased by $1.7 million, or 3.9%, over such expense for the same period in 2002. This increase is due to higher operating costs associated with the growth in attendance at NASCAR-sanctioned racing events held at BMS and LVMS, to higher insurance premium and other costs for property, casualty, liability, and other insurance coverage in the current period, to increased operating costs associated with higher motorsports-related merchandise sales, and to LMS hosting a new NASCAR-sanctioned Craftsman Truck Series race in the current period. The overall increase was partially offset by lower operating costs associated with lower attendance at NASCAR-sanctioned racing events held at LMS and IR, and by the initial costs associated with IR’s expanded speedway facilities and new naming rights agreement reflected in the same period in 2002.
 
NASCAR Purse and Sanction Fees for the six months ended June 30, 2003 increased by $5.8 million, or 13.8%, over such expense for the same period in 2002. This increase is due primarily to higher annual contractual race purses and sanctioning fees for NASCAR-sanctioned racing events in the current period.
 
Other Direct Operating Expense for the six months ended June 30, 2003 decreased by $2.0 million or 12.0%, from such expense for the same period in 2002. This decrease is due primarily to decreased operating costs associated with lower non-event SMIP souvenir and merchandising and Oil-Chem sales. The overall decrease was partially offset by operating costs associated with current period revenues of SMIT acquired in November 2002.
 
General and Administrative Expense for the six months ended June 30, 2003 increased by $973,000, or 3.2%, over such expense for the same period in 2002. This increase is due primarily to increased operating costs associated with growth and expansion at the
 
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Company’s speedways and operations. The overall increase was partially offset by decreased legal costs associated with the FTC litigation with Oil-Chem which was settled in March 2003.
 
Depreciation and Amortization Expense for the six months ended June 30, 2003 increased by $1.1 million, or 7.1%, over such expense for the same period in 2002. This increase is due primarily to increased depreciation expense from additions to property and equipment at the Company’s speedways, particularly at BMS and IR.
 
Interest Expense, Net for the six months ended June 30, 2003 was $11.6 million compared to $10.8 million for the same period in 2002. As discussed further below, interest expense, net for the six months ended June 30, 2003 includes $1.5 million of net interim interest expense on debt redeemed. The overall increase was partially offset by the lower interest rate on the 2003 Senior Subordinated Notes issued in May 2003 compared to the Former Senior Subordinated Notes, lower average outstanding borrowings and interest rates under the bank revolving credit facility during the current period, which were offset by lower capitalized interest and lower outstanding notes receivable during the current period. The lower capitalized interest reflects property and equipment related to IR’s expansion and modernization being placed into service in 2002.
 
Interim interest expense on debt redeemed, net represents interest expense incurred on the Former Senior Subordinated Notes between May 16, 2003, issuance date of the 2003 Senior Subordinated Notes, and June 15, 2003, redemption date of the Former Senior Subordinated Notes, net of interest income earned on invested proceeds during the interim period. The new notes were issued before redemption of the former notes because of a favorable interest rate environment and required notice of redemption to Former Senior Subordinated Note holders by the Company. See Note 4 to the Consolidated Financial Statements for additional information.
 
Loss on Early Debt Redemption and Refinancing of $12.8 million for the six months ended June 30, 2003 represents a charge associated with replacement of the Former Credit Facility and issuance of the 2003 Senior Subordinated Notes in May 2003, and redemption of the Former Senior Subordinated Notes in June 2003 at 104.25% of par value. The net redemption premium, associated unamortized net deferred loan costs, unamortized original issuance premium and gain recognition of a previously deferred cash flow hedge interest rate swap termination and settlement payment, and transaction costs, all associated with the former debt arrangements, and aggregating approximately $12.8 million, before income taxes of $5.0 million, were reflected as a charge to earnings in the second quarter 2003. The charge reduced basic and diluted earnings per share for the six months ended June 30, 2003 by $0.18. See Note 4 to the Consolidated Financial Statements for additional information.
 
Loss on early debt redemption of $1.2 million for the six months ended June 30, 2002 represents a charge associated with the Company’s redemption of all outstanding 5 3/4% convertible subordinated debentures totaling $53,694,000 in April 2002 at 101.64% of par value. The charge consists of redemption premium, associated unamortized net deferred loan costs, and transaction costs. The charge reduced basic and diluted earnings per share for the six months ended June 30, 2002 by $0.02. See Note 4 to the Consolidated Financial Statements for additional information.
 
FTC Refund Claims Settlement for the six months ended June 30, 2003 represents a charge to earnings for refund claims to be paid under a litigation settlement reached between the FTC, SMI and Oil-Chem on March 20, 2003, and associated costs of refund processing. As part of the settlement, SMI and Oil-Chem are offering a pro rata purchase price refund to certain customers who purchased zMax Power System before January 31, 2001. Under the settlement terms, aggregate refunds payable by SMI and Oil-Chem are not to exceed $1.0 million. Based on customer refund requests received to date, management believes such requests will likely exceed the maximum settlement payment. As such, the Company expects to refund payments aggregating $1.0 million once the customers 180-day deadline for affirmative acceptance of the Company’s offer has expired. See Note 7 to the Consolidated Financial Statements for additional information.
 
Other Expense (Income), Net. Other expense, net for the six months ended June 30, 2003 was $253,000 compared to other income, net of $277,000 for the same period in 2002. This change is due primarily to recognizing a loss on disposal of equipment damaged at TMS in the current period, and a gain on disposal of property at TMS in the same period in 2002. The remainder of the change was due to a combination of individually insignificant items.
 
Income Tax Provision. The Company’s effective income tax rate for the six months ended June 30, 2003 and 2002 was 39.3%.
 
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Income From Continuing Operations Before Cumulative Effect of Accounting Change for the six months ended June 30, 2003 decreased by $6.2 million, or 11.9%, from such income for the same period in 2002. This decrease is due to the factors discussed above.
 
Loss From Operations and Disposal of Discontinued Business of $686,000 for the six months ended June 30, 2002 represents the accounting for the Company’s discontinued operations and disposal of SoldUSA in April 2002. Losses from SoldUSA’s discontinued operations were $99,000, after income taxes of $64,000, and losses on disposal were $587,000, after income taxes of $381,000, in the first quarter 2002. See Note 1 to the Consolidated Financial statements for additional information.
 
Cumulative Effect of Accounting Change for Goodwill Impairment of $4.3 million for the six months ended June 30, 2002 represents the cumulative effect, net of income taxes of $297,000, of the Company’s assessment that goodwill associated with certain non-motorsports related reporting units was impaired upon adopting SFAS No. 142 “Goodwill and Other Intangible Assets” as of January 1, 2002. See Note 2 to the Consolidated Financial Statements for additional information.
 
Net Income for the six months ended June 30, 2003 decreased by $1.2 million, or 2.6%, from such income for the same period in 2002. This increase is due to the factors discussed above.
 
LIQUIDITY AND CAPITAL RESOURCES
 
The Company has historically met its working capital and capital expenditure requirements through a combination of cash flows from operations, bank borrowings and other debt and equity offerings. The Company expended significant amounts of cash in the six months ended June 30, 2003 for improvements and expansion at its speedway facilities. Significant changes in the Company’s financial condition and liquidity during the six months ended June 30, 2003 resulted primarily from:
 
 	(1)	 	net cash generated by operations amounting to $61.3 million, including a decrease in deferred race event revenue amounting to $24.6 million and an increase in accrued income taxes of $26.2 million;	
 
 	(2)	 	cash outlays for payments of debt redemption premium and debt issuance costs of $19.2 million; and	
 
 	(3)	 	cash outlays for capital expenditures amounting to $37.8 million.	
 
At June 30, 2003, the Company had cash and cash equivalents totaling $142.3 million and had $80.0 million in outstanding borrowings under the $250.0 million 2003 Revolving Credit Facility. At June 30, 2003, net deferred tax liabilities totaled $121.7 million. While primarily representing the tax effects of temporary differences between financial and income tax bases of assets and liabilities, the likely future reversal of net deferred income tax liabilities could negatively impact cash flows from operations in the years in which reversal occurs.
 
Cash flows from operations in the six months ended 2003 compared to 2002 were significantly impacted by larger decreases in deferred race event income in 2003 due primarily to advance food and beverage sales commissions received from the Levy Group in 2002 and changes in billing and payment timing and terms on advance ticket sales, suite rentals and other event related items.
 
The Company had the following contractual cash obligations and other commercial commitments as of June 30, 2003 (in thousands):
 
 	  	Payments Due By Period
	
 	  	Total
	  	Current
	  	1-3 Years
	  	3-5 Years
	  	Thereafter
	
Contractual Cash Obligations	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	
Current liabilities, excluding current maturities of long-term debt and deferred race event income	  	$	66,434	  	$	66,434	  	 	—  	  	 	—  	  	 	—  	
Long-term debt, including current maturities	  	 	360,166	  	 	143	  	$	23	  	$	130,000	  	$	230,000	
Payable to affiliate	  	 	2,594	  	 	—  	  	 	—  	  	 	—  	  	 	2,594	
Other liabilities	  	 	2,049	  	 	—  	  	 	—  	  	 	—  	  	 	2,049	
Operating leases	  	 	3,456	  	 	442	  	 	1,176	  	 	1,176	  	 	662	
 	  			  			  			  			  			
Total Contractual Cash Obligations	  	$	434,699	  	$	67,019	  	$	1,199	  	$	131,176	  	$	235,305	

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 	  	Commitment Expiration By Period
	
 	  	Total
	  	Current
	  	1-3 Years
	  	3-5 Years
	  	Thereafter
	
Other Commercial Commitments	  	 	 	  	 	 	  	 	  	 	  	 	
Letters of credit,	  	 	 	  	 	 	  	 	  	 	  	 	
Total Other Commercial Commitments	  	$	814	  	$	814	  	—  	  	—  	  	—  	

The Company presently does not have any significant off-balance sheet obligations, guarantees, commitments or other contractual cash obligations, other commercial commitments or contingent obligations.
 
Refinancing of Senior Subordinated Debt and Bank Credit Facility. On May 16, 2003, the Company issued $230.0 million in aggregate principal amount of 6¾% Senior Subordinated Notes due 2013 (the 2003 Senior Subordinated Notes, as more fully described below). Concurrent with the issuance of the 2003 Senior Subordinated Notes, the Company refinanced its Former Credit Facility. The 2003 Credit Facility, as more fully described below, consists of a revolving credit facility with an overall borrowing limit of $250.0 million, and separate sub-limits of $10.0 million for standby letters of credit and for 15-day swing line loans, and a $50.0 million five-year term loan. The net proceeds from the 2003 Senior Subordinated Notes, together with borrowings under the 2003 Credit Facility and cash and cash equivalents on hand, were used to (1) fully redeem, in June 2003, the Company’s $250.0 million in aggregate principal amount 8½% Senior Subordinated Notes due 2007 (the Former Senior Subordinated Notes), including the payment of redemption premium and accrued interest, (2) refinance borrowings under the Former Credit Facility, and (3) pay related fees and expenses associated with the redemption and refinancing. The refinancing of the Former Credit Facility and the Former Senior Subordinated Notes extend the Company’s senior and subordinated debt maturities, and management believes the refinancings provide additional financial and operational flexibility.
 
The Company’s management, including the Board of Directors, believes such debt redemption and replacement transactions are in the Company’s long-term interest based on the current favorable interest rate environment and previously scheduled maturity of the Former Credit Facility in May 2004. All borrowings outstanding under the Former Senior Subordinated Notes and Former Credit Facility were replaced and funded with the issuance of new long-term debt. The net redemption premium, associated unamortized net deferred loan costs, unamortized original issuance premium and gain recognition of a previously deferred interest rate swap payment, and transaction costs, all associated with the existing debt arrangements, aggregated approximately $7.8 million, after income taxes, and were reflected as a charge to earnings in the second quarter 2003. The charge reduced second quarter 2003 basic and diluted earnings per share by $0.18.
 
Approximately $6.5 million of available cash and cash equivalents were used to fund the redemption premium and accrued interest on the Former Senior Subordinated Notes and pay related commissions, fees and expenses associated with the 2003 Senior Subordinated Notes and 2003 Credit Facility. The 2003 Senior Subordinated Notes were issued at par, and net proceeds after commissions and fees approximated $224.2 million. Such proceeds, along with borrowings of $80.0 million under the replacement revolving credit facility and the new $50.0 million term loan, and cash and cash equivalents on hand were used to repay and retire then outstanding borrowings under the Former Senior Subordinated Notes and Former Credit Facility. Until the Former Senior Subordinated Notes were redeemed, the Company utilized net proceeds from the sale of the 2003 Senior Subordinated Notes to repay outstanding borrowings and accrued interest under the Former Credit Facility and invested in short-term, fixed income securities.
 
2003 Senior Subordinated Notes. The 2003 Senior Subordinated Notes mature on June 1, 2013 and pay interest semi-annually on June 1 and December 1, commencing on December 1, 2003. The 2003 Senior Subordinated Notes are guaranteed on a senior subordinated basis by the Guarantors. On or after June 1, 2008, the Company may redeem some or all of the 2003 Senior Subordinated Notes at any time at annually declining redemption premiums. On or before June 1, 2006, the Company may redeem up to 35% of the 2003 Senior Subordinated Notes with the proceeds from certain equity offerings at a redemption premium. If the Company experiences certain changes of control, the Company must offer to repurchase the 2003 Senior Subordinated Notes at 101% of the aggregate principal amount plus accrued interest. The indenture governing the 2003 Senior Subordinated Notes, among other things, limits the Company’s ability to: incur additional debt; pay dividends and make distributions; incur liens; make specified types of investments; apply net proceeds from certain asset sales; engage in transactions
 
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with Company affiliates; merge or consolidate; restrict dividends or other payments from subsidiaries; sell equity interest of subsidiaries; and sell, assign, transfer, lease, convey or dispose of assets.
 
The Company has agreed to offer to exchange the 2003 Senior Subordinated Notes for publicly tradable and substantially identical senior subordinated notes by using reasonable best efforts to file a registration statement with the Securities and Exchange Commission (SEC) on or before 90 days after the issuance of the 2003 Senior Subordinated Notes, to be declared effective by the SEC within 150 days from the issue date. Otherwise, the Company has agreed to file under certain circumstances a shelf registration statement to cover public resales of the 2003 Senior Subordinated Notes and to cause such registration statement to be declared effective as promptly as possible by the SEC. If the Company fails to satisfy these obligations, the Company has agreed to pay liquidated damages to holders of the 2003 Senior Subordinated Notes under certain circumstances.
 
2003 Credit Facility. The 2003 Credit Facility, executed on May 16, 2003, consists of a senior revolving facility (the Revolving Facility) and term loan (the Term Loan) provided by a syndicate of banks led by Bank of America, N.A. as an agent and lender. The Revolving Facility provides for borrowings in an aggregate principal amount of up to $250.0 million, and includes a sub-limit of $10.0 million for standby letters of credit and a sub-limit of $10.0 million for borrowings under 15-day swing line loans. As of June 30, 2003, the Company could borrow up to an additional $170.0 million under the Revolving Facility. The Term Loan is in the aggregate principal amount of $50.0 million.
 
Amounts outstanding under the 2003 Credit Facility bear interest at a rate based, at the Company’s option, upon (1) LIBOR plus a margin ranging from 1.5% to 2.5%, as adjusted from time to time in accordance with the terms of the 2003 Credit Facility, or (2) the greater of (a) Bank of America’s prime rate or (b) the Federal Funds rate plus 0.5%. The 2003 Credit Facility adjusts the margin applicable to LIBOR borrowings based upon certain ratios of funded debt to EBITDA, as defined in the 2003 Credit Facility. The 2003 Credit Facility matures in May 2008. Loans made pursuant to the Revolving Facility may be borrowed, repaid and reborrowed from time to time until the fifth anniversary of the establishment of the 2003 Credit Facility subject to certain conditions on the date borrowed. The Term Loan principal is being amortized by quarterly payments beginning in 2004 through final maturity in 2008.
 
The 2003 Credit Facility contains a number of financial, affirmative and negative covenants that regulate the Company’s operations. Financial covenants require maintenance of ratios of funded debt to EBITDA, funded senior debt to EBITDA and EBIT to interest expense and dividends, and require the Company to maintain a minimum net worth. Negative covenants restrict, among other things, the incurrence and existence of liens, the making of investments, restricted payments, including equity and debt security repurchases, capital expenditures, transactions with affiliates, acquisitions, sales of assets, and the incurrence of debt. Indebtedness under the 2003 Credit Facility is guaranteed by the Guarantors, and is secured by a pledge of all the capital stock and limited liability company interests, as the case may be, of the Guarantors.
 
Future Liquidity. The Company anticipates that cash from operations, funds available through the 2003 Credit Facility and proceeds from the sale of the 2003 Senior Subordinated Notes will be sufficient to meet its operating needs at least through June 2004, including planned capital expenditures at its speedway facilities and the payment of any future dividends that may be declared. Based upon anticipated future growth and financing requirements, the Company expects that it will, from time to time, engage in additional financing of a character and in amounts to be determined. The Company may, from time to time, redeem or retire its debt securities, and purchase its debt and equity securities, depending on liquidity and prevailing market conditions, as well as such factors as permissibility under the 2003 Credit Facility and the indenture governing the 2003 Senior Subordinated Notes, and as the Board of Directors, in its sole discretion, may consider relevant. While the Company expects to continue to generate positive cash flows from its existing speedway operations, and has generally experienced improvement in its financial condition, liquidity and credit availability, additional liquidity resources, as well as possibly others, could be needed to fund its continued growth, including the continued expansion and improvement of its speedway facilities.
 
Capital Expenditures
 
Management believes significant growth in the Company’s revenues depends, in large part, on consistent investment in facilities. As such, the Company expects to continue to make substantial capital improvements in its facilities to meet increasing demand and to
 
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increase revenue. Currently, a number of significant capital projects are underway.
 
Ÿ 2003 Projects. At June 30, 2003, the Company had various construction projects underway to increase and improve facilities for fan amenities and other site improvements at its speedways. The Company’s multi-year reconfiguration and modernization of IR was substantially finished in 2002, with completion presently scheduled for 2004. In March 2003, the Company substantially completed construction at BMS of approximately 43,000 new permanent grandstand seats for a net increase of approximately 10,000, including 52 new luxury suites, featuring new stadium-style seating, outstanding views, convenient elevator access and popular food courts. In 2003, the Company began construction at LVMS of approximately 15,000 new permanent seats, completion of which is presently scheduled for 2004. Similar to prior years, the Company continues to expand concessions, restrooms and other fan amenities for the convenience, comfort and enjoyment of fans at several of its speedways. The Company also plans to continue improving and expanding on-site roads and available parking, reconfiguring traffic patterns and entrances to ease congestion and improve traffic flow particularly at IR, and at other Company speedways.
 
The estimated aggregate cost of capital expenditures in 2003 will approximate $60 to $65 million. Numerous factors, many of which are beyond the Company’s control, may influence the ultimate costs and timing of various capital improvements at its facilities, including:
 
Ÿ	 	undetected soil or land conditions;	
 
Ÿ	 	additional land acquisition costs;	
 
Ÿ	 	increases in the cost of construction materials and labor;	
 
Ÿ	 	unforeseen changes in design;	
 
Ÿ	 	litigation, accidents or natural disasters affecting the construction site; and	
 
Ÿ	 	national or regional economic changes.	
 
In addition, the actual cost could vary materially from our estimates if assumptions about the quality of materials or workmanship required or the cost of financing such construction were to change. Construction is also subject to state and local permitting processes, which if changed, could materially affect the ultimate cost.
 
The Company also continually evaluates new opportunities that will add value for its stockholders, including the acquisition and construction of new speedway facilities, the expansion and development of existing Legends Cars and Oil-Chem products and markets and the expansion into complementary businesses.
 
Dividends
 
Any decision concerning the payment of common stock dividends depends upon the Company’s results of operations, financial condition and capital expenditure plans, and applicable limitations under the 2003 Credit Facility and 2003 Senior Subordinated Notes, and as the Company’s Board of Directors, in its sole discretion, may consider relevant. The 2003 Credit Facility allows for payment of dividends and repurchase of SMI securities up to $17.5 million annually.
 
Recently Issued Accounting Standards
 
In December 2002, SFAS No. 148 “Accounting for Stock-Based Compensation—Transition and Disclosure—an amendment of FASB No. 123” was issued to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The transition guidance and annual disclosure provisions of SFAS No. 148 are effective for financial statements issued for fiscal years ending after December 15, 2002. The interim disclosure provisions are effective for financial reports containing financial statements for interim periods beginning after December 15, 2002. The Company applied the disclosure provisions of SFAS No. 148 in these financial statements and accompanying notes.
 
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In January 2003, FASB Interpretation No. 46 (FIN 46), “Consolidation of Variable Interest Entities” was issued which, among other things, provides guidance on identifying variable interest entities (VIE) and determining when assets, liabilities, noncontrolling interests, and operating results of a VIE should be included in a company’s consolidated financial statements, and also requires additional disclosures by primary beneficiaries and other significant variable interest holders. The provisions of FIN 46 became effective upon issuance, and did not impact the Company’s financial statements or disclosures.
 
In April 2003, SFAS No. 149 “Amendment of Statement 133 on Derivative Instruments and Hedging Activities” was issued which amends and clarifies the accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and hedging activities under SFAS No. 133. It requires, among other things, that contracts with comparable characteristics be accounted for similarly and clarifies under what circumstances a contract with an initial net investment meets the characteristic of a derivative and when a derivative contains a financing component that warrants special reporting in the statement of cash flows. SFAS No. 149 is effective generally for contracts entered into and modified after June 30, 2003. The Company had no derivative instruments at June 30, 2003, and will assess the impact, if any, adoption would have on its financial statements or disclosures upon entering into any derivative instruments.
 
In May 2003, SFAS No. 150 “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” was issued to improve the accounting for certain financial instruments that, under previous guidance, issuers could account for as equity, and requires classification of those instruments as liabilities in statements of financial position. It affects, among other things, the accounting for generally three types of freestanding financial instruments: mandatory redeemable shares, put options and forward purchase contracts, and obligations that can be settled with shares, the monetary value of which is fixed, tied solely or predominately to a variable such as a market index, or varies inversely with the value of a company’s shares. SFAS No. 150 does not apply to features embedded in financial instruments that are not derivatives in entirety. SFAS No. 150 is effective generally for all financial instruments entered into or modified after May 31, 2003, and otherwise is effective for the first interim period beginning after June 15, 2003. The Company had no freestanding financial instruments at June 30, 2003, and will assess the impact, if any, adoption would have on its financial statements or disclosures upon entering into any such instruments.
 
Near-term Operating Factors
 
There are many factors that affect the Company’s growth potential, future operations and financial results, including some of the following operating factors:
 
Ÿ Current Operating Trends. The national incidents of September 11, 2001, along with terrorism alerts and the Iraq war, have raised a combination of operating factors never before encountered, including public concerns regarding air travel, military actions, and additional national or local catastrophic incidents. These factors, in an already challenging economy, are affecting consumer and corporate spending sentiment. Economic conditions and the competitiveness of racing can affect ticket and other sales. Management believes long-term ticket demand, including corporate marketing and promotional spending, should continue to grow. However, near-term ticket sales, particularly to corporate customers, and suite rentals, hospitality and other event revenues have been, and may continue to be, adversely impacted by these and other factors. The Company decided not to increase many ticket and concession prices at least for 2003 to help foster fan support and mitigate any near-term weakness.
 
Ÿ NASCAR Broadcasting Rights Agreement. Fiscal 2003 is the Company’s third year under the multi-year consolidated domestic television broadcast rights agreement for NASCAR Winston Cup and Busch Series events. This agreement is expected to provide the Company with future increases in contracted broadcasting revenues. Total revenues under this domestic broadcast rights agreement is expected to approximate $90 million in 2003, reflecting an increase of approximately $12 million over 2002. While this long-term rights agreement will likely result in annual revenue increases over the contract period, associated annual increases in purse and sanction fees paid to NASCAR have increased, and may continue to increase, at a relatively higher rate. Purse and sanction fees are negotiated with NASCAR on an annual basis.
 
Ÿ Insurance Coverage. Heightened concerns and challenges regarding property, casualty, liability, business interruption, and other insurance coverage have resulted after the national incidents on September 11, 2001 and incidents similar to the pedestrian bridge
 
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collapse at LMS in 2000. It has become increasingly difficult to obtain high policy limits of coverage at reasonable costs, including coverage for acts of terrorism. The Company has a material investment in property and equipment at each of its six speedway facilities, generally located near highly populated cities, and which hold motorsports events typically attended by large numbers of fans. These operational, geographical, and situational factors, among others, have resulted in significant increases in insurance premium costs in fiscal 2002 and 2003, and further increases are possible. While management believes it has reasonable limits of property, casualty, liability, and business interruption insurance in force, including coverage for acts of terrorism, management can not guarantee that such coverage would be adequate should a catastrophic event occur. The occurrence of such an incident at any of the Company’s speedway facilities could have a material adverse effect on its financial position and future results of operations if asset damage and/or Company liability were to exceed insurance coverage limits. The occurrence of additional national incidents, and particularly incidents at sporting event, entertainment or other public venues, may significantly impair the Company’s ability to obtain such insurance coverage in the future.
 
Ÿ Litigation Costs. As discussed in “Legal Proceedings” and Note 7 to the June 30, 2003 Consolidated Financial Statements, the Company is involved in various litigation for which significant legal costs were incurred in fiscal 2002, particularly associated with the FTC litigation with Oil-Chem. While the FTC litigation with Oil-Chem was settled in March 2003, the Company has other ongoing litigation. The Company intends to defend vigorously against the claims raised in existing legal actions, and it will likely incur significant legal costs in fiscal 2003. Although such legal costs in 2003 are expected to decline due to settlement of the FTC litigation and expected or completed resolution of other legal matters, management is presently unable to quantify the amount of these expected legal costs. New or changes in pending or threatened legal action against the Company could result in further increases in legal costs.
 
Ÿ Senior Subordinated Notes Redemption and Bank Credit Facility Replacement. As discussed in Note 4 to the Consolidated Financial Statements and above in “Liquidity and Capital Resources” and “Near Term Operating Factors”, in June 2003, the Company redeemed and retired all outstanding Former Senior Subordinated Notes with proceeds from the issuance of the 2003 Senior Subordinated Notes and the 2003 Credit Facility and from cash and cash equivalents on hand. The proceeds from the 2003 Senior Subordinated Notes, along with the 2003 Credit Facility and cash and cash equivalents on hand, were used to repay and retire then outstanding borrowings under the Former Senior Subordinated Notes and Former Credit Facility, fund redemption premium, accrued interest, commissions, fees and other transaction costs, fund capital expenditures and for working capital needs. The net redemption premium, associated unamortized net deferred loan costs, unamortized original issuance premium and gain recognition of a previously deferred interest rate swap payment, and transaction costs, all associated with the existing debt arrangements, aggregated approximately $7.8 million, after income taxes, and was reflected as a charge to earnings in the second quarter 2003. The charge reduced second quarter 2003 basic and diluted earnings per share by $0.18.
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
 
Interest Rate Risk. The Company’s financial instruments with market risk exposure consist only of notes receivable, bank revolving credit facility borrowings and the term loan under the 2003 Credit Facility that are sensitive to changes in interest rates. The Company’s 2003 Senior Subordinated Notes are fixed interest rate debt obligations. A change in interest rates of one percent on notes receivable and debt balances outstanding at June 30, 2003 would cause a change in annual interest income of approximately $139,000 and annual interest expense of approximately $1.3 million. See Note 7 to the Consolidated Financial Statements for information on the terms and conditions of notes receivable. See Note 4 to the Consolidated Financial Statements and above in “Liquidity and Capital Resources” for additional information on the terms and conditions of debt obligations.
 
Equity Price Risk. The Company’s marketable equity securities are included in other noncurrent assets and are classified as “available for sale.” Such investments are subject to price risk, which the Company attempts to minimize generally through portfolio diversification.
 
As discussed in Note 4 to the Consolidated Financial Statements and above in “Liquidity and Capital Resources” and “Near Term Operating Factors”, in June 2003, the Company redeemed and retired all outstanding 8½% Former Senior Subordinated Notes due 2007 with proceeds from issuing, in May 2003, the 6¾% 2003 Senior Subordinated Notes due 2013 and the 2003 Credit Facility maturing 2007, and cash and cash equivalents on hand. As of and during the six months ended June 30, 2003, there have been no other significant changes in the Company’s interest rate risk or equity price risk.
 
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 Item 4. Controls and Procedures
 
The Company’s Chief Executive Officer and Chief Financial Officer (its principal executive officer and principal financial officer, respectively) have concluded, as of the end of the period covered by this report, based on their evaluation as required by Rules 13a-15 or 15d-15 of the Securities Exchange Act of 1934, as amended, that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports filed or submitted by it under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
 
There were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 of the Securities Exchange Act of 1934, as amended, that occurred during the Company’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
 
33

Table of Contents
PART II—OTHER INFORMATION
 
 Item 1. Legal Proceedings
 
The Company is involved in various lawsuits in the normal course of business, some of which involve material claims. The more significant of these lawsuits are described below. Management does not believe the outcome of any of these lawsuits or incidents will have a material adverse effect on the Company’s financial position or future results of operations.
 
On May 1, 1999, during the running of an IRL Series racing event at LMS, an on-track accident occurred that caused race debris to enter the spectator seating area. On February 13, 2001, the parents of Haley A. McGee filed a personal injury action related to this accident against SMI, LMS and IRL in the Superior Court of Mecklenburg County, North Carolina. This lawsuit seeks unspecified damages and punitive damages related to the injuries of their daughter, as well as the medical expenses incurred and wages lost by her parents. On April 23, 2001, the Company filed its answer in this action. The parties agreed to settle this case for an undisclosed amount, and management expects the court to approve the settlement terms in August 2003. Management does not expect this settlement to have a material adverse effect on the Company’s financial position or future results of operations. On April 24, 2002, Rodney Pyatte filed a personal injury action related to this accident against SMI, LMS and IRL in the Superior Court of Mecklenburg County, North Carolina. This lawsuit sought unspecified damages and punitive damages related to the injuries of Rodney Pyatte, as well as the medical expenses incurred and wages lost. On June 24, 2002, the Company filed its answer in this action. The court dismissed this lawsuit with prejudice on July 14, 2003.
 
On May 20, 2000, near the end of a NASCAR-sanctioned event hosted at LMS, a portion of a pedestrian bridge leading from its track facility to a parking area failed. In excess of 100 people were injured to varying degrees. Preliminary investigations indicate the failure resulted from excessive interior corrosion resulting from improperly manufactured bridge components. Tindall Corporation designed, manufactured and constructed the portion of the pedestrian bridge that failed. Tindall contends that a product that Tindall purchased from Anti-Hydro International, Inc. and that Tindall incorporated into the bridge caused the corrosion.
 
To date, 102 individuals claiming injuries from the bridge failure on May 20, 2000, have filed a total of 48 separate lawsuits, and of these, 41 plaintiffs’ cases have been resolved by the defendants. Generally, the plaintiffs filed these negligence lawsuits and a wrongful death lawsuit against SMI, LMS, Tindall Corporation and Anti-Hydro International, Inc., in the North Carolina Superior Courts of Cabarrus, Mecklenburg, Rowan, Union and Wake Counties, and in the United States District Courts for the Middle District and Western District of North Carolina, seeking unspecified compensatory and punitive damages. The following lawsuits were filed during the second quarter of 2003: James Mann and Shelly Mann on May 12, 2003; Joyce Million on May 12, 2003; Joel Kennedy on May 15, 2003; Mark Nash on May 15, 2003; David Prosser and Denise Prosser on May 15, 2003; Jerry Stephens on May 15, 2003; Roger Dunham on May 16, 2003; and John Taylor on May 19, 2003.
 
Fifteen plaintiffs in eight lawsuits previously filed in North Carolina state court settled in August 2002, four plaintiffs in two lawsuits settled in December 2002, two plaintiffs in a single lawsuit settled in January 2003, one plaintiff in a single lawsuit settled in February 2003, two plaintiffs in a single lawsuit settled in May 2003, eleven plaintiffs in seven lawsuits settled in June 2003 and three plaintiffs in two lawsuits settled in July 2003 with the claims being dismissed as to all defendants, including SMI and LMS. On January 20, 2003, the trial of the first of these cases (three plaintiffs) began. This trial resulted in a directed verdict and dismissal of SMI at the close of all of the evidence. On March 27, 2003, the jury returned a verdict finding that LMS was not negligent in connection with the collapse of the pedestrian bridge. However, LMS was determined by the Court to be responsible for the acts and omissions of Tindall and therefore LMS will be jointly and severally liable for future verdicts. Discovery is proceeding in the remaining cases. All of the state court lawsuits were consolidated before one judge and are pending in Mecklenburg County. The remaining federal lawsuit is progressing under the same discovery plan that the parties are following in the consolidated state court lawsuits. The Company is vigorously defending itself and denies the allegations of negligence as well as the related claims for punitive damages. Management believes that neither the dispositions that have occurred, nor dispositions that may occur in the future, in this matter will have a material adverse effect on the Company’s financial position or future results of operations.
 
34

Table of Contents
On May 24, 2000, a Petition for Writ of Mandate, Declaratory Relief and Injunctive Relief was filed in the Superior Court of California, Sonoma County by Yellow Flag Alliance, Tony Lilly and Nancy Lilly against Sonoma County and Sonoma County Board of Supervisors. This action challenges the Sonoma County Board of Supervisors’ authorization of an IR renovation project. In particular, the petitioners claim that the County board failed to follow California statutes requiring environmental assessments of the IR project on issues such as noise, traffic, visual impairments, land use and zoning. Although neither SMI nor IR is named in the action, an adverse outcome could impact the Company’s ability to expand the IR facility to the extent previously planned. Management has been advised that settlement negotiations are ongoing which, if successful, would have no material impact on IR’s operations and would not require any payments by SMI or IR to the parties to the action.
 
On August 23, 2000, a shareholder derivative complaint was filed against SMI and its directors in the Delaware Chancery Court for New Castle County. The complaint, styled Crandon Capital Partners v. O. Bruton Smith, H.A. “Humpy” Wheeler, William R. Brooks, Edwin R. Clark, William P. Benton, Mark M. Gambill, Jack F. Kemp and Speedway Motorsports, Inc., alleges that in February 2000, SMI sold the Las Vegas Industrial Park – R&D Industrial Campus and approximately 300 acres of undeveloped adjacent land to O. Bruton Smith, SMI’s Chief Executive Officer, Chairman and majority stockholder, at less than these properties’ fair market value, which transaction allegedly constituted a breach of fiduciary duties and corporate waste. Plaintiffs are seeking unspecified damages, the establishment of a system of internal controls and procedures, rescission of the transaction with Mr. Smith or, alternatively, unspecified rescissory damages from Mr. Smith, and plaintiffs’ costs and attorney fees. The defendants filed an answer denying the allegations of the complaint. On July 16, 2003, the defendants filed a motion for summary judgment. Management believes that the complaint has no basis and is defending the action vigorously.
 
On April 18, 2001, Cracker Barrel Old Country Store, Inc. filed a complaint against AMS, SMI, NASCAR and Fox Entertainment Group, Inc., in the United States District Court for the Middle District of Tennessee. Cracker Barrel alleged that AMS breached its sponsorship contract for the March 11, 2001 Cracker Barrel 500 Winston Cup event at AMS, and alleged that SMI tortiously interfered with this contract. Cracker Barrel contended that as a result of the sponsorship contract, it was entitled to receive certain exposure from the national broadcast of the race. The complaint sought unspecified compensatory, treble and punitive damages, costs and attorney fees. On April 16, 2002, Cracker Barrel amended its complaint to include allegations of conspiracy. SMI and AMS denied the allegations. On November 22, 2002, the Court entered summary judgment in favor of all defendants and dismissed the case. The plaintiff then appealed to the United States Court of Appeals for the Sixth Circuit. On July 25, 2003, the Sixth Circuit dismissed the appeal. However, Cracker Barrel thereafter moved to dismiss its own appeal with prejudice, and AMS and SMI did not make any payment to Cracker Barrel.
 
 Item 4. Submission of Matters to a Vote of Security Holders
 
At the Annual Meeting of Stockholders held on April 23, 2003, H.A. Wheeler, Edwin R. Clark and Tom E. Smith were elected directors by the Company’s stockholders. Directors whose terms of office continued after the meeting were O. Bruton Smith, H.A. Wheeler, William R. Brooks, Edwin R. Clark, William P. Benton, Mark M. Gambill, Robert L. Rewey and Tom E. Smith. In addition to election of three directors, the stockholders ratified the selection of Deloitte & Touche LLP as the principal auditors of the Company.
 
 	  	Votes
For
	  	Votes
Against
	  	Votes
Withheld
	  	Unvoted
	
Election of H.A. Wheeler	  	39,007,308	  	—  	  	431,868	  	2,924,920	
Election of Edwin R. Clark	  	39,009,495	  	—  	  	429,681	  	2,924,920	
Election of Tom E. Smith	  	38,766,891	  	—  	  	672,285	  	2,924,920	
					
 	  	Votes
For
	  	Votes
Against
	  	Votes
Withheld
	  	Unvoted
	
Ratification of Deloitte & Touche LLP as principal auditors	  	37,007,564	  	2,424,889	  	6,723	  	2,924,920	
 
35

Table of Contents
 Item 6. Exhibits and Reports on Form 8-K
 
Exhibits filed during the fiscal quarter covered by this Form 10-Q are as follows:
 
(a)
 
Exhibit
Number
	  	Description

4.1	  	Indenture dated as of May 16, 2003 between SMI, the Guarantors named therein and U.S. Bank National Association, as Trustee (the “2003 Indenture”).	
		
4.2	  	Form of 6¾% Senior Subordinated Notes due 2013 (included in the 2003 Indenture).	
		
10.1	  	Credit Agreement dated as of May 16, 2003 among SMI and Speedway Funding, LLC as borrowers, certain subsidiaries and related parties of SMI, as Guarantors, and the Lenders named therein, including Bank of America, N.A. as agent for the Lenders and a Lender (the “2003 Credit Agreement”).	
		
10.2	  	Pledge Agreement dated as of May 16, 2003 by SMI and the subsidiaries of SMI that are guarantors under the 2003 Credit Agreement, as pledgors, and Bank of America, N.A. as agent for the Lenders and a Lender under the 2003 Credit Agreement.	
		
10.3	  	Registration Rights Agreement dated as of May 16, 2003 by and among SMI, the Guarantors named therein and Bank of America Securities LLC, Wachovia Securities, Inc., Credit Lyonnais Securities (USA) Inc., Fleet Securities, Inc. and SunTrust Capital Markets Inc.	
		
10.4	  	Purchase Agreement dated May 8, 2003 by and among SMI, the Guarantors named therein and Bank of America Securities LLC, Wachovia Securities, Inc., Credit Lyonnais Securities (USA) Inc., Fleet Securities, Inc. and SunTrust Capital Markets Inc.	
		
31.1	  	Certification of Mr. O. Bruton Smith pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	
		
31.2	  	Certification of Mr. William R. Brooks pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	
		
32.1	  	Certification of Mr. O. Bruton Smith pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	
		
32.2	  	Certification of Mr. William R. Brooks pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	
 
(b)
 
On May 5, 2003, the Company filed a report on Form 8-K dated May 5, 2003, pursuant to Item 5 of such form, reporting that the Company issued a press release announcing it is proposing to offer in a private placement $210 million aggregate principal amount of Senior Subordinated Notes due 2013, and that the press release was filed as an exhibit to the report on Form 8-K.
 
On May 6, 2003, the Company filed a report on Form 8-K dated May 6, 2003, pursuant to Item 9 of such form, reporting that the Company is negotiating the refinancing of its bank credit facility, which matures in May 2004, and pursuant to Item 12 of
 
36

Table of Contents
such form, reporting that the Company issued a press release announcing its earnings for the quarter ended March 31, 2003, and that the press release was filed as an exhibit to the report on Form 8-K.
 
On May 16, 2003, the Company filed a report on Form 8-K dated May 19, 2003, pursuant to Item 5 of such form, reporting that the Company issued a press release announcing it closed on the private placement of $230 million 6¾% Senior Subordinated Notes due 2013, and that the press release was filed as an exhibit to the report on Form 8-K.
 
Pursuant to General Instruction B on Form 8-K, any reports previously or in the future submitted under Items 9 and 12 are not deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act) and the Company is not subject to the liabilities of that section. The Company is not incorporating, and will not incorporate, by reference these reports into a filing under the Securities Act of 1933, as amended or the Exchange Act.
 
37

Table of Contents
 SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 	 	SPEEDWAY MOTORSPORTS, INC.	
 	 	 	 	(Registrant)	
			
Date: August 5, 2003	 	By:	 	/s/ O. Bruton Smith

O. Bruton Smith
Chairman and Chief Executive Officer	
			
Date: August 5, 2003	 	By:	 	/s/ William R. Brooks
	
 	 	 	 	William R. Brooks
Vice President, Chief Financial
Officer, Treasurer and Director
(principal financial and accounting officer)	
 
38

EXHIBIT 4.1
 
EXECUTION COPY
 
SPEEDWAY MOTORSPORTS, INC.
 
$230,000,000
 
6¾% SENIOR SUBORDINATED NOTES DUE 2013
 
INDENTURE
 
DATED AS OF MAY 16, 2003
 
U.S. BANK NATIONAL ASSOCIATION,
 
AS TRUSTEE

Table of Contents
 
 	  	Page
	
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE	  	1	
Section 1.01. Definitions	  	1	
Section 1.02. Incorporation by Reference of Trust Indenture Act	  	21	
Section 1.03. Rules of Construction	  	22	
		
ARTICLE II. THE NOTES	  	22	
Section 2.01. Form and Dating	  	22	
Section 2.02. Execution and Authentication	  	23	
Section 2.03. Registrar and Paying Agent	  	24	
Section 2.04. Paying Agent to Hold Money in Trust	  	24	
Section 2.05. Holder Lists	  	24	
Section 2.06. Transfer and Exchange	  	25	
Section 2.07. Replacement Notes	  	39	
Section 2.08. Outstanding Notes	  	39	
Section 2.09. Treasury Notes	  	40	
Section 2.10. Temporary Notes	  	40	
Section 2.11. Cancellation	  	40	
Section 2.12. Defaulted Interest	  	41	
		
ARTICLE III. REDEMPTION AND PREPAYMENT	  	41	
Section 3.01. Notices to Trustee	  	41	
Section 3.02. Selection of Notes to Be Redeemed	  	41	
Section 3.03. Notice of Redemption	  	42	
Section 3.04. Effect of Notice of Redemption	  	43	
Section 3.05. Deposit of Redemption Price	  	43	
Section 3.06. Notes Redeemed in Part	  	43	
Section 3.07. Optional Redemption	  	43	
Section 3.08. Mandatory Redemption	  	44	
		
ARTICLE IV. COVENANTS	  	45	
Section 4.01. Payment of Notes	  	45	
Section 4.02. Maintenance of Office or Agency	  	45	
Section 4.03. Reports	  	46	
Section 4.04. Compliance Certificate	  	46	
Section 4.05. Taxes	  	47	
Section 4.06. Stay, Extension and Usury Laws	  	47	
Section 4.07. Restricted Payments	  	48	
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries	  	51	
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock	  	51	
Section 4.10. Asset Sales	  	55	
 
i

Section 4.11. Transactions with Affiliates	  	60	
Section 4.12. Liens	  	60	
Section 4.13. Guarantees of Certain Indebtedness	  	61	
Section 4.14. Corporate Existence	  	61	
Section 4.15. Offer to Repurchase upon Change of Control	  	61	
Section 4.16. Limitation on Layering	  	62	
Section 4.17. Sale and Leaseback Transactions	  	62	
Section 4.18. Limitation on Issuances and Sales of Capital Stock of Wholly Owned Subsidiaries	  	63	
Section 4.19. Payments for Consent	  	63	
Section 4.20. Future Guarantors	  	63	
Section 4.21. Investment Company Act	  	64	
Section 4.22. Limitation on Unrestricted Subsidiaries	  	64	
		
ARTICLE V. SUCCESSORS	  	66	
Section 5.01. Merger, Consolidation or Sale of Assets	  	66	
Section 5.02. Successor Corporation Substituted	  	66	
		
ARTICLE VI. DEFAULTS AND REMEDIES	  	67	
Section 6.01. Events of Default	  	67	
Section 6.02. Acceleration	  	69	
Section 6.03. Other Remedies	  	69	
Section 6.04. Waiver of Past Defaults	  	70	
Section 6.05. Control by Majority	  	70	
Section 6.06. Limitation on Suits	  	70	
Section 6.07. Rights of Holders of Notes to Receive Payment	  	71	
Section 6.08. Collection Suit by Trustee	  	71	
Section 6.09. Trustee May File Proofs of Claim	  	71	
Section 6.10. Priorities	  	72	
Section 6.11. Undertaking for Costs	  	72	
Section 6.12. Restoration of Rights and Remedies	  	73	
Section 6.13. Rights and Remedies Cumulative	  	73	
Section 6.14. Delay or Omission Not Waiver	  	73	
		
ARTICLE VII. TRUSTEE	  	73	
Section 7.01. Duties of Trustee	  	73	
Section 7.02. Rights of Trustee	  	75	
Section 7.03. Individual Rights of Trustee	  	76	
Section 7.04. Trustee’s Disclaimer	  	76	
Section 7.05. Notice of Defaults	  	76	
Section 7.06. Reports by Trustee to Holders of the Notes	  	76	
Section 7.07. Compensation and Indemnity	  	77	
Section 7.08. Replacement of Trustee	  	78	
Section 7.09. Successor Trustee by Merger, Etc.	  	79	
 
ii

Section 7.10. Eligibility; Disqualification	  	79	
Section 7.11. Preferential Collection of Claims Against Company	  	80	
		
ARTICLE VIII. LEGAL DEFEASANCE AND COVENANT DEFEASANCE	  	80	
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance	  	80	
Section 8.02. Legal Defeasance and Discharge	  	80	
Section 8.03. Covenant Defeasance	  	81	
Section 8.04. Conditions to Legal or Covenant Defeasance	  	81	
Section 8.05. Deposited Money and Government Securities to Be Held in Trust: Other Miscellaneous Provisions	  	83	
Section 8.06. Repayment to Company	  	83	
Section 8.07. Reinstatement	  	84	
		
ARTICLE IX. AMENDMENT, SUPPLEMENT AND WAIVER	  	84	
Section 9.01. Without Consent of Holders of Notes	  	84	
Section 9.02. With Consent of Holders of Notes	  	85	
Section 9.03. Compliance with Trust Indenture Act	  	87	
Section 9.04. Revocation and Effect of Consents	  	87	
Section 9.05. Notation on or Exchange of Notes	  	87	
Section 9.06. Trustee to Sign Amendments, Etc.	  	87	
		
ARTICLE X. SUBORDINATION	  	88	
Section 10.01. Agreement to Subordinate	  	88	
Section 10.02. Liquidation; Dissolution; Bankruptcy	  	88	
Section 10.03. Default on Designated Senior Indebtedness	  	89	
Section 10.04. Acceleration of Notes	  	89	
Section 10.05. When Distribution Must Be Paid Over	  	90	
Section 10.06. Notice by Company	  	90	
Section 10.07. Subrogation	  	90	
Section 10.08. Relative Rights	  	91	
Section 10.09. Subordination May Not Be Impaired by Company	  	91	
Section 10.10. Distribution or Notice to Representative	  	91	
Section 10.11. Rights of Trustee and Paying Agent	  	91	
Section 10.12. Authorization to Effect Subordination	  	92	
Section 10.13. Amendments	  	92	
		
ARTICLE XI. SUBSIDIARY GUARANTEES	  	92	
Section 11.01. Subsidiary Guarantees	  	92	
Section 11.02. Execution and Delivery of Subsidiary Guarantee	  	93	
Section 11.03. Guarantors May Consolidate or Merger on Certain Terms	  	94	
Section 11.04. Releases of Subsidiary Guarantees	  	95	
Section 11.05. Trustee to Include Paying Agent	  	96	
Section 11.06. Subordination of Subsidiary Guarantees	  	96	
Section 11.07. Unrestricted Subsidiary	  	96	
 
iii

Section 11.08. Limits on Subsidiary Guarantees	  	97	
		
ARTICLE XII.	  	97	
Section 12.01. Satisfaction And Discharge Of Indenture	  	97	
Section 12.02. Application of Trust Money	  	98	
		
ARTICLE XIII. MISCELLANEOUS	  	99	
Section 13.01. Trust Indenture Act Controls	  	99	
Section 13.02. Notices	  	99	
Section 13.03. Communication by Holders of Notes with Other Holders of Notes	  	100	
Section 13.04. Certificate and Opinion As to Conditions Precedent	  	100	
Section 13.05. Statements Required in Certificate or Opinion	  	100	
Section 13.06. Rules by Trustee and Agents	  	101	
Section 13.07. No Personal Liability of Directors, Officers, Employees and Stockholders	  	101	
Section 13.08. Governing Law	  	101	
Section 13.09. No Adverse Interpretation of Other Agreements	  	101	
Section 13.10. Successors	  	102	
Section 13.11. Severability	  	102	
Section 13.12. Counterpart Originals	  	102	
Section 13.13. Table of Contents, Headings, Etc.	  	102	
Section 13.14. Further Instruments and Acts	  	102	
 
iv

LIST OF EXHIBITS
 
Exhibit A	  	FORM OF NOTE	
Exhibit B	  	FORM OF CERTIFICATE OF TRANSFER	
Exhibit C	  	FORM OF CERTIFICATE OF EXCHANGE	
Exhibit D	  	FORM Of CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR	
Exhibit E	  	FORM OF NOTE GUARANTEE	
Exhibit F	  	FORM OF SUPPLEMENTAL INDENTURE	
 
v

CROSS-REFERENCE TABLE
 
Reconciliation and tie between the Trust Indenture Act of 1939, as amended, and the Indenture, dated as of May 16, 2003.
 
TRUST
INDENTURE
ACT SECTION
	 	 	  	INDENTURE
SECTION

§310(a)(l)	 	 	  	7.10	
			
        (a)(2)	 	 	  	7.10	
			
        (a)(3)	 	 	  	N.A.	
			
        (a)(4)	 	 	  	N.A.	
			
        (a)(5)	 	 	  	7.10	
			
        (b)	 	 	  	7.08; 7.10	
			
        (c)	 	 	  	N.A.	
			
§311(a)	 	 	  	7.11	
			
        (b)	 	 	  	7.11	
			
        (c)	 	 	  	N.A.	
			
§312(a)	 	 	  	2.05	
			
        (b)	 	 	  	13.03	
			
        (c)	 	 	  	13.03	
			
§313(a)	 	 	  	7.06	
			
        (b)	 	 	  	7.06	
			
        (c)	 	 	  	7.06	
			
        (d)	 	 	  	7.06	
			
§314(a)	 	 	  	4.03	
			
        (b)	 	 	  	N.A.	
			
        (c)(1)	 	 	  	13.04	
			
        (c)(2)	 	 	  	13.04	
			
        (c)(3)	 	 	  	N.A.	
			
        (d)	 	 	  	N.A.	
			
        (e)	 	 	  	13.05	
			
        (f)	 	 	  	13.14	
			
§315(a)	 	 	  	7.01(b)	
			
        (b)	 	 	  	7.05	
			
        (c)	 	 	  	7.01(a)	
			
        (d)	 	 	  	7.01(c)	
			
        (e)	 	 	  	6.11	
			
§316(a)	 	 	  	2.08	
			
        (a)(1)(A)	 	 	  	6.05	
			
        (a)(1)(B)	 	 	  	6.04	
			
        (a)(2)	 	 	  	N.A.	
			
        (b)	 	 	  	6.07	
 
vi

        (c)	 	 	  	N.A.	
§317(a)(1)	 	 	  	6.03; 6.08	
        (a)(2)	 	 	  	6.09	
        (b)	 	 	  	2.04	
§318(a)	 	 	  	13.01	
 
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture.
 
vii

INDENTURE
 
THIS INDENTURE is dated as of May 16, 2003 (this “Indenture”), by and among SPEEDWAY MOTORSPORTS, INC., a Delaware corporation (the “Company”), the corporations listed on the signature pages hereto (each, a “Guarantor” and collectively, the “Guarantors”) and U.S. BANK NATIONAL ASSOCIATION, as trustee (the “Trustee”).
 
RECITALS
 
The Company has duly authorized the creation and issue of its 6¾% Senior Subordinated Notes Due 2013 (the “Initial Notes”) of substantially the tenor and amount hereinafter set forth, and to provide therefor and for, if and when issued in exchange for the Initial Notes pursuant to this Indenture and the Registration Rights Agreement (as defined herein), the Company’s 6¾% Senior Subordinated Notes Due 2013 (the “Exchange Notes,” and together with the Initial Notes, the “Notes”), the Company has duly authorized the execution and delivery of this Indenture.
 
All things necessary to make the Notes, when executed by the Company and authenticated and delivered by the Trustee hereunder and duly issued by the Company, the valid obligations of the Company and this Indenture a valid instrument of the Company, in accordance with their respective terms, have been done.
 
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that, for and in consideration of the premises and the purchase of the Initial Notes by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Notes, as follows:
 
ARTICLE I.
 
DEFINITIONS AND INCORPORATION BY REFERENCE
 
Section 1.01. Definitions.
 
“144A Global Note” means a global note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A.
 
“Acquired Indebtedness” means, with respect to any specified Person, (i) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person that was not incurred in connection with, or in contemplation of, such other Person merging with or into or becoming a Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien encumbering

any asset acquired by such specified Person, and in either case for purposes of this Indenture, shall be deemed to be Incurred by such specified Person at the time such other Person is merged with or into or becomes a Subsidiary of such specified Person, or at the time such asset is acquired by such specified Person, as the case may be.
 
“Additional Notes” means further notes (other than the Notes) issued under this Indenture in accordance with the terms of this Indenture, including Sections 2.01 and 2.02 hereof, as part of the same or different series as the Notes ranking equally with the Notes in all respects (other than the issuance dates and at the option of the Company the date from which interest will accrue), subject to compliance with Section 4.09 herein. The Notes and any Additional Notes subsequently issued under this Indenture shall be treated as a single class for all purposes under this Indenture, including, without limitation, waivers, amendments, redemptions, and offers to purchase.
 
“Affiliate” of any specified Person means (i) any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person or (ii) any other Person who is a director or executive officer of (a) such specified Person or (b) any Person described in the preceding clause (i). For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided , that beneficial ownership of 10% or more of the voting securities of a Person shall be deemed to be control.
 
“Affiliate Transaction” has the meaning set forth in Section 4.11 hereof.
 
“Agent” means any Registrar, Paying Agent or co-registrar.
 
“Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange.
 
“Asset Sale” means (i) the sale, lease, conveyance or other disposition of any assets (including, without limitation, by way of (x) a sale and leaseback, (y) the sale or other transfer of Equity Interests in or assets of an Unrestricted Subsidiary or (z) a Like Kind Exchange) other than sales of inventory in the ordinary course of business consistent with past practices; provided , that the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company, its Subsidiaries and the Unrestricted Subsidiaries taken as a whole will be governed by Section 4.15 and/or Sections 5.01 and 5.02 hereof and shall not be deemed to be an “Asset Sale,” and (ii) the issue or sale by the Company or any of its Subsidiaries of Equity Interests of any of the Company’s Subsidiaries, in the case of either clause (i) or (ii), whether in a single
 
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transaction or a series of related transactions (a) that have a fair market value of $1,000,000 or greater or (b) for net proceeds of $1,000,000 or greater. Notwithstanding the foregoing, the following will not be deemed to be an “Asset Sale”: (i) a transfer of assets by the Company to a Wholly Owned Subsidiary or by a Wholly Owned Subsidiary to the Company or to another Wholly Owned Subsidiary, (ii) an issuance of Equity Interests by a Wholly Owned Subsidiary to the Company or to another Wholly Owned Subsidiary, (iii) a Restricted Payment that is permitted by Section 4.07 hereof, (iv) the sale of Cash Equivalents in the ordinary course of business, (v) a disposition of inventory in the ordinary course of business, (vi) a disposition of obsolete or worn out equipment that is no longer useful in the conduct of the business of the Company and its Subsidiaries and that is disposed of in each case in the ordinary course of business, (vii) the licensing or sublicensing of intellectual property in the ordinary course of business which do not materially interfere with the business of the Company and its Subsidiaries taken as a whole, (viii) foreclosure on assets, and (ix) the disposition or distribution of any Capital Stock of an Unrestricted Subsidiary.
 
“Asset Sale Offer” has the meaning set forth in Section 4.10 hereof.
 
“Attributable Indebtedness” in respect of a sale and leaseback transaction means, at the time of determination, the present value (discounted at the rate of interest implicit in such transaction, determined in accordance with GAAP) of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction (including any period for which such lease has been extended or may, at the option of the lessor, be extended).
 
“Bankruptcy Law” means Title 11, U.S. Code or any similar federal or state law for the relief of debtors as now or hereinafter constituted.
 
“Board of Directors” means, with respect to any Person, the Board of Directors of such Person, or any authorized committee of such Board of Directors.
 
“Broker Dealer” has the meaning set forth in the Registration Rights Agreement.
 
“Business Day” means any day other than a Legal Holiday.
 
“Capital Lease Obligation” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized on a balance sheet in accordance with GAAP.
 
“Capital Stock” means (i) in the case of a corporation, corporate stock, (ii) in the case of an association or business entity, any and all shares, interest, participations, rights or other equivalents (however designated) of corporate stock, (iii) in the case of a partnership, partnership interests (whether general or limited) and (iv) any other interest
 
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or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.
 
“Cash Equivalents” means (i) United States dollars, (ii) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof having maturities of not more than six months from the date of acquisition, (iii) certificates of deposit and Eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers’ acceptances with maturities not exceeding six months and overnight bank deposits, in each case with any lender party to a Credit Agreement or with any domestic commercial bank having capital and surplus in excess of $500 million and a Keefe Bank Watch Rating of “B” or better, (iv) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (ii) and (iii) above entered into with any financial institution meeting the qualifications specified in clause (iii) above and (v) commercial paper having the highest rating obtainable from Moody’s Investors Service, Inc. or Standard & Poor’s Corporation and in each case maturing within six months after the date of acquisition.
 
“Change of Control” means the occurrence of any of the following: (i) the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of (A) the Company and its Subsidiaries taken as a whole to any “person” (as such term is used in Section 13(d)(3) of the Exchange Act) other than O. Bruton Smith or his Related Parties or Sonic Financial Corporation or any of their respective Affiliates or (B) Sonic Financial Corporation to any “person” (as defined above) other than O. Bruton Smith or his Related Parties or any of their respective Affiliates, (ii) the adoption of a plan relating to the liquidation or dissolution of the Company or Sonic Financial Corporation, (iii) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that (A) any “person” (as defined above), other than O. Bruton Smith or his Related Parties or Sonic Financial Corporation or any of their respective Affiliates, becomes the “beneficial owner” (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the Voting Stock of the Company or (B) any “person” (as defined above), other than O. Bruton Smith or his Related Parties or any of their respective Affiliates, becomes the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of Sonic Financial Corporation, (iv) the first day on which a majority of the members of the Board of Directors of the Company or Sonic Financial Corporation are not Continuing Directors or (v) a repurchase event or change of control payment or put or any similar event occurs as a result of change of control provision or a default occurs as a result of a change of control with respect to any other Indebtedness of the Company or any Subsidiary.
 
“Change of Control Offer” has the meaning set forth in Section 4.15 hereof.
 
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“Change of Control Payment” has the meaning set forth in Section 4.15 hereof.
 
“Change of Control Payment Date” has the meaning set forth in Section 4.15 hereof.
 
“Clearstream” means Clearstream, société anonyme (or any successor securities clearing agency).
 
“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder.
 
“Common Stock” means with respect to any Person, any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or nonvoting) of such Person’s common stock whether or not outstanding on the Issue Date, and includes, without limitation, all series and classes of such common stock.
 
“Company” means Speedway Motorsports, Inc., a Delaware corporation.
 
“Consolidated Cash Flow” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus (i) an amount equal to any extraordinary loss plus any net loss realized in connection with an Asset Sale (to the extent such losses were deducted in computing such Consolidated Net Income), plus (ii) provision for taxes based on income or profits of such Person and its Subsidiaries for such period, to the extent that such provision for taxes was included in computing such Consolidated Net Income, plus (iii) consolidated interest expense of such Person and its Subsidiaries for such period, whether paid or accrued and whether or not capitalized (including, without limitation, amortization of original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Indebtedness, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and net payments (if any) pursuant to Hedging Obligations), to the extent that any such expense was deducted in computing such Consolidated Net Income, plus (iv) depreciation, amortization (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash charges (excluding any such non-cash charge to the extent that it represents an accrual of or reserve for cash charges in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash charges were deducted in computing such Consolidated Net Income minus (v) non-cash items of such Person and its Subsidiaries increasing Consolidated Net Income for such period, in each case, on a consolidated basis and determined in accordance with
 
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GAAP. Notwithstanding the foregoing, the provision for taxes on the income or profits of, and the depreciation and amortization and other non-cash charges of, a Subsidiary of the referent Person shall be added to Consolidated Net Income to compute Consolidated Cash Flow only to the extent (and in the same proportion) that the Net Income of such Subsidiary was included in calculating the Consolidated Net Income of such Person and only if a corresponding amount would be permitted at the date of determination to be dividended to the Company by such Subsidiary without prior governmental approval (that has not been obtained), and without direct or indirect restriction pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Subsidiary or its stockholders.
 
“Consolidated Net Income” means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided , that (i) the Net Income (but not loss) of any Person that is not a Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions paid in cash to the referent Person or a Wholly Owned Subsidiary thereof, (ii) the Net Income of any Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary or its stockholders, (iii) the Net Income of any Person acquired in a pooling of interests transaction for any period prior to the date of such acquisition shall be excluded, (iv) the cumulative effect of a change in accounting principles shall be excluded and (v) the Net Income of, or any dividends or other distributions from, an Unrestricted Subsidiary, to the extent otherwise included, shall be excluded, until distributed in cash to the Company or one of its Subsidiaries.
 
“Consolidated Net Worth” means, with respect to any Person as of any date, the sum of (i) the consolidated equity of the common stockholders of such Person and its consolidated Subsidiaries as of such date plus (ii) the respective amounts reported on such Person’s balance sheet as of such date with respect to any series of preferred stock (other than Disqualified Stock) that by its terms is not entitled to the payment of dividends unless such dividends may be declared and paid only out of net earnings in respect of the year of such declaration and payment, but only to the extent of any cash received by such Person upon issuance of such preferred stock, less (x) all write-ups (other than write-ups resulting from foreign currency translations and write-ups of tangible assets of a going concern business made within 12 months after the acquisition of such business) subsequent to the date of this Indenture in the book value of any asset owned by such Person or a consolidated Subsidiary of such Person, (y) all investments as of such date in unconsolidated Subsidiaries and in Persons that are not Subsidiaries
 
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(except, in each case, Permitted Investments), and (z) all unamortized debt discount and expense and unamortized deferred charges as of such date, all of the foregoing determined in accordance with GAAP.
 
“Continuing Directors” means, with respect to any Person as of any date of determination, any member of the Board of Directors of such Person who (i) was a member of such Board of Directors on the date of this Indenture or (ii) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination or election.
 
“Corporate Trust Office of the Trustee” shall be at the address of the Trustee specified in Section 13.02 hereof or such other address as to which the Trustee may give notice to the Company.
 
“Covenant Defeasance” has the meaning set forth in Section 8.03 hereof.
 
“Credit Agreement” means one or more debt facilities (including without limitation the Credit Agreement expected to be entered into in the second fiscal quarter of 2003 by and among the Company and Speedway Funding, LLC, as borrowers, and the lenders named therein in aggregate principal amount of $300.0 million (the “2003 Credit Facility”)), commercial paper facilities or other debt instruments, indentures or agreements providing for revolving credit loans, term loans, letter of credit or other debt obligations, in each case as amended, modified, renewed, refunded, restructured, supplemented, replaced or refinanced in whole or in part from time to time, including without limitation any amendment increasing the amount of Indebtedness incurred or available to be borrowed thereunder, extending the maturity of any Indebtedness incurred thereunder or contemplated thereby or deleting, adding or substituting one or more parties hereto (whether or not such added or substituted parties are banks or other institutional lenders).
 
“1999 Credit Agreement” means that certain Credit Agreement dated as of May 28, 1999, as amended, by and among the Company, as borrower, and the lenders named therein, including NationsBank, N.A., as agent for the lenders and a lender, and First Union National Bank, as co-agent, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, and in each case as amended, modified, renewed, refunded, extended or refinanced from time to time.
 
“Custodian” means any receiver, trustee, assignee, liquidator, sequester or similar official under any Bankruptcy Law.
 
“Default” means any event that is, or with the passage of time or the giving of notice, or both, would be an Event of Default.
 
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“Definitive Note” means a Note registered in the name of the Holder thereof and issued in accordance with Section 2.06 hereof, substantially in the form of the Notes attached hereto as Exhibit A and that does not include the information called for by footnotes 1 and 3 thereof.
 
“Depositary” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, until a successor shall have been appointed and become such pursuant to the applicable provision of this Indenture, and, thereafter, “Depositary” shall mean or include such successor.
 
“Designated Senior Indebtedness” means (i) any Senior Indebtedness outstanding under the Credit Agreement and (ii) any other Senior Indebtedness permitted under this Indenture the principal amount of which is $25.0 million or more and that has been designated by the Company as “Designated Senior Indebtedness.”
 
“Designation” has the meaning set forth in Section 4.22 hereof.
 
“Designation Amount” has the meaning set forth in Section 4.22 hereof.
 
“Disqualified Stock” means any Capital Stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature.
 
“DTC” has the meaning set forth in Section 2.03 hereof.
 
“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).
 
“Equity Offering” means a public or private sale for cash of Capital Stock (other than Disqualified Stock) of the Company with gross proceeds to the Company of at least $25 million (other than public offerings with respect to a registration statement on Form S-4 (or any successor form covering substantially the same transactions), Form S-8 (or any successor form covering substantially the same transaction) or otherwise relating to equity securities issuable under any employee benefit plan of the Company).
 
“Euroclear” means the Euroclear Clearance System (or any successor securities clearing agency).
 
“Event of Default” has the meaning set forth in Section 6.01 hereof.
 
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“Excess Proceeds” has the meaning set forth in Section 4.10(b) hereof.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated by the SEC thereunder.
 
“Exchange Notes” has the meaning set forth in the Recitals.
 
“Exchange Offer” means the offer that may be made by the Company pursuant to the Registration Rights Agreement to exchange Exchange Notes for Initial Notes.
 
“Exchange Offer Registration Statement” has the meaning set forth in the Registration Rights Agreement.
 
“Existing Indebtedness” means Indebtedness of the Company and its Subsidiaries in existence on the date of this Indenture.
 
“Existing Notes” means the $250 million aggregate principal amount of 8 ½% of Senior Subordinated Notes due 2007.
 
“Fixed Charges” means, with respect to any Person for any period, the sum of (i) the consolidated interest expense of such Person and its Subsidiaries for such period, whether paid or accrued (including, without limitation, amortization of original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Indebtedness, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and net payments (if any) pursuant to Hedging Obligations) and (ii) the consolidated interest expense of such Person and its Subsidiaries that was capitalized during such period, and (iii) any interest expense on Indebtedness of another Person that is guaranteed by such Person or one of its Subsidiaries or secured by a Lien on assets of such Person or one of its Subsidiaries (whether or not such guarantee or Lien is called upon) and (iv) the product of (a) all cash dividend payments (and non-cash dividend payments in the case of a Person that is a Subsidiary) on any series of preferred stock of such Person, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP.
 
“Fixed Charge Coverage Ratio” means with respect to any Person for any period, the ratio of the Consolidated Cash Flow of such Person for such period to the Fixed Charges of such Person for such period. In the event that the Company or any of its Subsidiaries incurs, assumes, guarantees or redeems any Indebtedness (other than
 
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revolving credit borrowings) or issues preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee or redemption of Indebtedness, or such issuance or redemption of preferred stock, as if the same had occurred at the beginning of the applicable four-quarter reference period. In addition, for purposes of making the computation referred to above, (i) acquisitions that have been made by the Company or any of its Subsidiaries, including through mergers or consolidations and including any related financing transactions, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date shall be deemed to have occurred on the first day of the four-quarter reference period and Consolidated Cash Flow for such reference period shall be calculated without giving effect to clause (iii) of the proviso set forth in the definition of Consolidated Net Income, and (ii) the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded, and (iii) the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the referent Person or any of its Subsidiaries following the Calculation Date.
 
For purposes of this definition, whenever pro forma effect is to be given to any calculation under this definition, the pro forma calculations will be determined in good faith by a responsible financial or accounting officer of the Company. Any such pro forma calculations may include operating expense reductions for such period expecting to result from an acquisition which is being given pro forma effect that would be permitted pursuant to Article 11 of Regulation S-X under the Securities Act. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness will be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any interest rate agreement applicable to such Indebtedness if such interest rate agreement has a remaining term in excess of 12 months). If any Indebtedness that is being given pro forma effect bears an interest rate at the option of the Company, the interest rate shall be calculated by applying such optional rate chosen by the Company.
 
“Foreign Subsidiary” means any Subsidiary of the Company that (x) is not organized under the laws of the United States of America or any State thereof or the District of Columbia, or (y) was organized under the laws of the United States of America or any State thereof or the District of Columbia that has no material assets other than Capital Stock of one or more foreign entities of the type described in clause (x) above and is not a guarantor of Indebtedness under the Credit Agreement.
 
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“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the date of this Indenture.
 
“Global Note” means a Note that contains the paragraph referred to in footnote 1 and the additional schedule referred to in footnote 3 to the form of the Note attached hereto as Exhibit A.
 
“Global Note Legend” means the legend set forth in Section 2.06(g)(ii), which is required to be placed on all Global Notes issued under this Indenture.
 
“Government Securities” means: (i) securities that are (a) direct obligations of the United States of America for the payment of which the full faith and credit of the United States of America is pledged or (b) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof; and (ii) depositary receipts issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any Government Security which is specified in clause (i) above and held by such bank for the account of the holder of such depositary receipt, or with respect to any specific payment of principal or interest on any Government Security which is so specified and held; provided , that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the Government Security or the specific payment of principal or interest of the Government Security evidenced by such depositary receipt.
 
“Guarantee” or “guarantee” (unless the context requires otherwise) means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness. The term “guarantee” used as a verb shall have a correlative meaning.
 
“Guarantor” means (i) each of the Company’s Subsidiaries which becomes a guarantor of the Notes pursuant to Article XI and (ii) each of the Company’s Subsidiaries executing a supplemental indenture in which such Subsidiary agrees to be bound by the terms of this Indenture; provided , that any Person constituting a Guarantor as described above shall cease to constitute a Guarantor when its respective Subsidiary Guarantee is released in accordance with the terms hereof.
 
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“Guarantor Senior Indebtedness” means, with respect to any Guarantor, (i) the guarantee of such Guarantor of the Company’s Obligations under a Credit Agreement and (ii) any other Indebtedness permitted to be incurred by such Guarantor under the terms of this Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is on a parity with or subordinated in right of payment to the Guarantee of such Guarantor. Notwithstanding anything to the contrary in the foregoing, Guarantor Senior Indebtedness will not include (u) any Indebtedness of such Guarantor representing a guarantee of Indebtedness of the Company or any other Guarantor which is subordinate or junior to, or pari passu with, the Notes or the Subsidiary Guarantee of such other Guarantor, as the case may be, (v) any Indebtedness that is expressly subordinate or junior in right of payment to any other Indebtedness of such Guarantor, (w) any liability for federal, state, local or other taxes owed or owing by such Guarantor, (x) any Indebtedness of such Guarantor to any of its Subsidiaries or other Affiliates, (y) any trade payables or (z) that portion of any Indebtedness that is incurred in violation of this Indenture.
 
“Hedging Obligations” means, with respect to any Person, the obligations of such Person under (i) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements and (ii) other agreements or arrangements designed to protect such Person against fluctuations in interest rates and the value of foreign currencies purchased by the Company or any of its Subsidiaries in the ordinary course of business.
 
“Holder” means a Person in whose name one of the Notes is registered.
 
“IAI Global Note” mean the global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depository or its nominee that will be issued on the Issue Date or thereafter in a denomination equal to the outstanding principal amount of the Notes sold to Institutional Accredited Investors.”
 
“incur” has the meaning set forth in Section 4.09 hereof.
 
“Indebtedness” means, with respect to any Person, any indebtedness of such Person, whether or not contingent, in respect of borrowed money or evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof) or banker’s acceptances or representing Capital Lease Obligations or the balance deferred and unpaid of the purchase price of any property or representing any Hedging Obligations, except any such balance that constitutes an accrued expense or trade payable, if and to the extent any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP, as well as all indebtedness of others secured by a Lien on any asset of such Person (whether or not
 
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such indebtedness is assumed by such Person) and, to the extent not otherwise included, the guarantee by such Person of any indebtedness of any other Person.
 
“Indenture” means this Indenture, as amended or supplemented from time to time.
 
“Independent” means, with respect to the Company and its Subsidiaries, any person who (i) is in fact independent, (ii) does not directly or indirectly have any material financial interest in the Company or any of its Subsidiaries, or in any Affiliate of the Company or any of its Subsidiaries (other than as a result of holding securities of the Company) and (iii) is not an officer, employee, promoter, underwriter, trustee, partner or person performing similar functions for the Company or any of its Subsidiaries.
 
“Indirect Participant” means a Person who holds a beneficial interest in a Global Note through a Participant.
 
“Initial Notes” has the meaning set forth in the Recitals.
 
“Institutional Accredited Investor” means an institution that is an “accredited investor” as defined in Rule 501 (a) (1), (2), (3), (7) under the Securities Act, who are not also QIBs.
 
“Investments” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the forms of direct or indirect loans (including guarantees of Indebtedness or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP; provided , that an acquisition of assets, Equity Interests or other securities by the Company for consideration consisting of common equity securities of the Company shall not be deemed to be an Investment.
 
“Issue Date” means the date on which the Notes are originally issued.
 
“Legal Defeasance” has the meaning set forth in Section 8.02 hereof.
 
“Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.
 
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“Letter of Transmittal” means the letter of transmittal to be prepared by the Company and sent to all Holders of the Notes for use by such Holders in connection with the Exchange Offer.
 
“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
 
“Like Kind Exchange” means the exchange pursuant to Section 1031 of the Code of (i) any real property (other than any speedway that is owned on or acquired after the date of this Indenture by the Company or any Subsidiary) used or to be used in connection with the business of the Company or (ii) any other real property to be used in connection with the business of the Company.
 
“Liquidated Damages” means all liquidated damages then owing pursuant to Section 5 of the Registration Rights Agreement.
 
“Net Income” means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however, (i) any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with (a) any Asset Sale (including, without limitation, dispositions pursuant to sale and leaseback transactions) or (b) the disposition of any securities by such Person or any of its Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Subsidiaries, (ii) any extraordinary or nonrecurring gain (but not loss), together with any related provision for taxes on such extraordinary or nonrecurring gain (but not loss), (iii) any gain or loss, net of taxes, realized upon the termination of any employee pension benefit plan, (iv) any gain (but not loss), net of taxes (less all fees and expenses relating thereto), in respect of restructuring charges other than in the ordinary course of business, (v) any restoration to net income of any contingency reserve, except to the extent provision for such reserve was made out of income accrued at any time following the Issue Date, (vi) all deferred financing costs written off, and premiums paid and losses or gains incurred, in connection with any early extinguishment of Indebtedness including in connection with the redemption of the Existing Notes, and (vii) any noncash compensation charges or other noncash expenses or charges arising from the grant of or issuance or repricing of stock, stock options or other equity-based awards or any amendment, modification, substitution or change of any such stock, stock options or other equity-based awards.
 
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“Net Proceeds” means the aggregate cash proceeds (or in the case of any Asset Sale involving an Unrestricted Subsidiary, the amount of such aggregate cash proceeds that equals the aggregate amount of all Restricted Investments in such Unrestricted Subsidiary that have not been repaid prior to the date of such Asset Sale) received by the Company or any of its Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees and sales commissions), any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), and any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP. Notwithstanding the foregoing, in the event the Company or any of its Subsidiaries engages in a Like Kind Exchange, Net Proceeds shall not include any cash proceeds with respect to such Like Kind Exchange that are reinvested in or used to purchase pursuant to Section 1031 of the Code like kind real property used or to be used in the business of the Company.
 
“Non-Recourse Debt” means Indebtedness: (i) as to which neither the Company nor any of its Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor or otherwise), or (c) constitutes the lender; and (ii) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit (upon notice or lapse of time or both) any holder of any other Indebtedness of the Company or any of its Subsidiaries to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its Stated Maturity.
 
“Non-U.S. Person” means a Person who is not a U.S. Person.
 
“Note” or “Notes” have the meaning set forth in the Recitals.
 
“Note Amount” has the meaning set forth in Section 4.10 hereof.
 
“Note Custodian” means the Trustee, as custodian with respect to the Global Notes, or any successor entity thereto.
 
“Obligations” means any principal, interest, premium, penalties, fees, indemnifications, reimbursements, damages, costs, expenses and other liabilities payable under the documentation governing any Indebtedness.
 
“Offer Amount” has the meaning set forth in Section 4.10(c) hereof.
 
“Offer Period” has the meaning set forth in Section 4.10(c) hereof.
 
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“Offered Price” has the meaning set forth in Section 4.10(b) hereof.
 
“Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person.
 
“Officers’ Certificate” means a certificate signed on behalf of the Company by two Officers of the Company, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company, that meets the requirements of Section 13.05 hereof.
 
“Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 13.05 hereof. The counsel may be an employee of or counsel to the Company or the Trustee.
 
“Pari Passu Debt Amount” means has the meaning set forth in Section 4.10(b) hereof.
 
“Pari Passu Indebtedness” means Indebtedness that ranks equally in right of payment to the Notes.
 
“Pari Passu Offer” has the meaning set forth in Section 4.10(b) hereof.
 
“Participant” means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream).
 
“Paying Agent” has the meaning set forth in Section 2.03 hereof.
 
“Payment Blockage Notice” has the meaning set forth in Section 10.03 hereof.
 
“Permitted Indebtedness” has the meaning set forth in Section 4.09(c) hereof.
 
“Permitted Investments” means: (i) any Investment in the Company or in a Wholly Owned Subsidiary of the Company; (ii) any Investment in Cash Equivalents; (iii) any Investment by the Company or any Subsidiary of the Company in a Person, if as a result of such Investment (y) such Person becomes a Wholly Owned Subsidiary of the Company or (z) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Wholly Owned Subsidiary of the Company; (iv) any Restricted Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with Section 4.10 hereof; and (v) investments in Unrestricted
 
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Subsidiaries or in non-Wholly-Owned Subsidiaries or in joint ventures engaged in a similar or complementary line of business as the Company on the date of the Investment, which Investments do not exceed at any one time outstanding $15.0 million in the aggregate.
 
“Permitted Liens” means: (i) Liens on assets of the Company and its Subsidiaries securing Senior Indebtedness and Liens on assets of a Guarantor securing Guarantor Senior Indebtedness of such Guarantor; provided , that such Senior Indebtedness or Guarantor Senior Indebtedness, as the case may be, was permitted by the terms of this Indenture to be incurred; (ii) Liens in favor of the Company or a Wholly Owned Subsidiary; (iii) Liens on property of a Person existing at the time such Person is merged into or consolidated with the Company or any Subsidiary of the Company, provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with the Company; (iv) Liens on property existing at the time of acquisition thereof by the Company or any Subsidiary of the Company, provided that such Liens were in existence prior to the contemplation of such acquisition; (v) Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business; (vi) Liens relating to judgments to the extent permitted under this Indenture; (vii) Liens securing the Notes and the Subsidiary Guarantees; (viii) Liens on property of any Foreign Subsidiary securing Indebtedness of such Foreign Subsidiary permitted to be incurred under Section 4.09(c)(xiii); and (ix) Liens existing on the date of this Indenture.
 
“Permitted Refinancing Indebtedness” means any Indebtedness of the Company or any of its Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of the Company or any of its Subsidiaries; provided , that: (i) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of reasonable expenses incurred in connection therewith); (ii) such Permitted Refinancing Indebtedness has a final maturity date no earlier than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; (iii) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness is subordinated in right of payment to the Notes on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and (iv) such Indebtedness is incurred either by the Company or by the Subsidiary which is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded.
 
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“Person” means any individual, corporation, limited or general partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or agency or any political subdivision thereof (including any subdivision or ongoing business of any such entity or substantially all of the assets of any such entity, subdivision or business).
 
“Private Placement Legend” means the legend set forth in Section 2.06(g)(i) to be placed on all Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture.
 
“Purchase Date” has the meaning set forth in Section 4.10(c) hereof.
 
“QIB” means a “qualified institutional buyer” as defined in Rule 144A.
 
“Registrar” has the meaning set forth in Section 2.03 hereof.
 
“Registration Rights Agreement” means the Registration Rights Agreement, dated as of May 16, 2003, by and among the Company and the other parties named on the signature pages thereof, as such agreement may be amended, modified or supplemented from time to time.
 
“Regulations S” means Regulation S promulgated under the Securities Act.
 
“Regulation S Global Note” means a Global Note bearing the Private Placement Legend and deposited with or on behalf of the Depositary and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 903 of Regulation S.
 
“Related Parties” means, when used with respect to any individual: the spouse, lineal descendants, parents and siblings of any such individual; the estates, heirs, legatees and legal representatives of any such individual and any of the foregoing; and all trusts established by any such individual and any of the foregoing for estate planning purposes of which any such individual and any of the foregoing are the sole beneficiaries or grantors.
 
“Representative” means the indenture trustee or other trustee, agent or representative for any Senior Indebtedness.
 
“Responsible Officer,” when used with respect to the Trustee, means any officer within the Corporate Trust Administration of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer or employee to whom such matter is referred because of his knowledge of and familiarity with the particular subject.
 
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“Restricted Definitive Note” means a Definitive Note bearing the Private Placement Legend.
 
“Restricted Global Note” means a Global Note bearing the Private Placement Legend.
 
“Restricted Investment” means an Investment other than a Permitted Investment.
 
“Restricted Payments” has the meaning set forth in Section 4.07 hereof.
 
“Revocation” has the meaning set forth in Section 4.22 hereof.
 
“Rule 144” means Rule 144 promulgated under the Securities Act.
 
“Rule 144A” means Rule 144A promulgated under the Securities Act.
 
“Rule 903” means Rule 903 promulgated under the Securities Act.
 
“Rule 904” means Rule 904 promulgated under the Securities Act.
 
“SEC” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or if at any time after the execution of this Indenture the SEC is not existing and performing the duties now assigned to it under the Securities Act, Exchange Act and TIA then the body performing such duties at such time.
 
“Securities Act” means the Securities Act of 1933, as amended, or any successor statute, and the rules and regulations promulgated by the SEC under that act.
 
“Senior Indebtedness” means (i) Indebtedness under the Credit Agreement (including interest in respect thereof accruing after the commencement of any bankruptcy or similar proceeding to the extent that such interest is allowable as a bankruptcy claim in such proceeding) and (ii) any other Indebtedness permitted to be incurred by the Company under the terms of this Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is on a parity with or subordinated in right of payment to the Notes. Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness will not include (v) any Indebtedness that is expressly subordinate or junior in right of payment to any other Indebtedness of the Company, (w) any liability for federal, state, local or other taxes owed or owing by the Company, (x) any Indebtedness of the Company to any of its Subsidiaries, the Unrestricted Subsidiary or other Affiliates, (y) any trade payables or (z) that portion of Indebtedness that is incurred in violation of this Indenture.
 
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“Shelf Registration Statement” means the Shelf Registration Statement as defined in the Registration Rights Agreement.
 
“Significant Subsidiary” means any Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date hereof.
 
“Stated Maturity” means, with respect to any payment of interest on or principal of any Indebtedness, the date on which such payment was scheduled to be made in the documentation governing such Indebtedness without regard to the occurrence of any subsequent event or contingency.
 
“Subsidiary” means, with respect to any Person, (i) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof) and (ii) any partnership of which (a) the sole general partner or the managing general partner is such Person or a Subsidiary of such Person or (b) the only general partners are such Person or of one or more Subsidiaries of such Person (or any combination thereof). Notwithstanding the foregoing, the Unrestricted Subsidiary shall not, while designated as an unrestricted subsidiary under Section 11.07 hereof, be a Subsidiary of the Company for any purposes of this Indenture.
 
“Subsidiary Guarantee” means, individually and collectively, the guarantees given by the Guarantors pursuant to Article XI hereof, including a notation in the Notes substantially in the form included in Exhibit E.
 
“TIA” means the Trust Indenture Act of 1939 (15 U.S.C.ss.ss.77aaa-77bbbb) as in effect on the date on which this Indenture is qualified under the TIA.
 
“Transfer Restricted Securities” means securities that bear or are required to bear the legend set forth in Section 2.06(g) hereof.
 
“Trustee” means the party named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.
 
“Unrestricted Definitive Note” means one or more Definitive Notes that do not bear and are not required to bear the Private Placement Legend.
 
“Unrestricted Global Note” means a permanent Global Note substantially in the form of Exhibit A attached hereto that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, and that is
 
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deposited with or on behalf of and registered in the name of the Depositary, representing a series of Notes that do not bear the Private Placement Legend.
 
“Unrestricted Subsidiary” as of the Issue Date means Oil-Chem Research Corporation. Following the Issue Date, additional Unrestricted Subsidiaries can be designated pursuant to and in compliance with Section 4.22.
 
“U.S. Person” means a U.S. person as defined in Rule 902(o) under the Securities Act.
 
“Voting Stock” means, with respect to any Person as of any date, the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.
 
“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing (i) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment, by (ii) the then outstanding principal amount of such Indebtedness.
 
“Wholly Owned Subsidiary” of any Person means a Subsidiary of such Person all of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person or by such Person and one or more Wholly Owned Subsidiaries of such Person. Notwithstanding the foregoing, an Unrestricted Subsidiary shall not, while designated as an Unrestricted Subsidiary under Section 11.07 and Section 4.22 hereof, be included in the definition of Wholly Owned Subsidiary for any purposes of this Indenture.
 
Section 1.02. Incorporation by Reference of Trust Indenture Act.
 
Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.
 
The following TIA terms used in this Indenture have the following meanings:
 
“indenture securities” means the Notes and the Subsidiary Guarantees;
 
“indenture security Holder” means a Holder of a Note;
 
“indenture to be Qualified” means this Indenture;
 
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“indenture trustee” or “institutional trustee” means the Trustee;
 
“obligor” on the Notes means the Company and any successor obligor upon the Notes or any Guarantor.
 
All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.
 
Section	 	1.03. Rules of Construction.	
 
Unless the context otherwise requires:
 
(a) a term has the meaning assigned to it;
 
(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
 
(c) “or” is not exclusive;
 
(d) words in the singular include the plural, and in the plural include the singular;
 
(e) provisions apply to successive events and transactions; and
 
(f) references to sections of or rules under the Securities Act shall be deemed to include substitute, replacement of successor sections or rules adopted by the SEC from time to time.
 
ARTICLE II.
 
THE NOTES
 
Section 2.01. Form and Dating.
 
(a) General . The Notes and the certificate of authentication of the Trustee thereon shall be substantially in the form included in Exhibit A hereto, which is incorporated in and expressly made a part of this Indenture. The Subsidiary Guarantees shall be substantially in the form of Exhibit E hereto, the terms of which are incorporated in and made part of this Indenture. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note shall be dated the date of its authentication. The Notes shall be in denominations of $1,000 and integral multiples thereof.
 
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The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Company, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.
 
(b) Global Notes . Notes issued in global form shall be substantially in the form of Exhibit A attached hereto (including the text referred to in footnotes 1 and 3 thereto). Notes issued in certificated form shall be substantially in the form of Exhibit A attached hereto (but without including the text referred to in footnotes 1 and 3 thereto). Each Global Note shall represent such of the outstanding Notes as shall be specified therein and each shall provide that it shall represent the aggregate amount of outstanding Notes from time to time endorsed thereon and that the aggregate amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Trustee or the Note Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof.
 
(c) Euroclear and Clearstream Procedures Applicable . The provisions of Euroclear and Clearstream shall be applicable to transfers of beneficial interests in Global Notes that are held by Participants through Euroclear or Clearstream.
 
Section 2.02. Execution and Authentication.
 
Two Officers shall sign the Notes for the Company by manual or facsimile signature. If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid.
 
A Note shall not be valid until authenticated by the manual signature of the Trustee. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture.
 
The Trustee shall, upon a written order of the Company signed by two Officers (“Authentication Order”), authenticate Notes for original issue up to the aggregate principal amount stated in paragraph 4 of the Notes. The aggregate principal amount of Notes outstanding at any time may not exceed such amount except as provided in Sections 2.07 and 9.01(f) hereof. The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with the Company or an Affiliate of the Company.
 
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Section 2.03. Registrar and Paying Agent.
 
The Company shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange (“Registrar”) and an office or agency where Notes may be presented for payment (“Paying Agent”). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar.
 
The Company initially appoints The Depository Trust Company (“DTC”) to act as Depositary with respect to the Global Notes.
 
The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Note Custodian with respect to the Global Notes.
 
Section 2.04. Paying Agent to Hold Money in Trust.
 
The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium or Liquidated Damages, if any, or interest on the Notes, and will notify the Trustee of any default by the Company or any Guarantor in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money received from the Company or a Subsidiary. If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company or a Guarantor, the Trustee shall serve as Paying Agent for the Notes.
 
Section 2.05. Holder Lists.
 
(a) The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA §312(a). If the Trustee is not the Registrar, the Company shall, or shall cause the Registrar to, furnish to the Trustee at least seven Business Days before each interest payment date, and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may
 
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reasonably require of the names and addresses of the Holders of Notes and the Company and the Guarantors shall otherwise comply with TIA §312(a).
 
Section 2.06. Transfer and Exchange.
 
(a) Transfer and Exchange of Global Notes . A Global Note may not be transferred as a whole except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. All Global Notes will be exchanged by the Company for Definitive Notes if (i) the Company delivers to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 120 days after the date of such notice from the Depositary or (ii) the Company in its sole discretion determines that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and delivers a written notice to such effect to the Trustee. Upon the occurrence of either of the preceding events in (i) or (ii) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a), however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
 
(b) Transfer and Exchange of Beneficial Interests in the Global Notes . The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:
 
(i) Transfer of Beneficial Interests in the Same Global Note . Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend. Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note.
 
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No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(i).
 
(ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes . In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(i) above, the transferor of such beneficial interest must deliver to the Registrar either (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above. Upon consummation of an Exchange Offer by the Company in accordance with Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions contained in the Letter of Transmittal delivered by the Holder of such beneficial interests in the Restricted Global Notes. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof.
 
(iii) Transfer of Beneficial Interests to Another Restricted Global Note . A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(ii) above and the Registrar receives the following:
 
(A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;
 
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(B) if the transferee will take delivery in the form of a beneficial interest in the Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and
 
(C) if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications and certificates and Opinion of Counsel required by item (3) thereof, if applicable.
 
(iv) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in the Unrestricted Global Note . A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(ii) above and:
 
(A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company;
 
(B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;
 
(C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or
 
(D) the Registrar receives the following:
 
(1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or
 
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(2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
 
If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above.
 
Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.
 
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes .
 
(i) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes . If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon receipt by the Registrar of the following documentation:
 
(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;
 
(B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;
 
(C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903
 
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or Rule 904 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;
 
(D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof;
 
(E) if such beneficial interest is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable;
 
(F) such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or
 
(G) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.
 
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(ii) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes . A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if:
 
(A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of such beneficial interest, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company;
 
(B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;
 
(C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or
 
(D) the Registrar receives the following:
 
(1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Definitive Note that does not bear the Private Placement Legend, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or
 
(2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a Definitive Note that does not bear the Private Placement Legend, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
 
(iii) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes . If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for
 
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a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iii) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iii) shall not bear the Private Placement Legend.
 
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests .
 
(i) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes . If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:
 
(A) the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;
 
(B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;
 
(C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;
 
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(D) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof;
 
(E) if such Restricted Definitive Note is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable;
 
(F) if such Restricted Definitive Note is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof;
 
(G) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof, the Trustee shall cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the appropriate Restricted Global Note, in the case of clause (B) above, the 144A Global Note, in the case of clause (C) above, the Regulation S Global Note, and in all other cases, the IAI Global Note.
 
(ii) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes . A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if:
 
(A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company;
 
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(B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;
 
(C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or
 
(D) the Registrar receives the following:
 
(1) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or
 
(2) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
 
Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.
 
(iii) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes . A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes.
 
If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee
 
33

shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred.
 
(e) Transfer and Exchange of Definitive Notes for Definitive Notes . Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e).
 
(i) Restricted Definitive Notes to Restricted Definitive Notes . Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:
 
(A) if the transfer will be made pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;
 
(B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and
 
(C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable.
 
(ii) Restricted Definitive Notes to Unrestricted Definitive Notes . Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if:
 
(A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person
 
34

participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company;
 
(B) any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;
 
(C) any such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or
 
(D) the Registrar receives the following:
 
(1) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or
 
(2) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
 
(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes . A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.
 
(f) Exchange Offer . Upon the occurrence of the Exchange Offer in accordance with the Registration Rights Agreement, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02, the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Notes tendered for acceptance by Persons that certify in the applicable Letters of Transmittal that (x) they are not broker-dealers, (y) they are not participating in a distribution of the Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of the Company, and accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive
 
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Notes accepted for exchange in the Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Company shall execute and the Trustee shall authenticate and deliver to the Persons designated by the Holders of Definitive Notes so accepted Definitive Notes in the appropriate principal amount.
 
(g) Legends . The following legends shall appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture.
 
(i) Private Placement Legend .
 
(A) Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form :
 
“THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY BY THE INITIAL PURCHASERS TO A PERSON WHOM 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, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER 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 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) OR IN
 
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ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), TO THE COMPANY OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN ADDITION, TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND BY SUBSEQUENT INVESTORS, AS SET FORTH IN THROUGH ABOVE AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY EVIDENCED HEREBY.”
 
(B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend.
 
(ii) Global Note Legend. Each Global Note shall bear a legend in substantially the following form:
 
“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.”
 
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(h) Cancellation and/or Adjustment of Global Notes . At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.
 
(i) General Provisions Relating to Transfers and Exchanges .
 
(i) To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon the Company’s order or at the Registrar’s request.
 
(ii) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, 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 taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.11, 3.07, 3.08, 4.10, 4.15, 9.03 and 9.05 hereof).
 
(iii) The Registrar shall not be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.
 
(iv) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.
 
(v) The Company shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for
 
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 	redemption under Section 3.02 hereof and ending at the close of business on the day of selection, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part or (C) to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date.	
 
(vi) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary.
 
(vii) The Trustee shall authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof.
 
(viii) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile.
 
Section 2.07. Replacement Notes.
 
If any mutilated Note is surrendered to the Trustee, or the Company and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Company shall issue and the Trustee, upon the written order of the Company signed by two Officers of the Company, shall authenticate a replacement Note if the Trustee’s requirements are met. If required by the Trustee or the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Company may charge for its expenses in replacing a Note.
 
Every replacement Note is an additional obligation of the Company and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.
 
Section 2.08. Outstanding Notes.
 
The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section as not outstanding. Except as set
 
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forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note.
 
If a Note is replaced pursuant to Section 2.07 hereof, such Note ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser.
 
If the principal amount of any Note is considered paid under Section 4.01 hereof, the Note ceases to be outstanding and interest on it ceases to accrue.
 
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest.
 
Section 2.09. Treasury Notes.
 
In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company, any Guarantor or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Trustee knows are so owned shall be so disregarded.
 
Section 2.10. Temporary Notes.
 
Until definitive Notes are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Notes upon a written order of the Company signed by two Officers of the Company. Temporary Notes shall be substantially in the form of definitive Notes but may have variations that the Company considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Notes in exchange for temporary Notes.
 
Holders of temporary Notes shall be entitled to all of the benefits of this Indenture.
 
Section 2.11. Cancellation.
 
The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee (and no one else) shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall destroy cancelled Notes (subject to the
 
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record retention requirement of the Exchange Act). Certification of the destruction of all cancelled Notes shall be delivered to the Company. The Company may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation.
 
Section 2.12. Defaulted Interest.
 
If the Company defaults in a payment of interest on the Notes, the Company shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof, and such defaulted interest shall cease to be payable to the Persons who were Holders on the relevant regular record date. The Company shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Company shall fix or cause to be fixed each such special record date and payment date; provided , that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) shall mail or cause to be mailed to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid.
 
ARTICLE III.
 
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee.
 
If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, the Company shall furnish to the Trustee, at least 30 days but not more than 60 days before a redemption date, an Officers’ Certificate setting forth (i) the clause of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the redemption price.
 
Section 3.02. Selection of Notes to Be Redeemed.
 
If less than all of the Notes are to be redeemed at any time, the Trustee shall select the Notes to be redeemed among the Holders of the Notes in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot or in accordance with any other method the Trustee considers fair and appropriate. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise
 
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provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption.
 
The Trustee shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. Notes and portions of Notes selected shall be in amounts of $1,000 or integral multiples thereof; provided , that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.
 
Section	 	3.03. Notice of Redemption.	
 
At least 30 days but not more than 60 days before a redemption date, the Company shall mail or cause to be mailed, by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address.
 
The notice shall identify the Notes to be redeemed and shall state:
 
(a) the redemption date;
 
(b) the redemption price;
 
(c) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion shall be issued upon cancellation of the original Note;
 
(d) the name and address of the Paying Agent;
 
(e) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;
 
(f) that, unless the Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date;
 
(g) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and
 
(h) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes.
 
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At the Company’s request, the Trustee shall give the notice of redemption in the Company’s name and at its expense; provided , however , that the Company shall have delivered to the Trustee, at least 45 days prior to the redemption date, an Officers’ Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.
 
Section 3.04. Effect of Notice of Redemption.
 
Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price. A notice of redemption may not be conditional.
 
Section 3.05. Deposit of Redemption Price.
 
On or prior to the redemption date, the Company shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption price of and accrued interest on all Notes to be redeemed on that date. The Trustee or the Paying Agent shall promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption price of, and accrued interest on, all Notes to be redeemed.
 
If the Company complies with the provisions of the preceding paragraph, on and after the redemption date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption. If a Note is redeemed on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.
 
Section 3.06. Notes Redeemed in Part.
 
Upon surrender of a Note that is redeemed in part, the Company shall issue and, upon the Company’s written request, the Trustee shall authenticate for the Holder at the expense of the Company a new Note equal in principal amount to the unredeemed portion of the Note surrendered.
 
Section 3.07. Optional Redemption.
 
(a) The Company shall not have the option to redeem the Notes pursuant to this Section 3.07 prior to June 1, 2008. Thereafter, the Company shall have the option to redeem the Notes, in whole or in part, at the redemption prices (expressed as
 
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percentages of principal amount) set forth below plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the applicable redemption date, if redeemed during the 12-month period beginning on June 1 of the years indicated below:
 
YEAR
	  	PERCENTAGE
	 	
2008	  	103.375	%	
2009	  	102.250	%	
2010	  	101.125	%	
2011 and thereafter	  	100.000	%	
 
(b) At any time prior to June 1, 2006, the Company, at its option, may use the net proceeds of one or more Equity Offerings to redeem up to an aggregate of 35% of the aggregate principal amount of Notes originally issued under this Indenture at a redemption price equal to 106.75% of the aggregate principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, to the redemption date (subject to the rights of Holders of record on relevant record dates to receive interest due on an interest payment date); provided that this redemption provision shall not be applicable with respect to any transaction that results in a Change of Control; provided , further, that at least 65% of the initial aggregate principal amount of Notes must remain outstanding immediately after the occurrence of such redemption. Notwithstanding anything in this Article III to the contrary, in order to effect this redemption, the Company must mail a notice of redemption no later than 30 days after the closing of the related Equity Offering and must complete such redemption within 60 days of the closing of the Equity Offering.
 
(c) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Section 3.01 through 3.06 hereof.
 
Section 3.08. Mandatory Redemption.
 
Except as set forth under Sections 4.10 and 4.15 hereof, the Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes.
 
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ARTICLE IV.
 
COVENANTS
 
Section 4.01. Payment of Notes.
 
The Company shall pay or cause to be paid the principal of, premium, if any, and interest on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Company or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due. The Company shall pay all Liquidated Damages, if any, in the same manner on the dates and in the amounts set forth in the Registration Rights Agreement.
 
The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess of the then applicable interest rate on the Notes to the extent lawful. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Liquidated Damages (without regard to any applicable grace period) at the same rate to the extent lawful.
 
Section 4.02. Maintenance of Office or Agency.
 
The Company shall maintain in the Borough of Manhattan, the City of New York, an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of 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.
 
The Company also from time to time may designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and from time to time may 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 the Borough of Manhattan, the City of New York for such purposes. The Company shall 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.
 
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The Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03.
 
Section 4.03. Reports.
 
(a) Whether or not required by the rules and regulations of the SEC, so long as any Notes are outstanding, the Company shall furnish to the Trustee and to all Holders reasonably promptly after it is or would have been required to file such with the SEC (i) all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were required to file such forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report thereon by the Company’s certified independent accountants and (ii) all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports. In addition, whether or not required by the rules and regulations of the SEC, at any time after the Company files a registration statement with respect to the Exchange Offer or a Shelf Registration Statement, the Company shall file a copy of all such information and reports with the SEC for public availability (unless the SEC will not accept such filing) and shall promptly make such information available to all securities analysts and prospective investors who request it in writing. The Company and the Guarantors shall at all times comply with TIA §314(a). Notwithstanding anything to the contrary set forth in this Section 4.03, the Trustee shall have no duty to review the reports required to be provided by this Section 4.03 for purposes of determining compliance with any provisions of this Indenture.
 
(b) For so long as any Notes remain outstanding, the Company and the Guarantors shall furnish to all Holders and prospective purchasers of the Notes designated by the Holders of Notes, promptly upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
 
Section 4.04. Compliance Certificate.
 
(a) The Company shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers’ Certificate stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no
 
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event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event and what action the Company is taking or proposes to take with respect thereto.
 
(b) So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants or the Public Company Accounting Oversight Board, the year-end financial statements delivered pursuant to Section 4.03(a) above shall be accompanied by a written statement of the Company’s independent public accountants (who shall be a firm of established national reputation) that in making the examination necessary for certification of such financial statements, nothing has come to their attention that would lead them to believe that the Company has violated any provisions of Article IV or Article V hereof or, if any such violation has occurred, specifying the nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation.
 
(c) The Company shall, so long as any of the Notes are outstanding, deliver to the Trustee, forthwith upon the Company or any Officer becoming aware of any Default or Event of Default, an Officers’ Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto.
 
Section 4.05. Taxes.
 
The Company shall pay, and shall cause each of its Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies, except such as are contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes.
 
Section 4.06. Stay, Extension and Usury Laws.
 
The Company and each Guarantor covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company and each Guarantor (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted.
 
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Section 4.07. Restricted Payments.
 
(a) The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make any other payment or distribution on account of the Equity Interests of the Company or any of its Subsidiaries (including, without limitation, any payment in connection with any merger or consolidation involving the Company or any of its Subsidiaries) or to the direct or indirect holders of the Equity Interests of the Company or any of its Subsidiaries in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company, dividends or distributions payable to the Company or any Subsidiary of the Company or dividends or distributions made by a Subsidiary of the Company to all holders of its Common Stock on a pro rata basis); (ii) purchase, redeem or otherwise acquire or retire for value any Equity Interests of the Company, any Subsidiary of the Company, any Unrestricted Subsidiary or any direct or indirect parent of the Company (other than any such Equity Interests owned by the Company or any Subsidiary of the Company); (iii) make any principal payment on, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes (other than the Notes), except at Stated Maturity; or (iv) make any Restricted Investment (all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:
 
(1) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; and
 
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(b) of this Indenture; and
 
(3) such Restricted Payment, together with the aggregate of all other Restricted Payments made by the Company and its Subsidiaries after the date of this Indenture (excluding Restricted Payments permitted by clauses (2), (3), (4), (7), (8) and (9) of the next succeeding paragraph), is less than the sum of (i) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) commencing on the first day of the fiscal quarter beginning immediately prior to the Issue Date to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus (ii) 100% of the aggregate net cash proceeds and the fair market value, as determined in good faith by the Board of Directors of the Company, of marketable securities received by the Company from the issue or sale since the date of this Indenture of Equity Interests of the Company or of debt securities of the Company that have been converted into such
 
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Equity Interests (other than Equity Interests (or convertible debt securities) sold to a Subsidiary of the Company or an Unrestricted Subsidiary and other than Disqualified Stock or debt securities that have been converted into Disqualified Stock), plus (iii) to the extent that any Restricted Investment that was made after the date of this Indenture is sold for cash or otherwise liquidated or repaid for cash, the lesser of (A) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (B) the initial amount of such Restricted Investment, plus (C) the amount resulting from designation of an Unrestricted Subsidiary as a Subsidiary or an Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary for purposes of this Indenture (such amount to be valued as provided in the second succeeding paragraph) not to exceed the amount of Investments previously made by the Company or any Subsidiary in such Unrestricted Subsidiary and which was, while such Unrestricted Subsidiary was treated as an Unrestricted Subsidiary for purposes of this Indenture, treated as a Restricted Payment under this Indenture.
 
(b) The foregoing provisions will not prohibit: (1) the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration such payment would have complied with the provisions of this Indenture; (2) the redemption, repurchase, retirement or other acquisition of any Equity Interests of the Company in exchange for, or out of the proceeds of, the substantially concurrent sale (other than to a Subsidiary of the Company or an Unrestricted Subsidiary) of other Equity Interests of the Company (other than any Disqualified Stock); provided , that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement or other acquisition shall be excluded from clause (3)(ii) of the preceding paragraph; (3) the defeasance, redemption or repurchase of pari passu or subordinated Indebtedness with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness or the substantially concurrent sale (other than to a Subsidiary of the Company or an Unrestricted Subsidiary) of Equity Interests of the Company (other than Disqualified Stock); provided , that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement or other acquisition shall be excluded from clause (3)(ii) of the preceding paragraph; (4) the making of any Restricted Investments after the date of this Indenture not exceeding in the aggregate $75.0 million provided , that no Default or Event of Default shall have occurred and be continuing immediately after such transaction; (5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Subsidiary of the Company held by any member of the Company’s (or any of its Subsidiaries’) management pursuant to any management equity subscription agreement or stock option agreement; provided , that (A) the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests shall not exceed $1.0 million in any 12-month period plus the aggregate cash proceeds received by the Company during such 12-month period from any reissuance of Equity Interests by the Company to members of management of the Company and its Subsidiaries, and (B) no Default or Event of Default shall have occurred and be continuing immediately after such transaction; (6) the
 
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payment of cash dividends on the Company’s shares of Common Stock in the aggregate amount per fiscal year equal to $0.30 per share for each share of Common Stock of the Company outstanding as of the one record date for dividends payable in respect of such fiscal year plus an additional amount per share equal to 33% of such permitted cash per share dividend payment to the extent the Company’s Board of Directors approves any such increase in dividends per share (as such amount shall be adjusted for changes in the capitalization of the Company upon recapitalizations, reclassifications, stock splits, stock dividends, reverse stock splits, stock consolidations and similar transactions), provided, however , in the event a Change of Control occurs, the aggregate amounts permitted to be paid in cash dividends per fiscal year shall not exceed the aggregate amounts of cash dividends paid in the same fiscal year most recently occurring prior to such Change of Control, provided , further , that for purposes of this exception, shares of Common Stock issued for less than fair market value (other than shares issued pursuant to options or otherwise in accordance with the Company’s employee stock option, purchase or option plans) shall not be deemed outstanding; provided , further that no Default or Event of Default shall have occurred and be continuing immediately after such transaction; (7) the repurchase of Capital Stock deemed to occur upon exercise of stock options to the extent that shares of such Capital Stock represent a portion of the exercise price of such options; (8) the payment of cash in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exercisable for Capital Stock of the Company; and (9) payments or distributions to stockholders pursuant to appraisal rights required under applicable law in connection with any consolidation, merger or transfer of assets that complies with Section 5.01.
 
In connection with the designation of an Unrestricted Subsidiary as a Subsidiary or the Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary for purposes of this Indenture, all outstanding Investments previously made by the Company or any Subsidiary in an Unrestricted Subsidiary will be deemed to constitute Investments in an amount equal to the greater of (x) the net book value of such Investments at the time of such designation or such Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary for purposes of this Indenture and (y) the fair market value of such Investments at the time of such designation or such Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary for purposes of this Indenture.
 
The amount of all Restricted Payments (other than cash) shall be the fair market value (evidenced by a resolution of the Board of Directors of the Company set forth in an Officers’ Certificate delivered to the Trustee) on the date of the Restricted Payment of the asset(s) proposed to be transferred by the Company or such Subsidiary, as the case may be, pursuant to the Restricted Payment. Not later than the date of making any Restricted Payment, the Company shall deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed, which calculations may be based upon the Company’s latest available financial statements.
 
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Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries.
 
The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Subsidiary to (i)(a) pay dividends or make any other distributions to the Company or any of its Subsidiaries (1) on its Capital Stock or (2) with respect to any other interest or participation in, or measured by, its profits, or (b) pay any indebtedness owed to the Company or any of its Subsidiaries, (ii) make loans or advances to the Company or any of its Subsidiaries or (iii) transfer any of its properties or assets to the Company or any of its Subsidiaries, except for such encumbrances or restrictions existing under or by reason of (a) applicable law, (b) this Indenture, (c) the Credit Agreement as in effect on the date of this Indenture (and thereafter only to the extent such encumbrances or restrictions are no more restrictive than those in effect under the Credit Agreement as in effect on the date of this Indenture), (d) Existing Indebtedness, (e) any instrument governing Indebtedness or Capital Stock of a Person acquired by the Company or any of its Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired, (f) customary non-assignment provisions in leases entered into in the ordinary course of business and consistent with past practices, (g) Capital Lease Obligations or purchase money obligations for property acquired in the ordinary course of business that impose restrictions of the nature described in Section 4.09(c)(iii) on the property so acquired, (h) restrictions contained in Indebtedness of Foreign Subsidiaries permitted to be incurred under this Indenture, so long as such restrictions or encumbrances are customary for Indebtedness of the type issued and permitted by their terms at all times (other than during the occurrence and continuation of a payment default under such Indebtedness) distributions or loans to the Company to permit payments on the Notes when due as required by the terms of this Indenture (in the view of an Officer of the Company as expressed in an Officers’ Certificate thereof); and (i) Permitted Refinancing Indebtedness; provided , that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are no more restrictive than those contained in the agreements governing the Indebtedness being refinanced.
 
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.
 
(a) The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Indebtedness) and that the Company will not issue any Disqualified Stock and will not permit any of its Subsidiaries to issue any shares of preferred stock.
 
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(b) The Company and any Guarantor may incur Indebtedness (including Acquired Indebtedness) and the Company may issue shares of Disqualified Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
 
(c) The foregoing provisions will not apply to any of the following items of indebtedness (“Permitted Indebtedness”):
 
(i) the incurrence by the Company and the Guarantors of Indebtedness under the Credit Agreement (including guarantees thereof) in an aggregate principal amount at any time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed $350.0 million less the aggregate amount of all Net Proceeds of Asset Sales applied to permanently reduce the commitments with respect to such Indebtedness pursuant to Section 4.10 hereof;
 
(ii) the incurrence by the Company of Indebtedness represented by the Notes, excluding any Additional Notes, and the incurrence by the Guarantors of Indebtedness represented by the Subsidiary Guarantees;
 
(iii) the incurrence by the Company or any of its Subsidiaries of Indebtedness represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions), mortgage financings or purchase money obligations, in each case incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of the Company or such Subsidiary, in an aggregate principal amount not to exceed $20.0 million at any time outstanding;
 
(iv) the incurrence by the Company or any of its Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund, (A) Existing Indebtedness (other than the Existing Notes and the 1999 Credit Agreement) or (B) Indebtedness that was permitted by this Indenture to be incurred (other than any such Indebtedness incurred pursuant to clause (i), (iii), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii) or (xiv) of this Section);
 
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(v) the incurrence by the Company or any of its Wholly Owned Subsidiaries or any Guarantor of intercompany Indebtedness between or among the Company and any of its Wholly Owned Subsidiaries or any Guarantor; provided , however , that (i) if the Company is the obligor on such Indebtedness, such Indebtedness is expressly subordinate to the payment in full of all Obligations with respect to the Notes and (ii)(A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company, a Wholly Owned Subsidiary or a Guarantor and (B) any sale or other transfer of any such Indebtedness to a Person that is not either the Company, a Wholly Owned Subsidiary or a Guarantor shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Subsidiary, as the case may be;
 
(vi) the incurrence by the Company of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to Indebtedness that is permitted by the terms of this Indenture to be incurred;
 
(vii) the incurrence by the Company of Hedging Obligations under currency exchange agreements; provided , that such agreements were entered into in the ordinary course of business;
 
(viii) the incurrence of Indebtedness of a Guarantor represented by guarantees of Indebtedness of the Company that has been incurred in accordance with the terms of this Indenture;
 
(ix) Indebtedness of the Company or any of its Subsidiaries in connection with surety, performance, appeal or similar bonds, completion guarantees or similar instruments entered into in the ordinary course of business or from letters of credit or other obligations in respect of self-insurance and workers’ compensation obligations or similar arrangements; provided that, in each case contemplated by this clause (ix), upon the drawing of such instrument, such obligations are reimbursed within 30 days following such drawing; provided, further , that such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
 
(x) Indebtedness of the Company or any of its Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within three business days of incurrence;
 
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(xi) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease the Notes pursuant to Section 8.02 or Section 8.03;
 
(xii) Indebtedness of the Company or any Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Subsidiary pursuant to such an agreement, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Subsidiary; provided that the maximum assumable liability in respect of all such obligations shall at no time exceed the gross proceeds actually paid or received by the Company and any Subsidiary, including the fair market value of non-cash proceeds;
 
(xiii) Indebtedness of Foreign Subsidiaries in the aggregate principal amount of $25 million outstanding at any one time in the aggregate; provided that on the date of incurrence of any such Indebtedness the Company could borrow $1.00 of Indebtedness (other than Permitted Indebtedness) under paragraph (b) above; and
 
(xiv) the incurrence by the Company of Indebtedness (in addition to Indebtedness permitted by any other clause of this paragraph) in an aggregate principal amount (or accreted value, as applicable) at any time outstanding not to exceed $25.0 million.
 
For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section, the Company in its sole discretion shall classify or reclassify such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types; provided that Indebtedness under the Credit Agreement which is outstanding or available on the Issue Date or entered into in connection with the refinancing of the 1999 Credit Agreement, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, in an amount not in excess of the amount permitted to be incurred pursuant to clause (c)(i) above, shall be deemed to have been incurred pursuant to clause (c)(i) above rather than pursuant to paragraph (b) above.
 
Indebtedness permitted by this Section need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section permitting such Indebtedness.
 
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Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on any Capital Stock (other than Disqualified Stock) in the form of additional shares of the same class of Capital Stock (other than Disqualified Stock) will not be deemed to be an incurrence of Indebtedness for purposes of this Section; provided , in each such case, that the amount thereof as accrued is included in Fixed Charge Coverage Ratio of the Company.
 
For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
 
If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred shall be equal to the greater of (x) the principal of such Indebtedness and (y) the amount that may be drawn under such letter of credit.
 
The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
 
Section 4.10. Asset Sales.
 
(a) The Company will not, and will not permit any of its Subsidiaries to, consummate an Asset Sale unless (i) the Company (or the Subsidiary, as the case may be) receives consideration at the time of such Asset Sale at least equal to the fair market value (evidenced by a resolution of the Board of Directors of the Company, set forth in an Officers’ Certificate delivered to the Trustee, or by an independent appraisal by an accounting, appraisal or investment banking firm of national standing) of the assets or Equity Interests issued or sold or otherwise disposed of and (ii) at least 75% of the consideration therefor received by the Company or such Subsidiary is in the form of cash or Cash Equivalents; provided , however , that (x) clause (ii) of this paragraph shall not apply to any Asset Sale involving an Unrestricted Subsidiary and (y) this paragraph shall not apply to any Like Kind Exchange.
 
For purposes of requirement (a)(ii) of this Section, the following will be deemed to be cash: (A) the amount of any Senior Indebtedness of the Company or any Subsidiary that is actually assumed by the transferee in such Asset Sale and from which the Company and the Subsidiaries are fully and unconditionally released (excluding any liabilities that are incurred in connection with or in anticipation of such Asset Sale and contingent liabilities) and (B) the amount of any notes, securities or other similar obligations received by the Company or any Subsidiary from such transferee that are immediately converted, sold or exchanged (or are converted, sold or exchanged within 30
 
55

days of the related Asset Sale) by the Company or the Subsidiaries into cash in an amount equal to the net cash proceeds realized upon such conversion, sale or exchange.
 
(b) Within 365 days after the receipt of any Net Proceeds from an Asset Sale, the Company may apply such Net Proceeds, at its option, (i) to permanently reduce Senior Indebtedness of the Company or any Guarantor (and correspondingly reduce commitments with respect thereto in the case of any reduction of borrowings under the Credit Agreement), provided , however , that any Indebtedness created in connection with any registered offering of securities under the Securities Act or a private placement of securities (including under Rule 144A) pursuant to an exemption from the registration requirements of the Securities Act shall be excluded from this clause (i); (ii) to the acquisition of a controlling interest in another business, the making of a capital expenditure or the acquisition of other long-term assets, in each case, in the same or a similar line of business as the Company was engaged in on the date of this Indenture or (iii) to reimburse the Company or its Subsidiaries for expenditures made, and costs incurred, to repair, rebuild, replace or restore property subject to loss, damage or taking to the extent that the Net Proceeds consist of insurance proceeds received on account of such loss, damage or taking. Pending the final application of any such Net Proceeds, the Company may temporarily reduce Senior Indebtedness or otherwise invest such Net Proceeds in any manner that is not prohibited by this Indenture. Any Net Proceeds from Asset Sales that are not applied or invested as provided in the first sentence of this clause (b) will be deemed to constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds exceeds $5.0 million, the Company will apply the Excess Proceeds to the repayment of the Notes and any other Pari Passu Indebtedness outstanding with similar provisions requiring the Company to make an offer to purchase such Indebtedness with the proceeds from any Asset Sale as follows:
 
(A) the Company will make an offer to purchase (an “Asset Sale Offer”) from all Holders of the Notes in accordance with the procedures set forth in the Indenture in the maximum principal amount (expressed as a multiple of $1,000) of Notes that may be purchased out of an amount (the “Note Amount”) equal to the product of such Excess Proceeds multiplied by a fraction, the numerator of which is the outstanding principal amount of the Notes, and the denominator of which is the sum of the outstanding principal amount (or accreted value in the case of Indebtedness issued with original issue discount) of the Notes and such Pari Passu Indebtedness (subject to proration in the event such amount is less than the aggregate Offered Price (as defined herein) of all Notes tendered) and
 
(B) to the extent required by such Pari Passu Indebtedness to permanently reduce the principal amount of such Pari Passu Indebtedness (or accreted value in the case of Indebtedness issued with original issue discount), the Company will make an offer to purchase or otherwise
 
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repurchase or redeem Pari Passu Indebtedness (a “Pari Passu Offer”) in an amount (the “Pari Passu Debt Amount”) equal to the excess of the Excess Proceeds over the Note Amount; provided that in no event will the Company be required to make a Pari Passu Offer in a Pari Passu Debt Amount exceeding the principal amount (or accreted value) of such Pari Passu Indebtedness plus the amount of any premium required to be paid to repurchase such Pari Passu Indebtedness.
 
The Notes will be purchased at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the date of purchase such Asset Sale Offer is consummated (the “Offered Price”), in accordance with the procedures set forth in this Indenture. To the extent that the aggregate Offered Price of the Notes tendered pursuant to an Asset Sale Offer is less than the Note Amount relating thereto or the aggregate amount of Pari Passu Indebtedness that is purchased in a Pari Passu Offer is less than the Pari Passu Debt Amount, the Company may use any remaining Excess Proceeds for general corporate purposes, subject to the other covenants contained in the Indenture. If the aggregate principal amount of Notes and Pari Passu Indebtedness surrendered by Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes to be purchased on a pro rata basis. Upon the completion of the purchase of all the Notes tendered pursuant to an Asset Sale Offer and the completion of a Pari Passu Offer, the amount of Excess Proceeds, if any, shall be reset at zero.
 
Notwithstanding the foregoing, the Company and its Subsidiaries will be permitted to consummate one or more Asset Sales with respect to assets or properties with an aggregate fair market value (evidenced by a resolution of the Board of Directors set forth in an Officers’ Certificate delivered to the Trustee) not in excess of $7.5 million with respect to all such Asset Sales made subsequent to the date of this Indenture without complying with the provisions of the preceding paragraphs.
 
In the event of the transfer of substantially all (but not all) of the property and assets of the Company as an entirety to a Person in a transaction permitted under Section 5.01 hereof, the successor corporation shall be deemed to have sold the properties and assets of the Company not so transferred for purposes of this Section and shall comply with the provisions of this Section with respect to such deemed sale as if it were an Asset Sale. In addition, the fair market value of such properties and assets of the Company or its Subsidiaries deemed to be sold shall be deemed to be Net Proceeds for purposes of this Section.
 
If at any time any non-cash consideration received by the Company in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash, then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Proceeds thereof shall be applied in accordance with this Section.
 
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(c) In the event that, pursuant to Section 4.10(b) hereof, the Company shall be required to commence an Asset Sale Offer, the Company shall follow the procedures specified below.
 
The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the “Offer Period”). No later than five Business Days after the termination of the Offer Period (the “Purchase Date”), the Company shall purchase the principal amount of Notes required to be purchased pursuant to Section 4.10(b) hereof (the “Offer Amount”) or, if less than the Offer Amount has been tendered, all Notes tendered in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made. If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest shall be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Asset Sale Offer.
 
Upon the commencement of an Asset Sale Offer, the Company shall send, by first class mail, a notice to the Trustee and each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice, which shall govern the terms of the Asset Sale Offer, shall state:
 
(i) that the Asset Sale Offer is being made pursuant to this Section 4.10 and the length of time the Asset Sale Offer shall remain open;
 
(ii) the Offer Amount, the purchase price and the Purchase Date;
 
(iii) that any Note not tendered or accepted for payment shall continue to accrue interest;
 
(iv) that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Purchase Date;
 
(v) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may only elect to have all of such Note purchased and may not elect to have only a portion of such Note purchased;
 
(vi) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed, or transfer by book-entry transfer, to the Company, a
 
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depository, if appointed by the Company, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;
 
(vii) that Holders shall be entitled to withdraw their election if the Company, the depository or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;
 
(viii) that, if the aggregate principal amount of Notes surrendered by Holders exceeds the Offer Amount, the Company shall select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $1,000, or integral multiples thereof, shall be purchased); and
 
(ix) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer).
 
On or before the Purchase Date, the Company shall, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered, and shall deliver to the Trustee an Officers’ Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 4.10. The Company, the Depository or the Paying Agent, as the case may be, shall promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company shall promptly issue a new Note, and the Trustee, upon written request from the Company shall authenticate and mail or deliver such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company shall publicly announce the results of the Asset Sale Offer on the Purchase Date.
 
Other than as specifically provided in this Section 4.10, any purchase pursuant to this Section 4.10 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.
 
(d) The Company will comply with the requirements of Section 14(e) of, and Rule 14e-1, under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to an Asset Sale Offer.
 
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Section 4.11. Transactions with Affiliates.
 
The Company will not, and will not permit any of its Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an “Affiliate Transaction”), unless (i) such Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Subsidiary with an unrelated Person, (ii) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $4.0 million, the Company delivers to the Trustee a resolution of the Board of Directors of the Company set forth in an Officers’ Certificate certifying that such Affiliate Transaction complies with clause (i) above and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors of the Company or, if there are no such disinterested directors, by a majority of the members of the Board of Directors of the Company and (iii) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $15.0 million, the Company delivers to the Trustee an opinion as to the fairness to the Holders of Notes of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing; provided , that (1) any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock options and stock ownership plans approved by the Board of Directors of the Company or the payment of fees and indemnities of directors of the Company and its Subsidiaries in the ordinary course of business and consistent with the past practices of the Company or such Subsidiary, (2) loans or advances to employees in the ordinary course of business, (3) transactions between or among the Company and/or its Wholly Owned Subsidiaries, (4) Restricted Payments (other than Restricted Investments) that are permitted by the provisions of Section 4.07 hereof and (5) any transactions undertaken pursuant to any contracts in existence on the Issue Date (as in effect on the Issue Date) and any renewals, replacements or modifications of such contracts (pursuant to new transactions or otherwise) on terms no less favorable to the Holders of the Notes, than those in effect on the Issue Date, in each case, shall not be deemed Affiliate Transactions.
 
Section 4.12. Liens.
 
The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien securing Indebtedness on any asset now owned or hereafter acquired, or any income or profits therefrom or assign or convey any right to receive income therefrom, except Permitted Liens, unless all payments due under this Indenture and the Notes are secured on an equal and ratable basis with the Indebtedness so secured until such time as such Indebtedness is
 
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no longer secured by a Lien; provided , that if such Indebtedness is by its terms expressly subordinated to the Notes or any Subsidiary Guarantee, the Lien securing such Indebtedness shall be subordinate and junior to the Lien securing the Notes and the Subsidiary Guarantees with the same relative priority as such subordinate or junior Indebtedness shall have with respect to the Notes and the Subsidiary Guarantees.
 
Section 4.13. Guarantees of Certain Indebtedness.
 
The Company will not permit any of its Subsidiaries that is not a Guarantor to incur, guarantee or secure through the granting of Liens the payment of any Indebtedness, and the Company will not, and will not permit any of its Subsidiaries to, pledge any intercompany notes representing obligations of any of its Subsidiaries, to secure the payment of any Indebtedness, in each case unless such Subsidiary, the Company and the Trustee execute and deliver a supplemental indenture to this Indenture evidencing such Subsidiary’s Subsidiary Guarantee (providing for the unconditional guarantee by such Subsidiary, on a senior subordinated basis, of the Notes).
 
Section 4.14. Corporate Existence.
 
Subject to Article V hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect (a) its corporate existence, and the corporate, partnership or other existence of each of its Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company or any such Subsidiary and (b) the rights (charter and statutory), licenses and franchises of the Company and its Subsidiaries; provided , however , that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Subsidiaries, if the Board of Directors of the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the Holders of the Notes.
 
Section 4.15. Offer to Repurchase upon Change of Control.
 
(a) Upon the occurrence of a Change of Control, each Holder of Notes will have the right to require the Company to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of such Holder’s Notes pursuant to the offer described below (the “Change of Control Offer”) at an offer price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest and Liquidated Damages, if any, thereon (the “Change of Control Payment”) to the date of purchase (the “Change of Control Payment Date”). Within 15 days following any Change of Control, the Company will mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase Notes pursuant to the procedures required by this Indenture and described in such notice. The Change of
 
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Control Payment Date shall be a Business Day not less than 30 days nor more than 60 days after such notice is mailed. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control.
 
(b) On the Change of Control Payment Date, the Company will, to the extent lawful, (i) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered and deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company. The Paying Agent will promptly mail to each Holder of Notes so tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided , that each such new Note will be in a principal amount of $1,000 or an integral multiple thereof. Prior to complying with the provisions of this Section 4.15, but in any event within 90 days following a Change of Control, the Company will either repay all outstanding Senior Indebtedness or obtain the requisite consents, if any, under all agreements governing outstanding Senior Indebtedness to permit the repurchase of Notes required by this Section 4.15. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.
 
(c) The Company will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements of this Section 4.15 applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.
 
Section 4.16. Limitation on Layering.
 
Notwithstanding the provisions of Section 4.09 hereof, (a) the Company shall not incur any Indebtedness that is subordinate or junior in right of payment to any Indebtedness of the Company and senior in any respect in right of payment to the Notes, and (b) no Guarantor shall incur any Indebtedness that is subordinate or junior in right of payment to any Indebtedness of such Guarantor and senior in any respect in right of payment to the Subsidiary Guarantee of such Guarantor.
 
Section 4.17. Sale and Leaseback Transactions.
 
The Company will not, and will not permit any of its Subsidiaries to, enter into any sale and leaseback transaction; provided , that the Company or one of its
 
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Subsidiaries may enter into a sale and leaseback transaction if (a) the Company or such Subsidiary could have (i) incurred Indebtedness in an amount equal to the Attributable Indebtedness relating to such sale and leaseback transaction pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(b) hereof and (ii) incurred a Lien to secure such Indebtedness pursuant to Section 4.12, (b) the gross cash proceeds of such sale and leaseback transaction are at least equal to the fair market value (as determined in good faith by the Board of Directors of the Company and set forth in an Officers’ Certificate delivered to the Trustee) of the property that is the subject of such sale and leaseback transaction and (c) the transfer of assets in such sale and leaseback transaction is permitted by, and the Company applies the proceeds of such transaction in compliance with, Section 4.10 hereof.
 
Section 4.18. Limitation on Issuances and Sales of Capital Stock of Wholly Owned Subsidiaries.
 
The Company (a) will not, and will not permit any Wholly Owned Subsidiary of the Company to, transfer, convey, sell, lease or otherwise dispose of any Capital Stock of any Wholly Owned Subsidiary of the Company to any Person (other than the Company or a Wholly Owned Subsidiary of the Company), unless (i) such transfer, conveyance, sale, lease or other disposition is of all the Capital Stock of such Wholly Owned Subsidiary and (ii) the cash Net Proceeds from such transfer, conveyance, sale, lease or other disposition are applied in accordance with Section 4.10 and (b) will not permit any Wholly Owned Subsidiary of the Company to issue any of its Equity Interests (other than, if necessary, shares of its Capital Stock constituting directors’ qualifying shares) to any Person other than to the Company or a Wholly Owned Subsidiary of the Company.
 
Section 4.19. Payments for Consent.
 
The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder of any Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to be paid or is paid to all Holders of the Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.
 
Section 4.20. Future Guarantors.
 
The Company and each Guarantor shall cause each domestic Subsidiary of the Company or such Guarantor, as the case may be, that, after the date of this Indenture, becomes a Subsidiary to execute and deliver (a) an indenture supplemental to this Indenture and thereby become a Guarantor that shall be bound by the Subsidiary Guarantee of the Notes in the form set forth in this Indenture (without such Guarantor
 
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being required to execute and deliver the Subsidiary Guarantee endorsed on the Notes) and (b) an Opinion of Counsel to the effect that such supplemental indenture has been duly authorized and executed by such Person and constitutes the legal, valid, binding and enforceable obligation of such Person (subject to such customary exceptions concerning fraudulent conveyance laws, creditors’ rights and equitable principles as may be acceptable to the Trustee in its discretion).
 
Section 4.21. Investment Company Act.
 
The Company shall not, and shall not permit any of its Subsidiaries to, become an investment company subject to registration under the Investment Company Act of 1940, as amended.
 
Section 4.22. Limitation on Unrestricted Subsidiaries.
 
The Company may designate after the Issue Date any Subsidiary (other than a Guarantor) as an “Unrestricted Subsidiary” under this Indenture (a “Designation”) only if:
 
(a) no Default shall have occurred and be continuing at the time of or after giving effect to such Designation;
 
(b) the Company would be permitted to make an Investment (other than a Permitted Investment) at the time of Designation (assuming the effectiveness of such Designation) pursuant to Section 4.07(a) in an amount (the “Designation Amount”) equal to the greater of (1) the net book value of the Company’s interest in such Subsidiary calculated in accordance with GAAP or (2) the fair market value of the Company’s interest in such Subsidiary as determined in good faith by the Company’s Board of Directors;
 
(c) the Company would be permitted under the Indenture to incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to Fixed Charge Coverage Ratio (on a pro forma basis) in Section 4.09(b) at the time of such Designation (assuming the effectiveness of such Designation);
 
(d) such Unrestricted Subsidiary does not own any Capital Stock in any Subsidiary of the Company which is not simultaneously being designated an Unrestricted Subsidiary;
 
(e) such Unrestricted Subsidiary is not liable, directly or indirectly, with respect to any Indebtedness other than Unrestricted Subsidiary Indebtedness, provided that an Unrestricted Subsidiary may provide a Guarantee for the Notes; and
 
(f) such Unrestricted Subsidiary is not a party to any agreement, contract, arrangement or understanding at such time with the Company or any Subsidiary
 
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unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company or, in the event such condition is not satisfied, the value of such agreement, contract, arrangement or understanding to such Unrestricted Subsidiary from and after the date of Designation shall be deemed a Restricted Payment.
 
In the event of any such Designation, the Company shall be deemed to have made an Investment constituting a Restricted Payment pursuant to Section 4.07 for all purposes of this Indenture in the Designation Amount.
 
The Company shall not and shall not cause or permit any Subsidiary to at any time:
 
(a) provide credit support for, guarantee or subject any of its property or assets (other than the Capital Stock of any Unrestricted Subsidiary) to the satisfaction of, any Indebtedness of any Unrestricted Subsidiary (including any undertaking, agreement or instrument evidencing such Indebtedness) (other than Permitted Investments in Unrestricted Subsidiaries), or
 
(b) be directly or indirectly liable for any Indebtedness of any Unrestricted Subsidiary.
 
For purposes of the foregoing, the Designation of a Subsidiary of the Company as an Unrestricted Subsidiary shall be deemed to be the Designation of all of the subsidiaries of such Subsidiary as Unrestricted Subsidiaries. Unless so designated as an Unrestricted Subsidiary, any Person that becomes a subsidiary of the Company will be classified as a Subsidiary.
 
The Company may revoke any Designation of a Subsidiary as an Unrestricted Subsidiary (a “Revocation”) if:
 
(a) no Default shall have occurred and be continuing at the time of and after giving effect to such Revocation;
 
(b) all Liens and Indebtedness of such Unrestricted Subsidiary outstanding immediately following such Revocation would, if incurred at such time, have been permitted to be incurred for all purposes of the Indenture; and
 
(c) unless such redesignated Subsidiary shall not have any Indebtedness outstanding (other than Indebtedness that would be Permitted Indebtedness), immediately after giving effect to such proposed Revocation, and after giving pro forma effect to the incurrence of any such Indebtedness of such redesignated Subsidiary as if such Indebtedness was incurred on the date of the Revocation, the Company could incur $1.00
 
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of additional Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.09(b).
 
All Designations and Revocations must be evidenced by a resolution of the Board of Directors of the Company delivered to the Trustee certifying compliance with the foregoing provisions.
 
ARTICLE V.
 
SUCCESSORS
 
Section 5.01. Merger, Consolidation or Sale of Assets.
 
The Company may not consolidate or merge with or into (whether or not the Company is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to another corporation, Person or entity unless: (i) the Company is the surviving corporation or the entity or the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia; (ii) the entity or Person formed by or surviving any such consolidation or merger (if other than the Company) or the entity or Person to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made assumes all the obligations of the Company under the Notes and this Indenture pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee; (iii) immediately after such transaction no Default or Event of Default exists; and (iv) except in the case of a merger of the Company with or into a Wholly Owned Subsidiary of the Company, the Company or the entity or Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made (A) will have Consolidated Net Worth immediately after the transaction equal to or greater than the Consolidated Net Worth of the Company immediately preceding the transaction and (B) will, at the time of such transaction and after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(b).
 
Section 5.02. Successor Corporation Substituted.
 
Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of the Company in accordance with Section 5.01 hereof, the successor corporation formed by such
 
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consolidation or into or with which the Company is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, lease, conveyance or other disposition, the provisions of this Indenture referring to the “Company” shall refer instead to the successor corporation and not to the Company, other than for purposes of calculating Consolidated Net Income in connection with Section 4.07), 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; provided , however , that the predecessor Company shall not be relieved from the obligation to pay the principal of and interest on the Notes except in the case of a sale of all of the Company’s assets that meets the requirements of Section 5.01 hereof.
 
ARTICLE VI.
 
DEFAULTS AND REMEDIES
 
Section 6.01. Events of Default.
 
Each of the following constitutes an “Event of Default”:
 
(a) default for 30 days in the payment when due of interest on, or Liquidated Damages, if any, with respect to, the Notes (whether or not prohibited by the subordination provisions of this Indenture);
 
(b) default in payment when due of the principal of or premium, if any, on the Notes (whether or not prohibited by Article X of this Indenture);
 
(c) failure by the Company to comply with the provisions described under Section 4.10 or 4.15;
 
(d) failure by the Company to comply with Section 4.07 or 4.09 hereof and the continuance of such failure for a period of 30 days after notice is 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 Notes then outstanding;
 
(e) failure by the Company for 60 days after notice is 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 Notes then outstanding to comply with any of the Company’s other covenants or other agreements in this Indenture or the Notes;
 
(f) default 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 of its Subsidiaries (or the payment of which is guaranteed by the Company or any of its Subsidiaries) whether such Indebtedness or guarantee now exists, or is created after the date of this Indenture, which default (i) is
 
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caused by a failure to pay principal of such Indebtedness at its Stated Maturity (after the expiration of any applicable grace period) or (ii) results in the acceleration of such Indebtedness prior to its maturity and, in each case, the principal amount of which Indebtedness, together with the principal amount of any other such Indebtedness described in clauses (i) and (ii) above, aggregates $5.0 million or more;
 
(g) a final judgment or final judgments for the payment of money are entered by a court or courts of competent jurisdiction against the Company or any of its Subsidiaries and such judgment or judgments remain undischarged for a period (during which execution shall not be effectively stayed) of 60 days; provided , that the aggregate of all such undischarged judgments exceeds $5.0 million (net of amounts covered by insurance);
 
(h) the Company or any of its Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a “Significant Subsidiary” pursuant to or within the meaning of Bankruptcy Law:
 
(i) commences a voluntary case,
 
(ii) consents to the entry of an order for relief against it in an involuntary case,
 
(iii) consents to the appointment of a Custodian of it or for all or substantially all of its property,
 
(iv) makes a general assignment for the benefit of its creditors, or
 
(v) generally is not paying its debts as they become due;
 
(i) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
 
(i) is for relief against the Company or any of its Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary in an involuntary case;
 
(ii) appoints a Custodian of the Company or any of its Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary or for all or substantially all of the property of the Company or any of its Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a “Significant Subsidiary”; or
 
(iii) orders the liquidation of the Company or any of its Subsidiaries or any group of Subsidiaries that, taken as a whole, would
 
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constitute a Significant Subsidiary; and the order or decree remains unstayed and in effect for 60 consecutive days; or
 
(j) the Subsidiary Guarantee of any Guarantor is held in judicial proceedings to be unenforceable or invalid or ceases for any reason to be in full force and effect (other than in accordance with the terms of this Indenture) or any Guarantor or any Person acting on behalf of any Guarantor denies or disaffirms such Guarantor’s obligations under its Subsidiary Guarantee (other than by reason of a release of such Guarantor from its Subsidiary Guarantee in accordance with the terms of this Indenture).
 
Section	 	6.02. Acceleration.	
 
If any Event of Default (other than an Event of Default specified in clause (h) or (i) of Section 6.01 hereof with respect to the Company, any Significant Subsidiary or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary) occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Upon any such declaration, the Notes shall become due and payable immediately; provided , however , that if any Senior Indebtedness is outstanding under the Credit Agreement, upon a declaration of acceleration, the Notes shall be payable upon earlier of (a) the day which is five Business Days after the provision to the Company and the agent under the Credit Agreement of written notice of such declaration and (b) the date of acceleration of any Indebtedness under the Credit Agreement. Notwithstanding the foregoing, if an Event of Default specified in clause (h) or (i) of Section 6.01 hereof occurs with respect to the Company, any Significant Subsidiary or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary, all outstanding Notes shall be due and payable immediately without further action, notice or declaration on the part of the Trustee or any Holder. The Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may on behalf of all of the Holders rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, interest or premium that has become due solely because of the acceleration) have been cured or waived.
 
Section 6.03. Other Remedies.
 
If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.
 
The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or
 
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acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.
 
Section 6.04. Waiver of Past Defaults.
 
The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under this Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the Notes (including in connection with an offer to purchase); provided , however , that the Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration. 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 Event of Default or impair any right consequent thereon.
 
Section 6.05. Control by Majority.
 
Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it; provided , however , the Trustee may refuse to follow any direction that conflicts with law or this Indenture which the Trustee determines may be unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal liability.
 
Section 6.06. Limitation on Suits.
 
A Holder of a Note may pursue a remedy with respect to this Indenture or the Notes only if:
 
(a) the Holder of a Note gives to the Trustee written notice of a continuing Event of Default;
 
(b) the Holders of at least 25% in aggregate principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy;
 
(c) such Holder of a Note or Holders of Notes offer and, if requested, provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense;
 
(d) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity; and
 
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(e) during such 60-day period the Holders of a majority in aggregate principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with the request.
 
A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.
 
Section 6.07. Rights of Holders of Notes to Receive Payment.
 
Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium and Liquidated Damages, if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall be absolute and unconditional and shall not be impaired or affected without the consent of such Holder.
 
Section 6.08. Collection Suit by Trustee.
 
If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company or any Guarantor for the whole amount of principal of, premium and Liquidated Damages, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and 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, its agents and counsel.
 
Section 6.09. Trustee May File Proofs of Claim.
 
The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Company (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial 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 to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for
 
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any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained 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 Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.
 
Section 6.10. Priorities.
 
If the Trustee collects any money pursuant to this Article VI, it shall pay out the money in the following order:
 
FIRST: to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;
 
SECOND: to Holders of Notes for amounts due and unpaid on the Notes for principal, premium and Liquidated Damages, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium and Liquidated Damages, if any and interest, respectively; and
 
THIRD: to the Company or to such party as a court of competent jurisdiction shall direct.
 
The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10.
 
Section 6.11. 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 or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in aggregate principal amount of the then outstanding Notes.
 
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Section 6.12. Restoration of Rights and Remedies.
 
If the Trustee or any Holder of Notes 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 the Company, the Trustee and the Holders shall, subject to any determination in such proceeding, 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 6.13. Rights and Remedies Cumulative.
 
Except as otherwise provided in Section 7.07 hereof, 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 6.14. Delay or Omission Not Waiver.
 
No delay or omission of the Trustee or of any Holder of any Note 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 VI 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.
 
ARTICLE VII.
 
TRUSTEE
 
Section 7.01. Duties of Trustee.
 
(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.
 
(b) Except during the continuance of an Event of Default:
 
(i) the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only
 
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those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
 
(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.
 
(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:
 
(i) this paragraph does not limit the effect of paragraph (b) of this Section;
 
(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and
 
(iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof.
 
(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of this Section. No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holders, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.
 
(e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
 
(f) The Trustee shall not be deemed to have knowledge of any Default or Event of Default unless (i) the Trustee or a Responsible Officer shall have actual knowledge of a Default or an Event of Default, (ii) the Trustee or a Responsible Officer shall have received notice of a Default or an Event of Default in accordance with the provisions of this Indenture or (iii) a Default or an Event of Default occurred or is occurring pursuant to Section 4.01 hereof.
 
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Section	 	7.02. Rights of Trustee.	
 
(a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. Except as provided in Section 7.01(b), the Trustee need not investigate any fact or matter stated in the document.
 
(b) Before the Trustee acts or refrains from acting, the Trustee may require an Officers’ Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel. 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 from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.
 
(c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture; provided , that the Trustee’s conduct does not constitute willful misconduct or negligence.
 
(d) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company or Guarantor shall be sufficient if signed by an Officer of the Company or such Guarantor.
 
(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, order, demand or direction of any of the Holders unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with such request, order, demand or direction.
 
(f) Except with respect to Section 4.01, the Trustee shall have no duty to inquire as to the performance of the Company with respect to the covenants contained in Article 4. In addition, the Trustee shall not be deemed to have knowledge of an Event of Default except (i) any Default or Event of Default occurring pursuant to Sections 4.01, 6.01(a) or 6.01(b) or (ii) any Default or Event of Default of which the Trustee shall have received written notification or obtained actual knowledge.
 
(g) Delivery of reports, information and documents to the Trustee under Section 4.03 is for informational purposes only and the Trustee’s receipt of the foregoing shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance
 
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with any of their covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).
 
Section 7.03. Individual Rights of Trustee.
 
The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company or any Affiliate of the Company with the same rights it would have if it were not Trustee; provided , however , in the event that the Trustee acquires any conflicting interest, the Trustee must (a) eliminate such conflict within 90 days, (b) if a registration statement with respect to the Notes is effective, apply to the SEC for permission to continue as Trustee or (c) resign as Trustee. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
 
Section 7.04. Trustee’s Disclaimer.
 
The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Company’s use of the proceeds from the Notes or any money paid to the Company or upon the Company’s direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.
 
Section 7.05. Notice of Defaults.
 
If a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, premium, if any, or interest on any Note, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes.
 
Section 7.06. Reports by Trustee to Holders of the Notes.
 
Within 60 days after May 15 of each year commencing with the year 2004, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA §313(a) (but if no event described in TIA §313(a) has occurred within the 12 months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA §313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA §313(c).
 
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A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Company and filed with the SEC and each stock exchange on which the Notes are listed in accordance with TIA §313(d). The Company shall promptly notify the Trustee when the Notes are listed on any stock exchange.
 
Section 7.07. Compensation and Indemnity.
 
The Company shall pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.
 
The Company shall indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company (including this Section 7.07) and defending itself against any claim (whether asserted by the Company or any Holder or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its negligence or bad faith. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder (except to the extent such failure prejudices the Company). The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel, and the Company shall pay the reasonable fees and expenses of one such counsel. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld.
 
The obligations of the Company under this Section 7.07 shall survive the satisfaction and discharge of this Indenture.
 
To secure the Company’s payment obligations in this Section, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.
 
When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(h) or (i) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.
 
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The Trustee shall comply with the provisions of TIA §313(b)(2) to the extent applicable.
 
Section 7.08. Replacement of Trustee.
 
A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08.
 
The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of Notes of a majority in aggregate principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if:
 
(a) the Trustee fails to comply with Section 7.10 hereof;
 
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;
 
(c) a Custodian or public officer takes charge of the Trustee or its property; or
 
(d) the Trustee becomes incapable of acting.
 
If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in aggregate principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company.
 
If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company, or the Holders of Notes of at least 10% in aggregate principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.
 
If the Trustee, after written request by any Holder of a Note who has been a Holder of a Note for at least six months, fails to comply with Section 7.10, such Holder of a Note may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
 
A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a
 
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notice of its succession to Holders of the Notes. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee; provided , all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company’s obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee.
 
Section 7.09. Successor Trustee by Merger, Etc.
 
If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee; provided , that such corporation shall be otherwise qualified and eligible under this Article VII and under the TIA, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Notes 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 Notes so authenticated with the same effect as if such successor Trustee had itself authenticated such Notes. In the event that any Notes shall not have been authenticated by such predecessor Trustee, any such successor Trustee may authenticate and deliver such Notes, in either its own name or that of its predecessor Trustee, with the full force and effect which this Indenture provides for the certificate of authentication of the Trustee.
 
Section 7.10. Eligibility; Disqualification.
 
There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus (with its affiliates) of at least $50 million as set forth in its most recent published annual report of condition.
 
If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section 7.10, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. None of the Company or any of its Affiliates shall serve as Trustee hereunder. If at any time the Trustee shall cease to be eligible to serve as Trustee hereunder pursuant to the provisions of this Section 7.10, it shall resign immediately in the manner and with the effect specified in this Article VII.
 
This Indenture shall always have a Trustee who satisfies the requirements of TIA §310(a)(1), (2) and (5). The Trustee is subject to TIA §310(b).
 
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Section 7.11. Preferential Collection of Claims Against Company.
 
The Trustee is subject to TIA §311(a), excluding any creditor relationship listed in TIA §311(b). A Trustee who has resigned or been removed shall be subject to TIA §311(a) to the extent indicated therein.
 
ARTICLE VIII.
 
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
 
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.
 
The Company may, at the option of its Board of Directors evidenced by a resolution set forth in an Officers’ Certificate, at any time, elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon compliance with the conditions set forth below in this Article VIII.
 
Section 8.02. Legal Defeasance and Discharge.
 
Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from its obligations with respect to all outstanding Notes on the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in (a) and (b) below, and to have satisfied all its other obligations under such Notes and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of outstanding Notes to receive solely from the trust fund described in Section 8.04 hereof, and as more fully set forth in such Section, payments in respect of the principal of, premium, if any, and interest and Liquidated Damages, if any, on such Notes when such payments are due; (b) the Company’s obligations with respect to such Notes under Article II and Section 4.02 hereof; (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company’s obligations in connection therewith; and (d) this Article VIII. Subject to compliance with this Article VIII, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.
 
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Section 8.03. Covenant Defeasance.
 
Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from its obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18 and 4.20 hereof with respect to the outstanding Notes on and after the date the conditions set forth below are satisfied (hereinafter, “Covenant Defeasance”), and the Notes shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(c) through 6.01(g) hereof shall not constitute Events of Default.
 
Section 8.04. Conditions to Legal or Covenant Defeasance.
 
The following shall be the conditions to the application of either Section 8.02 or 8.03 hereof to the outstanding Notes:
 
(a) the Company must irrevocably deposit or cause to be deposited with the Trustee, in trust, for the benefit of the Holders, cash in United States dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium and Liquidated Damages, if any, and interest on the outstanding Notes on the Stated Maturity or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to maturity or to a particular redemption date;
 
(b) in the case of an election under Section 8.02 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (ii) since the date of this Indenture, there has been a change in the applicable federal income tax law, in either case
 
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to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;
 
(c) in the case of an election under Section 8.03 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
 
(d) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the incurrence of Indebtedness all or a portion of the proceeds of which will be used to defease the Notes pursuant to this Article VIII concurrently with such incurrence) or insofar as Sections 6.01(h) or 6.01(i) hereof is concerned, at any time in the period ending on the 91st day after the date of deposit;
 
(e) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound;
 
(f) the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that after the 91st day following the deposit or on the day after the last day of the applicable preference period under Bankruptcy Law following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally;
 
(g) the Company shall have delivered to the Trustee an Officers’ Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders over any other creditors of the Company or any Subsidiary Guarantor with the intent of defeating, hindering, delaying or defrauding any creditors of the Company, any Guarantor of the Company or others; and
 
(h) the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with.
 
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Section 8.05. Deposited Money and Government Securities to Be Held in Trust: Other Miscellaneous Provisions.
 
Subject to Section 8.06 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest, but such money need not be segregated from other funds except to the extent required by law.
 
The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.
 
Anything in this Article VIII to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the request of the Company any money or noncallable Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
 
Section 8.06. Repayment to Company.
 
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, premium, if any, or interest on any Note 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 its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as a secured creditor, look only to the Company for payments thereof, and all liability of the 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 to the Company, may at the expense of the Company cause to be published once, in The New York Times and The Wall Street Journal (national edition), 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 notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company.
 
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Section 8.07. Reinstatement.
 
If the Trustee or Paying Agent is unable to apply any United States dollars or non-callable Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided , however , that, if the Company makes any payment of principal of, premium, if any, or interest on any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.
 
ARTICLE IX.
 
AMENDMENT, SUPPLEMENT AND WAIVER
 
Section 9.01. Without Consent of Holders of Notes.
 
Notwithstanding Section 9.02 of this Indenture, the Company, the Guarantors and the Trustee may amend or supplement this Indenture, the Subsidiary Guarantees or the Notes without the consent of any Holder of a Note:
 
(a) to cure any ambiguity, defect or inconsistency;
 
(b) to provide for uncertificated Notes in addition to or in place of certificated Notes;
 
(c) to provide for the assumption of the Company’s or Guarantor’s obligations to the Holders of the Notes in the case of a merger or consolidation in accordance with this Indenture;
 
(d) to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights hereunder of any Holder of the Notes;
 
(e) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA; or
 
(f) to provide for the issuance of Additional Notes pursuant to this Indenture to the extent permitted under the restrictions contained in the Credit Agreement, if then in effect, and described under Section 4.09 hereof.
 
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Upon the request of the Company and the Guarantors accompanied by a resolution of their respective Boards of Directors authorizing the execution of any such amended or supplemental Indenture, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee shall join with the Company and the Guarantors in the execution of any amended or supplemental Indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental Indenture that affects its own rights, duties or immunities under this Indenture or otherwise.
 
Section 9.02. With Consent of Holders of Notes.
 
Except as provided below in this Section 9.02, this Indenture, the Notes and the Subsidiary Guarantees may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding (including consents obtained in connection with a tender offer or exchange offer for the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium, if any, or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture or the Notes may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes (including consents obtained in connection with a tender offer or exchange offer for the Notes).
 
Upon the request of the Company and the Guarantors accompanied by a resolution of their respective Boards of Directors authorizing the execution of any such amended or supplemental Indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee shall join with the Company and the Guarantors in the execution of such amended or supplemental Indenture unless such amended or supplemental Indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental Indenture. It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof.
 
After an amendment, supplement or waiver under this Section becomes effective, the Company shall mail to the Trustee and the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal
 
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amount of the Notes then outstanding may waive compliance in a particular instance by the Company with any provision of this Indenture, the Notes or the Subsidiary Guarantees. However, without the consent of each Holder affected, an amendment or waiver may not (with respect to any Notes held by a non-consenting Holder):
 
(a) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;
 
(b) reduce the principal of or change the fixed maturity of any Note or alter or waive any of the provisions with respect to the redemption or repurchase of the Notes (other than with respect to Sections 4.10 and 4.15 hereof);
 
(c) reduce the rate of or change the time for payment of interest, including default interest, on any Note;
 
(d) waive a Default or Event of Default in the payment of principal of or premium, if any, or interest on the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration);
 
(e) make any Note payable in money other than that stated in the Notes;
 
(f) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of principal of, premium, if any, or interest on the Notes;
 
(g) waive a redemption payment with respect to any Note (other than a payment required by Section 4.10 or 4.15 hereof);
 
(h) release any Guarantor from any of its obligations under its Subsidiary Guarantee or this Indenture, except in accordance with the terms of this Indenture;
 
(i) make any change in Section 6.04 or 6.07 hereof or in the foregoing amendment and waiver provisions; or
 
(j) make any amendment to the provisions of Article X of this Indenture or the related definitions if such amendment would adversely affect the rights of Holders of Notes.
 
In addition, any amendment to the provisions of Section 4.10 and 4.15 of this Indenture or the related definitions will require the consent of the Holders of at least 66  2 / 3 % in aggregate principal amount of the Notes then outstanding if such amendment would adversely affect the rights of Holders of Notes and any amendment to the
 
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provisions of this Indenture relating to subordination or legal or covenant defeasance will require the consent of the lenders under the Credit Agreement, if then in effect (or the agent therefor, acting on their behalf).
 
Upon the execution of any supplemental indenture under this Article IX, 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 Notes theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.
 
Section 9.03. Compliance with Trust Indenture Act.
 
Every amendment or supplement to this Indenture, the Subsidiary Guarantees or the Notes shall be set forth in an amended or supplemental Indenture that complies with the TIA as then in effect.
 
Section 9.04. Revocation and Effect of Consents.
 
Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.
 
Section 9.05. Notation on or Exchange of Notes.
 
The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the Trustee shall authenticate new Notes that reflect the amendment, supplement or waiver.
 
Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.
 
Section 9.06. Trustee to Sign Amendments, Etc.
 
The Trustee shall sign any amended or supplemental indenture authorized pursuant to this Article IX if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Company and each Subsidiary Guarantor may not sign an amendment or supplemental Indenture until each of their respective Boards of Directors approves it. In executing any amended or supplemental indenture, the Trustee shall be entitled to receive and (subject to Section 7.01) shall be fully protected in relying upon, an Officers’ Certificate and an Opinion of Counsel stating
 
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that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture.
 
ARTICLE X.
 
SUBORDINATION
 
Section 10.01. Agreement to Subordinate.
 
The Company agrees, and each Holder by accepting a Note agrees, that the Indebtedness and other payment obligations on, or with respect to or evidenced by the Note (including any obligation to repurchase the Notes) is subordinated in right of payment, to the extent and in the manner provided in this Article X, to the prior payment in full of all Senior Indebtedness (whether outstanding on the date hereof or hereafter created, incurred, assumed or guaranteed), and that the subordination is for the benefit of the holders of Senior Indebtedness.
 
Section 10.02. Liquidation; Dissolution; Bankruptcy.
 
Upon any distribution to creditors of the Company in a liquidation or dissolution of the Company or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Company or its property, in an assignment for the benefit of creditors or any marshaling of the Company’s assets and liabilities:
 
(a) holders of Senior Indebtedness shall be entitled to receive payment in full of all Obligations due in respect of such Senior Indebtedness (including, in the case of Senior Indebtedness under the Credit Agreement, interest after the commencement of any such proceeding at the rate specified in the Credit Agreement) before Holders of Notes shall be entitled to receive any payment with respect to the Notes (except that Holders may receive (i) Equity Interests or debt securities that are subordinated to at least the same extent as the Notes to (A) Senior Indebtedness and (B) any securities issued in exchange for Senior Indebtedness and (ii) payments and other distributions made from any defeasance trust created pursuant to Section 8.01 hereof); and
 
(b) until all Obligations with respect to Senior Indebtedness (as provided in subsection (a) above) are paid in full, any distribution to which Holders would be entitled but for this Article X shall be made to holders of Senior Indebtedness (except that Holders may receive (i) Equity Interests or debt securities that are subordinated to at least the same extent as the Notes to (A) Senior Indebtedness and (B) any securities issued in exchange for Senior Indebtedness and (ii) payments and other distributions made from any defeasance trust created pursuant to Section 8.01 hereof), as their interests may appear.
 
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Section 10.03. Default on Designated Senior Indebtedness.
 
The Company may not make any payment or distribution to the Trustee or any Holder in respect of Obligations with respect to the Notes and may not acquire from the Trustee or any Holder any Notes for cash or property (other than (i) Equity Interests or debt securities that are subordinated to at least the same extent as the Notes to (A) Senior Indebtedness and (B) any securities issued in exchange for Senior Indebtedness and (ii) payments and other distributions made from any defeasance trust created pursuant to Section 8.01 hereof) until all principal and other Obligations with respect to the Senior Indebtedness have been paid in full if:
 
(a) a default in the payment of any principal of or other Obligations with respect to Designated Senior Indebtedness occurs; or
 
(b) a default, other than a payment default under clause (a) above, on Designated Senior Indebtedness occurs and is continuing that then permits holders of the Designated Senior Indebtedness as to which such default relates to accelerate its maturity and the Trustee receives a notice of the default (a “Payment Blockage Notice”) from a Representative with respect to such Designated Senior Indebtedness. If the Trustee receives any such Payment Blockage Notice, no subsequent Payment Blockage Notice shall be effective for purposes of this Section unless and until (i) at least 360 days shall have elapsed since the effectiveness of the immediately prior Payment Blockage Notice and (ii) all scheduled payments of principal, premium, if any, and interest on the Notes that have come due have been paid in full in cash. No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Payment Blockage Notice unless such default shall have been waived for a period of not less than 90 days.
 
The Company may and shall resume payments on and distributions in respect of the Notes and may acquire them upon the earlier of:
 
(1) the date upon which the default is cured or waived, or
 
(2) in the case of a default referred to in clause (b) of the preceding paragraph, 179 days pass after notice is received if the maturity of such Designated Senior Indebtedness has not been accelerated,
 
if this Article X otherwise permits the payment, distribution or acquisition at the time of such payment or acquisition.
 
Section 10.04. Acceleration of Notes.
 
If payment of the Notes is accelerated because of an Event of Default, the Company shall promptly notify holders of Senior Indebtedness of the acceleration.
 
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Section 10.05. When Distribution Must Be Paid Over.
 
In the event that the Trustee or any Holder receives any payment of any Obligations with respect to the Notes at a time when the Trustee or such Holder, as applicable, has actual knowledge that such payment is prohibited by Section 10.03 hereof, such payment shall be held by the Trustee or such Holder, in trust for the benefit of, and shall be paid forthwith over and delivered, upon written request, to, the holders of Senior Indebtedness as their interests may appear or their Representative under the indenture or other agreement (if any) pursuant to which Senior Indebtedness may have been issued, as their respective interests may appear, for application to the payment of all Obligations with respect to Senior Indebtedness remaining unpaid to the extent necessary to pay such Obligations in full in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness.
 
With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform only such obligations on the part of the Trustee as are specifically set forth in this Article X, and no implied covenants or obligations with respect to the holders of Senior Indebtedness shall be read into this Indenture against the Trustee. 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 the Trustee shall pay over or distribute to or on behalf of Holders or the Company or any other Person money or assets to which any holders of Senior Indebtedness shall be entitled by virtue of this Article X, except if such payment is made as a result of the willful misconduct or gross negligence of the Trustee.
 
Section 10.06. Notice by Company.
 
The Company shall promptly notify the Trustee and the Paying Agent of any facts known to the Company that would cause a payment of any Obligations with respect to the Notes to violate this Article X, but failure to give such notice shall not affect the subordination of the Notes to the Senior Indebtedness as provided in this Article X.
 
Section 10.07. Subrogation.
 
After all Senior Indebtedness is paid in full and until the Notes are paid in full, Holders shall be subrogated (equally and ratably with all other Indebtedness pari passu with the Notes) to the rights of holders of Senior Indebtedness to receive distributions applicable to Senior Indebtedness to the extent that distributions otherwise payable to the Holders have been applied to the payment of Senior Indebtedness. A distribution made under this Article X to holders of Senior Indebtedness that otherwise would have been made to Holders is not, as between the Company and Holders, a payment by the Company on the Notes.
 
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Section 10.08. Relative Rights.
 
This Article X defines the relative rights of Holders and holders of Senior Indebtedness. Nothing in this Indenture shall:
 
(a) impair, as between the Company and Holders, the obligation of the Company, which is absolute and unconditional, to pay principal of and interest on the Notes in accordance with their terms;
 
(b) affect the relative rights of Holders and creditors of the Company other than their rights in relation to holders of Senior Indebtedness; or prevent the Trustee or any Holder from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders and owners of Senior Indebtedness to receive distributions and payments otherwise payable to Holders.
 
If the Company fails because of this Article X to pay principal of or interest on a Note on the due date, the failure is still a Default or Event of Default.
 
Section 10.09. Subordination May Not Be Impaired by Company.
 
No right of any holder of Senior Indebtedness to enforce the subordination of the Indebtedness evidenced by the Notes shall be impaired by any act or failure to act by the Company or any Holder or by the failure of the Company or any Holder to comply with this Indenture.
 
Section 10.10. Distribution or Notice to Representative.
 
Whenever a distribution is to be made or a notice given to holders of Senior Indebtedness, the distribution may be made and the notice given to their Representative.
 
Upon any payment or distribution of assets of the Company referred to in this Article X, the Trustee and the Holders shall be entitled to rely upon any order or decree made by any court of competent jurisdiction or upon any certificate of such Representative or of the liquidating trustee or agent or other Person making any distribution to the Trustee or to the Holders for the purpose of ascertaining the Persons entitled to participate in such 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 X.
 
Section 10.11. Rights of Trustee and Paying Agent.
 
Notwithstanding the provisions of this Article X or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment or distribution by the Trustee, and
 
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the Trustee and the Paying Agent may continue to make payments on the Notes, unless the Trustee shall have received at its Corporate Trust Office at least five Business Days prior to the date of such payment written notice of facts that would cause the payment of any Obligations with respect to the Notes to violate this Article X. Only the Company, the Representative of Designated Senior Indebtedness or a Representative may give the notice. Nothing in this Article X shall impair the claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
 
The Trustee in its individual or any other capacity may hold Senior Indebtedness with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights.
 
Section 10.12. Authorization to Effect Subordination.
 
Each Holder of a Note by the Holder’s acceptance thereof authorizes and directs the Trustee on the Holder’s behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Article X, and appoints the Trustee to act as the Holder’s attorney-in-fact for any and all such purposes. If the Trustee does not file a proper proof of claim or proof of debt in the form required in any proceeding referred to in Section 6.09 hereof at least 30 days before the expiration of the time to file such claim, each of the Representative of Designated Senior Indebtedness and a Representative, if any, are hereby authorized to file an appropriate claim for and on behalf of the Holders of the Notes.
 
Section 10.13. Amendments.
 
The provisions of this Article X shall not be amended or modified without the written consent of the holders of all Senior Indebtedness.
 
ARTICLE XI.
 
SUBSIDIARY GUARANTEES
 
Section 11.01. Subsidiary Guarantees.
 
Each of the Guarantors hereby, jointly and severally, unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Company hereunder or thereunder, that: (a) the principal of and interest on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in
 
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case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors will be jointly and severally obligated to pay the same immediately. The Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenant that this Subsidiary Guarantee will not be discharged except by complete performance of the obligations contained in the Notes and this Indenture. If any Holder or the Trustee is required by any court or otherwise to return to the Company or Guarantors, or any Custodian, Trustee, liquidator or other similar official acting in relation to either the Company or Guarantors, any amount paid by either to the Trustee or such Holder, this Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor agrees that they shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article VI for the purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article VI, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Subsidiary Guarantee. The Guarantors shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Guarantee.
 
Section 11.02. Execution and Delivery of Subsidiary Guarantee.
 
To evidence its Subsidiary Guarantee set forth in Section 11.01, each Guarantor hereby agrees that a notation of such Subsidiary Guarantee substantially in the form included in Exhibit E shall be endorsed by an officer of such Subsidiary Guarantor on each Note authenticated and delivered by the Trustee and that this Indenture shall be executed on behalf of such Guarantor by its President or one of its Vice Presidents and attested to by an Officer.
 
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Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in Section 11.01, shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Subsidiary Guarantee.
 
If an officer or Officer whose signature is on this Indenture or on the Subsidiary Guarantee no longer holds that office at the time the Trustee authenticates the Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall be valid nevertheless.
 
The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee set forth in this Indenture on behalf of the Guarantors.
 
Section 11.03. Guarantors May Consolidate or Merger on Certain Terms.
 
(a) Except as set forth in Articles IV and V, nothing contained in this Indenture or in any of the Notes shall prevent any consolidation or merger of a Guarantor with or into the Company or shall prevent any sale or conveyance of the property of a Guarantor as an entirety or substantially as an entirety, to the Company.
 
(b) Except as set forth in Article IV, nothing contained in this Indenture or in any of the Notes shall prevent any consolidation or merger of a Guarantor with or into a corporation or corporations other than the Company (whether or not affiliated with the Guarantor), or successive consolidations or mergers in which a Guarantor or its successor or successors shall be a party or parties, or shall prevent any sale or conveyance of the property of a Guarantor as an entirety or substantially as an entirety, to a corporation other than the Company (whether or not affiliated with the Guarantor) authorized to acquire and operate the same; provided , however , that (i) each Guarantor hereby covenants and agrees that, upon any such consolidation, merger, sale or conveyance, the Subsidiary Guarantee endorsed on the Notes, and the due and punctual performance and observance of all of the covenants and conditions of this Indenture to be performed by such Guarantor, shall be expressly assumed (in the event that the Guarantor is not the surviving corporation in the merger) by supplemental indenture reasonably satisfactory in form to the Trustee, executed and delivered to the Trustee, by the corporation formed by such consolidation, or into which the Guarantor shall have been merged, or by the corporation which shall have acquired such property and (ii) immediately after giving effect to such transaction, no Default or Event of Default would exist. In case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor corporation, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the Subsidiary Guarantee endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Guarantor, such successor corporation shall succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor corporation
 
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thereupon may cause to be signed any or all of the Subsidiary Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee. All the Subsidiary Guarantees so issued shall in all respects have the same legal rank and benefit under this Indenture as the Subsidiary Guarantees theretofore and thereafter issued in accordance with the terms of this Indenture as though all of such Subsidiary Guarantees had been issued at the date of the execution hereof.
 
Section 11.04. Releases of Subsidiary Guarantees.
 
Concurrently with any sale of assets (including, if applicable, all of the capital stock of any Guarantor), any Liens in favor of the Trustee in the assets sold thereby shall be released; provided , that in the event of an Asset Sale, the Net Proceeds from such sale or other disposition are treated in accordance with the provisions of Section 4.10 hereof. If the assets sold in such sale or other disposition include all or substantially all of the assets of any Guarantor or all of the capital stock of any Guarantor, then such Guarantor (in the event of a sale or other disposition of all of the capital stock of such Guarantor) or the corporation acquiring the property (in the event of a sale or other disposition of all or substantially all of the assets of a Guarantor) shall be released and relieved of its obligations under its Subsidiary Guarantee or Section 11.03, hereof, as the case may be; provided , that in the event of an Asset Sale, the Net Proceeds from such sale or other disposition are treated in accordance with the provisions of Section 4.10 hereof. Upon delivery by the Company to the Trustee of an Officers’ Certificate and an Opinion of Counsel to the effect that such sale or other disposition was made by the Company in accordance with the provisions of this Indenture, including without limitation Section 4.10 hereof, the Trustee shall execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations under its Subsidiary Guarantee.
 
Upon (a) the release by all holders of Senior Indebtedness and Guarantor Senior Indebtedness of all guarantees issued by a Guarantor relating to such Senior Indebtedness and Guarantor Senior Indebtedness and all Liens on the property and assets of such Guarantor relating to Senior Indebtedness and Guarantor Senior Indebtedness, or (b) the designation of a Subsidiary as an Unrestricted Subsidiary in compliance with the terms of this Indenture then such Guarantor shall be released and relieved of any obligations under its Subsidiary Guarantee. Upon delivery by the Company to the Trustee of an Officers’ Certificate and an Opinion of Counsel to the effect that either (a) all holders of Senior Indebtedness and Guarantor Senior Indebtedness have released all guarantees issued by a Guarantor and all Liens on the property and assets of such Guarantor relating to such Senior Indebtedness and Guarantor Senior Indebtedness, or (b) that a Subsidiary has been designated as an Unrestricted Subsidiary in compliance with the terms of this Indenture, the Trustee shall execute any documents reasonably
 
95

required in order to evidence the release of such Guarantor from its obligations under its Subsidiary Guarantee.
 
Any Guarantor not released from its obligations under its Subsidiary Guarantee pursuant to either of the preceding paragraphs of this Section 11.04 shall remain liable for the full amount of principal of and interest on the Notes and for the other obligations of any Guarantor under this Indenture as provided in this Article XI.
 
Section 11.05. Trustee to Include Paying Agent.
 
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 XI, shall in such case (unless the context shall otherwise require) be construed as extending to and including such Paying Agent within its meaning as fully and for all intents and purposes as if such Paying Agent were named, in this Article XI, in place of the Trustee.
 
Section 11.06. Subordination of Subsidiary Guarantees.
 
The obligations of each Guarantor under its Subsidiary Guarantee pursuant to this Article XI shall be junior and subordinated to the Guarantor Senior Indebtedness of such Guarantor on the same basis as the Notes are junior and subordinated to Senior Indebtedness. For the purposes of the foregoing sentence, the Trustee and the Holders shall have the right to receive and/or retain payments by any of the Guarantors only at such times as they may receive and/or retain payments in respect of the Notes pursuant to this Indenture, including Article X hereof.
 
Section 11.07. Unrestricted Subsidiary.
 
The Board of Directors of the Company may at any time designate an Unrestricted Subsidiary to be a Subsidiary; provided , that such designation shall be deemed to be an incurrence of Indebtedness by a Subsidiary of the Company of any outstanding Indebtedness of each Unrestricted Subsidiary and such designation shall only be permitted if (a) such Indebtedness is permitted under Section 4.09 hereof, calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period, and (b) no Default or Event of Default would be in existence following such designation. In addition, each Unrestricted Subsidiary shall continue to be an Unrestricted Subsidiary for purposes of this Indenture only if it: (i) has no Indebtedness other than Non-Recourse Debt; (ii) is a Person with respect to which neither the Company nor any of its Subsidiaries has any direct or indirect obligation (A) to subscribe for additional Equity Interests or (B) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; and (iii) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Subsidiaries. If, at any time,
 
96

an Unrestricted Subsidiary fails to meet the requirements described in the preceding sentence, such Unrestricted Subsidiary shall thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Unrestricted Subsidiary shall be deemed to be incurred by a Subsidiary of the Company as of such date (and, if such Indebtedness is not permitted to be incurred as of such date under Section 4.09 hereof, the Company shall be in default of such covenant). In the event an Unrestricted Subsidiary is designated as a Subsidiary or ceases to be an Unrestricted Subsidiary for purposes of this Indenture, the Company shall cause such Unrestricted Subsidiary to execute and deliver to the Trustee a supplemental indenture pursuant to which such Unrestricted Subsidiary will become a Guarantor.
 
Section 11.08. Limits on Subsidiary Guarantees.
 
Notwithstanding anything to the contrary in this Article XI, the aggregate amount of the Obligations guaranteed under this Indenture by any Guarantor shall be reduced to the extent necessary to prevent the Subsidiary Guarantee of such Guarantor from violating or becoming voidable under any law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors.
 
ARTICLE XII.
 
Section 12.01. Satisfaction And Discharge Of Indenture.
 
This Indenture will be discharged and will cease to be of further effect (except as to surviving rights of registration of transfer or exchange of Notes as expressly provided for herein) as to all outstanding Notes hereunder, and the Trustee, upon Company Request and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when
 
(a) either
 
(1) all the Notes theretofore authenticated and delivered (other than (i) lost, stolen or destroyed Notes which have been replaced or paid as provided in Section 2.07 or (ii) all Notes 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 8.05) have been delivered to the Trustee for cancellation; or
 
(2) all such Notes not theretofore delivered to the Trustee for cancellation (i) have become due and payable, (ii) will become due and payable at their Stated Maturity within one year or (iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company;
 
97

(b) the Company or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust an amount in United States dollars sufficient to pay and discharge the entire Indebtedness on the Notes not theretofore delivered to the Trustee for cancellation, including the principal of, premium, if any, and accrued interest on, such Notes at such maturity, Stated Maturity or redemption date;
 
(c) after giving effect thereto, no Default or Event of Default shall have occurred and be continuing under any Indebtedness of the Company or any Subsidiary on the date of such deposit;
 
(d) such satisfaction and discharge will not result in a breach or violation of, or constitute a default under, this Indenture or any other material agreement or instrument to which the Company, or any Subsidiary is a party or by which the Company or any Subsidiary is bound;
 
(e) the Company or any Guarantor has paid or caused to be paid all other sums payable hereunder by the Company and any Guarantor; and
 
(f) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, in form and substance satisfactory to the Trustee, each stating that (i) all conditions precedent herein relating to the satisfaction and discharge hereof have been complied with.
 
Notwithstanding the satisfaction and discharge hereof, the obligations of the Company to the Trustee under Section 7.07 and, if United States dollars shall have been deposited with the Trustee pursuant to subclause (2) of subsection (a) of this Section 12.01, the obligations of the Trustee under Section 12.02 and Section 8.06 shall survive.
 
Section 12.02. Application of Trust Money.
 
Subject to the provisions of Section 8.06, all United States dollars deposited with the Trustee pursuant to Section 12.01 shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal of, premium, if any, and interest on, the Notes for whose payment such United States dollars have been deposited with the Trustee.
 
98

ARTICLE XIII.
 
MISCELLANEOUS
 
Section 13.01. Trust Indenture Act Controls.
 
If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA §318(c), the imposed duties shall control. If any provision of this Indenture modifies or excludes any provision of the TIA 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.
 
Section 13.02. Notices.
 
Any notice or communication by the Company, a Guarantor or the Trustee to the others is duly given if in writing and delivered in person or mailed by first class mail (registered or certified, return receipt requested), telex, telecopier or overnight air courier guaranteeing next day delivery, to the others’ address:
 
If to the Company or a Guarantor:
 
Speedway Motorsports, Inc.
Highway 29 North
Post Office Box 600
Concord, NC 28026-0600
Telecopier No.: (704) 532-3312
Attention: Mr. William R. Brooks
 
If to the Trustee:
 
U.S. Bank National Association
180 East Fifth Street
Suite 200
St. Paul, MN 55101
Telecopier No.: (651) 244-0711
Attention: Corporate Trust Administration
 
The Company, a Guarantor or the Trustee, by notice to the others may designate additional or different addresses for subsequent notices or communications.
 
All notices and communications (other than those sent to Holders) 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, 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 overnight air courier guaranteeing next day delivery.
 
99

Any notice or communication to a Holder shall be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA §313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.
 
If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.
 
If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time.
 
Section 13.03. Communication by Holders of Notes with Other Holders of Notes.
 
Holders may communicate pursuant to TIA §312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Company, the Guarantors, the Trustee, the Registrar and anyone else shall have the protection of TIA §312(c).
 
Section 13.04. Certificate and Opinion As to Conditions Precedent.
 
Upon any request or application by the Company and/or any Guarantor to the Trustee to take any action or refrain from taking any action under this Indenture, the Company and/or such Guarantor, as the case may be, shall furnish to the Trustee:
 
(a) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 13.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and
 
(b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 13.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.
 
Section 13.05. Statements Required in Certificate or Opinion.
 
Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA §314(a)(4)) shall comply with the provisions of TIA §314(e) and shall include:
 
(a) a statement that the Person making such certificate or opinion has read such covenant or condition;
 
100

(b) 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;
 
(c) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been satisfied; and
 
(d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied.
 
Section 13.06. Rules by Trustee and Agents.
 
The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions; provided , that no such rule shall conflict with the terms of this Indenture or the TIA.
 
Section 13.07. No Personal Liability of Directors, Officers, Employees and Stockholders.
 
No director, officer, employee, incorporator or stockholder of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the Notes, the Subsidiary Guarantees, this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy.
 
Section 13.08. Governing Law.
 
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES.
 
Section 13.09. No Adverse Interpretation of Other Agreements.
 
This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture, the Notes or the Subsidiary Guarantees.
 
101

Section 13.10. Successors.
 
All agreements of the Company and the Guarantors in this Indenture, the Subsidiary Guarantees and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors.
 
Section 13.11. Severability.
 
In case any provision in this Indenture, the Subsidiary Guarantees or in the Notes 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 13.12. Counterpart Originals.
 
The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
 
Section 13.13. Table of Contents, Headings, Etc.
 
The Table of Contents and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.
 
Section 13.14. Further Instruments and Acts.
 
Upon request of the Trustee, the Company and the Guarantors will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Indenture.
 
[Signatures on following page]

102

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
 
COMPANY:	
	
SPEEDWAY MOTORSPORTS, INC., a
Delaware corporation	
		
By:	 	/s/    William R. Brooks

Name:	 	        William R. Brooks	
Title:	 	        Chief Financial Officer, Vice President
        and Treasurer	
 
GUARANTORS:	
	
SPEEDWAY FUNDING, LLC., a Delaware limited liability corporation	
		
By:	 	/s/    William R. Brooks

Name:	 	        William R. Brooks	
Title:	 	     President	

600 RACING, INC., a North Carolina corporation	
		
By:	 	/s/    William R. Brooks

Name:	 	        William R. Brooks	
Title:	 	        Vice President	

 
 
ATLANTA MOTOR SPEEDWAY, INC., a Georgia corporation	
		
By:	 	/s/    William R. Brooks

Name:	 	        William R. Brooks	
Title:	 	        Vice President	

 
BRISTOL MOTOR SPEEDWAY, INC. , a
Tennessee corporation	
		
By:	 	/s/    William R. Brooks

Name:	 	        William R. Brooks	
Title:	 	        Vice President	
 
CHARLOTTE MOTOR SPEEDWAY, LLC, a North Carolina limited liability company	
		
By:	 	/s/    William R. Brooks

Name:	 	        William R. Brooks	
Title:	 	        Vice President	
 
INEX CORP. a North Carolina corporation	
		
By:	 	/s/    William R. Brooks

By:	 	        William R. Brooks	
Title:	 	        Vice President	
 
LAS VEGAS MOTOR SPEEDWAY, INC. , a
Delaware corporation	
		
By:	 	/s/    William R. Brooks

Name:	 	        William R. Brooks	
Title:	 	        Vice President	
 
NEVADA SPEEDWAY LLC , a Delaware limited
liability corporation	
		
By:	 	/s/    William R. Brooks

Name:	 	        William R. Brooks	
Title:	 	        Vice President	

SPEEDWAY SYSTEMS, LLC , a North Carolina limited liability company	

By:	 	/s/    William R. Brooks

Name:	 	        William R. Brooks	
Title:	 	        Vice President	
 
SPR, INC. , a Delaware corporation	
		
By:	 	/s/    William R. Brooks

Name:	 	        William R. Brooks	
Title:	 	        Vice President	
 
TEXAS MOTOR SPEEDWAY, INC. , a Texas corporation	
		
By:	 	/s/    William R. Brooks

Name:	 	        William R. Brooks	
Title:	 	        Vice President	
 
SPEEDWAY PROPERTIES COMPANY, LLC, a Delaware limited liability corporation	
		
By:	 	/s/    William R. Brooks

Name:	 	        William R. Brooks	
Title:	 	        President	
 
SPEEDWAY SONOMA, LLC , a Delaware limited liability company	
		
By:	 	/s/    William R. Brooks

Name:	 	        William R. Brooks	
Title:	 	        Vice President	

SPEEDWAY MEDIA, LLC , a North Carolina limited liability company	
		
By:	 	/s/    William R. Brooks

Name:	 	        William R. Brooks	
Title:	 	        Vice President	
 
TRACKSIDE HOLDING CORPORATION , a
North Carolina corporation	
		
By:	 	/s/    William R. Brooks

Name:	 	        William R. Brooks	
Title:	 	        Vice President	
 
MOTORSPORTS BY MAIL, LLC , a North Carolina limited liability company	
		
By:	 	/s/    William R. Brooks

Name:	 	        William R. Brooks	
Title:	 	        President	
 
SMI TRACKSIDE, LLC , a North Carolina limited liability company	
		
By:	 	/s/    William R. Brooks

Name:	 	        William R. Brooks	
Title:	 	        Vice President	

TRUSTEE :
 
U.S. BANK NATIONAL ASSOCIATION	
		
By:	 	/s/    Richard H. Prokosch

Name:	 	        Richard H. Prokosch	
Title:	 	        Vice President	

EXHIBIT A
CUSIP NUMBER [8477888AJ5]
[8477888AK2]
[U84570AC1]
 
ISIN NUMBER [US847788AJ50]
[US847788AK24]
[US84570AC11]
 
(Face of Note)
 
SPEEDWAY MOTORSPORTS, INC.
 
6  3 / 4 % [INITIAL] [EXCHANGE] SENIOR SUBORDINATED NOTES DUE 2013
 
No.                         
 
$                         
 
SPEEDWAY MOTORSPORTS, INC., a Delaware corporation, for value received, hereby promises to pay to                           or registered assigns, the principal sum of              Dollars on June 1, 2013.
 
Interest Payment Dates June 1, and December 1
 
Record Dates: May 15, and November 15
 
SPEEDWAY MOTORSPORTS, INC.	
		
By:	 	 
	
 	 	Name:	
 	 	Title:	

By:	 	 
	
 	 	Name:	
 	 	Title:	
 
This is one of the [Global] Notes referred
to in the within mentioned Indenture:
 
Dated:                  ,         
 
U.S. BANK NATIONAL ASSOCIATION,
    as Trustee
 
A-6

		
By:	 	 
	
 	 	    Authorized Signatory	
 
A-7

(Back of Note)
 
SPEEDWAY MOTORSPORTS, INC.
 
6¾% [INITIAL] [EXCHANGE] SENIOR SUBORDINATED NOTES DUE 2013
 
[Unless and until it is exchanged in whole or in part for Notes in certificated form, this Note may not be transferred except as a whole by the Depository to a nominee of the Depository, by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository. Unless this certificate is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York, New York) (“DTC”), to the issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as may be requested by an authorized representative of DTC (and any payment is made to Cede & Co. or such other entity as may be 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.] 1
 
“THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY BY THE INITIAL PURCHASERS TO A PERSON WHOM 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, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER 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 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT,

1	 	This paragraph should be included only if the Note is issued in Global Form.	
 
A-8

PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) 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), TO THE COMPANY OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN ADDITION, TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND BY SUBSEQUENT INVESTORS, AS SET FORTH IN THROUGH ABOVE AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH ABOVE.
 
NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY EVIDENCED HEREBY.” 2 “THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.”
 
Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.
 
1. Interest . Speedway Motorsports, Inc., a Delaware corporation (such corporation, and its successors and assigns under the Indenture, being herein called the (“Company”), promises to pay interest on the principal amount of this Note at 6¾% per annum from May 16, 2003 until maturity and shall pay the Liquidated Damages, if any, payable pursuant to Section 5 of the Registration Rights Agreement referred to below. The Company will pay interest and Liquidated Damages semi-annually on June 1 and December 1 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an “Interest Payment Date”). Interest on the Notes will

2	 	This paragraph should be included only if the Note is a Transfer Restricted Security.	
 
A-9

accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided , that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided , further , that the first Interest Payment Date shall be December 1, 2003. The Company shall pay, to the extent lawful, interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate that is 1% per annum in excess of the rate then in effect; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Liquidated Damages (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months.
 
2. Method of Payment . The Company shall pay interest on the Notes (except defaulted interest) and Liquidated Damages, if any, to the Persons who are registered Holders of Notes at the close of business on May 15 or November 15 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal, premium, interest and Liquidated Damages at the office or agency of the Company maintained for such purpose within or without the City and State of New York, or, at the option of the Company, payment of interest and Liquidated Damages may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that payment by wire transfer of immediately available will be required with respect to principal of and interest, premium and Liquidated Damages, if any, on all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.
 
3. Paying Agent and Registrar . Initially, U.S. Bank National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity; provided that if the Company or such Subsidiary is acting as Paying Agent, the Company or such Affiliate shall segregate all funds held by it as Paying Agent and hold them in trust for the benefit of the Holders or the Trustee.
 
4. Indenture . The Company issued the Notes under an Indenture dated as of May 16, 2003 (the “ Indenture ”), among the Company, the Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§
 
A-10

77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. The Notes are unsecured obligations of the Company limited to $230.0 million in aggregate principal amount.
 
The summary of the terms of this Note contained herein does not purport to be complete and is qualified by reference to the Indenture. To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Note and the terms of the Indenture, the terms of the Indenture shall control.
 
The Indenture restricts, among other things, the Company’s ability to incur additional indebtedness and issue preferred stock, pay dividends or make certain other restricted payments, incur liens to secure pari passu or subordinated indebtedness, engage in any sale and leaseback transaction, sell stock of Subsidiaries, incur indebtedness that is subordinate in right of payment to any Senior Indebtedness and senior in right of payment to the Notes, apply net proceeds from certain asset sales, merge or consolidate with any other person, sell, assign, transfer, lease, convey or otherwise dispose of substantially all of the assets of the Company or enter into certain transactions with affiliates.
 
5. Optional Redemption .
 
The Company shall not have the option to redeem the Notes prior to June 1, 2008. Thereafter, the Company shall have the option to redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest thereon to the applicable redemption date, if redeemed during the 12-month period beginning on June 1 of the years indicated below:
 
YEAR
	  	PERCENTAGE
	 	
2008	  	103.375	%	
2009	  	102.250	%	
2010	  	101.125	%	
2011 and thereafter	  	100.000	%	
 
In addition, at any time prior to June 1, 2006, the Company, at its option, may use the net proceeds of one or more Equity Offerings to redeem up to an aggregate of 35% of the aggregate principal amount of Notes originally issued under the Indenture at a redemption price equal to 106.75% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon, if any, to the redemption date (subject to the rights of Holders of record on relevant record dates to receive interest due on an Interest Payment Date); provided that this redemption provision shall not be applicable with respect to any transaction that results in a Change of Control; provided , further that at least 65% of the initial aggregate principal amount of Notes remains outstanding immediately after the occurrence of such redemption. In order to effect the foregoing
 
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redemption, the Company must mail a notice of redemption no later than 30 days after the closing of the related Equity Offering and must complete such redemption within 60 days of the closing of the Equity Offering.
 
6. Mandatory Redemption .
 
Except as set forth in paragraph 7 below, the Company shall not be required to make mandatory redemption payments with respect to the Notes.
 
7. Repurchase at Option of Holder .
 
(a) Upon a Change of Control, each Holder of Notes will have the right to require the Company to make an offer (a “Change of Control Offer”) to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of each Holder’s Notes at a purchase price equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest and Liquidated Damages, if any, to the date of purchase (in either case, the “Change of Control Payment”). Within 15 days following any Change of Control, the Company shall mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase Notes pursuant to the procedures governing the Change of Control Offer as required by the Indenture and described in such notice.
 
(b) Under certain circumstances described in the Indenture, the Company will be required to apply the proceeds of Asset Sales to the repayment of the Notes and Pari Passu Indebtedness.
 
8. Notice of Redemption . Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date, interest ceases to accrue on Notes or portions thereof called for redemption.
 
9. Denominations, Transfer, Exchange . The Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, it need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date.
 
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10. Persons Deemed Owners . The registered Holder of a Note may be treated as its owner for all purposes.
 
11. Amendment, Supplement and Waiver . Subject to certain exceptions, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Notes, and any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes. Without the consent of any Holder of a Note, the Indenture or the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to provide for the assumption of the Company’s, or any Guarantor’s obligations to Holders of the Notes in case of a merger or consolidation, to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Indenture of any such Holder, to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act or to provide for the issuance of Additional Notes pursuant to the Indenture to the extent permitted under the restrictions contained in the Credit Agreement and in the Indenture.
 
12. Defaults and Remedies . The Events of Default provided by the Indenture include, without limitation:
 
(a) default for 30 days in the payment when due of interest on, or Liquidated Damages, if any, with respect to, the Notes (whether or not prohibited by the subordination provisions of the Indenture);
 
(b) default in payment when due of the principal of or premium, if any, on the Notes (whether or not prohibited by the subordination provisions of the Indenture);
 
(c) failure by the Company to comply with Section 4.10 or 4.15 of the Indenture;
 
(d) failure by the Company to comply with Section 4.07 or 4.09 of the Indenture and the continuance of such failure for a period of 30 days after notice is given to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amounts of the Notes then outstanding;
 
(e) failure by the Company for 60 days after notice is 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 Notes then outstanding to comply with any of the Company’s other covenants or agreements in the Indenture or the Notes;
 
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(f) default 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 of its Subsidiaries (or the payment of which is guaranteed by the Company or any of its Subsidiaries) whether such Indebtedness or guarantee now exists, or is created after the date of the Indenture, which default (i) is caused by a failure to pay principal of such Indebtedness at its Stated Maturity (after the expiration of any applicable grace period) or (ii) results in the acceleration of such Indebtedness prior to its maturity and, in each case, the principal amount of which Indebtedness, together with the principal amount of any other such Indebtedness described in clauses (i) and (ii) above, aggregates $5.0 million or more;
 
(g) failure by the Company or any of its Subsidiaries to pay final judgments aggregating in excess of $5.0 million (net of amounts covered by insurance), which judgments are not paid, discharged or stayed for a period of 60 days;
 
(h) certain events of bankruptcy or insolvency with respect to the Company or any of its Subsidiaries;
 
(i) the Subsidiary Guarantee of any Guarantor is held in judicial proceedings to be unenforceable or invalid or ceases for any reason to be in full force and effect (other than in accordance with the terms of the Indenture) or any Guarantor or any Person acting on behalf of any Guarantor denies or disaffirms such Guarantor’s obligations under its Subsidiary Guarantee (other than by reason of a release of such Guarantor from its Subsidiary Guarantee in accordance with the terms of the Indenture).
 
If any Event of Default (other than an Event of Default specified in clause (h) above occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately; provided , however , that if any Senior Indebtedness is outstanding under the Credit Agreement, upon a declaration of acceleration, the Notes shall be payable upon earlier of (x) the day which is five Business Days after the provision to the Company and the agent under the Credit Agreement of written notice of such declaration and (y) the date of acceleration of any Indebtedness under the Credit Agreement. Notwithstanding the foregoing, in the case of an Event of Default specified in clause (h) of this paragraph 12 occurs with respect to the Company, any Significant Subsidiary or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary, all outstanding Notes will become due and payable without further action or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the
 
A-14

Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the Notes. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default.
 
13. Trustee Dealings with Company . The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee.
 
14. No Recourse Against Others . A director, officer, employee, incorporator or stockholder of the Company, as such, shall not have any liability for any obligations of the Company under the Notes or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder, by accepting a Note, waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes.
 
15. Authentication . This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.
 
16. Abbreviations . Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JE TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
 
17. Additional Rights of Holders of Transfer Restricted Securities . In addition to the rights provided to Holders of Notes under the Indenture, Holders of Transferred Restricted Securities shall have all the rights set forth in the Registration Rights Agreement dated as of May 16, 2003, among the Company and the parties named on the signature pages thereof (the “Registration Rights Agreement”).
 
18. CUSIP Numbers . Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.
 
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The Company will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to:
 
Speedway Motorsports, Inc.
Highway 29 North
Post Office Box 600
Concord, NC 28026-0600
Attention: Secretary
 
19. Unclaimed Money . If money for the payment of principal, premium, if any, or interest, or Liquidated Damages, if any, remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its request unless any abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment unless such abandoned property law designates another Person.
 
20. Discharge and Defeasance . Subject to certain conditions, the Company at any time may terminate some or all of the obligations of the Company under the Notes and the Indenture if the Company irrevocably deposits in trust with the Trustee cash or U.S. Government Obligations for the payment of principal, premium, if any, interest and Liquidated Damages, if any, on the Notes to redemption or maturity, as the case may be.
 
21. Reports . Whether or not required by the rules and regulations of the SEC, so long as any Notes are outstanding, the Company shall furnish to the Trustee and to the Holders of Notes reasonably promptly after it is or would have been required to file such with the SEC (i) all quarterly and annual financial information that is or would be required to be contained in a filing with the SEC on Forms l0-Q and 10-K if the Company were required to file such forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report thereon by the Company’s certified independent accountants and (ii) all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports. In addition, whether or not required by the rules and regulations of the SEC, at any time after the Company files a registration statement with respect to the Exchange Offer or a Shelf Registration Statement, the Company shall (i) file a copy of all such information and reports with the SEC for public availability (unless the SEC will not accept such a filing) and (ii) if the SEC will not accept such filing, promptly upon written request and payment of the reasonable cost of duplication and delivery, supply copies of such documents to securities analysts and prospective inventors. In addition, for so long as any Notes remain outstanding, the Company shall furnish to the Trustee, the Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. The Company also shall comply with the other provisions of TIA §314(a).
 
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22. Governing Law . THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE.
 
A-17

ASSIGNMENT FORM
 
To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to:	  	 	

(Insert Assignee’s legal name)	

	
	
(Insert assignee’s soc, sec, or tax I.D. no.)	

	

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

to transfer this Note 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 Note)
 
Signature Guarantee:                                          
 
Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).
 
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OPTION OF HOLDER TO ELECT PURCHASE
 
If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box below:
 
¨ Section 4.10 ¨ Section 4.15.
 
If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased:
 
$                     
 
Date:                                 
 
Your Signature:                                                  
(Sign exactly as your name appears on the face of this Note)
 
Tax Identification No:                                      
 
Signature Guarantee*:                                          
 
*Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).
 
A-19

SECURITIES OF EXCHANGES OF THE GLOBAL NOTE 3
 
The following exchanges of a part of this Global Note for an interest in another Global Note, or of other Restricted Global Notes for an interest in this Global Note, have been made:
 
Date of
Exchange	 	Amount of
decrease
in Principal
Amount [at
maturity] of
this Global
Note	 	Amount of
increase in
Principal
Amount [at
maturity] of
this Global Note	  	Principal Amount
[at maturity] of
this Global Note
following such
decrease
(or increase)	  	Signature of
authorized officer
of Trustee or Note
Custodian	

 

3	 	This should be included only if the Note is issued in Global Form.	
 
A-20

EXHIBIT B
 
FORM OF CERTIFICATE OF TRANSFER
 
Speedway Motorsports, Inc.
Highway 29 North
Post Office Box 600
Concord, NC 28026-0600
 
U.S. Bank National Association
180 East Fifth Street
Suite 200
St. Paul, MN 55101
 
Re: 6¾% Senior Subordinated Notes due 2013
 
Reference is hereby made to the Indenture, dated as of May 16, 2003 (the “Indenture”), between Speedway Motorsports, Inc., as issuer (the “Company”), and U.S. Bank National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
 
                                 , (the “Transferor”) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $              in such Note[s] or interests (the “Transfer”), to                                  (the “Transferee”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:
 
[CHECK ALL THAT APPLY]
 
1. ¨ Check if Transferee will take delivery of a beneficial interest in the 144A Global Note or a Definitive Note Pursuant to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believed and believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Definitive Note and in the Indenture and the Securities Act.
 
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2. ¨ Check if Transferee will take delivery of a beneficial interest in the Regulation S Global Note or a Definitive Note pursuant to Regulation S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act and (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the Regulation S Global Note and/or the Definitive Note and in the Indenture and the Securities Act.
 
3. ¨ Check and complete if Transferee will take delivery of a beneficial interest in the IAI Global Note or a Definitive Note pursuant to any provision of the Securities Act other than Rule 144A or Regulation S . The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):
 
(a) ¨ such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;
 
or
 
(b) ¨ such Transfer is being effected to the Company or a subsidiary thereof;
 
or
 
(c) ¨ such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act;
 
or
 
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(d) ¨ such Transfer is being effected to an Institutional Accredited Investor and pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor hereby further certifies that it has not engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the Indenture and (2) if such Transfer is in respect of a principal amount of Notes at the time of transfer of less than $250,000, an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the IAI Global Note and/or the Definitive Notes and in the Indenture and the Securities Act.
 
4. ¨ Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Definitive Note.
 
(a) ¨  Check if Transfer is pursuant to Rule 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.
 
(b) ¨  Check if Transfer is Pursuant to Regulation S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated
 
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in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.
 
(c) ¨  Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.
 
This certificate and the statements contained herein are made for your benefit and the benefit of the Company.

 	 	 
	
 	 	[Insert Name of Transferor]	

By:	 	 
	
 	 	Name:	
 	 	Title:	
 
Dated:                                 
 
B-24

ANNEX A TO CERTIFICATE OF TRANSFER
 
1. The Transferor owns and proposes to transfer the following:
 
[CHECK ONE OF (a) OR (b)]
 
                                                                                          (a)	 	¨	  	a beneficial interest in the:	
			
                                                                                                  (i)	 	¨	  	144A Global Note (CUSIP              ), or	
			
                                                                                                  (ii)	 	¨	  	Regulation S Global Note (CUSIP              ), or	
			
                                                                                                  (iii)	 	¨	  	IAI Global Note (CUSIP              ); or	
			
                                                                                          (b)	 	¨	  	a Restricted Definitive Note.	
 
2. After the Transfer the Transferee will hold:
 
[CHECK ONE]
 
                                                                                          (a)	 	¨	  	a beneficial interest in the:	
			
                                                                                                  (i)	 	¨	  	144A Global Note (CUSIP              ), or	
			
                                                                                                  (ii)	 	¨	  	Regulation S Global Note (CUSIP              ), or,	
			
                                                                                                  (iii)	 	¨	  	IAI Global Note (CUSIP              ), or	
			
                                                                                                  (iv)	 	¨	  	Unrestricted Global Note (CUSIP              ); or	
			
                                                                                          (b)	 	¨	  	a Restricted Definitive Note; or	
			
                                                                                          (c)	 	¨	  	an Unrestricted Definitive Note,	
 
                                                                               in accordance with the terms of the Indenture.

B-25

EXHIBIT C
 
FORM OF CERTIFICATE OF EXCHANGE
 
Speedway Motorsports, Inc.
Highway 29 North
Post Office Box 600
Concord, NC 28026-0600
 
Re: 6¾ Senior Subordinated Notes due 2013
 
(CUSIP              )
 
Reference is hereby made to the Indenture, dated as of May 16, 2003 (the “Indenture”), between Speedway Motorsports, Inc., as issuer (the “Company”), and U.S. Bank National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
 
             , (the “Owner”) owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $              in such Note[s] or interests (the “Exchange”). In connection with the Exchange, the Owner hereby certifies that:
 
1. Exchange of Restricted Definitive Notes or Beneficial Interests in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted Global Note
 
(a) ¨ Check if Exchange is from beneficial interest in a Restricted Global Note to beneficial interest in an Unrestricted Global Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the “Securities Act”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
 
(b) ¨  Check if Exchange is from beneficial interest in a Restricted Global Note to Unrestricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for an Unrestricted Definitive
 
C-1

Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
 
(c) ¨ Check if Exchange is from Restricted Definitive Note to beneficial interest in an Unrestricted Global Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
 
(d) ¨ Check if Exchange is from Restricted Definitive Note to Unrestricted Definitive Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
 
2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes
 
(a) ¨ Check if Exchange is from beneficial interest in a Restricted Global Note to Restricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act.
 
C-2

(b) Check if Exchange is from Restricted Definitive Note to beneficial interest in a Restricted Global Note. In connection with the Exchange of the Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE] ¨ 144A Global Note, ¨ Regulation S Global Note, ¨ IAI Global Note with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.
 
This certificate and the statements contained herein are made for your benefit and the benefit of the Company.

	
[Insert Name of Transferor]	

By:	 	 
	
 	 	Name:	
 	 	Title:	
 
Dated:	 	                                	
 
C-3

EXHIBIT D
 
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
 
Speedway Motorsports, Inc.
Highway 29 North
Post Office Box 600
Concord, NC 28026-0600
 
U.S. Bank National Association
180 East Fifth Street
Suite 200
St. Paul, MN 55101
 
Re: 6¾ Senior Subordinated Notes due 2013
 
Reference is hereby made to the Indenture, dated as of May 16, 2003 (the “Indenture”), between Speedway Motorsports, Inc., as issuer (the “Company”), and U.S. Bank National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
 
In connection with our proposed purchase of $              aggregate principal amount of:
 
(a) ¨ a beneficial interest in a Global Note, or
 
(b) ¨ a Definitive Note,
 
we confirm that:
 
1. We understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with, such restrictions and conditions and the United States Securities Act of 1933, as amended (the “Securities Act”).
 
2. We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any interest therein, we will do so only (A) to the Company or any
 
D-1

subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to a “qualified institutional buyer” (as defined therein), (C) to an institutional “accredited investor” (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Company a signed letter substantially in the form of this letter and, if such transfer is in respect of a principal amount of Notes, at the time of transfer of less than $250,000, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such transfer is in compliance with the Securities Act, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or (F) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any person purchasing the Definitive Note or beneficial interest in a Global Note from us in a transaction meeting the requirements of clauses (A) through (E) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein.
 
3. We understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect.
 
4. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment.
 
5. We are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of which is an institutional “accredited investor”) as to each of which we exercise sole investment discretion.
 
D-2

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.

[Insert Name of Accredited Investor]	

By:	 	 	
 	 	Name:	
 	 	Title:	
 
Dated:
 
D-3

EXHIBIT E
 
FORM OF NOTE GUARANTEE
 
For value received, each Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture, (a) the due and punctual payment of the principal of, premium, if any, and interest on the Notes, whether at maturity, by acceleration or otherwise, the due and punctual payment of interest on overdue principal and premium, and, to the extent permitted by law, interest, and the due and punctual performance of all other obligations of the Company to the Holders or the Trustee all in accordance with the terms of the Indenture and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. The obligations of the Guarantors to the Holders of Notes and to the Trustee pursuant to the Subsidiary Guarantee and the Indenture are expressly set forth in Article XI of the Indenture and reference is hereby made to the Indenture for the precise terms of the Subsidiary Guarantee. The Indebtedness evidenced by this Subsidiary Guarantee is, to the extent and in the manner provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Guarantor Senior Indebtedness (as defined in the Indenture), and this Subsidiary Guarantee is issued subject to such provisions. Each Holder of a Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee, on behalf of such Holder, to take such action as may be necessary or appropriate to effectuate the subordination as provided in the Indenture and (c) appoints the Trustee attorney-in-fact of such Holder for such purpose; provided , however , that the Indebtedness evidenced by this Subsidiary Guarantee shall cease to be so subordinated and subject in right of payment upon any defeasance of this Note in accordance with the provisions of the Indenture.
 
GUARANTORS :	
	
SPEEDWAY FUNDING, LLC. , a Delaware limited liability corporation	
		
By:	 	 

Name:	 	        William R. Brooks	
Title:	 	         President	
 
600 RACING, INC. , a North Carolina corporation	
		
By:	 	 

Name:	 	        William R. Brooks	
Title:	 	        Vice President	
 
D-1

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

Name:	 	        William R. Brooks	
Title:	 	        Vice President	
 
BRISTOL MOTOR SPEEDWAY, INC. ,
a Tennessee corporation	
		
By:	 	 

Name:	 	        William R. Brooks	
Title:	 	        Vice President	
 
CHARLOTTE MOTOR SPEEDWAY, LLC, a North Carolina limited liability company	
		
By:	 	 

Name:	 	        William R. Brooks	
Title:	 	        Vice President	
 
INEX CORP. a North Carolina corporation	
		
By:	 	 

By:	 	        William R. Brooks	
Title:	 	        Vice President	
 
LAS VEGAS MOTOR SPEEDWAY, INC. , a Delaware corporation	
		
By:	 	 

Name:	 	        William R. Brooks	
Title:	 	        Vice President	
 
NEVADA SPEEDWAY LLC , a Delaware limited liability corporation	
		
By:	 	 

Name:	 	        William R. Brooks	
Title:	 	        Vice President	
 
D-2

SPEEDWAY SYSTEMS, LLC , a North Carolina
limited liability company	
		
By:	 	 

Name:	 	        William R. Brooks	
Title:	 	        Vice President	
 
SPR, INC., a Delaware corporation	
		
By:	 	 

Name:	 	        William R. Brooks	
Title:	 	        Vice President	
 
TEXAS MOTOR SPEEDWAY, INC., a Texas corporation	
		
By:	 	 

Name:	 	        William R. Brooks	
Title:	 	        Vice President	
 
SPEEDWAY PROPERTIES COMPANY, LLC, a Delaware limited liability corporation	
		
By:	 	 

Name:	 	        William R. Brooks	
Title:	 	        President	
 
SPEEDWAY SONOMA, LLC , a Delaware limited liability company	
		
By:	 	 

Name:	 	        William R. Brooks	
Title:	 	        Vice President	
 
SPEEDWAY MEDIA, LLC , a North Carolina limited liability company	
		
By:	 	 

Name:	 	        William R. Brooks	
Title:	 	        Vice President	
 
D-3

TRACKSIDE HOLDING CORPORATION, a North Carolina corporation	
		
By:	 	 

Name:	 	        William R. Brooks	
Title:	 	        Vice President	
 
MOTORSPORTS BY MAIL, LLC , a North Carolina limited liability company	
		
By:	 	 

Name:	 	        William R. Brooks	
Title:	 	        President	
 
SMI TRACKSIDE, LLC , a North Carolina
limited liability company	
		
By:	 	 

Name:	 	        William R. Brooks	
Title:	 	        Vice President	
 
D-4

EXHIBIT F
 
FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT
GUARANTORS
 
SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of              , among              (the “Guaranteeing Subsidiary”), a subsidiary of              (or its permitted successor), a [Delaware] corporation (the “Company”), the Company, the other Guarantors (as defined in the Indenture referred to herein) and              , as trustee under the indenture referred to below (the “Trustee”).
 
WITNESSETH
 
WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the “Indenture”), dated as of May 16, 2003 providing for the issuance of an aggregate principal amount of up to $230,000,000 of 6 ¾% Senior Subordinated Notes due 2013 (the “Notes”);
 
WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Note Guarantee”); and
 
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.
 
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:
 
1. CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
 
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees as follows:
 
(a) Along with all Guarantors named in the Indenture, to jointly and severally Guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, the Notes or the obligations of the Company hereunder or thereunder, that:
 
F-1

(i) the principal of and interest on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and
 
(ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately.
 
(b) The obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor.
 
(c) The following is hereby waived: diligence presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever.
 
(d) This Note Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and the Indenture, and the Guaranteeing Subsidiary accepts all obligations of a Guarantor under the Indenture.
 
(e) If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors, or any Custodian, Trustee, liquidator or other similar official acting in relation to either the Company or the Guarantors, any amount paid by either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.
 
(f) The Guaranteeing Subsidiary shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.
 
F-2

(g) As between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 of the Indenture for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 of the Indenture, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Note Guarantee.
 
(h) The Guarantors shall have the right to seek contribution from any nonpaying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Guarantee.
 
(i) Pursuant to Section 10.02 of the Indenture, after giving effect to any maximum amount and any other contingent and fixed liabilities that are relevant under any applicable Bankruptcy or fraudulent conveyance laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under Article 10 of the Indenture, this new Note Guarantee shall be limited to the maximum amount permissible such that the obligations of such Guarantor under this Note Guarantee will not constitute a fraudulent transfer or conveyance.
 
3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees that the Note Guarantees shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Note Guarantee.
 
4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
 
(a) The Guaranteeing Subsidiary may not consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another corporation, Person or entity whether or not affiliated with such Guarantor unless:
 
(i) subject to Sections 11.03 and 11.04 of the Indenture, the Person formed by or surviving any such consolidation or merger (if other than a Guarantor or the Company) unconditionally assumes all the obligations of such Guarantor, pursuant to a supplemental indenture in form and substance reasonably satisfactory to the Trustee, under the Notes, the Indenture and the Note Guarantee on the terms set forth herein or therein; and
 
F-3

(ii) immediately after giving effect to such transaction, no Default or Event of Default exists.
 
(b) In case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor corporation, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the Note Guarantee endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of the Indenture to be performed by the Guarantor, such successor corporation shall succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor corporation thereupon may cause to be signed any or all of the Note Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee. All the Note Guarantees so issued shall in all respects have the same legal rank and benefit under the Indenture as the Note Guarantees theretofore and thereafter issued in accordance with the terms of the Indenture as though all of such Note Guarantees had been issued at the date of the execution hereof.
 
(c) Except as set forth in Articles 4 and 5 and Section 11.04 of Article 11 of the Indenture, and notwithstanding clauses (a) and (b) above, nothing contained in the Indenture or in any of the Notes shall prevent any consolidation or merger of a Guarantor with or into the Company or another Guarantor, or shall prevent any sale or conveyance of the property of a Guarantor as an entirety or substantially as an entirety to the Company or another Guarantor.
 
5. RELEASES.
 
(a) In the event of a sale or other disposition of all of the assets of any Guarantor, by way of merger, consolidation or otherwise, or a sale or other disposition of all to the capital stock of any Guarantor, in each case to a Person that is not (either before or after giving effect to such transaction) a Subsidiary of the Company, then such Guarantor (in the event of a sale or other disposition, by way of merger, consolidation or otherwise, of all of the capital stock of such Guarantor) or the corporation acquiring the property (in the event of a sale or other disposition of all or substantially all of the assets of such Guarantor) will be released and relieved of any obligations under its Note Guarantee; provided that the Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of the Indenture, including without limitation Section 4.10 of the Indenture. Upon delivery by the Company to the Trustee of an Officers’ Certificate and an Opinion of Counsel to the effect that such sale or other disposition was made by the Company in accordance with the provisions of the Indenture, including without limitation Section 4.10 of the Indenture, the Trustee shall execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations under its Note Guarantee.
 
F-4

(b) Any Guarantor not released from its obligations under its Note Guarantee shall remain liable for the full amount of principal of and interest on the Notes and for the other obligations of any Guarantor under the Indenture as provided in Article 10 of the Indenture.
 
6. NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee, incorporator, stockholder or agent of the Guaranteeing Subsidiary, as such, shall have any liability for any obligations of the Company or any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy.
 
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
 
8. COUNTERPARTS. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
 
9. EFFECT OF HEADINGS. The Section headings herein are for convenience only and shall not affect the construction hereof.
 
10. THE TRUSTEE. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company.
 
F-5

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and  attested, all as of the date first above written.
 
Dated:                  ,     
 
[Guaranteeing Subsidiary]	
		
By:	 	 

 	 	Name:	
 	 	Title:	
 
SPEEDWAY MOTORSPORTS, INC.	
		
By:	 	 

 	 	Name:	
 	 	Title:	
 
[Existing Guarantors]	
		
By:	 	 

 	 	Name:	
 	 	Title:	
 
U.S. BANK NATIONAL ASSOCIATION, as Trustee	
		
By:	 	 

 	 	Authorized Signatory	
 
F-6

Schedule I
 
SCHEDULE OF GUARANTORS
 
The following schedule lists each Guarantor under the Indenture as of the Issue Date:
 
SPEEDWAY FUNDING, LLC.
600 RACING, INC.
ATLANTA MOTOR SPEEDWAY, INC.
BRISTOL MOTOR SPEEDWAY, INC.
CHARLOTTE MOTOR SPEEDWAY, LLC
INEX CORP.
LAS VEGAS MOTOR SPEEDWAY, INC.
NEVADA SPEEDWAY LLC
SPEEDWAY SYSTEMS, LLC
SPR, INC.
TEXAS MOTOR SPEEDWAY, INC.
SPEEDWAY PROPERTIES COMPANY, LLC
SPEEDWAY SONOMA, LLC
SPEEDWAY MEDIA, LLC
TRACKSIDE HOLDING CORPORATION
MOTORSPORTS BY MAIL, LLC
SMI TRACKSIDE, LLC,
 
F-7

EXHIBIT 10.1
CREDIT AGREEMENT
 
among
 
SPEEDWAY MOTORSPORTS, INC.,
 
SPEEDWAY FUNDING, LLC
 
as Borrowers,
 
CERTAIN SUBSIDIARIES AND RELATED PARTIES
 
FROM TIME TO TIME PARTY HERETO,
 
as Guarantors,
 
THE SEVERAL LENDERS FROM TIME TO TIME PARTY HERETO,
 
BANK OF AMERICA, N.A.,
 
as Administrative Agent
 
AND
 
WACHOVIA BANK, NATIONAL ASSOCIATION,
 
as Syndication Agent
 
AND
 
CREDIT LYONNAIS NEW YORK BRANCH,
 
FLEET NATIONAL BANK,
 
SUNTRUST BANK,
 
as the Documentation Agents
 
AND
 
BANC OF AMERICA SECURITIES LLC,
 
as Lead Arranger and Book Manager
 
DATED AS OF MAY 16, 2003

TABLE OF CONTENTS
 
SECTION 1 DEFINITIONS	  	1	
 	  	1.1	    	Definitions	  	1	
 	  	1.2	    	Computation of Time Periods	  	26	
 	  	1.3	    	Accounting Terms	  	26	
		
SECTION 2 CREDIT FACILITY	  	27	
 	  	2.1	    	Revolving Loans	  	27	
 	  	2.2	    	Term Loan	  	29	
 	  	2.3	    	Letter of Credit Subfacility	  	31	
 	  	2.4	    	Swingline Loan Subfacility	  	39	
 	  	2.5	    	Increase in Commitments	  	40	
		
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES	  	41	
 	  	3.1	    	Default Rate	  	41	
 	  	3.2	    	Extension and Conversion	  	42	
 	  	3.3	    	Prepayments	  	42	
 	  	3.4	    	Termination and Reduction of Revolving Commitments	  	44	
 	  	3.5	    	Fees	  	44	
 	  	3.6	    	Capital Adequacy	  	45	
 	  	3.7	    	Inability To Determine Interest Rate	  	46	
 	  	3.8	    	Illegality	  	46	
 	  	3.9	    	Requirements of Law	  	46	
 	  	3.10	    	Taxes	  	48	
 	  	3.11	    	Funding Losses	  	50	
 	  	3.12	    	Pro Rata Treatment	  	50	
 	  	3.13	    	Sharing of Payments	  	51	
 	  	3.14	    	Place and Manner of Payments	  	51	
 	  	3.15	    	Payments Set Aside	  	53	
		
SECTION 4 GUARANTY	  	54	
 	  	4.1	    	The Guaranty	  	54	
 	  	4.2	    	Obligations Unconditional	  	54	
 	  	4.3	    	Reinstatement	  	55	
 	  	4.4	    	Certain Additional Waivers	  	55	
 	  	4.5	    	Remedies	  	56	
 	  	4.6	    	Continuing Guarantee	  	56	
		
SECTION 5 CONDITIONS	  	56	
 	  	5.1	    	Closing Conditions	  	56	
 	  	5.2	    	Conditions to all Extensions of Credit	  	58	
		
SECTION 6 REPRESENTATIONS AND WARRANTIES	  	59	
 	  	6.1	    	Financial Condition	  	59	

i

 	  	6.2	    	No Change	  	60	
 	  	6.3	    	Organization; Existence; Compliance with Law	  	60	
 	  	6.4	    	Power; Authorization; Enforceable Obligations	  	60	
 	  	6.5	    	No Legal Bar	  	61	
 	  	6.6	    	No Material Litigation	  	61	
 	  	6.7	    	No Default	  	61	
 	  	6.8	    	Ownership of Property; Liens	  	62	
 	  	6.9	    	Intellectual Property	  	62	
 	  	6.10	    	No Burdensome Restrictions	  	62	
 	  	6.11	    	Taxes	  	62	
 	  	6.12	    	ERISA	  	63	
 	  	6.13	    	Governmental Regulations, Etc .	  	65	
 	  	6.14	    	Subsidiaries	  	65	
 	  	6.15	    	Purpose of Loans	  	65	
 	  	6.16	    	Environmental Matters	  	66	
 	  	6.17	    	Solvency	  	66	
 	  	6.18	    	No Untrue Statement	  	66	
 	  	6.19	    	Subordinated Indebtedness	  	66	
 	  	6.20	    	Pledge Agreement	  	67	
		
SECTION 7 AFFIRMATIVE COVENANTS	  	67	
 	  	7.1	    	Information Covenants	  	67	
 	  	7.2	    	Preservation of Existence and Franchises	  	70	
 	  	7.3	    	Books and Records	  	70	
 	  	7.4	    	Compliance with Law	  	70	
 	  	7.5	    	Payment of Taxes and Other Indebtedness	  	70	
 	  	7.6	    	Insurance	  	71	
 	  	7.7	    	Maintenance of Property	  	71	
 	  	7.8	    	Performance of Obligations	  	71	
 	  	7.9	    	Use of Proceeds	  	71	
 	  	7.10	    	Audits/Inspections	  	71	
 	  	7.11	    	Financial Covenants	  	72	
 	  	7.12	    	Additional Credit Parties	  	72	
 	  	7.13	    	Ownership of Subsidiaries	  	73	
 	  	7.14	    	Redemption of Existing Notes	  	73	
		
SECTION 8 NEGATIVE COVENANTS	  	74	
 	  	8.1	    	Indebtedness	  	74	
 	  	8.2	    	Liens 	  	75	
 	  	8.3	    	Nature of Business	  	75	
 	  	8.4	    	Consolidation, Merger, Sale or Purchase of Assets, etc.	  	75	
 	  	8.5	    	Advances, Investments, Loans, etc.	  	76	
 	  	8.6	    	Restricted Payments	  	76	
 	  	8.7	    	Modifications of Other Agreements	  	76	
 	  	8.8	    	Transactions with Affiliates	  	77	
 	  	8.9	    	Fiscal Year	  	77	
 
ii

 	  	8.10	    	Limitation on Restrictions on Dividends and Other Distributions, etc.	  	77	
 	  	8.11	    	Issuance and Sale of Subsidiary Stock 	  	77	
 	  	8.12	    	Sale Leasebacks	  	78	
 	  	8.13	    	Capital Expenditures	  	78	
 	  	8.14	    	No Further Negative Pledges	  	78	
 	  	8.15	    	Designated Senior Indebtedness	  	78	
		
SECTION 9 EVENTS OF DEFAULT	  	79	
 	  	9.1	    	Events of Default	  	79	
 	  	9.2	    	Acceleration; Remedies	  	81	
 	  	9.3	    	Application of Funds	  	82	
		
SECTION 10 AGENCY PROVISIONS	  	83	
 	  	10.1	    	Appointment and Authorization of Administrative Agent	  	83	
 	  	10.2	    	Delegation of Duties	  	84	
 	  	10.3	    	Liability of Administrative Agent	  	84	
 	  	10.4	    	Reliance by Administrative Agent	  	84	
 	  	10.5	    	Notice of Default	  	85	
 	  	10.6	    	Credit Decision; Disclosure of Information by Administrative Agent	  	85	
 	  	10.7	    	Indemnification of Administrative Agent	  	86	
 	  	10.8	    	Administrative Agent in its Individual Capacity	  	86	
 	  	10.9	    	Successor Administrative Agent	  	87	
 	  	10.10	    	Administrative Agent May File Proofs of Claim	  	87	
 	  	10.11	    	Guaranty Matters	  	88	
 	  	10.12	    	Other Agents; Arrangers and Managers	  	89	
		
SECTION 11 MISCELLANEOUS	  	89	
 	  	11.1	    	Notices	  	89	
 	  	11.2	    	Right of Set-Off	  	91	
 	  	11.3	    	Benefit of Agreement	  	91	
 	  	11.4	    	No Waiver; Remedies Cumulative	  	94	
 	  	11.5	    	Payment of Expenses, etc.	  	95	
 	  	11.6	    	Amendments, Waivers and Consents	  	95	
 	  	11.7	    	Counterparts	  	97	
 	  	11.8	    	Headings	  	97	
 	  	11.9	    	Indemnification	  	97	
 	  	11.10	    	Survival of Indemnification	  	98	
 	  	11.11	    	Confidentiality	  	98	
 	  	11.12	    	Governing Law; Submission to Jurisdiction; Venue	  	99	
 	  	11.13	    	WAIVER OF RIGHT TO TRIAL BY JURY	  	100	
 	  	11.14	    	Severability	  	100	
 	  	11.15	    	Entirety	  	100	
 	  	11.16	    	Survival of Representations and Warranties	  	100	
 	  	11.17	    	Binding Effect; Termination	  	101	
 	  	11.18	    	Borrowers’ Obligations Joint and Several	  	101	
 
iii

SCHEDULES
 
Schedule 1.1B	  	Existing Letters of Credit	
Schedule 1.1C	  	Investments	
Schedule 1.1D	  	Liens	
Schedule 2.1(a)	  	Schedule of Lenders and Commitments	
Schedule 2.1(b)(i)	  	Form of Notice of Borrowing	
Schedule 2.1(e)	  	Form of Revolving Note	
Schedule 2.2(e)	  	Form of Term Note	
Schedule 2.4(e)	  	Swingline Note	
Schedule 3.2	  	Form of Notice of Extension/Conversion	
Schedule 5.1(g)	  	Form of Legal Opinion	
Schedule 6.2(a)	  	General Disclosure Schedule	
Schedule 6.4	  	Required Consents, Authorizations, Notices and Filings	
Schedule 6.6	  	Litigation	
Schedule 6.9	  	Intellectual Property	
Schedule 6.11	  	Taxes	
Schedule 6.14	  	Subsidiaries	
Schedule 6.16	  	Phase I Environmental Site Assessments	
Schedule 7.1(c)	  	Form of Officer’s Compliance Certificate	
Schedule 7.12	  	Form of Joinder Agreement	
Schedule 8.1	  	Indebtedness	
Schedule 11.3(b)	  	Form of Assignment and Assumption	
 
iv

CREDIT AGREEMENT
 
THIS CREDIT AGREEMENT (the “ Credit Agreement ”) is entered into as of May 16, 2003 among SPEEDWAY MOTORSPORTS, INC., a Delaware corporation (“ Speedway Motorsports ”), SPEEDWAY FUNDING, LLC, a Delaware limited liability company (“ Speedway Funding ”) (each a “ Borrower ”, and collectively the “ Borrowers ”), certain subsidiaries and related parties identified on the signature pages hereto and such other subsidiaries and related parties as may from time to time become a party hereto (the “ Guarantors ”), the several lenders identified on the signature pages hereto and such other lenders as may from time to time become a party hereto (the “ Lenders ”), BANK OF AMERICA, N.A., as Administrative Agent for the Lenders (in such capacity, the “ Administrative Agent ”), WACHOVIA BANK, NATIONAL ASSOCIATION, as Syndication Agent (in such capacity, the “ Syndication Agent ”), CREDIT LYONNAIS NEW YORK BRANCH, FLEET NATIONAL BANK, and SUNTRUST BANK, as the Documentation Agents (in such capacity, the “ Documentation Agents ”), and BANC OF AMERICA SECURITIES LLC, as Lead Arranger and Book Manager for the Lenders.
 
WHEREAS, the Borrowers and the Guarantors have requested that the Lenders provide revolving credit and term loan facilities in the aggregate amount of $300,000,000 for the purposes of (i) refinancing existing Indebtedness (ii) financing seasonal working capital needs of Speedway Motorsports and its Subsidiaries, (iii) financing letter of credit needs of Speedway Motorsports and its Subsidiaries, (iv) financing general corporate needs of Speedway Motorsports and its Subsidiaries including capital expenditures, (v) financing permitted investments and (vi) financing the acquisition of additional motor speedways and related businesses; and
 
WHEREAS, the Lenders have agreed to make the requested facilities available on the terms and conditions set forth herein;
 
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
 
SECTION 1 
 
DEFINITIONS
 
1.1 Definitions.
 
As used in this Credit Agreement, the following terms shall have the meanings specified below unless the context otherwise requires:

“ Additional Credit Party ” means each Person that becomes a Guarantor after the Closing Date by execution of a Joinder Agreement.
 
“ Affiliate ” means, with respect to any Person, any other Person (i) directly or indirectly controlling or controlled by or under direct or indirect common control with such Person or (ii) directly or indirectly owning or holding five percent (5%) or more of the equity interest in such Person. For purposes of this definition, “control” when used with respect to any 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.
 
“ Administrative Agent ” shall have the meaning assigned to such term in the heading hereof.
 
“ Agent’s Fee Letter ” means the letter from the Agent to the Borrowers dated April 15, 2003.
 
“ Agent’s Fees ” shall have the meaning assigned to such term in Section 3.5(c).
 
“ Agent-Related Persons ” means the Administrative Agent, together with its Affiliates (including, in the case of Bank of America in its capacity as the Administrative Agent, the Arranger), and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates.
 
“ 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 applicable Commitment Fee for any day for purposes of Section 3.5(a), the appropriate applicable percentage set forth below corresponding to the Consolidated Total Debt Ratio in effect as of the most recent Calculation Date:
 
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Pricing
Level
	  	Consolidated
Total Debt Ratio
	  	Applicable Percentages
	 	
	  		  	Revolving
Commitment &
Term Loan
Eurodollar Loans
	 	 	Revolving
Commitment &
Term Loan Base
Rate Loans
	 	 	Standby
Letter of
Credit Fee
	 	 	Trade Letter
of Credit Fee
	 	 	Commitment
Fee
	 	
I	  	Less than or equal to 1.50 to 1.00	  	1.50	%	 	0.50	%	 	1.50	%	 	0.125	%	 	0.375	%	
II	  	Less than or equal to 2.00 to 1.00 but greater than 1.50 to 1.00	  	1.75	%	 	0.75	%	 	1.75	%	 	0.125	%	 	0.375	%	
III	  	Less than or equal to 2.50 to 1.00 but greater than 2.00 to 1.00	  	2.00	%	 	1.00	%	 	2.00	%	 	0.125	%	 	0.375	%	
IV	  	Less than or equal to 3.00 but greater than 2.50 to 1.00	  	2.25	%	 	1.25	%	 	2.25	%	 	0.125	%	 	0.50	%	
V	  	Greater than 3.00 to 1.00	  	2.50	%	 	1.50	%	 	2.50	%	 	0.125	%	 	0.50	%	
 
Determination of the appropriate Applicable Percentages shall be made as of each Calculation Date. The Consolidated Total Debt Ratio in effect as of a Calculation Date shall establish the Applicable Percentages for the Loans, the Standby Letter of Credit Fee, the Trade Letter of Credit Fee and the Commitment Fee that shall be effective as of the date designated by the Administrative Agent as the Applicable Percentage Change Date; provided , however, that if the Required Financial Information for such Calculation Date is not delivered when due pursuant to Section 7.1(c), then Pricing Level V shall apply until the Applicable Percentage Change Date. The Administrative 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 Administrative Agent of the Applicable Percentages shall be conclusive absent demonstrable error. The initial Applicable Percentage(s) shall be based on Pricing Level III until the first Applicable Percentage Change Date occurring after the Closing Date.
 
“ Applicable Percentage Change Date ” means, with respect to any Calculation Date, a date designated by the Administrative Agent that is not more than five (5) Business Days after receipt by the Administrative Agent of the Required Financial Information for such Calculation Date.
 
“ Approved Fund ” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
 
“ Arranger ” means Banc of America Securities LLC in its capacity as lead arranger and book manager.
 
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“ Attorney Costs ” means and includes all reasonable fees, expenses and disbursements of any law firm or other external counsel and, without duplication, the allocated cost of internal legal services and all expenses and disbursements of internal counsel.
 
“ Asset Disposition ” shall mean and include (i) the sale, lease or other disposition of any Property by Speedway Motorsports or any of its Subsidiaries, but for purposes hereof shall not include, in any event, (A) the sale of inventory in the ordinary course of business, (B) the sale, lease or other disposition of machinery and equipment no longer used or useful in the conduct of business and (C) a sale, lease, transfer or disposition of Property to a Credit Party, and (ii) receipt by Speedway Motorsports or any of its Subsidiaries of any cash insurance proceeds or condemnation award payable by reason of theft, loss, physical destruction or damage, taking or similar event with respect to any of its Property.
 
“ Bank of America ” means Bank of America, N.A. and its successors.
 
“ Bankruptcy Code ” means the Bankruptcy Code in Title 11 of the United States Code, as amended, modified, succeeded or replaced from time to time.
 
“ Base Rate ” means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate.” The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in the prime rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.
 
“ Base Rate Loan ” means any Loan bearing interest at a rate determined by reference to the Base Rate.
 
“ Borrowers ” means the Persons identified as such in the heading hereof, together with any successors and permitted assigns.
 
“ Borrowers’ Obligations ” means, without duplication, (i) all of the obligations of either of the Borrowers to the Lenders and the Administrative Agent, whenever arising, under this Credit Agreement, the Notes or any of the other Credit Documents (including, but not limited to, all interest accruing from and after the commencement of any case, proceeding or action under any existing or future laws relating to bankruptcy or insolvency with respect to either of the Borrowers, regardless of whether such interest is an allowed claim under the Bankruptcy Code in Title 11 of the United States Code) and (ii) all obligations owing from either of the Borrowers or any Credit Party to any Lender,
 
4

or any Affiliate of a Lender, arising under any Hedge Agreements relating to the Obligations hereunder.
 
“ Business Day ” means a day other than a Saturday, Sunday or other day on which commercial banks in Charlotte, North Carolina are authorized or required by law to close, except that, when used in connection with a Eurodollar Loan, such day shall also be a day on which dealings between banks are carried on in Dollar deposits in London, England and New York, New York.
 
“ Calculation Date ” means the last day of each fiscal quarter of Speedway Motorsports.
 
“ Capital Lease ” means, as applied to any Person, any lease of any Property (whether real, personal or mixed) by that Person as lessee which, in accordance with GAAP is or should be accounted for as a capital lease on the balance sheet of that Person.
 
“ Capital Stock ” means (i) in the case of a corporation, capital stock, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of Capital Stock, (iii) in the case of a partnership, partnership interests (whether general or limited), (iv) in the case of a limited liability company, membership interests and (v) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.
 
“ Cash Collateralize ” has the meaning provided in Section 2.3(h).
 
“ Cash Consideration ” means cash paid to or for the account of a seller for the acquisitions permitted by Section 8.4(c) plus (i) any notes given to such seller having a maturity date shorter than the Termination Date and (ii) any Funded Indebtedness assumed in the transaction.
 
“ Cash Equivalents ” means (a) securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) having maturities of not more than twelve months from the date of acquisition, (b) Dollar denominated time deposits and certificates of deposit of (i) any Lender, (ii) any domestic commercial bank of recognized standing having capital and surplus in excess of $500,000,000 or (iii) any bank whose short-term commercial paper rating from S&P is at least A-1 or the equivalent thereof or from Moody’s is at least P-1 or the equivalent thereof (any such bank being an “ Approved Lender ”), in each case with maturities of not more than 270 days from the date of acquisition, (c) commercial paper and variable or fixed rate notes issued by any Approved Lender (or by the parent company thereof) or any variable rate notes issued by, or guaranteed by, any domestic corporation whose senior unsecured indebtedness for borrowed money is rated A-1 (or the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or better by
 
5

Moody’s and maturing within six months of the date of acquisition, (d) repurchase agreements with a bank or trust company (including any of the Lenders) or recognized securities dealer having capital and surplus in excess of $500,000,000 for direct obligations issued by or fully guaranteed by the United States of America or any agency or instrumentality thereof in which the Borrowers shall have a perfected first priority security interest (subject to no other Liens) and having, on the date of purchase thereof, a fair market value of at least 100% of the amount of the repurchase obligations, (e) obligations of any state of the United States or any political subdivision thereof, the interest with respect to which is exempt from federal income taxation under Section 103 of the Code, having a long term rating of at least Aa-3 or AA- by Moody’s or S&P, respectively, and maturing within three years from the date of acquisition thereof, (f) Investments in municipal or corporate auction preferred stock (i) rated AAA (or the equivalent thereof) or better by S&P or Aaa (or the equivalent thereof) or better by Moody’s and (ii) with dividends that reset at least once every 365 days and (g) Investments, classified in accordance with GAAP as current assets, in money market investment programs registered under the Investment Company Act of 1940, as amended, which are administered by reputable financial institutions having capital of at least $100,000,000 and the portfolios of which are limited to Investments of the character described in the foregoing subdivisions (a) through (f).
 
“ Change of Control ” means the occurrence of any of the following events:
 
(a) any Person or two or more Persons (acting as a “group” within the meaning of Section 13(d)(3) of the Exchange Act), excluding Persons who are on the Closing Date executive officers or directors of Speedway Motorsports or Permitted Transferees, shall have acquired “beneficial ownership” (as such term is defined in Rule 13d-3 of the SEC under the Exchange Act), directly or indirectly, of, or shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of, control over, Voting Stock of either of the Borrowers (or other securities convertible into such Voting Stock) representing more than 25% of the combined voting power of all Voting Stock of such Borrower and shall have filed or shall have become required to file, a Schedule 13D with the SEC disclosing that it is the intention of such Person or group to acquire control of either of the Borrowers;
 
(b) a majority of the Board of Directors of either of the Borrowers existing on the Closing Date changes; or
 
(c) any “Change of Control” (as such term is defined in the Indenture) shall occur pursuant to the terms of the Indenture.
 
“ Closing Date ” means the date hereof.
 
“ Code ” means the Internal Revenue Code of 1986, as amended, and any successor thereto, as interpreted by the rules and regulations issued thereunder, in each case as in
 
6

effect from time to time. References to sections of the Code shall be construed also to refer to any successor sections.
 
“ Commitment ” means the LOC Commitment, the Revolving Commitment, the Swingline Commitment and/or the Term Loan Commitment.
 
“ Commitment Fee ” shall have the meaning given such term in Section 3.5(a).
 
“ Commitment Percentage ” means the Revolving Commitment Percentage and the Term Loan Commitment Percentage.
 
“ Consolidated Capital Charges Coverage Ratio ” means, as of any Calculation Date, the ratio of (i) Consolidated EBIT for the four-quarter period ended as of such Calculation Date, to (ii) Consolidated Interest Expense plus dividends paid on preferred and/or common stock and/or stock repurchases paid for the four-quarter period ended as of such Calculation Date.
 
“ Consolidated Capital Expenditures ” means, for any period, all capital expenditures of Speedway Motorsports and its Subsidiaries on a consolidated basis for such period, as determined in accordance with GAAP.
 
“ Consolidated EBIT ” means, for any period, the sum of (i) Consolidated Net Income for such period, plus (ii) an amount which, in the determination of Consolidated Net Income for such period, has been deducted for (A) Consolidated Interest Expense and (B) total federal, state, local and foreign income, value added and similar taxes all as determined in accordance with GAAP.
 
“ Consolidated EBITDA ” means, for any period, the sum of (i) Consolidated Net Income for such period, plus (ii) an amount which, in the determination of Consolidated Net Income for such period, has been deducted for (A) Consolidated Interest Expense, (B) total federal, state, local and foreign income, value added and similar taxes and (C) depreciation and amortization expense, all as determined in accordance with GAAP.
 
“ Consolidated Interest Expense ” means, for any period, with respect to the combined results of Speedway Motorsports and its Subsidiaries on a consolidated basis, gross interest expense (both expensed and capitalized) for such period, as determined in accordance with GAAP.
 
“ Consolidated Net Income ” means, for any period, with respect to the combined results of Speedway Motorsports and its Subsidiaries, the gross revenues from operations (including payments received of interest income) less all operating and non-operating expenses including taxes on income, all determined in accordance with GAAP; but excluding as income: (i) net gains on the sale, conversion or other disposition of capital assets, (ii) net gains on the acquisition, retirement, sale or other disposition of Capital Stock and other securities issued by Speedway Motorsports and its Subsidiaries, (iii) net
 
7

gains on the collection of proceeds of life insurance policies, (iv) any write-up of any asset, and (v) any other gain or loss of an extraordinary nature as determined in accordance with GAAP.
 
“ Consolidated Net Worth ” means, as of any date, total shareholders’ equity of Speedway Motorsports and its Subsidiaries less preferred stock redeemable at the holder’s discretion and preferred stock having a first call of fifteen years or less all on a consolidated basis as of such date, as determined in accordance with GAAP.
 
“ Consolidated Senior Debt Ratio ” means, as of any Calculation Date, the sum of (i) Funded Indebtedness of Speedway Motorsports and its Subsidiaries on a consolidated basis as of such Calculation Date minus Subordinated Debt of the Credit Parties as of such Calculation Date, to (ii) Consolidated EBITDA for the four quarter period ended as of such Calculation Date.
 
“ Consolidated Total Debt Ratio ” means, as of any Calculation Date, the ratio of (i) 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.
 
“ Controlled Group ” means (i) the controlled group of corporations as defined in Section 414(b) of the Code and the applicable regulations thereunder, or (ii) the group of trades or businesses under common control as defined in Section 414(c) of the Code and the applicable regulations thereunder, of which Speedway Motorsports or any of its Subsidiaries is a member.
 
“ Credit Documents ” means a collective reference to this Credit Agreement, the Notes, the Pledge Agreement, each Joinder Agreement, the Hedge Agreements, the Agent’s Fee Letter and all other related agreements and documents issued or delivered hereunder or thereunder or pursuant hereto or thereto.
 
“ Credit Party ” means any of the Borrowers and the Guarantors.
 
“ Debt Transactions ” means, with respect to Speedway Motorsports or any of its Subsidiaries, any sale, issuance or placement of Funded Indebtedness, whether or not evidenced by a promissory note or other written evidence of indebtedness, except for Funded Indebtedness permitted to be incurred pursuant to Section 8.1.
 
“ Default ” means any event, act or condition which, with notice or lapse of time, or both, would constitute an Event of Default.
 
“ Dollars ” and “ $ ” means dollars in lawful currency of the United States of America.
 
8

“ Domestic Credit Party ” means any Credit Party that is incorporated or organized under the laws of any state of the United States or the District of Columbia.
 
“ Domestic Subsidiary ” means, with respect to any Person, any Subsidiary of such Person which is incorporated or organized under the laws of any state of the United States or the District of Columbia.
 
“ Effective Date ” means the date hereof provided that the conditions set forth in Section 5.1 shall have been fulfilled (or waived in the sole discretion of the Lenders).
 
“ Eligible Assignee ” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other than a natural person) approved by (i) the Administrative Agent and, with respect to any assignment of the Revolving Commitment, the Issuing Lender and the Swingline Lender, and (ii) unless an Event of Default has occurred and is continuing, the Borrowers (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include the Borrowers or any of the Borrowers’ Affiliates or Subsidiaries.
 
“ Environmental Claim ” means any investigation, written notice, violation, written demand, written allegation, action, suit, injunction, judgment, order, consent decree, penalty, fine, lien, proceeding, or written claim whether administrative, judicial, or private in nature from activities or events taking place during or prior to the Borrowers’ or any of its Subsidiaries’ ownership or operation of any real property and arising (a) pursuant to, or in connection with, an actual or alleged violation of, any Environmental Law, (b) in connection with any Hazardous Material, (c) from any assessment, abatement, removal, remedial, corrective, or other response action required by an Environmental Law or other order of a Governmental Authority or (d) from any actual or alleged damage, injury, threat, or harm to health, safety, natural resources, or the environment.
 
“ Environmental Laws ” means any and all lawful and applicable Federal, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to the environment or to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes into the environment including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes.
 
“ Equity Transaction ” means any issuance by Speedway Motorsports or any of its Subsidiaries of (i) shares of its Capital Stock, (ii) any shares of its Capital Stock pursuant to the exercise of options or warrants or (iii) any shares of its Capital Stock pursuant to the conversion of any debt securities to equity; excluding , however , any shares at any time issued or issuable to any key employees, directors, consultants and other individuals providing services to Speedway Motorsports or any of its Subsidiaries pursuant to the
 
9

1994 Stock Option Plan of Speedway Motorsports or any other “employee benefit plan” within the meaning of Rule 405 promulgated by the SEC under the Securities Act of 1933, as amended.
 
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute thereto, as interpreted by the rules and regulations thereunder, all as the same may be in effect from time to time. References to sections of ERISA shall be construed also to refer to any successor sections.
 
“ ERISA Affiliate ” means an entity, whether or not incorporated, which is under common control with any Credit Party within the meaning of Section 4001(a)(14) of ERISA, or is a member of a group which includes Speedway Motorsports or any of its Subsidiaries and which is treated as a single employer under Sections 414(b), (c), (m), or (o) of the Code.
 
“ Eurodollar Base Rate ” means, for any Interest Period with respect to any Eurodollar Loan:
 
(a) the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate that appears on the page of the Telerate screen (or any successor thereto) that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or
 
(b) if the rate referenced in the preceding clause (a) does not appear on such page or service or such page or service shall not be available, the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate on such other page or other service that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or
 
(c) if the rates referenced in the preceding clauses (a) and (b) are not available, the rate per annum determined by the Administrative Agent as the rate of interest at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 4:00 p.m. (London time) two Business Days prior to the first day of such Interest Period.
 
“ Eurodollar Loan ” means any Loan bearing interest at a rate determined by reference to the Eurodollar Rate.
 
10

“ Eurodollar Rate ” means for any Interest Period with respect to any Eurodollar Loan, a rate per annum determined by the Administrative Agent pursuant to the following formula:
 
Eurodollar Rate =	 	Eurodollar Base Rate
	 	 	
	 	1.00 – Eurodollar Reserve Percentage	 	 	
 
“ Eurodollar Reserve Percentage ” means, for any day during any Interest Period, the reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the Board of Governors of the Federal Reserve System for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “eurocurrency liabilities”). The Eurodollar Rate for each outstanding Eurodollar Rate Loan shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage.
 
“ Event of Default ” means such term as defined in Section 9.1.
 
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and any successor thereto.
 
“ Existing Credit Agreement ” means that certain Credit Agreement dated as of May 28, 1999 (as amended or modified from time to time) among the Borrowers, the guarantors and lenders identified therein, and NationsBank, N.A. (now known as Bank of America, N.A.), as administrative agent for the lenders thereunder.
 
“ Existing Notes ” means the 8 ½% Senior Subordinated Notes Due 2007 of Speedway Motorsports.
 
“ Federal Funds Rate ” means, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day immediately succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the immediately preceding Business Day as so published on the immediately succeeding Business Day, and (b) if no such rate is so published on such immediately succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to the next 1/100 th of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.
 
“ Fees ” means all fees payable pursuant to Section 3.5.
 
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“ Foreign Subsidiary ” means any Subsidiary of either of the Borrowers that is not a Domestic Subsidiary.
 
“ Fund ” means any Person (other than a natural person) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business. 
 
“ Funded Indebtedness ” means, with respect to any Person, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:
 
(a) the outstanding principal amount of (i) all obligations for borrowed money, whether current or long-term (including the Obligations hereunder and all Indebtedness evidenced by the Senior Subordinated Notes), and (ii) all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments;
 
(b) the outstanding principal amount of (i) all purchase money indebtedness (including indebtedness and obligations in respect of conditional sales and title retention arrangements, except for customary conditional sales and title retention arrangements with suppliers that are entered into in the ordinary course of business) and (ii) all indebtedness and obligations in respect of the deferred purchase price of property or services (other than trade accounts payable incurred in the ordinary course of business and payable on customary trade terms);
 
(c) the maximum amount available to be drawn on all direct obligations under letters of credit (including standby and commercial), bankers’ acceptances and similar instruments (including bank guaranties, surety bonds, comfort letters, keep-well agreements and capital maintenance agreements to the extent such instruments or agreements support financial, rather than performance, obligations);
 
(d) the amount of obligations (determined in accordance with GAAP) under any Capital Lease and the principal balance outstanding under any Synthetic Lease;
 
(e) the attributed principal amount of any Securitization Transaction;
 
(f) all preferred stock and comparable equity interests providing for mandatory redemption, sinking fund or other like payments having a first call of fifteen years or less;
 
(g) Guaranty Obligations in respect of Funded Indebtedness of another Person;
 
(f) Funded Indebtedness of any partnership or joint venture or other similar entity in which such Person is a general partner or joint venturer, and, as such, has
 
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personal liability for such obligations, but only to the extent there is recourse to such Person for payment thereof.
 
“ GAAP ” means generally accepted accounting principles in the United States applied on a consistent basis and subject to the terms of Section 1.3 hereof.
 
“ Governmental Authority ” means any Federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory body.
 
“ Guarantor ” means each of those Persons identified as a “Guarantor” on the signature pages hereto, and each Additional Credit Party which may hereafter execute a Joinder Agreement, together with their successors and permitted assigns.
 
“ Guaranty Obligations ” means, with respect to any Person, without duplication, any obligations of such Person (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) guaranteeing or intended to guarantee any Indebtedness of any other Person in any manner, whether direct or indirect, and including without limitation any obligation, whether or not contingent, (i) to purchase any such Indebtedness or any Property constituting security therefor, (ii) to advance or provide funds or credit support for the payment or purchase of any such Indebtedness or to maintain working capital, solvency or other balance sheet condition of such other Person (including without limitation keep well agreements, maintenance agreements, comfort letters or similar agreements or arrangements) for the benefit of any holder of Indebtedness of such other Person, (iii) to lease or purchase Property, securities or services primarily for the purpose of assuring the holder of such Indebtedness, or (iv) to otherwise assure or hold harmless the holder of such Indebtedness against loss in respect thereof. The amount of any Guaranty Obligation hereunder shall (subject to any limitations set forth therein) be deemed to be an amount equal to the outstanding principal amount (or maximum principal amount, if larger) of the Indebtedness in respect of which such Guaranty Obligation is made.
 
“ Hazardous Materials ” means any substance, material or waste defined or regulated in or under any Environmental Laws.
 
“ Hedge Agreements ” mean interest rate swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts and other similar agreements designed to hedge against fluctuations in interest rates or foreign exchange rates.
 
“ Indebtedness ” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:
 
(a) all Funded Indebtedness;
 
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(b) all contingent obligations under letters of credit (including standby and commercial), bankers’ acceptances and similar instruments (including bank guaranties, surety bonds, comfort letters, keep-well agreements and capital maintenance agreements to the extent such instruments or agreements support financial, rather than performance, obligations);
 
(c) net obligations under any Hedge Agreement;
 
(d) Guaranty Obligations in respect of Indebtedness of another Person; and
 
(e) Indebtedness of any partnership or joint venture or other similar entity in which such Person is a general partner or joint venturer, and, as such, has personal liability for such obligations, but only to the extent there is recourse to such Person for payment thereof.
 
“ Indenture ” means (i) that certain Indenture dated as of May 16, 2003 among Speedway Motorsports as issuer, the Guarantors and U.S. Bank National Association as trustee, as the same may be modified, supplemented or amended from time to time.
 
“ Intercompany Indebtedness ” means any Indebtedness (a) owing to any Credit Party or Subsidiary (i) by any Domestic Credit Party (provided such Indebtedness by its terms is specifically subordinated in right of payment to the prior payment of the Borrowers’ Obligations on terms and conditions reasonably satisfactory to the Required Lenders) or (ii) by any Subsidiary that is not a Domestic Credit Party in an aggregate principal amount not to exceed $20,000,000 at any one time outstanding, or (b) owing to any Subsidiary that is not a Credit Party by any other Subsidiary that is not a Credit Party.
 
“ Interest Payment Date ” means (i) as to any Base Rate Loan the last day of each March, June, September and December, the date of repayment of principal of such Loan and the Termination Date and the date of the final principal amortization installment on the Term Loan, as applicable, (ii) as to Swingline Loans, such dates as to which the Swingline Lender may agree and (iii) as to any Eurodollar Loan, the last day of each Interest Period for such Loan, the date of repayment of principal of such Loan and the Termination Date and the date of the final principal amortization installment on the Term Loan, as applicable, and in addition where the applicable Interest Period is more than three months, then also on the date three months from the beginning of the Interest Period, and each three months thereafter. If an Interest Payment Date falls on a date which is not a Business Day, such Interest Payment Date shall be deemed to be the next succeeding Business Day, except that in the case of Eurodollar Loans where the next succeeding Business Day falls in the next succeeding calendar month, then on the next preceding Business Day.
 
“ Interest Period ” means, (i) as to Eurodollar Loans, a period of one, two, three or six months’ duration, as the Borrowers may elect, commencing in each case, on the date of the borrowing (including conversions, extensions and renewals) and (ii) as to any
 
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Swingline Loan, a period of such duration, not to exceed 15 days, as the applicable Borrower may request and the Swingline Lender may agree in accordance with the provisions of Section 2.3(b)(i), commencing in each case, on the date of borrowing; provided , however , (A) if any Interest Period would end on a day which is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day (except that in the case of Eurodollar Loans where the next succeeding Business Day falls in the next succeeding calendar month, then on the next preceding Business Day), (B) (i) in the case of Loans comprising Revolving Loans, no Interest Period shall extend beyond the Termination Date and (ii) in the case of Loans comprising the Term Loan, no Interest Period shall extend beyond any principal amortization payment date unless, and to the extent that, the portion of the applicable Term Loan comprised of Eurodollar Loans expiring prior to the applicable principal amortization plus the portion of the applicable Term Loan comprised of Base Rate Loans equals or exceeds the principal amortization payment then due, and (C) in the case of Eurodollar Loans, where an Interest Period begins on a day for which there is no numerically corresponding day in the calendar month in which the Interest Period is to end, such Interest Period shall end on the last day of such calendar month.
 
“ Investment ”, in any Person, means any loan or advance to such Person, any purchase or other acquisition of any Capital Stock, warrants, rights, options, obligations or other securities of such Person, any capital contribution to such Person or any other investment in such Person, including, without limitation, any Guaranty Obligation incurred for the benefit of such Person.
 
“ Issuing Lender ” means Bank of America.
 
“ Issuing Lender Fees ” shall have the meaning assigned to such term in Section 3.5(b)(iii).
 
“ Joinder Agreement ” means a Joinder Agreement substantially in the form of Schedule 7.12 hereto, executed and delivered by an Additional Credit Party in accordance with the provisions of Section 7.12.
 
“ Lenders ” means each of the Persons identified as a “Lender” on the signature pages hereto, and each Person which may become a Lender by way of assignment in accordance with the terms hereof or pursuant to Section 2.5, together with their successors and permitted assigns.
 
“ Letter of Credit ” means (i) any letter of credit issued by the Issuing Lender for the account of the Borrowers in accordance with the terms of Section 2.3 and (ii) existing letters of credit issued by the Issuing Lender for the account of any Credit Party and set forth on Schedule 1.1B .
 
“ Lien ” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, security interest, encumbrance, lien (statutory or otherwise), preference,
 
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priority or charge of any kind (including any agreement to give any of the foregoing or any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the Uniform Commercial Code as adopted and in effect in the relevant jurisdiction or other similar recording or notice statute, any lease in the nature thereof).
 
“ Loan ” or “ Loans ” means the Revolving Loans, the Swingline Loans and/or the Term Loans, and the Base Rate Loans and Eurodollar Loans comprising such Loans.
 
“ LOC Advance ” means, with respect to each Revolving Lender, such Lender’s funding of its participation in any LOC Borrowing.
 
“ LOC Borrowing ” means any extension of credit resulting from a drawing under any Letter of Credit that has not been reimbursed or refinanced as a borrowing of Revolving Loans.
 
“ LOC Commitment ” means the commitment of the Issuing Lender to issue, and to honor payment obligations under, Letters of Credit hereunder and with respect to each Lender, the commitment of each Revolving Lender to purchase participation interests in the Letters of Credit up to such Lender’s Revolving Commitment Percentage of LOC Committed Amount as specified in Schedule 2.1(a) , as such amount may be reduced in accordance with the provisions hereof.
 
“ LOC Committed Amount ” shall have the meaning assigned to such term in Section 2.3.
 
“ LOC Documents ” means, with respect to any Letter of Credit, such Letter of Credit, any amendments thereto, any documents delivered in connection therewith, any application therefor, and any agreements, instruments, guarantees or other documents (whether general in application or applicable only to such Letter of Credit) governing or providing for (i) the rights and obligations of the parties concerned or at risk or (ii) any collateral security for such obligations.
 
“ LOC Obligations ” means, at any time, the sum of (i) the maximum amount which is, or at any time thereafter may become, available to be drawn under Letters of Credit then outstanding, assuming compliance with all requirements for drawings referred to in such Letters of Credit plus (ii) the aggregate amount of all drawings outstanding under Letters of Credit honored by the Issuing Lender but not theretofore reimbursed.
 
“ Material Adverse Change ” means a material adverse change in (i) the condition (financial or otherwise), operations, assets or liabilities of Speedway Motorsports and its Subsidiaries taken as a whole, (ii) the ability of the Credit Parties taken as a whole to perform any material obligation under the Credit Documents or (iii) the material rights and remedies of the Lenders under the Credit Documents.
 
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“ Material Adverse Effect ” means a material adverse effect on (i) the condition (financial or otherwise), operations, assets or liabilities of Speedway Motorsports and its Subsidiaries taken as a whole, (ii) the ability of the Credit Parties taken as a whole to perform any material obligation under the Credit Documents or (iii) the material rights and remedies of the Lenders under the Credit Documents.
 
“ Materials of Environmental Concern ” means any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products or any hazardous or toxic substances, materials or wastes, defined or regulated as such in or under any Environmental Laws, including, without limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
 
“ Material Subsidiary ” means any wholly owned Subsidiary whose assets constitute more than 5% of the consolidated assets of Speedway Motorsports and its consolidated Subsidiaries as of the end of the immediately preceding fiscal quarter or that generates more than 5% of the Consolidated EBITDA of Speedway Motorsports and its consolidated Subsidiaries for the period of four consecutive fiscal quarters ending as of the end of the immediately preceding fiscal quarter.
 
“ Maximum Permitted Amount ” shall have the meaning given to such terms in Section 8.6.
 
“ Moody’s ” means Moody’s Investors Service, Inc., or any successor or assignee of the business of such company in the business of rating securities.
 
“ Multiemployer Plan ” means a Plan which is a multiemployer plan as defined in Sections 3(37) or 4001(a)(3) of ERISA.
 
“ Multiple Employer Plan ” means a Plan for which any Credit Party or any ERISA Affiliate and at least one employer other than a Credit Party or any ERISA Affiliate are contributing sponsors.
 
“ Net Cash Proceeds ” means proceeds paid in cash or Cash Equivalents received by Speedway Motorsports or any of its Subsidiaries in connection with any Asset Disposition or Debt Transaction, net of (a) direct costs (including, without limitation, legal, accounting and investment banking fees, and sales commissions) and (b) taxes paid or payable as a result thereof; it being understood that “Net Cash Proceeds” shall include, without limitation, any cash or Cash Equivalents received upon the sale or other disposition of non-cash consideration received by such Person in any Asset Disposition or Debt Transaction.
 
“ Net Proceeds ” means proceeds received by Speedway Motorsports or any of its Subsidiaries from time to time in connection with any Equity Transaction, net of the actual costs and taxes incurred by such Person in connection with and attributable to such Equity Transaction.
 
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“ Note ” or “ Notes ” means any Revolving Note, the Swingline Note and/or the Term Notes.
 
“ Notice of Borrowing ” means a written notice of borrowing in substantially the form of Schedule 2.1(b)(i) , as required by Section 2.1(b)(i).
 
“ Notice of Extension/Conversion ” means the written notice of extension or conversion in substantially the form of Schedule 3.2 as required by Section 3.2.
 
“ Obligations ” means, collectively, the Loans and the LOC Obligations.
 
“ Operating Lease ” means, as applied to any Person, any lease (including, without limitation, leases which may be terminated by the lessee at any time) of any Property (whether real, personal or mixed) which is not a Capital Lease other than any such lease in which that Person is the lessor.
 
“ Participation Interest ” means the purchase by a Lender of a participation in Letters of Credit as provided in Section 2.3(d), in Swingline Loans as provided in Section 2.4(b)(iii) and in Loans as provided in Section 3.13.
 
“ PBGC ” means the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA and any successor thereof.
 
“ Permitted Investments ” means Investments which are either (i) cash and Cash Equivalents; (ii) accounts receivable created, acquired or made by any Credit Party or Subsidiary in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; (iii) Investments consisting of stock, obligations, securities or other property received by any Credit Party or Subsidiary in settlement of accounts receivable (created in the ordinary course of business) from insolvent obligors; (iv) Investments existing as of the Closing Date and set forth in Schedule 1.1C ; (v) Guaranty Obligations permitted by Section 8.1, (vi) acquisitions permitted by Section 8.4(c); (vii) loans to directors, officers, employees, agents, customers or suppliers that do not exceed an aggregate principal amount of $500,000 at any one time outstanding for Speedway Motorsports and all of its Subsidiaries taken together; (viii) Investments received as consideration in connection with or arising by virtue of any merger, consolidation, sale or other transfer of assets permitted under Section 8.4; (ix) Intercompany Indebtedness; (x) Capital Stock or other securities of any Person which is traded on the New York Stock Exchange, the American Stock Exchange, the London Stock Exchange, the Paris Bourse or NASDAQ, provided the aggregate basis at any one time in such Investments does not exceed $2,500,000 and such investments have not been purchased on margin; and (xi) loans or advances to Persons to the extent necessary to enable them to pay taxes, fees and other expenses as and when required to maintain liquor licenses provided such loans or advances (A) are customary in Speedway Motorsports’
 
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business and (B) the aggregate principal amount outstanding at any one time of such loans or advances does not exceed $2,000,000.
 
“ Permitted Liens ” means:
 
(i) Liens in favor of the Administrative Agent on behalf of the Lenders;
 
(ii) Liens (other than Liens created or imposed under ERISA) for taxes, assessments or governmental charges or levies not yet due or Liens for taxes being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with GAAP have been established (and as to which the Property subject to any such Lien is not yet subject to foreclosure, sale or loss on account thereof);
 
(iii) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and suppliers and other Liens imposed by law or pursuant to customary reservations or retentions of title arising in the ordinary course of business, provided that such Liens secure only amounts not yet due and payable or, if due and payable, are being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with GAAP have been established (and as to which the Property subject to any such Lien is not yet subject to foreclosure, sale or loss on account thereof);
 
(iv) Liens (other than Liens created or imposed under ERISA) incurred or deposits made by any Credit Party or any Subsidiary in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money);
 
(v) Liens arising in connection with attachments or judgments (including judgment or appeal bonds), provided that the judgments secured shall, within 60 days after the entry thereof, be discharged within 30 days or the execution thereof be stayed pending appeal and be discharged within 30 days after the expiration of any such stay;
 
(vi) easements, rights-of-way, restrictions (including zoning restrictions), minor defects or irregularities in title and other similar charges or encumbrances not, in any material respect, impairing the use of the encumbered Property for its intended purposes;
 
(vii) Liens on Property securing purchase money Indebtedness (including Capital Leases) to the extent permitted under Section 8.1(c), provided
 
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that any such Lien attaches to such Property concurrently with or within 90 days after the acquisition thereof;
 
(viii) normal and customary rights of setoff upon deposits of cash in favor of banks or other depository institutions;
 
(ix) Liens existing as of the Closing Date and set forth on Schedule 1.1D ; and
 
(x) Liens arising under leases permitted hereunder (other than Capital Leases).
 
“ Permitted Transferee ” means (i) either of the Borrowers, (ii) Sonic Financial Corporation or any successor thereof (provided at least 51% of the Voting Stock of Sonic Financial Corporation is owned by O. Bruton Smith, Family Members (as hereinafter defined) or another Permitted Transferee), (iii) O. Bruton Smith or the spouse or any lineal descendant of O. Bruton Smith and/or any parent of any such holder (collectively, the “ Family Members ”), (iv) the trustee of a trust (including a voting trust) for the benefit of such holder and/or Family Members, (v) a corporation in respect of which such holder and/or Family Members hold beneficial ownership of all shares of Capital Stock of such corporation, (vi) a partnership in respect of which such holder and/or Family Members hold beneficial ownership of all partnership shares of or interests in such partnership, (vii) a limited liability company in respect of which such holder and/or Family Members hold beneficial ownership of all memberships in or interests of such company, (viii) the estate of such holder and/or Family Members or (ix) any other holder of Capital Stock of Speedway Motorsports who or which becomes a holder in accordance with clause (iii), (iv), (v), (vi), (vii) or (viii) hereof; provided, however, that none of the foregoing will be deemed a Permitted Transferee if the transfer results in the failure of Speedway Motorsports to meet the criteria for listing on the New York Stock Exchange.
 
“ Person ” means any individual, partnership, joint venture, firm, corporation, limited liability company, association, trust or other enterprise (whether or not incorporated) or any Governmental Authority.
 
“ Plan ” means any employee benefit plan (as defined in Section 3(3) of ERISA) which is covered by ERISA and with respect to which any Credit Party or any of its Subsidiaries or any ERISA Affiliate is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” within the meaning of Section 3(5) of ERISA.
 
“ Pledge Agreement ” means the pledge agreement dated as of the Closing Date executed in favor of the Administrative Agent by each of the Borrowers, as amended, modified, restated or supplemented from time to time.
 
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“ Prime Rate ” means the per annum rate of interest established from time to time by the Administrative Agent at its principal office in Charlotte, North Carolina as its Prime Rate with each change in the Prime Rate being effective on the date such change is publicly announced as effective (it being understood and agreed that the Prime Rate is a reference rate used by Bank of America in determining interest rates on certain loans and is not intended to be the lowest rate of interest charged on any extension of credit by Bank of America to any debtor).
 
“ Pro Forma Basis ” means, with respect to any transaction, for purposes of determining the applicable pricing level under the definition of “Applicable Percentage” and determining compliance with the financial covenants hereunder, that such transaction shall be deemed to have occurred as of the first day of the period of four consecutive fiscal quarters ending as of the most recent Calculation Date with respect to which the Administrative Agent has received the Required Financial Information. Further, for purposes of making calculations on a “Pro Forma Basis” hereunder, (i) in the case of any Asset Disposition, (A) income statement items (whether positive or negative) attributable to the property, entities or business units that are the subject of such Asset Disposition shall be excluded to the extent relating to any period prior to the date thereof, and (B) Indebtedness paid or retired in connection with such Asset Disposition shall be deemed to have been paid and retired as of the first day of the applicable period; and (ii) in the case of any acquisition, consolidation or merger, (A) income statement items (whether positive or negative) attributable to the property, entities or business units that are the subject thereof shall be included to the extent relating to any period prior to the date thereof, and (B) Indebtedness incurred in connection with such acquisition, consolidation or merger shall be deemed to have been incurred as of the first day of the applicable period (and interest expense shall be imputed for the applicable period assuming prevailing interest rates hereunder).
 
“ Property ” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.
 
“ Regulation U ” means Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor thereof.
 
“ Reportable Event ” means any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty-day notice period has been waived.
 
“ Required Financial Information ” means, with respect to the applicable Calculation Date, (i) the financial statements of Speedway Motorsports required to be delivered pursuant to Section 7.1 for the fiscal period or quarter ending as of such Calculation Date, and (ii) the certificate of the chief financial officer, chief executive officer or president of Speedway Motorsports required by Section 7.1 to be delivered with the financial statements described in clause (i) above.
 
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“ Required Lenders ” means, at any time, (i) Lenders which are then in compliance with their obligations hereunder (as determined by the Administrative Agent) and holding in the aggregate more than fifty percent (50%) of the Commitments, or (ii) if the Commitments have been terminated or have expired, Lenders having more than fifty percent (50%) of the aggregate principal amount of the Obligations outstanding (taking into account in each case Participation Interests or obligations to participate therein).
 
“ Requirement of Law ” means, as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or to which any of its material property is subject.
 
“ Restricted Payment ” means (i) any dividend or other distribution, direct or indirect, on account of any shares of any class of stock of any Credit Party, now or hereafter outstanding, (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of stock of Speedway Motorsports or any of its Subsidiaries, now or hereafter outstanding, (iii) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of stock of Speedway Motorsports or any of its Subsidiaries, (iv) any payment or prepayment of principal of, premium, if any, or interest on, redemption, purchase, retirement, defeasance, sinking fund or similar payment with respect to, any Indebtedness pursuant to clause (a)(i) of the definition of “Intercompany Indebtedness” or (v) any voluntary or optional payment or prepayment or redemption or acquisition for value of (including by way of depositing money or securities with the trustee with respect thereto before due for the purpose of paying when due), refund, refinance or exchange (or, in each case, any notice with respect thereto) of any other Indebtedness.
 
“ Revolving Commitment ” means the commitment of each Revolving Lender to make Revolving Loans in an aggregate principal amount at any time outstanding of up to such Lender’s Revolving Commitment Percentage multiplied by the Revolving Committed Amount (as such Revolving Committed Amount may be reduced from time to time pursuant to Section 3.4).
 
“ Revolving Commitment Percentage ” means, for any Revolving Lender, the percentage identified as its Revolving Commitment as specified in Schedule 2.1(a) .
 
“ Revolving Committed Amount ” means, collectively, the aggregate amount of all the Revolving Commitments as referenced in Section 2.1(a) and individually, the amount of each Revolving Lender’s Revolving Commitment as specified in Schedule 2.1(a) .
 
“ Revolving Lenders ” means Lenders holding a Revolving Commitment hereunder, or, if the Revolving Commitments have been terminated or have expired,
 
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Lenders having Revolving Obligations outstanding hereunder (taking into account in each case Participation Interests).
 
“ Revolving Loans ” shall have the meaning assigned to such term in Section 2.1(a).
 
“ Revolving Obligations ” means the Revolving Loans, the LOC Obligations and the Swingline Loans.
 
“ Revolving Note ” or “ Revolving Notes ” means the promissory notes of the Borrowers in favor of each of the Revolving Lenders evidencing the Revolving Loans in substantially the form attached as Schedule 2.1(e) , individually or collectively, as appropriate as such promissory notes may be amended, modified, supplemented, extended, renewed or replaced from time to time.
 
“ SEC ” means the Securities and Exchange Commission or any agency or instrumentality of the United States of America succeeding to the powers and duties thereof.
 
“ Securitization Transaction ” means any financing or factoring or similar transaction (or series of such transactions) entered into by the Credit Parties or their Subsidiaries pursuant to which such Person sells, conveys or otherwise transfers, or grants a security interest in, accounts, payments, receivables, rights to future lease payments or residuals or similar rights to payment to a special purpose subsidiary or affiliate or any other Person.
 
“ Senior Subordinated Notes ” means the senior subordinated notes due 2013 of Speedway Motorsports in the aggregate original principal amount of $230,000,000 issued pursuant to the Indenture dated as of May 16, 2003.
 
“ S&P ” means Standard & Poor’s Ratings Group, a division of McGraw Hill, Inc., or any successor or assignee of the business of such division in the business of rating securities.
 
“ Single Employer Plan ” means any Plan which is covered by Title IV of ERISA, but which is not a Multiemployer Plan.
 
“ Solvent ” or “ Solvency ” means, with respect to any Person as of a particular date, that on such date (i) such Person is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (ii) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature in their ordinary course, (iii) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person’s Property would constitute unreasonably small capital after giving due
 
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consideration to the prevailing practice in the industry in which such Person is engaged or is to engage, (iv) the fair value of the Property of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person and (v) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured. In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
 
“ Speedway Funding ” shall have the meaning assigned to such term in the heading hereof.
 
“ Speedway Motorsports ” shall have the meaning assigned to such term in the heading hereof.
 
“ Standby Letter of Credit Fee ” shall have the meaning assigned to such term in Section 3.5(b)(i).
 
“ Subsidiary ” means, as to any Person, (a) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time, any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person directly or indirectly through Subsidiaries, and (b) any partnership, association, joint venture or other entity in which such Person directly or indirectly through Subsidiaries has more than 50% equity interest at any time. Unless otherwise provided, “Subsidiary” shall mean a subsidiary of Speedway Motorsports.
 
“ Subordinated Debt ” means any Indebtedness of Speedway Motorsports and its consolidated Subsidiaries which by its terms is expressly subordinated in right of payment to the prior payment of the obligations of the Credit Parties under the Credit Documents on terms and conditions and evidenced by documentation satisfactory to the Administrative Agent and the Required Lenders, including, without limitation, the Senior Subordinated Notes.
 
“ Swingline Commitment ” means the commitment of the Swingline Lender to make Swingline Loans in an aggregate principal amount at any time outstanding up to the Swingline Committed Amount and the commitment of the Revolving Lenders to purchase participation interests in the Swingline Loans up to their respective Revolving Commitment Percentage of the Swingline Committed Amount as provided in Section 2.4(b)(iii), as such amounts may be reduced from time to time in accordance with the provisions hereof.
 
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“ Swingline Committed Amount ” shall have the meaning assigned to such term in Section 2.4(a).
 
“ Swingline Lender ” means the Administrative Agent.
 
“ Swingline Loan ” shall have the meaning assigned to such term in Section 2.4(a).
 
“ Swingline Note ” means the promissory note of the Borrower in favor of the Swingline Lender in the original principal amount of $10,000,000, as such promissory note may be amended, modified, restated or replaced from time to time.
 
“ Synthetic Lease ” means any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing arrangement that is considered borrowed money indebtedness for tax purposes but is classified as an operating lease under GAAP.
 
“ Term Lenders ” means Lenders holding a Term Loan Commitment hereunder, or, if the Term Loan Commitments have been terminated or have expired, Lenders having any portion of the Term Loan outstanding hereunder (taking into account in each case Participation Interests pursuant to Section 3.13).
 
“ Term Loan ” shall have the meaning assigned to such term in Section 2.2(a).
 
“ Term Loan Commitment ” means the commitment of each Term Lender to make a Term Loan advance equal to such Lender’s Term Loan Committed Amount (and for purposes of making determinations of Required Lenders, the Obligations with respect to the Term Loan shall be based on the outstanding principal balance of the Term Loan).
 
“ Term Loan Commitment Percentage ” means, for any Term Lender, the percentage identified as its Term Loan Commitment Percentage as specified on Schedule 2.1(a) .
 
“ Term Loan Committed Amount ” means, collectively, the aggregate amount of all of the Term Loan Commitments and, individually, the amount of each Term Lender’s Term Loan Commitment as specified on Schedule 2.1(a) , as such amounts may be reduced from time to time in accordance with the provisions hereof.
 
“ Term Note ” or “ Term Notes ” means the promissory notes of the Borrowers in favor of each of the Term Lenders evidencing the Term Loan in substantially the form attached as Schedule 2.2(c) , individually or collectively, as appropriate, as such promissory notes may be amended, modified, supplemented, extended or renewed from time to time.
 
“ Termination Date ” means May 16, 2008.
 
“ Termination Event ” means (i) with respect to any Plan, the occurrence of a Reportable Event or the substantial cessation of operations (within the meaning of
 
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Section 4062(e) of ERISA); (ii) the withdrawal of any Credit Party or any of its Subsidiaries or any ERISA Affiliate from a Multiple Employer Plan during a plan year in which it was a substantial employer (as such term is defined in Section 4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan subject to Title IV of ERISA; (iii) the distribution of a notice of intent to terminate or the actual termination of a Plan pursuant to Section 4041(a)(2) or 4041A of ERISA; (iv) the institution of proceedings to terminate or the actual termination of a Plan by the PBGC under Section 4042 of ERISA; (v) any event or condition which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan; or (vi) the complete or partial withdrawal of any Credit Party of its Subsidiaries or any ERISA Affiliate from a Multiemployer Plan.
 
“ Trade Letter of Credit Fee ” shall have the meaning assigned to such term in Section 3.5(b)(ii).
 
“ Voting Stock ” means, with respect to any Person, Capital Stock issued by such Person the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even though the right so to vote has been suspended by the happening of such a contingency.
 
1.2 Computation of Time Periods .
 
For purposes of computation of periods of time hereunder, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding.”
 
1.3 Accounting Terms .
 
Except as otherwise expressly provided herein, all accounting terms used herein shall be interpreted, and all financial statements and certificates and reports as to financial matters required to be delivered to the Lenders hereunder shall be prepared, in accordance with GAAP applied on a consistent basis. All calculations made for the purposes of determining compliance with this Credit Agreement shall (except as otherwise expressly provided herein) be made by application of GAAP applied on a basis consistent with the most recent annual or quarterly financial statements delivered pursuant to Section 7.1 hereof (or, prior to the delivery of the first financial statements pursuant to Section 7.1 hereof, consistent with the financial statements as of December 31, 2002); provided, however, if (a) Speedway Motorsports shall object in writing to determining such compliance on such basis at the time of delivery of such financial statements due to any change in GAAP or the rules promulgated with respect thereto or (b) the Administrative Agent or the Required Lenders shall so object in writing within 30 days after delivery of such financial statements, then such calculations shall be made on a basis consistent with the most recent financial statements delivered by Speedway Motorsports to the Lenders as to which no such objection shall have been made.
 
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Notwithstanding anything herein to the contrary, determination of (i) the applicable pricing level under the definition of “Applicable Percentage” and (ii) compliance with the financial covenants hereunder shall be made on a Pro Forma Basis.
 
SECTION 2
 
CREDIT FACILITY
 
2.1 Revolving Loans .
 
(a) Revolving Commitment . Subject to the terms and conditions hereof and in reliance upon the representations and warranties set forth herein, each Revolving Lender severally agrees to make revolving credit loans (“ Revolving Loans ”) to the Borrowers from time to time from the Closing Date until the Termination Date, or such earlier date as the Revolving Commitments shall have been terminated as provided herein for the purposes hereinafter set forth; provided , however , that the sum of the aggregate principal amount of outstanding Revolving Loans shall not exceed the Revolving Committed Amount and; provided , further , (i) with regard to each Revolving Lender individually, such Lender’s share of outstanding Revolving Obligations shall not exceed such Lender’s Revolving Commitment Percentage of the Revolving Committed Amount, (ii) with regard to the Revolving Lenders collectively, the aggregate principal amount of outstanding Revolving Obligations shall not exceed TWO HUNDRED FIFTY MILLION DOLLARS ($250,000,000) (as such aggregate maximum amount may be reduced from time to time as provided in Section 3.4, the “ Revolving Committed Amount ”) and (iii) with regard to the Revolving Lenders collectively, the aggregate principal amount of the Revolving Obligations shall not exceed the Revolving Committed Amount. Revolving Loans may consist of Base Rate Loans or Eurodollar Loans, or a combination thereof, as the Borrowers may request and may be repaid and reborrowed in accordance with the provisions hereof; provided , however , that no more than six Eurodollar Loans shall be outstanding hereunder at any time with respect to Revolving Loans. For purposes hereof, Eurodollar Loans with different Interest Periods shall be considered as separate Eurodollar Loans, even if they begin on the same date and have the same duration, although borrowings, extensions and conversions may, in accordance with the provisions hereof, be combined at the end of existing Interest Periods to constitute a new Eurodollar Loan with a single Interest Period.
 
(b) Revolving Loan Borrowings.
 
(i) Notice of Borrowing . The Borrowers shall request a Revolving Loan borrowing by written notice (or telephone notice promptly confirmed in writing) to the Administrative Agent not later than 11:00 A.M. (Charlotte, North Carolina time) on the Business Day prior to the date of the requested borrowing in the case of Base Rate Loans, and on the third Business Day prior to the date of the requested borrowing in the case of Eurodollar Loans. Each such request for
 
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borrowing shall be irrevocable and shall specify (A) that a Revolving Loan is requested, (B) the date of the requested borrowing (which shall be a Business Day), (C) the aggregate principal amount to be borrowed and (D) whether the borrowing shall be comprised of Base Rate Loans, Eurodollar Loans or a combination thereof, and if Eurodollar Loans are requested, the Interest Period(s) therefor. If any such Notice of Borrowing shall fail to specify (I) an applicable Interest Period in the case of a Eurodollar Loan, then such notice shall be deemed to be a request for an Interest Period of one month, or (II) the type of Revolving Loan requested, then such notice shall be deemed to be a request for a Base Rate Loan hereunder. The Administrative Agent shall give notice to each Revolving Lender before 5:00 p.m. (Charlotte, North Carolina time) on the day of receipt of each Notice of Borrowing specifying the contents thereof and each such Lender’s share of any borrowing to be made pursuant thereto.
 
(ii) Minimum Amounts . Each Revolving Loan borrowing shall be in a minimum aggregate amount of $1,000,000 and integral multiples of $100,000 in excess thereof (or the remaining amount of the Revolving Commitment, if less).
 
(iii) Advances . Each Revolving Lender will make its Revolving Commitment Percentage of each Revolving Loan borrowing available to the Administrative Agent for the account of the Borrowers at the office of the Administrative Agent specified in Schedule 2.1(a) , or at such other office as the Administrative Agent may designate in writing, by 12:00 P.M. (Charlotte, North Carolina time) on the date specified in the applicable Notice of Borrowing in Dollars and in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the Borrowers by the Administrative Agent by crediting the account of the Borrowers on the books of such office with the aggregate of the amounts made available to the Administrative Agent by the Revolving Lenders and in like funds as received by the Administrative Agent.
 
(c) Repayment . The principal amount of all Revolving Loans shall be due and payable in full on the Termination Date.
 
(d) Interest . Subject to the provisions of Section 3.1, Revolving Loans shall bear interest as follows:
 
(i) Base Rate Loans . During such periods as Revolving Loans shall be comprised of Base Rate Loans, the sum of the Base Rate plus the Applicable Percentage;
 
(ii) Eurodollar Loans . During such periods as Revolving Loans shall be comprised of Eurodollar Loans, the Eurodollar Rate plus the Applicable Percentage.
 
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Interest on the Revolving Loans shall be payable in arrears on each Interest Payment Date.
 
(e) Revolving Notes . The Revolving Loans made by each Revolving Lender shall be evidenced by a duly executed promissory note of the Borrowers to each Revolving Lender in substantially the form of Schedule 2.1(e) .
 
2.2 Term Loan .
 
(a) Term Loan . Subject to and upon the terms and conditions hereof, each Term Lender severally agrees to make its Term Loan Commitment Percentage of a term loan (the “ Term Loan ”) to the Borrowers on the Closing Date in the aggregate principal amount of FIFTY MILLION DOLLARS ($50,000,000) (the “ Term Loan Committed Amount ”) for the purposes hereinafter set forth. The Term Loan may consist of Base Rate Loans or Eurodollar Loans, or a combination thereof, as the Borrowers may request; provided , however , that no more than six Eurodollar Loans shall be outstanding hereunder at any time with respect to the Term Loan. For purposes hereof, Eurodollar Loans with different Interest Periods shall be considered as separate Eurodollar Loans, even if they begin on the same date and have the same duration, although borrowings, extensions and conversions may, in accordance with the provisions hereof, be combined at the end of existing Interest Periods to constitute a new Eurodollar Loan with a single Interest Period. Amounts repaid on the Term Loan may not be reborrowed.
 
(b) Term Loan Borrowing .
 
(i) Notice of Borrowing . The Borrower shall request the Term Loan borrowing by written notice (or telephonic notice promptly confirmed in writing) to the Administrative Agent not later than 11:00 A.M. (Charlotte, North Carolina time) on the Business Day prior to the Closing Date in the case of Base Rate Loans, and on the third Business Day prior to the Closing Date in the case of Eurodollar Loans. The request for borrowing shall be irrevocable and shall specify (A) that a Term Loan is requested, (B) the aggregate principal amount to be borrowed, and (C) whether the borrowing shall be comprised of Base Rate Loans, Eurodollar Loans or a combination thereof, and if Eurodollar Loans are requested, the Interest Period(s) therefor. If such Notice of Borrowing shall fail to specify (I) an applicable Interest Period in the case of a Eurodollar Loan, then such notice shall be deemed to be a request for an Interest Period of one month, or (II) the type of Term Loan requested, then such notice shall be deemed to be a request for a Base Rate Loan hereunder. The Administrative Agent shall give notice to each Term Lender before 5:00 p.m. (Charlotte, North Carolina time) on the day of receipt of the Notice of Borrowing specifying the contents thereof and each such Lender’s share of any borrowing to be made pursuant thereto.
 
(ii) Advances . Each Term Lender will make its Term Loan Commitment Percentage of the Term Loan available to the Administrative Agent
 
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for the account of the Borrowers at the office of the Administrative Agent specified in Schedule 2.1(a) , or at such other office as the Administrative Agent may designate in writing, by 12:00 P.M. (Charlotte, North Carolina time) on the date specified in the applicable Notice of Borrowing in Dollars and in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the Borrowers by the Administrative Agent by crediting the account of the Borrowers on the books of such office with the aggregate of the amounts made available to the Administrative Agent by the Term Lenders and in like funds as received by the Administrative Agent.
 
(c) Repayment of Term Loan . The principal amount of the Term Loan shall be due and payable in sixteen (16) consecutive quarterly installments, on as follows:
 
Date
	  	Principal
Amortization
Payment
	  	Date
	  	Principal
Amortization
Payment
	
September 30, 2004	  	$	1,562,500	  	September 30, 2006	  	$	3,125,000	
December 31, 2004	  	$	1,562,500	  	December 31, 2006	  	$	3,125,000	
March 31, 2005	  	$	1,562,500	  	March 31, 2007	  	$	3,125,000	
June 30, 2005	  	$	1,562,500	  	June 30, 2007	  	$	3,125,000	
September 30, 2005	  	$	3,125,000	  	September 30, 2007	  	$	4,687,500	
December 31, 2005	  	$	3,125,000	  	December 31, 2007	  	$	4,687,500	
March 31, 2006	  	$	3,125,000	  	March 31, 2008	  	$	4,687,500	
June 30, 2006	  	$	3,125,000	  	May 16, 2008	  	$	4,687,500	
 	  	 	 	  	 	  			
 	  	 	 	  	Total	  	$	50,000,000	
 
(d) Interest on the Term Loan . Subject to the provisions of Section 3.1, the Term Loan shall bear interest as follows:
 
(i) Base Rate Loans . During such periods as the Term Loan shall be comprised of Base Rate Loans, the sum of the Base Rate plus the Applicable Percentage; and
 
(ii) Eurodollar Loans . During such periods as the Term Loan shall be comprised of Eurodollar Loans, the sum of the Eurodollar Rate plus the Applicable Percentage.
 
Interest on the Term Loan shall be payable in arrears on each Interest Payment Date.
 
(e) Term Notes . The Term Loan shall be evidenced by a duly executed promissory note of the Borrower to each Term Lender in substantially the form of Schedule 2.2(e) .
 
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2.3 Letter of Credit Subfacility .
 
(a) Letters of Credit . Subject to the terms and conditions hereof and of the LOC Documents, if any, (i) the Issuing Lender agrees, in reliance on the agreements of the other Revolving Lenders set forth herein, from time to time on any Business Day from the Closing Date until the Termination Date, (A) to issue Letters of Credit as the Borrowers may request for their own account or for the account of another Credit Party as provided herein, (B) to amend or renew Letters of Credit previously issued hereunder, and (C) to honor drafts under Letters of Credit; and (iii) the Revolving Lenders severally agree to purchase from the Issuing Lender a participation interest in the existing Letters of Credit and Letters of Credit issued hereunder in an amount equal to such Lender’s Revolving Commitment Percentage thereof; provided that (A) the aggregate principal amount of the LOC Obligations shall not at any time exceed TEN MILLION DOLLARS ($10,000,000) (the “ LOC Committed Amount ”), (B) with regard to the Revolving Lenders collectively, the aggregate principal amount of Revolving Obligations shall not exceed the aggregate Revolving Committed Amount, and (C) with regard to each Revolving Lender individually, such Lender’s Revolving Commitment Percentage of Revolving Obligations shall not exceed its respective Revolving Committed Amount. Subject to the terms and conditions hereof, the Borrowers’ ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrowers may obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. Existing Letters of Credit shall be deemed to have been issued hereunder and shall be subject to and governed by the terms and conditions hereof.
 
(b) Obligation to Issue or Amend .
 
(i) The Issuing Lender shall be under no obligation to issue any Letter of Credit if:
 
(A) the issuance of such Letter of Credit would violate one or more policies of the Issuing Lender; or
 
(B) such Letter of Credit is in an initial amount less than $100,000.
 
(ii) The Issuing Lender shall not issue or amend any Letter of Credit if:
 
(A) such Letter of Credit is to be denominated in a currency other than Dollars;
 
(B) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Issuing Lender from issuing or amending such Letter of Credit, or any law applicable to the Issuing Lender or any request or directive (whether or not having the force of law) from any Governmental Authority with
 
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jurisdiction over the Issuing Lender shall prohibit, or request that the Issuing Lender refrain from, the issuance or amendment of letters of credit generally or such Letter of Credit in particular or shall impose upon the Issuing Lender with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Issuing Lender is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the Issuing Lender any unreimbursed loss, cost or expense that was not applicable on the Closing Date and that the Issuing Lender in good faith deems material to it;
 
(C) subject to Section 2.3(c)(iii), the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance or last renewal, unless the Revolving Lenders holding in the aggregate more than 50% of the Commitments have approved such expiry date;
 
(D) the expiry date of such requested Letter of Credit would occur after the Termination Date, unless all the Revolving Lenders have approved such expiry date;
 
(E) one or more applicable conditions contained in Section 5 shall not then be satisfied and the Issuing Lender shall have received written notice thereof from any Revolving Lender or any Credit Party at least one Business Day prior to the requested date of issuance (or amendment, as applicable) of such Letter of Credit; or
 
(F) the Revolving Commitments have been terminated pursuant to Section 9.2.
 
(iii) The Issuing Lender shall be under no obligation to amend any Letter of Credit if:
 
(A) the Issuing Lender would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof; or
 
(B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
 
(c) Procedures for Issuance and Amendment; Auto-Renewal .
 
(i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of a Borrower delivered to the Issuing Lender (with a copy to the Administrative Agent) in the form of a Letter of Credit application, appropriately completed and signed by such Borrower. Such Letter of Credit application must be received by the Issuing Lender and the Administrative Agent
 
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not later than 11:00 a.m. at least two Business Days (or such later date and time as the Issuing Lender may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit application shall specify in form and detail satisfactory to the Issuing Lender: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as the Issuing Lender may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit application shall specify in form and detail satisfactory to the Issuing Lender (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as the Issuing Lender may require.
 
(ii) Promptly after receipt of any Letter of Credit application, the Issuing Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit application from the Borrowers and, if not, the Issuing Lender will provide the Administrative Agent with a copy thereof. Upon receipt by the Issuing Lender of confirmation from the Administrative Agent that the requested issuance or amendment is permitted in accordance with the terms hereof, then, subject to the terms and conditions hereof, the Issuing Lender shall, on the requested date, issue a Letter of Credit for the account of the Borrowers or enter into the applicable amendment, as the case may be, in each case in accordance with the Issuing Lender’s usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Revolving Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Lender a risk participation in such Letter of Credit in an amount equal to the product of such Lender’s Revolving Commitment Percentage of such Letter of Credit.
 
(iii) If the Borrowers so request in any applicable Letter of Credit application, the Issuing Lender may, in its sole and absolute discretion, agree to issue a Letter of Credit that has automatic renewal provisions (each, an “ Auto-Renewal Letter of Credit ”); provided that any such Auto-Renewal Letter of Credit must permit the Issuing Lender to prevent any such renewal at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “ Nonrenewal Notice Date ”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the Issuing Lender, the Borrowers shall not be required to make a specific request to the Issuing Lender for any such renewal. Once an Auto-Renewal Letter of Credit has been issued, the Revolving Lenders shall be deemed to have authorized (but
 
33

may not require) the Issuing Lender to permit the renewal of such Letter of Credit at any time to an expiry date not later than the Termination Date; provided , however, that the Issuing Lender shall not permit any such renewal if (A) the Issuing Lender has determined that it would have no obligation at such time to issue such Letter of Credit in its renewed form under the terms hereof, or (B) it has received notice (which may be by telephone or in writing) on or before the day that is two Business Days before the Nonrenewal Notice Date (1) from the Administrative Agent that Revolving Lenders holding more than 50% of the Revolving Commitments have elected not to permit such renewal or (2) from the Administrative Agent, any Revolving Lender or Credit Party that one or more of the applicable conditions specified in Section 5.2 is not then satisfied.
 
(iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the Issuing Lender will also deliver to the Borrowers and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.
 
(d) Drawings and Reimbursements; Funding of Participations .
 
(i) Upon any drawing under any Letter of Credit, the Issuing Lender shall notify the Borrowers and the Administrative Agent thereof. Not later than 11:00 a.m. on the date of any payment by the Issuing Lender under a Letter of Credit (each such date, an “ Honor Date ”), the Borrowers shall reimburse the Issuing Lender through the Administrative Agent in an amount equal to the amount of such drawing. If the Borrowers fail to so reimburse the Issuing Lender by such time, the Administrative Agent shall promptly notify each Revolving Lender of the Honor Date, the amount of the unreimbursed drawing (the “ Unreimbursed Amount ”), and the amount of such Lender’s Revolving Commitment Percentage thereof. In such event, the Borrowers shall be deemed to have requested a borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.1(b) for the principal amount of Base Rate Loans, the amount of the unutilized portion of the aggregate Revolving Commitments or the conditions set forth in Section 5.2. Any notice given by the Issuing Lender or the Administrative Agent pursuant to this Section may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.
 
(ii) Each Revolving Lender (including the Revolving Lender acting as Issuing Lender) shall upon any notice pursuant to Section 2.3(d)(i) make funds available to the Administrative Agent for the account of the Issuing Lender at the Administrative Agent’s office in an amount equal to its Revolving Commitment Percentage of the Unreimbursed Amount not later than 1:00 p.m. on the Business
 
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Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.3(d)(iii), each Revolving Lender that so makes funds available shall be deemed to have made a Revolving Loan that is a Base Rate Loan to the Borrowers in such amount. The Administrative Agent shall remit the funds so received to the Issuing Lender.
 
(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a borrowing of Base Rate Loans for any reason, the Borrowers shall be deemed to have incurred from the Issuing Lender an LOC Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which LOC Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the default rate set forth in Section 3.1. In such event, each Revolving Lender’s payment to the Administrative Agent for the account of the Issuing Lender pursuant to Section 2.3(d)(ii) shall be deemed payment in respect of its participation in such LOC Borrowing and shall constitute an LOC Advance from such Revolving Lender in satisfaction of its participation obligation under this Section 2.3.
 
(iv) Until each Revolving Lender funds its Revolving Loan or LOC Advance pursuant to this Section to reimburse the Issuing Lender for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Revolving Commitment Percentage of such amount shall be solely for the account of the Issuing Lender.
 
(v) Each Revolving Lender’s obligation to make Revolving Loans or LOC Advances to reimburse the Issuing Lender for amounts drawn under Letters of Credit, as contemplated by this Section, shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right that such Lender may have against the Issuing Lender, the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default or Event of Default, (C) non-compliance with the conditions set forth in Section 5.2, or (D) any other occurrence, event or condition, whether or not similar to any of the foregoing. No such making of an LOC Advance shall relieve or otherwise impair the obligation of the Borrowers to reimburse the Issuing Lender for the amount of any payment made by the Issuing Lender under any Letter of Credit, together with interest as provided herein.
 
(vi) If any Revolving Lender fails to make available to the Administrative Agent for the account of the Issuing Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section by the time specified herein, the Issuing Lender shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Issuing Lender at a rate per annum equal to the Federal Funds Rate from time to time in effect. A certificate
 
35

of the Issuing Lender submitted to any Revolving Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.
 
(e) Repayment of Participations .
 
(i) At any time after the Issuing Lender has made a payment under any Letter of Credit and has received from any Revolving Lender such Lender’s LOC Advance in respect of such payment in accordance with Section 2.3(d), if the Administrative Agent receives for the account of the Issuing Lender any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the Borrowers or otherwise, including proceeds of cash collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Lender its Revolving Commitment Percentage thereof (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s LOC Advance was outstanding) in the same funds as those received by the Administrative Agent.
 
(ii) If any payment received by the Administrative Agent for the account of the Issuing Lender pursuant to Section 2.3(d)(i) is required to be returned under any of the circumstances described in Section 3.15 (including pursuant to any settlement entered into by the Issuing Lender in its discretion), each Revolving Lender shall pay to the Administrative Agent for the account of the Issuing Lender its Revolving Commitment Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect.
 
(f) Obligations Absolute . The obligation of the Borrowers to reimburse the Issuing Lender for each drawing under each Letter of Credit and to repay each LOC Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Credit Agreement under all circumstances, including the following:
 
(i) any lack of validity or enforceability of such Letter of Credit, this Credit Agreement, or any other agreement or instrument relating thereto;
 
(ii) the existence of any claim, counterclaim, set-off, defense or other right that the Borrowers may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Issuing Lender or any other Person, whether in connection with this Credit Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;
 
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(iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;
 
(iv) any payment by the Issuing Lender under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the Issuing Lender under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under the Bankruptcy Code or other applicable insolvency or debtor relief law; or
 
(v) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrowers.
 
The Borrowers shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrowers’ instructions or other irregularity, the Borrowers will immediately notify the Issuing Lender. The Borrowers shall be conclusively deemed to have waived any such claim against the Issuing Lender and its correspondents unless such notice is given as aforesaid.
 
(g) Role of Issuing Lender . Each Revolving Lender and the Borrowers agree that, in paying any drawing under a Letter of Credit, the Issuing Lender shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the Issuing Lender, any Agent-Related Person nor any of the respective correspondents, participants or assignees of the Issuing Lender shall be liable to any Revolving Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders, the Required Lenders, or Revolving Lenders holding in the aggregate more than 50% of the Revolving Commitments, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Letter of Credit application. The Borrowers hereby assume all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided , however , that this assumption is not intended to, and shall not, preclude the Borrowers’ pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the Issuing Lender, any Agent-Related Person, nor any of the respective correspondents, participants or assignees of the Issuing
 
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Lender, shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.3(f); provided , however , that anything in such clauses to the contrary notwithstanding, the Borrowers may have a claim against the Issuing Lender, and the Issuing Lender may be liable to the Borrowers, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrowers that the Borrowers prove were caused by the Issuing Lender’s willful misconduct or gross negligence or the Issuing Lender’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, the Issuing Lender may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the Issuing Lender shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, that may prove to be invalid or ineffective for any reason.
 
(h) Cash Collateral . (i) If the Issuing Lender has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an LOC Borrowing, or (ii) if, as of the Termination Date, any Letter of Credit may for any reason remain outstanding and partially or wholly undrawn, the Borrower shall immediately Cash Collateralize the then-aggregate amount of all LOC Obligations outstanding (determined as of the date of such LOC Borrowing or the Termination Date, as the case may be). For purposes hereof, “ Cash Collateralize ” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the Issuing Lender and the Revolving Lenders, as collateral for the LOC Obligations, cash or deposit account balances pursuant to documentation in form and substance satisfactory to the Administrative Agent and the Issuing Lender (which documents are hereby consented to by the Revolving Lenders). Derivatives of such term have corresponding meanings. The Borrowers hereby grant to the Administrative Agent, for the benefit of the Issuing Lender and the Revolving Lenders, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing. Cash collateral shall be maintained in blocked, non-interest bearing deposit accounts at Bank of America.
 
(i) Applicability of ISP98 and UCP . Unless otherwise expressly agreed by the Issuing Lender and the Borrowers when a Letter of Credit is issued, (i) the rules of the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each standby Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce (the “ ICC ”) at the time of issuance (including the ICC decision published by the Commission on Banking Technique and Practice on April 6, 1998 regarding the European single currency (euro)) shall apply to each trade Letter of Credit.
 
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(j) Letter of Credit Fees . The Borrower shall pay Letter of Credit fees as set forth in Section 3.5(b).
 
(k) Conflict with Letter of Credit Documents . In the event of any conflict between the terms hereof and the terms of any Letter of Credit Document, the terms hereof shall control.
 
2.4 Swingline Loan Subfacility .
 
(a) Swingline Commitment . Subject to the terms and conditions set forth herein, the Swingline Lender, in its individual capacity, agrees to make certain revolving credit loans to the Borrowers (each a “ Swingline Loan ” and, collectively, the “ Swingline Loans ”) at any time and from time to time, during the period from the Closing Date until the Termination Date for the purposes hereinafter set forth; provided , however , (i) the aggregate amount of Swingline Loans outstanding at any time shall not exceed TEN MILLION DOLLARS ( $10,000,000 ) (the “ Swingline Committed Amount ”), and (ii) the sum of the aggregate principal amount of Revolving Obligations outstanding at any time shall not exceed the Revolving Committed Amount. Swingline Loans hereunder shall be made as Base Rate Loans in accordance with the provisions of this Section 2.4, and may be repaid and reborrowed in accordance with the provisions hereof.
 
(b) Swingline Loan Advances .
 
(i) Notices; Disbursement . The Borrowers shall request a Swingline Loan advance hereunder by written notice (or telephone notice promptly confirmed in writing) to the Swingline Lender not later than 11:00 A.M. (Charlotte, North Carolina time) on the Business Day of the requested Swingline Loan advance. Each such notice shall be irrevocable and shall specify (A) that a Swingline Loan advance is requested, (B) the date of the requested Swingline Loan advance (which shall be a Business Day), (C) the principal amount of the Swingline Loan advance requested and (D) that all of the conditions set forth in Section 5.2 are then satisfied. Each Swingline Loan shall be made as a Base Rate Loan and shall have such maturity date as the Swingline Lender and the Borrowers shall agree upon receipt by the Swingline Lender of any such notice from the Borrowers. The Swingline Lender shall initiate the transfer of funds representing the Swingline Loan advance to the Borrowers by 3:00 P.M. (Charlotte, North Carolina time) on the Business Day of the requested borrowing.
 
(ii) Minimum Amounts . Each Swingline Loan advance shall be in a minimum principal amount of $500,000 and in integral multiples of $100,000 in excess thereof.
 
(iii) Repayment of Swingline Loans . The principal amount of all Swingline Loans shall be due and payable on the earlier of (A) the end of the applicable Interest Period or (B) the Termination Date. The Swingline Lender
 
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may, at any time, in its sole discretion, by written notice to the Borrowers, demand repayment of their Swingline Loans by way of a Revolving Loan advance, in which case the Borrowers shall be deemed to have requested a Revolving Loan advance comprised solely of Base Rate Loans in the amount of such Swingline Loans; provided , however , that any such demand shall be deemed to have been given one Business Day prior to the Termination Date and on the date of the occurrence of any Event of Default described in Section 9.1 and upon acceleration of the Indebtedness hereunder and the exercise of remedies in accordance with the provisions of Section 9.2. Each Revolving Lender, if so directed by the Administrative Agent in writing, hereby irrevocably agrees to make its pro rata share of each such Revolving Loan in the amount, in the manner and on the date specified in the preceding sentence notwithstanding (I) the amount of such borrowing may not comply with the minimum amount for advances of Revolving Loans otherwise required hereunder, (II) whether any conditions specified in Section 5.2 are then satisfied, (III) whether a Default or an Event of Default then exists, (IV) failure of any such request or deemed request for Revolving Loan to be made by the time otherwise required hereunder, (V) whether the date of such borrowing is a date on which Revolving Loans are otherwise permitted to be made hereunder or (VI) any termination of the Revolving Commitments relating thereto immediately prior to or contemporaneously with or after such borrowing. In the event that any Revolving Loan cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code with respect to the Borrower or any other Credit Party), then each Revolving Lender hereby agrees that it shall upon written notice of the unavailability of a Revolving Loan and request for participation purchase (as of the date such borrowing would otherwise have occurred, but adjusted for any payments received from the Borrower on or after such date and prior to such purchase) from the Swingline Lender such Participation Interests in the outstanding Swingline Loans as shall be necessary to cause each such Lender to share in such Swingline Loans ratably based upon its Revolving Commitment Percentage (determined before giving effect to any termination of the Commitments pursuant to Section 3.4), provided that all interest payable on the Swingline Loans shall be for the account of the Swingline Lender until the date as of which the respective Participation Interests are purchased.
 
(c) Interest on Swingline Loans . Subject to the provisions of Section 3.1, each Swingline Loan shall bear interest at per annum rate equal to the Base Rate. Interest on Swingline Loans shall be payable in arrears on each applicable Interest Payment Date (or at such other times as may be specified herein).
 
2.5 Increase in Commitments .
 
Subject to the terms and conditions set forth herein, the Borrowers may at any time during the period from the Closing Date until May 16, 2005, upon notice to the Administrative Agent,
 
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increase the Revolving Commitments and/or the Term Loan by an amount up to an additional ONE HUNDRED MILLION DOLLARS ($100,000,000) in the aggregate; provided that:
 
(a) any such increase shall be in a minimum aggregate principal amount of $5 million and integral multiples of $1 million in excess thereof (or the remaining amount, if less),
 
(b) on the effective date of such increase, (i) with respect to any increase in the Revolving Commitments, if any Revolving Loans are outstanding at the time of any such increase, the Borrowers shall make such payments and adjustments on the Revolving Loans and (ii) with respect to any increase in the Term Loan, if any portion of the Term Loan is outstanding at the time of any such increase, the Borrowers shall make such payments and adjustments on the Term Loan (in each case including payment of any amounts owing under Section 3.11) as necessary to give effect to the revised commitment percentages and commitment amounts,
 
(c) the conditions to the making of a Loan set forth in Section 5.2 shall be satisfied, and
 
(d) the Borrowers shall obtain commitments for the amount of the increase from existing Lenders (provided that no existing Lender shall have any obligation to increase its commitments hereunder) or other commercial banks or financial institutions that would constitute an Eligible Assignee that are reasonably acceptable to the Administrative Agent (and with respect to any increase in the Revolving Commitments, the Issuing Lender and the Swingline Lender), provided that such other commercial banks and financial institutions join in this Credit Agreement as Lenders by joinder agreement or other arrangement reasonably acceptable to the Administrative Agent. In connection with any such increase in the Commitments, Schedule 2.1(a) shall be revised to reflect the modified commitments and commitment percentages of the Lenders, and the Borrowers will provide supporting corporate resolutions, legal opinions, promissory notes and other items as may be reasonably requested by the Administrative Agent and the new Lenders (including the existing Lenders that are increasing their commitments) in connection therewith.
 
SECTION 3
 
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
 
3.1 Default Rate .
 
Upon the occurrence, and during the continuance, of an Event of Default, the principal of and, to the extent permitted by law, interest on the Loans and any other amounts owing hereunder or under the other Credit Documents shall bear interest, payable on demand, at a per annum rate 2% greater than the rate which would otherwise be applicable (or if no rate is applicable, whether in respect of interest, fees or other amounts, then 2% greater than the Base Rate).
 
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3.2 Extension and Conversion .
 
The Borrowers shall have the option on any Business Day, to extend existing Loans into a subsequent permissible Interest Period or to convert Loans into Loans of another type; provided , however, that (i) except as provided in Section 3.8, Eurodollar Loans may be converted into Base Rate Loans only on the last day of the Interest Period applicable thereto, (ii) Eurodollar Loans may be extended, and Base Rate Loans may be converted into Eurodollar Loans, only if no Default or Event of Default is in existence on the date of extension or conversion, (iii) Loans extended as, or converted into, Eurodollar Loans shall be subject to the terms of the definition of “ Interest Period ” set forth in Section 1.1 and shall be in such minimum amounts as provided in Section 2, (iv) no more than six separate Eurodollar Loans shall be outstanding hereunder at any time with respect to the Revolving Loans and no more than six separate Eurodollar Loans shall be outstanding hereunder at any time with respect to the Term Loan and (v) any request for extension or conversion of a Eurodollar Loan which shall fail to specify an Interest Period shall be deemed to be a request for an Interest Period of one month. Each such extension or conversion shall be effected by the Borrowers by giving a Notice of Extension/Conversion (or telephone notice promptly confirmed in writing) to the Administrative Agent prior to 11:00 A.M. (Charlotte, North Carolina time) on the Business Day of, in the case of the conversion of a Eurodollar Loan into a Base Rate Loan and on the third Business Day prior to, in the case of the extension of a Eurodollar Loan as, or conversion of a Base Rate Loan into, a Eurodollar Loan, the date of the proposed extension or conversion, specifying the date of the proposed extension or conversion, the Loans to be so extended or converted, the types of Loans into which such Loans are to be converted and, if appropriate, the applicable Interest Periods with respect thereto. Each request for extension or conversion shall constitute a representation and warranty by the Borrowers of the matters specified in subsections (ii), (iii), (iv) and (v) of Section 5.2(a). In the event the Borrowers fail to request extension or conversion of any Eurodollar Loan in accordance with this Section, or any such conversion or extension is not permitted or required by this Section, then such Loan shall be automatically converted into a Base Rate Loan at the end of the Interest Period applicable thereto. The Administrative Agent shall give each applicable Lender notice as promptly as practicable of any such proposed extension or conversion affecting any Loan.
 
3.3 Prepayments .
 
(a) Voluntary Prepayments . The Borrowers shall have the right to prepay Loans in whole or in part from time to time without premium or penalty; provided , however , that (i) Eurodollar Loans may only be prepaid on three Business Days’ prior written notice to the Administrative Agent specifying the applicable Loans to be prepaid, (ii) any prepayment of Eurodollar Loans will be accompanied by accrued interest thereon and subject to Section 3.11; and (iii) each such partial prepayment of Loans shall be in a minimum principal amount of $1,000,000 and integral multiples of $100,000 in excess thereof. Each such notice of voluntary prepayment shall be irrevocable and shall specify the date and amount of prepayment and the Loans that are to be prepaid. The Administrative Agent will give prompt notice to the Lenders of any prepayment on the
 
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Loans and each Lender’s interest therein. Subject to the foregoing terms, (A) voluntary prepayments on the Revolving Loans shall be applied as the Borrowers may elect and (B) voluntary prepayments on the Term Loan shall be applied to the principal amortization installments in inverse order of maturity. Within the foregoing parameters for application, voluntary prepayments shall be applied first to Base Rate Loans and then to Eurodollar Loans. Voluntary prepayments on the Revolving Loans may be reborrowed in accordance with the provisions hereof. Such voluntary prepayments shall not reduce the Revolving Committed Amount. Amounts prepaid on the Term Loans may not be reborrowed
 
(b) Mandatory Prepayments .
 
(i) Overadvance . If at any time (A) the aggregate principal amount of the Revolving Obligations exceeds the Revolving Committed Amount, (B) the aggregate amount of LOC Obligations shall exceed the aggregate LOC Committed Amount, or (C) the aggregate amount of Swingline Loans shall exceed the Swingline Committed Amount, the Borrowers jointly and severally promise to prepay immediately upon demand the outstanding principal balance on the Revolving Loans or provide cash collateral in the manner and in an aggregate amount necessary to eliminate such excess in respect of the LOC Obligations. In the case of a mandatory prepayment required on account of subsection (B) in the foregoing sentence, the amount required to be paid shall serve to temporarily reduce the Revolving Committed Amount (for purposes of borrowing availability hereunder, but not for purposes of computation of fees) by the amount of the payment required until such time as the situation shall no longer exist. Payments hereunder shall be applied first to the Revolving Loans and Swingline Loans and then to a cash collateral account in respect of the LOC Obligations.
 
(ii) Asset Dispositions . The Obligations shall be immediately prepaid as hereafter provided in an amount equal to one hundred percent (100%) of the Net Cash Proceeds received from any Asset Disposition to the extent (A) such Net Cash Proceeds are not reinvested in the same or similar property or assets within six (6) months of the date of such Asset Disposition, and (B) the aggregate amount of such Net Cash Proceeds not reinvested in accordance with the foregoing clause (A) shall exceed $1,000,000 in any fiscal year.
 
(iii) Debt Transactions . The Obligations shall be immediately prepaid as hereafter provided in an amount equal to one hundred percent (100%) of the Net Cash Proceeds received from any Debt Transaction.
 
(iv) Application . All prepayments made pursuant to this Sections 3.3(b)(ii) and (iii) shall be accompanied by accrued interest thereon and subject to Section 3.11 and shall be applied first to the principal amortization installments on the Term Loans in inverse order of Interest Period maturities, then to Swingline Loans, then to Revolving Loans, in each case to Base Rate Loans and
 
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then to Eurodollars Loans in direct order of Interest Period maturities. Prepayments on the Revolving Obligations under Sections 3.3(b)(ii) and (iii) shall permanently reduce the Revolving Committed Amount.
 
(c) Notice . The Borrowers will provide notice to the Administrative Agent of any prepayment by 11:00 A.M. (Charlotte, North Carolina time) on the date of prepayment. Amounts paid on the Loans under subsection (a) and (b)(i) hereof may be reborrowed in accordance with the provisions hereof.
 
3.4 Termination and Reduction of Revolving Commitments .
 
The Borrowers may from time to time permanently reduce or terminate the aggregate Revolving Committed Amount in whole or in part (in minimum aggregate amounts of $10,000,000 (or, if less, the full remaining amount of the Revolving Committed Amount)) upon five Business Days’ prior written notice from the Borrowers to the Administrative Agent; provided, however, no such termination or reduction shall be made which would reduce the Revolving Committed Amount to an amount less than the aggregate principal amount of Revolving Obligations outstanding. The Revolving Commitments of the Revolving Lenders shall automatically terminate on the Termination Date. The Administrative Agent shall promptly notify each of the Revolving Lenders of receipt by the Administrative Agent of any notice from the Borrowers pursuant to this Section 3.4.
 
3.5 Fees .
 
(a) Commitment Fee . In consideration of the Revolving Commitments hereunder, the Borrowers agree to pay the Administrative Agent for the ratable benefit of the Revolving Lenders in accordance with such Lender’s Revolving Commitment Percentage a commitment fee (the “ Commitment Fee ”) equal to the Applicable Percentage per annum on the average daily unused amount of the Revolving Committed Amount for the applicable period. For the purposes hereof Swingline Loans shall not be considered usage under the Revolving Commitments. The Commitment Fee shall be payable (i) quarterly in arrears on the Interest Payment Date following the last day of each calendar quarter for the immediately preceding quarter (or portion thereof) beginning with the first such date to occur after the Closing Date and (ii) on the Termination Date.
 
(b) Letter of Credit Fees .
 
(i) Standby Letter of Credit Issuance Fee . In consideration of the issuance of standby Letters of Credit hereunder, the Borrowers jointly and severally promise to pay to the Administrative Agent for the ratable benefit of the Revolving Lenders in accordance with such Lender’s Revolving Commitment Percentage a fee (the “ Standby Letter of Credit Fee ”) on the average daily maximum amount available to be drawn under each such standby Letter of Credit computed at a per annum rate for each day from the date of issuance to the date of
 
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expiration equal to the Applicable Percentage for Standby Letter of Credit Fee. The Standby Letter of Credit Fee will be payable quarterly in arrears on the 15th day of each January, April, July and October for the immediately preceding fiscal quarter (or a portion thereof).
 
(ii) Trade Letter of Credit Drawing Fee . In consideration of the issuance of trade Letters of Credit hereunder, the Borrowers jointly and severally promise to pay to the Administrative Agent for the ratable benefit of the Revolving Lenders in accordance with such Lender’s Revolving Commitment Percentage a fee (the “ Trade Letter of Credit Fee ”) equal to the Applicable Percentage for trade Letter of Credit Fee on the amount of each drawing under any such trade Letter of Credit. The Trade Letter of Credit Fee will be payable on each date of drawing under a trade Letter of Credit.
 
(iii) Issuing Lender Fees . In addition to the Standby Letter of Credit Fee payable pursuant to clause (i) above and the Trade Letter of Credit Fee payable pursuant to clause (ii) above, the Borrowers jointly and severally promise to pay, to the Issuing Lender for its own account without sharing by the other Lenders the letter of credit fronting and negotiation fees agreed to by the Borrowers and the Issuing Lender from time to time and the customary charges from time to time of the Issuing Lender with respect to the issuance, amendment, transfer, administration, cancellation and conversion of, and drawings under, such Letters of Credit (collectively, the “ Issuing Lender Fees ”).
 
(c) Administrative Fees . The Borrowers jointly and severally promise to pay to the Administrative Agent, for its own account and for the account of Banc of America Securities LLC, as applicable, the annual administrative fee, structuring fee and other fees referred to in the Administrative Agent’s Fee Letter (collectively, the “ Agent’s Fees ”).
 
(d) Upfront Fees . The Borrowers jointly and severally promise to pay to the Administrative Agent for the benefit of the Lenders in immediately available funds on or before the Closing Date an upfront fee (the “ Upfront Fee ”) as outlined in the letter from the Administrative Agent to the Lenders dated April 15, 2003.
 
3.6 Capital Adequacy .
 
If, after the date hereof, any Lender has determined that the adoption or the becoming effective of after the Closing Date, or any change in after the Closing Date, or any change after the Closing Date by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof in the interpretation or administration of, any applicable law, rule or regulation regarding capital adequacy, or compliance by such Lender with any request or directive after the Closing Date regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Lender’s capital or assets as a consequence of its commitments or obligations hereunder to a level below that which such Lender could have
 
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achieved but for such adoption, effectiveness, change or compliance (taking into consideration such Lender’s policies with respect to capital adequacy), then, upon 10 days’ notice, including calculations of the amount due, from such Lender to the Borrowers, the Borrowers shall be jointly and severally obligated to pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction. Each determination by any such Lender of amounts owing under this Section shall, absent manifest error, be conclusive and binding on the parties hereto.
 
3.7 Inability To Determine Interest Rate .
 
If prior to the first day of any Interest Period, the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrowers) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrowers and the Lenders as soon as practicable thereafter. If such notice is given (x) any Eurodollar Loans requested to be made on the first day of such Interest Period shall be made as Base Rate Loans and (y) any Loans that were to have been converted on the first day of such Interest Period to or continued as Eurodollar Loans shall be converted to or continued as Base Rate Loans. Until such notice has been withdrawn by the Administrative Agent, no further Eurodollar Loans shall be made or continued as such, nor shall the Borrower have the right to convert Base Rate Loans to Eurodollar Loans.
 
3.8 Illegality .
 
Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof occurring after the Closing Date shall make it unlawful for any Lender to make or maintain Eurodollar Loans as contemplated by this Credit Agreement, (a) such Lender shall promptly give written notice of such circumstances to the Borrowers and the Administrative Agent (which notice shall be withdrawn whenever such circumstances no longer exist), (b) the commitment of such Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled and, until such time as it shall no longer be unlawful for such Lender to make or maintain Eurodollar Loans, such Lender shall then have a commitment only to make a Base Rate Loan when a Eurodollar Loan is requested and (c) such Lender’s Loans then outstanding as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on the respective last days or the then current Interest Periods with respect to such Loans or within such earlier period as required by law. If any such conversion of a Eurodollar Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, the Borrowers shall jointly and severally pay to such Lender such amounts, if any, as may be required pursuant to Section 3.11.
 
3.9 Requirements of Law .
 
If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof applicable to any Lender, or compliance by any Lender with any request or
 
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directive (whether or not having the force of law) from any central bank or other Governmental Authority, in each case made subsequent to the Closing Date (or, if later, the date on which such Lender becomes a Lender):
 
(a) shall subject such Lender to any tax of any kind whatsoever with respect to any Letter of Credit or any Eurodollar Loans made by it or its obligation to make Eurodollar Loans, or change the basis of taxation of payments to such Lender in respect thereof (except for Non-Excluded Taxes covered by Section 3.10 (including Non-Excluded Taxes imposed solely by reason of any failure of such Lender to comply with its obligations under Section 3.10(b)) and changes in taxes measured by or imposed upon the overall net income, or franchise tax (imposed in lieu of such net income tax), of such Lender or its applicable lending office, branch, or any affiliate thereof); or
 
(b) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender which is not otherwise included in the determination of the Eurodollar Rate hereunder; or
 
(c) shall impose on such Lender any other condition (excluding any tax of any kind whatsoever); and the result of any of the foregoing is to increase the cost to such Lender, by an amount which such Lender deems to be material, of making, converting into, continuing or maintaining Eurodollar Loans or to reduce any amount receivable hereunder in respect thereof;
 
then, in any such case, upon notice to the Borrowers from such Lender, through the Administrative Agent, in accordance herewith, the Borrowers shall be jointly and severally obligated to pay promptly to such Lender, upon its demand, any additional amounts necessary to compensate such Lender for such increased cost or reduced amount receivable, provided that, in any such case, the Borrowers may elect to convert the Eurodollar Loans made by such Lender hereunder to Base Rate Loans by giving the Administrative Agent at least one Business Day’s notice of such election, in which case the Borrowers shall be jointly and severally obligated to pay promptly to such Lender, upon demand, without duplication, such amounts, if any, as may be required pursuant to Section 3.11. If any Lender becomes entitled to claim any additional amounts pursuant to this subsection, it shall provide prompt notice thereof to the Borrowers through the Administrative Agent, certifying (x) that one of the events described in this paragraph (a) has occurred and describing in reasonable detail the nature of such event, (y) as to the increased cost or reduced amount resulting from such event and (z) as to the additional amount demanded by such Lender and a reasonably detailed explanation of the calculation thereof. Such a certificate as to any additional amounts payable pursuant to this subsection submitted by such Lender, through the Administrative Agent, to the Borrowers shall be conclusive and binding on the parties hereto in the absence of manifest error. This covenant shall survive the termination of this Credit Agreement and the payment of the Loans and all other amounts payable hereunder.
 
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3.10 Taxes .
 
(a) Except as provided below in this subsection, all payments made by any Borrower under this Credit Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any court, or governmental body, agency or other official, excluding taxes measured by or imposed upon the overall net income of any Lender or its applicable lending office, or any branch or affiliate thereof, and all franchise taxes, branch taxes, taxes on doing business or taxes on the overall capital or net worth of any Lender or its applicable lending office, or any branch or affiliate thereof, in each case imposed in lieu of net income taxes, imposed: (i) by the jurisdiction under the laws of which such Lender, applicable lending office, branch or affiliate is organized or is located, or in which its principal executive office is located, or any nation within which such jurisdiction is located or any political subdivision thereof; or (ii) by reason of any connection between the jurisdiction imposing such tax and such Lender, applicable lending office, branch or affiliate other than a connection arising solely from such Lender having executed, delivered or performed its obligations, or received payment under or enforced, this Credit Agreement. If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“ Non-Excluded Taxes ”) are required to be withheld from any amounts payable to the Administrative Agent or any Lender hereunder, (A) the amounts so payable to the Administrative Agent or such Lender shall be increased to the extent necessary to yield to the Administrative Agent or such Lender (after payment of all Non-Excluded Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Credit Agreement, provided , however , that a Borrower shall be entitled to deduct and withhold any Non-Excluded Taxes and shall not be required to increase any such amounts payable to any Lender that is not organized under the laws of the United States of America or a state thereof if such Lender fails to comply with the requirements of paragraph (b) of this subsection whenever any Non-Excluded Taxes are payable by such Borrower, and (B) as promptly as possible thereafter such Borrower shall send to the Administrative Agent for its own account or for the account of such Lender, as the case may be, a certified copy of an original official receipt received by such Borrower showing payment thereof. If a Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent the required receipts or other required documentary evidence, such Borrower shall indemnify the Administrative Agent and the Lenders for any incremental taxes, interest or penalties that may become payable by the Administrative Agent or any Lender as a result of any such failure. The agreements in this subsection shall survive the termination of this Credit Agreement and the payment of the Loans and all other amounts payable hereunder.
 
(b) Each Lender that is not incorporated under the laws of the United States of America or a state thereof (a “ Foreign Lender ”) shall:
 
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(X) (i) on or before the date of any payment by the Borrowers under this Credit Agreement to such Lender, deliver to the Borrowers and the Administrative Agent (A) two (2) duly completed copies of United States Internal Revenue Service Form 1001 or 4224, or successor applicable form, as the case may be, certifying that it is entitled to receive payments under this Credit Agreement without deduction or withholding of any United States federal income taxes and (B) an Internal Revenue Service Form W-8 or W-9, or successor applicable form, as the case may be, certifying that it is entitled to an exemption from United States backup withholding tax;
 
(ii) deliver to the Borrowers and the Administrative Agent two (2) further copies of any such form or certification on or before the date that any such form or certification expires or becomes obsolete and after the occurrence of any event requiring a change in the most recent form previously delivered by it to the Borrowers; and
 
(iii) obtain such extensions of time for filing and complete such forms or certifications as may reasonably be requested by the Borrowers or the Administrative Agent; or
 
(Y) in the case of any such Lender that is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (i) represent to the Borrowers (for the benefit of the Borrowers and the Administrative Agent) that it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (ii) agree to furnish to the Borrowers on or before the date of any payment by any Borrower, with a copy to the Administrative Agent two (2) accurate and complete original signed copies of Internal Revenue Service Form W-8, or successor applicable form certifying to such Lender’s legal entitlement at the date of such certificate to an exemption from U.S. withholding tax under the provisions of Section 881(c) of the Code with respect to payments to be made under this Credit Agreement (and to deliver to the Borrowers and the Administrative Agent two (2) further copies of such form on or before the date it expires or becomes obsolete and after the occurrence of any event requiring a change in the most recently provided form and, if necessary, obtain any extensions of time reasonably requested by the Borrowers or the Administrative Agent for filing and completing such forms), and (iii) agree, to the extent legally entitled to do so, upon reasonable request by the Borrowers, to provide to the Borrowers (for the benefit of the Borrowers and the Administrative Agent) such other forms as may be reasonably required in order to establish the legal entitlement of such Lender to an exemption from withholding with respect to payments under this Credit Agreement;
 
unless in any such case any change in treaty, law or regulation has occurred after the date such Person becomes a Lender hereunder which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such form
 
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with respect to it and such Lender so advises the Borrowers and the Administrative Agent. Each Person that shall become a Lender or a participant of a Lender pursuant to subsection 11.3 shall, upon the effectiveness of the related transfer, be required to provide all of the forms, certifications and statements required pursuant to this subsection, provided that in the case of a participant of a Lender the obligations of such participant of a Lender pursuant to this subsection (b) shall be determined as if the participant of a Lender were a Lender except that such participant of a Lender shall furnish all such required forms, certifications and statements to the Lender from which the related participation shall have been purchased.
 
3.11 Funding Losses .
 
Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrowers shall jointly and severally compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:
 
(a) any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); or
 
(b) any failure by the Borrowers (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by the Borrowers;
 
including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained. The Borrowers shall also jointly and severally pay any customary administrative fees charged by such Lender in connection with the foregoing.
 
For purposes of calculating amounts payable by the Borrowers to the Lenders under this Section 3.11, each Lender shall be deemed to have funded each Eurodollar Loan made by it at the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Loan was in fact so funded.
 
3.12 Pro Rata Treatment .
 
Except to the extent otherwise provided herein, each Loan, each payment or prepayment of principal of any Loan (other than Swingline Loans) or reimbursement obligations arising from drawings under Letters of Credit, each payment of interest on the Loans or reimbursement obligations arising from drawings under Letters of Credit, each payment of the Commitment Fee, each payment of the Standby Letter of Credit Fee, each payment of the Trade Letter of Credit Fee, each reduction of the Revolving Committed Amount and each conversion or extension of any Loan (other than Swingline Loans), shall be allocated pro rata among the applicable Lenders
 
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in accordance with the respective principal amounts of their outstanding Loans and Participation Interests.
 
3.13 Sharing of Payments .
 
The Lenders agree among themselves that, in the event that any Lender shall obtain payment in respect of any Loan or any other obligation owing to such Lender under this Credit Agreement through the exercise of a right of setoff, banker’s lien or counterclaim, or pursuant to a secured claim under Section 506 of Title 11 of the United States Code or other security or interest arising from, or in lieu of, such secured claim, received by such Lender under any applicable bankruptcy, insolvency or other similar law or otherwise, or by any other means, in excess of its pro rata share of such payment as provided for in this Credit Agreement, such Lender shall promptly notify the Administrative Agent thereof and purchase from the other Lenders a participation in such Loans and other obligations in such amounts, and make such other adjustments from time to time, as shall be equitable to the end that all Lenders share such payment in accordance with their respective ratable shares as provided for in this Credit Agreement. The Lenders further agree among themselves that if payment to a Lender obtained by such Lender through the exercise of a right of setoff, banker’s lien, counterclaim or other event as aforesaid shall be rescinded or must otherwise be restored, each Lender which shall have shared the benefit of such payment shall, by repurchase of a participation theretofore sold, return its share of that benefit (together with its share of any accrued interest payable with respect thereto) to each Lender whose payment shall have been rescinded or otherwise restored. The Borrowers agree that any Lender so purchasing such a participation may, to the fullest extent permitted by law, exercise all rights of payment, including setoff, banker’s lien or counterclaim, with respect to such participation as fully as if such Lender were a holder of such Loan or other obligation in the amount of such participation. Except as otherwise expressly provided in this Credit Agreement, if any Lender or the Administrative Agent shall fail to remit to the Administrative Agent or any other Lender an amount payable by such Lender or the Administrative Agent to the Administrative Agent or such other Lender pursuant to this Credit Agreement on the date when such amount is due, such payments shall be made together with interest thereon for each date from the date such amount is due until the date such amount is paid to the Administrative Agent or such other Lender at a rate per annum equal to the Federal Funds Rate. If under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a setoff to which this Section 3.13 applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders under this Section 3.13 to share in the benefits of any recovery on such secured claim.
 
3.14 Place and Manner of Payments .
 
(a) All payments to be made by the Credit Parties hereunder shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff of any kind, and except as otherwise specifically provided herein, shall be made to the Administrative Agent in Dollars in immediately available funds at its offices at the Administrative Agent’s office specified in Schedule 2.1(a) not later than 2:00 P.M.
 
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(Charlotte, North Carolina time) on the date when due. Payments received after such time shall be deemed to have been received on the next succeeding Business Day. The Administrative Agent may (but shall not be obligated to) debit the amount of any such payment which is not made by such time to any ordinary deposit account of the Borrowers maintained with the Administrative Agent (with notice to the Borrowers). The Borrowers shall, at the time any Borrower makes any payment under this Credit Agreement, specify to the Administrative Agent the Loans, LOC Obligations, Fees, interest or other amounts payable hereunder to which such payment is to be applied (and in the event that it fails so to specify, or if such application would be inconsistent with the terms hereof, the Administrative Agent shall distribute such payment to the Lenders in such manner as the Administrative Agent may determine to be appropriate in respect of obligations owing by the Borrowers hereunder, subject to the terms of Section 3.12(a)). The Administrative Agent will distribute such payments to such Lenders, if any such payment is received prior to 12:00 Noon (Charlotte, North Carolina time) on a Business Day in like funds as received prior to the end of such Business Day and otherwise the Administrative Agent will distribute such payment to such Lenders on the next succeeding Business Day. Whenever any payment hereunder shall be stated to be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day (subject to accrual of interest and Fees for the period of such extension), except that in the case of Eurodollar Loans, if the extension would cause the payment to be made in the next following calendar month, then such payment shall instead be made on the next preceding Business Day. Except as expressly provided otherwise herein, all computations of interest and fees shall be made on the basis of actual number of days elapsed over a year of 360 days, except that computations of interest on Base Rate Loans (unless the Base Rate is determined by reference to the Federal Funds Rate) shall be calculated based on a year of 365 or 366 days, as appropriate. Interest shall accrue from and include the date of borrowing, but exclude the date of payment.
 
(b) Unless the Borrowers or any Lender has notified the Administrative Agent, prior to the date any payment is required to be made by it to the Administrative Agent hereunder, that such Borrower or such Lender, as the case may be, will not make such payment, the Administrative Agent may assume that the Borrowers or such Lender, as the case may be, has timely made such payment and may (but shall not be so required to), in reliance thereon, make available a corresponding amount to the Person entitled thereto. If and to the extent that such payment was not in fact made to the Administrative Agent in immediately available funds, then:
 
(i) if the Borrowers failed to make such payment, each Lender shall forthwith on demand repay to the Administrative Agent the portion of such assumed payment that was made available to such Lender in immediately available funds, together with interest thereon in respect of each day from and including the date such amount was made available by the Administrative Agent to such Lender to the date such amount is repaid to the Administrative Agent in immediately available funds at the Federal Funds Rate from time to time in effect; and
 
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(ii) if any Lender failed to make such payment, such Lender shall forthwith on demand pay to the Administrative Agent the amount thereof in immediately available funds, together with interest thereon for the period from the date such amount was made available by the Administrative Agent to the Borrower to the date such amount is recovered by the Administrative Agent (the “ Compensation Period ”) at a rate per annum equal to the Federal Funds Rate from time to time in effect. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in the applicable borrowing. If such Lender does not pay such amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent may make a demand therefor upon the Borrowers, and the Borrowers shall pay such amount to the Administrative Agent, together with interest thereon for the Compensation Period at a rate per annum equal to the rate of interest applicable to the applicable borrowing. Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Commitment or to prejudice any rights that the Administrative Agent or the Borrowers may have against any Lender as a result of any default by such Lender hereunder.
 
A notice of the Administrative Agent to any Lender or the Borrowers with respect to any amount owing under this subsection shall be conclusive, absent manifest error.
 
(c) The obligations of the Lenders hereunder to make Loans and to fund participations in Letters of Credit and Swingline Loans are several and not joint. The failure of any Lender to make any Loan or to fund any such participation on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan or purchase its participation.
 
3.15 Payments Set Aside .
 
To the extent that any payment by or on behalf of the Borrowers is made to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises its right of set-off, and such payment or the proceeds of such set-off or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under the Bankruptcy Code or any other applicable insolvency or debtor relief law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred, and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect.
 
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SECTION 4 
 
GUARANTY
 
4.1 The Guaranty .
 
Each of the Guarantors hereby jointly and severally guarantees to each Lender and the Administrative Agent as hereinafter provided the prompt payment of the Borrowers’ Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise) strictly in accordance with the terms thereof. The Guarantors hereby further agree that if any of the Borrowers’ Obligations are not paid in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise), the Guarantors will, jointly and severally, promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Borrowers’ Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration or otherwise) in accordance with the terms of such extension or renewal.
 
Notwithstanding any provision to the contrary contained herein or in any other of the Credit Documents, the obligations of each Guarantor hereunder shall be limited to an aggregate amount equal to the largest amount that would not render its Guaranty Obligations hereunder subject to avoidance under Section 548 of the Bankruptcy Code or any comparable provisions of any applicable state law.
 
4.2 Obligations Unconditional .
 
The obligations of the Guarantors under Section 4.1 hereof are joint and several, absolute and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of any of the Credit Documents, or any other agreement or instrument referred to therein, or any substitution, release or exchange of any other guarantee of or security for any of the Borrowers’ Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section 4.2 that the obligations of the Guarantors hereunder shall be absolute and unconditional under any and all circumstances. Without limiting the generality of the foregoing, it is agreed that, to the fullest extent permitted by law, the occurrence of any one or more of the following shall not alter or impair the liability of any Guarantor hereunder which shall remain absolute and unconditional as described above:
 
(i) at any time or from time to time, without notice to any Guarantor, the time for any performance of or compliance with any of the Borrowers’ Obligations shall be extended, or such performance or compliance shall be waived;
 
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(ii) any of the acts mentioned in any of the provisions of any of the Credit Documents or any other agreement or instrument referred to therein shall be done or omitted;
 
(iii) the maturity of any of the Borrowers’ Obligations shall be accelerated, or any of the Borrowers’ Obligations shall be modified, supplemented or amended in any respect, or any right under any of the Credit Documents or any other agreement or instrument referred to therein shall be waived or any other guarantee of any of the Borrowers’ Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with;
 
(iv) any Lien granted to, or in favor of, the Administrative Agent or any Lender or Lenders as security for any of the Borrowers’ Obligations shall fail to attach or be perfected; or
 
(v) any of the Borrowers’ Obligations shall be determined to be void or voidable (including, without limitation, for the benefit of any creditor of any Guarantor) or shall be subordinated to the claims of any Person (including, without limitation, any creditor of any Guarantor).
 
With respect to its obligations hereunder, each Guarantor hereby expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that the Administrative Agent or any Lender exhaust any right, power or remedy or proceed against any Person under any of the Credit Documents or any other agreement or instrument referred to therein, or against any other Person under any other guarantee of, or security for, any of the Borrowers’ Obligations.
 
4.3 Reinstatement .
 
The obligations of the Guarantors under this Section 4 shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Person in respect of the Borrowers’ Obligations is rescinded or must be otherwise restored by any holder of any of the Borrowers’ Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, and each Guarantor agrees that it will indemnify the Administrative Agent and each Lender on demand for all reasonable costs and expenses (including, without limitation, fees and expenses of counsel) incurred by the Administrative Agent or such Lender in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law.
 
4.4 Certain Additional Waivers .
 
Without limiting the generality of the provisions of this Section 4, each Guarantor hereby specifically waives the benefits of N.C. Gen. Stat. §§ 26-7 through 26-9, inclusive. Each Guarantor further agrees that such Guarantor shall have no right of recourse to security for the
 
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Borrowers’ Obligations. Each of the Guarantors further agrees that it shall have no right of subrogation, reimbursement or indemnity, nor any right of recourse to security, if any, for the Borrowers’ Obligations so long as any amounts payable to the Administrative Agent or the Lenders in respect of the Borrowers’ Obligations shall remain outstanding or any of the Commitments shall not have expired or been terminated.
 
4.5 Remedies .
 
The Guarantors agree that, to the fullest extent permitted by law, as between the Guarantors, on the one hand, and the Administrative Agent and the Lenders, on the other hand, the Borrowers’ Obligations may be declared to be forthwith due and payable as provided in Section 9.2 hereof (and shall be deemed to have become automatically due and payable in the circumstances provided in said Section 9.2) for purposes of Section 4.1 hereof notwithstanding any stay, injunction or other prohibition preventing such declaration (or preventing such Borrowers’ Obligations from becoming automatically due and payable) as against any other Person and that, in the event of such declaration (or such Borrowers’ Obligations being deemed to have become automatically due and payable), such Borrowers’ Obligations (whether or not due and payable by any other Person) shall forthwith become due and payable by the Guarantors for purposes of said Section 4.1.
 
4.6 Continuing Guarantee .
 
The guarantee in this Section 4 is a continuing guarantee, and shall apply to all Borrowers’ Obligations whenever arising.
 
SECTION 5 
 
CONDITIONS
 
5.1 Closing Conditions .
 
The obligation of the Lenders to enter into this Credit Agreement and to fund the initial advance hereunder shall be subject to satisfaction of the following conditions:
 
(a) The Administrative Agent shall have received original counterparts of this Credit Agreement executed by each of the parties hereto;
 
(b) The Administrative Agent shall have received an appropriate original Revolving Note and Term Note for each Lender, executed by each of the Borrowers;
 
(c) The Administrative Agent shall have received original counterparts of the Pledge Agreement executed by each of the parties thereto, together with all stock certificates evidencing the Capital Stock pledged to the Administrative Agent pursuant to the Pledge Agreement, together with duly executed in blank, undated stock powers
 
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attached thereto (unless, with respect to the pledged Capital Stock of any Foreign Subsidiary, such stock powers are deemed unnecessary by the Administrative Agent in its reasonable discretion under the law of the jurisdiction of incorporation of such Person);
 
(d) The Administrative Agent shall have received all documents it may reasonably request relating to the existence and good standing of each of the Credit Parties, the corporate or other necessary authority for and the validity of the Credit Documents, and any other matters relevant thereto, all in form and substance reasonably satisfactory to the Administrative Agent;
 
(e) The Administrative Agent shall have received an incumbency certificate for each of the Borrowers certified by a secretary or assistant secretary to be true and correct as of the Effective Date.
 
(f) The Administrative Agent shall have received a certificate executed by the chief financial officer of the Borrowers as of the Closing Date (i) calculating the Consolidated Total Debt Ratio, the Consolidated Senior Debt Ratio and the Consolidated Capital Charges Coverage Ratio and (ii) certifying that immediately after giving effect to this Credit Agreement and the other Credit Documents, (A) no Default or Event of Default exists and (B) the representations and warranties set forth in Section 6 are true and correct in all material respects;
 
(g) The Administrative Agent shall have received a legal opinion of Parker, Poe, Adams and Bernstein, LLP, counsel for the Credit Parties, dated as of the Closing Date and substantially in the form of Schedule 5.1(g) ;
 
(h) The Lenders shall have received and approved (i) a consolidated and consolidating balance sheet and income statement of Speedway Motorsports and its Subsidiaries for the fiscal year ending December 31, 2002, together with related consolidated and consolidating statements of operations and retained earnings and of cash flows for such fiscal year, setting forth in comparative form consolidated and consolidating figures for the preceding fiscal year, all such financial information described above to be in reasonable form and detail and, as to the consolidated statements only, audited by independent certified public accountants of recognized national standing reasonably acceptable to the Administrative Agent and whose opinion shall be unqualified, and (ii) a consolidated and consolidating balance sheet and income statement of Speedway Motorsports and its Subsidiaries for the fiscal quarter ending March 31, 2003, together with related consolidated and consolidating statements of operations and retained earnings and of cash flows for such fiscal quarter in each case setting forth in comparative form consolidated and consolidating figures for the corresponding period of the preceding fiscal year, all such financial information described above to be in reasonable form and detail and reasonably acceptable to the Administrative Agent, and accompanied by a certificate of the chief executive officer, chief financial officer or president of Speedway Motorsports to the effect that such quarterly financial statements fairly present in all material respects the financial condition of Speedway Motorsports and
 
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its Subsidiaries and have been prepared in accordance with GAAP, subject to changes resulting from audit and normal year-end audit adjustments, including without limitation the addition of footnotes;
 
(i) No Material Adverse Change shall have occurred since the financial statements as of December 31, 2002;
 
(j) The Administrative Agent shall have received copies of insurance policies or certificates of insurance of the Credit Parties evidencing liability and casualty insurance meeting the requirements of the Credit Documents;
 
(k) The Administrative Agent and the Lenders shall have received and approved a true and complete copy of the Indenture;
 
(l) The Administrative Agent shall have received evidence that the Existing Credit Agreement is being repaid in full with proceeds of the initial advance hereunder and the commitments under the Existing Credit Agreement are being terminated simultaneously with the effectiveness of this Credit Agreement;
 
(m) The Administrative Agent shall have received such other documents, agreements or information which may be reasonably requested by the Administrative Agent and/or the Required Lenders; and
 
(n) The Administrative Agent shall have received for its own account and for the accounts of the Lenders, all fees and expenses required by this Credit Agreement or any other Credit Document to be paid on or before the Closing Date.
 
5.2 Conditions to all Extensions of Credit.
 
The obligations of each Lender to make, convert or extend any Loan (including the initial Loans) and to issue or extend, or participate in, a Letter of Credit are subject to satisfaction of the following conditions in addition to satisfaction on the Closing Date (and on the Closing Date only) of the conditions set forth in Section 5.1 and satisfaction on the Effective Date of the conditions set forth in Section 5.2:
 
(i) The Borrowers shall have delivered, an appropriate Notice of Borrowing, Notice of Extension/Conversion or LOC Documents;
 
(ii) The representations and warranties set forth in Section 6 shall be, subject to the limitations set forth therein, true and correct in all material respects as of such date (except for those which expressly relate to an earlier date);
 
(iii) There shall not have been commenced against the Borrowers or any Guarantor an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or any case, proceeding or other
 
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action for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of such Person or for any substantial part of its Property or for the winding up or liquidation of its affairs, and such involuntary case or other case, proceeding or other action shall remain undismissed, undischarged or unbonded;
 
(iv) No Default or Event of Default shall exist and be continuing either prior to or after giving effect thereto and
 
(v) There shall not have occurred any Material Adverse Change since the extension of the last Loan; and
 
(vi) Immediately after giving effect to the making of any such Revolving Loan (and the application of the proceeds thereof) the sum of Revolving Obligations outstanding shall not exceed the Revolving Committed Amount, the sum of LOC Obligations outstanding shall not exceed the LOC Committed Amount, and the sum of Swingline Loans outstanding shall not exceed the Swingline Committed Amount.
 
The delivery of each Notice of Borrowing and each Notice of Extension/Conversion shall constitute a representation and warranty by the Borrowers of the correctness of the matters specified in subsections (ii), (iii), (iv) and (v) and (vi) above.
 
SECTION 6
 
REPRESENTATIONS AND WARRANTIES
 
Each of the Credit Parties hereby represents to the Administrative Agent and each Lender that:
 
6.1 Financial Condition.
 
The audited combined balance sheets, statements of income and statements of cash flows of Speedway Motorsports for the year ended December 31, 2002 have heretofore been furnished to each Lender. Such financial statements (including the notes thereto) (i) have been audited by Deloitte & Touche LLP, (ii) have been prepared in accordance with GAAP consistently applied throughout the periods covered thereby and (iii) present fairly (on the basis disclosed in the footnotes to such financial statements) the combined financial condition, results of operations and cash flows of Speedway Motorsports and its combined Subsidiaries as of such date and for such periods. The unaudited interim balance sheets of Speedway Motorsports and its consolidated Subsidiaries as at the end of, and the related unaudited interim statements of income and of cash flows for, the fiscal quarter ended March 31, 2003 have heretofore been furnished to each Lender. Such interim financial statements, for each such quarterly period, (i) have been prepared in accordance with GAAP consistently applied throughout the periods covered thereby
 
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and (ii) present fairly (on the basis disclosed in the footnotes to such financial statements) the combined financial condition, results of operations and cash flows of Speedway Motorsports and its consolidated Subsidiaries as of such date and for such periods. During the period from March 31, 2003 to and including the Closing Date, there has been no sale, transfer or other disposition by it or any of its Subsidiaries of any material part of the business or property of Speedway Motorsports and its consolidated Subsidiaries, taken as a whole, and no purchase or other acquisition by any of them of any business or property (including any Capital Stock of any other person) material in relation to the combined financial condition of Speedway Motorsports and its consolidated Subsidiaries, taken as a whole, in each case which is not reflected in the foregoing financial statements or in the notes thereto or has not otherwise been disclosed in writing to the Lenders on or prior to the Closing Date.
 
6.2 No Change .
 
Since December 31, 2002, (a) except as and to the extent disclosed on Schedule 6.2(a) , there has been no development or event relating to or affecting any of the Credit Parties which has had or would be reasonably expected to have a Material Adverse Effect and (b) except as permitted under this Credit Agreement (if this Credit Agreement were to have been in effect from and after December 31, 2002), no dividends or other distributions have been declared, paid or made upon the Capital Stock or other equity interest in any Credit Party nor has any of the Capital Stock or other equity interest in any Credit Party been redeemed, retired, purchased or otherwise acquired for value by such Credit Party.
 
6.3 Organization; Existence; Compliance with Law .
 
Each of the Credit Parties (a) is duly organized, validly existing and is in good standing under the laws of the jurisdiction of its incorporation or organization, (b) has the corporate or other necessary power and authority, and the legal right, to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged and (c) is duly qualified as a foreign entity and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification, other than in such jurisdictions where the failure to be so qualified and in good standing would not be reasonably expected to have a Material Adverse Effect, and (d) is in compliance with all material Requirements of Law.
 
6.4 Power; Authorization; Enforceable Obligations .
 
Each of the Credit Parties has the corporate or other necessary power and authority, and the legal right, to make, deliver and perform the Credit Documents to which it is a party, and in the case of the Borrowers, to borrow hereunder, and each of the Borrowers has taken all necessary corporate or other necessary action to authorize the borrowings on the terms and conditions of this Credit Agreement, and to authorize the execution, delivery and performance of the Credit Documents to which each is a party. No consent or authorization of, filing with, notice to or other similar act by or in respect of, any Governmental Authority or any other Person is required to be obtained or made by or on behalf of any Credit Party in connection with the
 
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execution, delivery, performance, validity or enforceability of the Credit Documents to which such Person is a party, except for consents, authorizations, notices and filings described in Schedule 6.4 , all of which have been obtained or made or have the status described in such Schedule 6.4 . This Credit Agreement has been, and each other Credit Document to which it is a party will be, duly executed and delivered on behalf the Credit Parties. This Credit Agreement constitutes, and each other Credit Document to which it is a party when executed and delivered will constitute, a legal, valid and binding obligation of such Credit Party, enforceable against each such Person in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
 
6.5 No Legal Bar .
 
Except as previously disclosed in writing to the Lenders on or prior to the Closing Date, the execution, delivery and performance of the Credit Documents by the Credit Parties, the borrowings hereunder and the use of the proceeds of the borrowings hereunder (a) will not violate any Requirement of Law or contractual obligation of any Credit Party in any respect that would reasonably be expected to have a Material Adverse Effect, (b) will not result in, or require, the creation or imposition of any Lien on any of the properties or revenues of any of the Credit Parties pursuant to any such Requirement of Law or contractual obligation and (c) will not violate or conflict with any provision of the articles of incorporation or by-laws of any Credit Party.
 
6.6 No Material Litigation .
 
No litigation, investigation, prosecution, proceeding, imposition of fines or penalties or dispute of, by or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Credit Parties or their Subsidiaries, threatened by or against any of the Credit Parties or against their respective properties or revenues which (a) relates to any of the Credit Documents or any of the transactions contemplated hereby or thereby or (b) would be reasonably expected to have a Material Adverse Effect. Set forth on Schedule 6.6 is a summary of all claims (excluding routine claims for benefits under employee benefit plans and arrangements), litigation, investigations, prosecutions and proceedings pending or, to the best knowledge of the Credit Parties, threatened by or against any of the Credit Parties or their Subsidiaries or against any of their respective properties or revenues, and none of such actions, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
 
6.7 No Default .
 
None of the Credit Parties or their Subsidiaries is in default under or with respect to any of their contractual obligations in any respect which would be reasonably expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing or would result from the consummation of the transactions contemplated by the Credit Documents.
 
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6.8 Ownership of Property; Liens .
 
Each of the Credit Parties and their Subsidiaries has good record and marketable title in fee simple to, or a valid leasehold interest in, all its material real property, and good title to, or a valid leasehold interest in, all its other material property, and none of such property is subject to any Lien, except for Permitted Liens or, with respect to property of a Subsidiary which is not a Credit Party, such Lien would not reasonably be likely to have a Material Adverse Effect.
 
6.9 Intellectual Property .
 
Each of the Credit Parties and their Subsidiaries owns, or has the legal right to use, all United States trademarks, tradenames, copyrights, technology, know-how and processes necessary for each of them to conduct its business as currently conducted (the “ Intellectual Property ”) except for those the failure to own or have such legal right to use would not be reasonably expected to have a Material Adverse Effect. Except as provided on Schedule 6.9 , no claim has been asserted and is pending by any Person challenging or questioning the use of any such Intellectual Property or the validity or effectiveness of any such Intellectual Property, nor does any Credit Party know of any such claim, and the use of such Intellectual Property by the Credit Parties and their Subsidiaries does not infringe on the rights of any Person, except for such claims and infringements that in the aggregate would not be reasonably expected to have a Material Adverse Effect. 
 
6.10 No Burdensome Restrictions .
 
No Requirement of Law or contractual obligation of any Credit Party or any of their Subsidiaries would be reasonably expected to have a Material Adverse Effect.
 
6.11 Taxes .
 
Except as disclosed on Schedule 6.11 hereof, each of the Credit Parties and their Subsidiaries has filed or caused to be filed all United States federal income tax returns and all other material tax returns which, to the knowledge of any Credit Party, are required to be filed and has paid (a) all taxes shown to be due and payable on said returns or (b) all taxes shown to be due and payable on any assessments of which it has received notice made against it or any of its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority (other than any (i) taxes, fees or other charges with respect to which the failure to pay, in the aggregate, would not have a Material Adverse Effect or (ii) taxes, fees or other charges the amount or validity of which are currently being contested and with respect to which reserves in conformity with GAAP have been provided on the books of such Credit Party or Subsidiary, as the case may be; and no tax Lien has been filed, and, to the knowledge of any of the Credit Parties, no claim is being asserted, with respect to any such tax, fee or other charge.
 
6.12 ERISA .
 
Except as would not result in a Material Adverse Effect:
 
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(a) During the five-year period prior to the date on which this representation is made or deemed made: (i) no Termination Event has occurred, and, to the best of the Credit Parties’ or any ERISA Affiliate’s knowledge, no event or condition has occurred or exists as a result of which any Termination Event could reasonably be expected to occur, with respect to any Plan; (ii) no “accumulated funding deficiency,” as such term is defined in Section 302 of ERISA and Section 412 of the Code, whether or not waived, has occurred with respect to any Plan; (iii) each Plan has been maintained, operated, and funded in compliance with its own terms and in material compliance with the provisions of ERISA, the Code, and any other applicable federal or state laws; and (iv) no lien in favor of the PBGC or a Plan has arisen or is reasonably likely to arise on account of any Plan.
 
(b) The actuarial present value of all “benefit liabilities” under each Single Employer Plan (determined within the meaning of Section 401(a)(2) of the Code, utilizing the actuarial assumptions used to fund such Plans), whether or not vested, did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the current value of the assets of such Plan allocable to such accrued liabilities.
 
(c) Neither any of the Credit Parties, their Subsidiaries nor any ERISA Affiliate has incurred, or, to the best of the Credit Parties’ knowledge, are reasonably expected to incur, any withdrawal liability under Title IV of ERISA to any Multiemployer Plan or Multiple Employer Plan. Neither any of the Credit Parties, their Subsidiaries nor any ERISA Affiliate has received any notification that any Multiemployer Plan is in reorganization (within the meaning of Section 4241 of ERISA), is insolvent (within the meaning of Section 4245 of ERISA), or has been terminated (within the meaning of Title IV of ERISA), and no Multiemployer Plan is, to the best of the Credit Parties’ knowledge, reasonably expected to be in reorganization, insolvent, or terminated.
 
(d) No prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) or breach of fiduciary responsibility has occurred with respect to a Plan which has subjected or may subject any Credit Party, any of their Subsidiaries or any ERISA Affiliate to any material liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any agreement or other instrument pursuant to which any Credit Party, any Subsidiary or any ERISA Affiliate has agreed or is required to indemnify any person against any such liability.
 
6.13 Governmental Regulations, Etc .
 
(a) No part of the proceeds of the Loans will be used, directly or indirectly, for the purpose of purchasing or carrying any “margin stock” within the meaning of Regulation U. If requested by any Lender or the Administrative Agent, the Borrowers will furnish to the Administrative Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR Form U-1 (or any successor thereto)
 
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referred to in said Regulation U. No indebtedness being reduced or retired out of the proceeds of the Loans was or will be incurred for the purpose of purchasing or carrying any margin stock within the meaning of Regulation U. “Margin stock” within the meaning of Regulation U does not constitute more than 25% of the value of the consolidated assets of Speedway Motorsports and its Subsidiaries. None of the transactions contemplated by this Credit Agreement (including, without limitation, the direct or indirect use of the proceeds of the Loans) will violate or result in a violation of the Securities Act of 1933, as amended, or the Exchange Act or regulations issued pursuant thereto, or Regulation U.
 
(b) None of the Credit Parties or their Subsidiaries is subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act or the Investment Company Act of 1940, each as amended. In addition, none of the Credit Parties or their Subsidiaries is (i) an “investment company” registered or required to be registered under the Investment Company Act of 1940, as amended, and is not controlled by such a company, or (ii) a “holding company”, or a “subsidiary company” of a “holding company”, or an “affiliate” of a “holding company” or of a “subsidiary” of a “holding company”, within the meaning of the Public Utility Holding Company Act of 1935, as amended.
 
(c) No director, executive officer or principal shareholder of any Credit Party or any Subsidiary is a director, executive officer or principal shareholder of any Lender. For the purposes hereof the terms “director”, “executive officer” and “principal shareholder” (when used with reference to any Lender) have the respective meanings assigned thereto in Regulation O issued by the Board of Governors of the Federal Reserve System.
 
(d) Each of the Credit Parties and their Subsidiaries has obtained all material licenses, permits, franchises or other governmental authorizations necessary to the ownership of its respective Property and to the conduct of its business.
 
(e) Each of the Credit Parties and their Subsidiaries is not in violation of any applicable statute, regulation or ordinance of the United States of America, or of any state, city, town, municipality, county or any other jurisdiction, or of any agency thereof (including without limitation, federal, state or local environmental laws and regulations), which violation could reasonably be expected to have a Material Adverse Effect.
 
(f) Each of the Credit Parties and their Subsidiaries is current with all material reports and documents, if any, required to be filed with any state or federal securities commission or similar agency and is in full compliance in all material respects with all applicable rules and regulations of such commissions.
 
(g) None of the Credit Parties intends to treat any of the Loans, the Letters of Credit or any related transaction as a “reportable transaction” (within the meaning of Treasury Regulation Section 1.6011-4). In the event a Credit Party determines that it will
 
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take any action inconsistent with such intention, it will promptly notify the Administrative Agent thereof. If a Credit Party so notifies the Administrative Agent, any Lender may treat its Loans (and its participation interests in Letters of Credit and Swingline Loans) as subject to Treasury Regulation Section 301.6112-1, and such Lender will maintain any lists and other records required thereby.
 
6.14 Subsidiaries .
 
Schedule 6.14 sets forth all Subsidiaries (including Subsidiaries that are not Material Subsidiaries) of Speedway Motorsports at the Closing Date, the jurisdiction of incorporation of each such Subsidiary and the direct or indirect ownership interest of Speedway Motorsports therein.
 
6.15 Purpose of Loans .
 
The proceeds of the Loans hereunder shall be used solely (i) to refinance existing indebtedness of the Borrowers, (ii) to finance working capital needs of Speedway Motorsports and its Subsidiaries, (iii) to finance letter of credit needs of Speedway Motorsports and its Subsidiaries, (iv) to finance general corporate needs of Speedway Motorsports and its Subsidiaries including capital expenditures, (v) to finance permitted investments and (vi) to finance the acquisition of additional motor speedways and related businesses. No proceeds of the Obligations shall be used by any Subsidiary that is not a Guarantor.
 
6.16 Environmental Matters .
 
Except as set forth in Phase I Environmental Site Assessments previously delivered to the Lenders and identified on Schedule 6.16 :
 
(a) Each of the facilities and properties owned, leased or operated by any Credit Party or any Subsidiary (the “ Properties ”) and all businesses of any Credit Party or any Subsidiary at the Properties (the “ Businesses ”) are in compliance with all applicable Environmental Laws, except where the failure to so comply would not have a Material Adverse Effect, and, to the best knowledge of any Credit Party, there are no conditions relating to the Businesses or Properties that could give rise to liability under any applicable Environmental Laws, except where such liability would not have a Material Adverse Effect.
 
(b) None of the Credit Parties or their Subsidiaries has received any written notice of, or inquiry from any Governmental Authority regarding, any currently unresolved material violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of the Properties or the Businesses, nor does any Credit Party have knowledge that any such notice is being threatened, except where such violation, non-compliance or liability would not have a Material Adverse Effect.
 
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(c) Materials of Environmental Concern have not been transported or disposed of from the Properties, or generated, treated, stored or disposed of at, on or under any of the Properties or any other location, in each case by or on behalf of any Credit Party or any Subsidiary, or to the knowledge of any Credit Party, by any other Person, in violation of, or in a manner that would be reasonably likely to give rise to liability under, any applicable Environmental Law, except where such liability or the failure to so comply would not have a Material Adverse Effect.
 
(d) No judicial proceeding or governmental or administrative action is pending or, to the knowledge of any Credit Party, threatened, under any Environmental Law to which any Credit Party or any Subsidiary is or, to the knowledge of any Credit Party or any Subsidiary, will be named as a party, nor are there any consent decrees or other decrees, consent orders, administrative orders outstanding under any Environmental Law with respect to any Credit Party, any Subsidiary, the Properties or the Businesses.
 
(e) To the knowledge of any Credit Party, there has been no release or threat of release of Materials of Environmental Concern at or from the Properties, related to the operations (including, without limitation, disposal) of any Credit Party or any Subsidiary in connection with the Properties or otherwise in connection with the Businesses, in violation of or in a manner that would reasonably be expected to give rise to liability under Environmental Laws, except where such violation or liability would not have a Material Adverse Effect.
 
6.17 Solvency .
 
Speedway Motorsports on a consolidated basis is Solvent.
 
6.18 No Untrue Statement .
 
Neither (a) this Credit Agreement nor any other Credit Document or certificate or document executed and delivered by or on behalf of either of the Borrowers or any other Credit Party in accordance with or pursuant to any Credit Document nor (b) any statement, representation, or warranty provided to the Administrative Agent in connection with the negotiation or preparation of the Credit Documents contains any misrepresentation or untrue statement of material fact or omits to state a material fact necessary, in light of the circumstance under which it was made, in order to make any such warranty, representation or statement contained therein not misleading.
 
6.19 Subordinated Indebtedness .
 
The Borrowers’ Obligations constitute “Senior Indebtedness” as such term is defined in the Indenture, and the Indebtedness represented by the Indenture is subordinate to the Loans.
 
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6.20 Pledge Agreement .
 
The Pledge Agreement is effective to create in favor of the Administrative Agent, for the ratable benefit of the holders of the “Secured Obligations” (as such term is defined in the Pledge Agreement), a legal, valid and enforceable security interest in the collateral identified therein, except to the extent the enforceability thereof may be limited by the Bankruptcy Code or any other applicable insolvency or debtor relief laws affecting creditors’ rights generally and by equitable principles of law (regardless of whether enforcement is brought in equity or at law) and, when such collateral is delivered to the Administrative Agent, the Pledge Agreement shall constitute a fully perfected first priority Lien on, and security interest in, all right, title and interest of the pledgors thereunder in such collateral, in each case prior and superior in right to any other Lien. 
 
SECTION 7
 
AFFIRMATIVE COVENANTS
 
Each Credit Party hereby covenants and agrees that, so long as this Credit Agreement is in effect or any amounts payable hereunder or under any other Credit Document shall remain outstanding, and until all of the Commitments hereunder shall have terminated:
 
7.1 Information Covenants .
 
The Borrowers will furnish, or cause to be furnished, to the Administrative Agent and each of the Lenders:
 
(a) Annual Financial Statements . As soon as available, and in any event within 120 days after the close of each fiscal year of Speedway Motorsports and its Subsidiaries beginning with the fiscal year ending December 31, 2003, a consolidated and consolidating balance sheet and income statement of Speedway Motorsports and its Subsidiaries, as of the end of such fiscal year, together with related consolidated and consolidating statements of operations and retained earnings and of cash flows for such fiscal year, setting forth in comparative form consolidated and consolidating figures for the preceding fiscal year, all such financial information described above to be in reasonable form and detail and, as to the consolidated statements only, audited by independent certified public accountants of recognized national standing reasonably acceptable to the Administrative Agent and whose opinion shall be unqualified.
 
(b) Quarterly Financial Statements . As soon as available, and in any event within 45 days after the close of each fiscal quarter of Speedway Motorsports and its Subsidiaries (other than the fourth fiscal quarter, in which case 120 days after the end thereof) beginning with the fiscal quarter ending June 30, 2003, a consolidated and consolidating balance sheet and income statement of Speedway Motorsports and its Subsidiaries, as of the end of such fiscal quarter, together with related consolidated and
 
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consolidating statements of operations and retained earnings and of cash flows for such fiscal quarter in each case setting forth in comparative form consolidated and consolidating figures for the corresponding period of the preceding fiscal year, all such financial information described above to be in reasonable form and detail and reasonably acceptable to the Administrative Agent, and accompanied by a certificate of the chief executive officer, chief financial officer or president of Speedway Motorsports to the effect that such quarterly financial statements fairly present in all material respects the financial condition of Speedway Motorsports and its Subsidiaries and have been prepared in accordance with GAAP, subject to changes resulting from audit and normal year-end audit adjustments, including without limitation the addition of footnotes.
 
(c) Officer’s Certificate . At the time of delivery of the financial statements provided for in Sections 7.1(a) and 7.1(b) above, a certificate of the chief executive officer, chief financial officer or president of Speedway Motorsports substantially in the form of Schedule 7.1(c) , (i) demonstrating compliance with the financial covenants contained in Section 7.11 by calculation thereof as of the end of each such fiscal period and (ii) stating that no Default or Event of Default exists, or if any Default or Event of Default does exist, specifying the nature and extent thereof and what action the Borrowers propose to take with respect thereto.
 
(d) Accountant’s Certificate . Within the period for delivery of the annual financial statements provided in Section 7.1(a), a certificate of the accountants conducting the annual audit stating that they have reviewed this Credit Agreement and stating further whether, in the course of their audit, they have become aware of any Default or Event of Default and, if any such Default or Event of Default exists, specifying the nature and extent thereof.
 
(e) Auditor’s Reports . Promptly upon receipt thereof, a copy of any other report or “management letter” submitted by independent accountants to a Credit Party or a Subsidiary in connection with any annual, interim or special audit of the books of a Credit Party or a Subsidiary.
 
(f) Reports . Promptly upon transmission or receipt thereof, (a) copies of any filings and registrations with, and reports to or from, the SEC, or any successor agency, and copies of all financial statements, proxy statements, notices and reports as a Credit Party or a Subsidiary shall send to its shareholders generally or to the holders of any issue of Indebtedness owed by a Credit Party or a Subsidiary in their capacity as such holders and (b) upon the request of the Administrative Agent, all reports and written information to and from the United States Environmental Protection Agency, or any state or local agency responsible for environmental matters, the United States Occupational Health and Safety Administration, or any state or local agency responsible for health and safety matters, or any successor agencies or authorities concerning environmental, health or safety matters.
 
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(g) Notices . Upon a Credit Party obtaining knowledge thereof, the Borrowers will give written notice to the Administrative Agent immediately of (i) the occurrence of an event or condition consisting of a Default or Event of Default, specifying the nature and existence thereof and what action the Credit Parties propose to take with respect thereto, and (ii) the occurrence of any of the following with respect to a Credit Party or a Subsidiary (A) the pendency or commencement of any litigation, arbitral or governmental proceeding against such Credit Party or Subsidiary which if adversely determined is likely to have a Material Adverse Effect, (B) the institution of any proceedings against the Credit Party or Subsidiary with respect to, or the receipt of written notice by such Person of potential liability or responsibility for violation, or alleged violation of any federal, state or local law, rule or regulation, including but not limited to, Environmental Laws, the violation of which would likely have a Material Adverse Effect, (C) any notice or determination concerning the imposition of any withdrawal liability by a Multiemployer Plan against such Credit Party, Subsidiary or any ERISA affiliate, the determination that a Multiemployer Plan is, or is expected to be, in reorganization within the meaning of Title IV of ERISA or the termination of any Plan covered by Title IV of ERISA or (D) any Credit Party’s intention to treat any of the Loans, the Letters of Credit or any related transaction as a “reportable transaction” (within the meaning of Treasury Regulation Section 1.6011-4) (and such notice shall include a duly completed copy of IRS Form 8886 or any successor form thereto).
 
(h) ERISA . Upon any of the Credit Parties, any Subsidiary or any ERISA Affiliate obtaining knowledge thereof, the Borrowers will give written notice to the Administrative Agent promptly (and in any event within five business days) of: (i) any event or condition, including, but not limited to, any Reportable Event, that constitutes, or might reasonably lead to, a Termination Event; (ii) with respect to any Multiemployer Plan, the receipt of notice as prescribed in ERISA or otherwise of any withdrawal liability assessed against the Credit Parties, any Subsidiary or any ERISA Affiliate, or of a determination that any Multiemployer Plan is in reorganization or insolvent (both within the meaning of Title IV of ERISA); (iii) the failure to make full payment on or before the due date (including extensions) thereof of all amounts which any Credit Party, any Subsidiary or any ERISA Affiliate is required to contribute to each Plan pursuant to its terms and as required to meet the minimum funding standard set forth in ERISA and the Code with respect thereto; or (iv) any change in the funding status of any Plan that could have a Material Adverse Effect, together, with a description of any such event or condition or a copy of any such notice and a statement by the principal financial officer of Speedway Motorsports briefly setting forth the details regarding such event, condition, or notice, and the action, if any, which has been or is being taken or is proposed to be taken by the Credit Parties with respect thereto. Promptly upon request, the Credit Parties shall furnish the Administrative Agent and each of the Lenders with such additional information concerning any Plan as may be reasonably requested, including, but not limited to, copies of each annual report/return (Form 5500 series), as well as all schedules and attachments thereto required to be filed with the Department of Labor and/or the Internal Revenue Service pursuant to ERISA and the Code, respectively, for each “plan year” (within the meaning of Section 3(39) of ERISA).
 
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(i) Other Information . With reasonable promptness upon any such request, such other information regarding the business, properties or financial condition of the Credit Parties and their Subsidiaries as the Administrative Agent or the Required Lenders may reasonably request.
 
7.2 Preservation of Existence and Franchises .
 
Each of the Credit Parties and their Subsidiaries will do all things necessary to preserve and keep in full force and effect its existence, material rights, franchises and authority, except, with respect to Subsidiaries which are not Credit Parties, where the failure to do so would not reasonably be likely to have a Material Adverse Effect.
 
7.3 Books and Records .
 
Each of the Credit Parties and their Subsidiaries will keep complete and accurate books and records of its transactions in accordance with good accounting practices on the basis of GAAP (including the establishment and maintenance of appropriate reserves), except, with respect to Subsidiaries which are not Credit Parties, where the failure to do so would not reasonably be likely to have a Material Adverse Effect.
 
7.4 Compliance with Law .
 
Each of the Credit Parties and their Subsidiaries will comply with all laws, rules, regulations and orders, and all applicable restrictions imposed by all Governmental Authorities, applicable to it and its property if noncompliance with any such law, rule, regulation, order or restriction would have a Material Adverse Effect.
 
7.5 Payment of Taxes and Other Indebtedness .
 
Each of the Credit Parties and their Subsidiaries will pay and discharge (i) all taxes, assessments and governmental charges or levies imposed upon it, or upon its income or profits, or upon any of its properties, before they shall become delinquent, (ii) all lawful claims (including claims for labor, materials and supplies) which, if unpaid, might give rise to a Lien upon any of its properties, and (iii) except as prohibited hereunder, all of its other Indebtedness as it shall become due; provided , however , that a Credit Party or its Subsidiaries shall not be required to pay any such tax, assessment, charge, levy, claim or Indebtedness which is being contested in good faith by appropriate proceedings and as to which adequate reserves therefor have been established in accordance with GAAP, unless the failure to make any such payment (i) would give rise to an immediate right to foreclose on a Lien securing such amounts or (ii) would have a Material Adverse Effect.
 
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7.6 Insurance .
 
Each of the Credit Parties and their Subsidiaries will at all times maintain in full force and effect insurance (including worker’s compensation insurance, liability insurance, casualty insurance, business interruption insurance, terrorism insurance and property insurance) in such amounts, covering such risks and liabilities and with such deductibles or self-insurance retentions as are in accordance with normal industry practice provided by nationally recognized, financially sound insurance companies rated not less than A (or the equivalent thereof) by Best’s Key Rating Guide or S&P. The Credit Parties and their Subsidiaries will notify the Administrative Agent at any time they obtain knowledge of material issues which would materially and adversely affect the prospects of renewing any of their required coverage or, in the event of non-renewal, to obtain the required coverage from another source.
 
7.7 Maintenance of Property .
 
Each of the Credit Parties and their Subsidiaries will maintain and preserve its properties and equipment material to the conduct of its business in good repair, working order and condition, normal wear and tear excepted, and will make, or cause to be made, in such properties and equipment from time to time all repairs, renewals, replacements, extensions, additions, betterments and improvements thereto as may be needed or proper, to the extent and in the manner customary for companies in similar businesses, except, with respect to Subsidiaries which are not Credit Parties, where the failure to do so would not reasonably be likely to have a Material Adverse Effect.
 
7.8 Performance of Obligations .
 
Each of the Credit Parties and their Subsidiaries will perform in all material respects all of its obligations under the terms of all material agreements, indentures, mortgages, security agreements or other debt instruments to which it is a party or by which it is bound, except, with respect to Subsidiaries which are not Credit Parties, where the failure to do so would not reasonably be likely to have a Material Adverse Effect.
 
7.9 Use of Proceeds .
 
The Borrowers will use the proceeds of the Loans solely for the purposes set forth in Section 6.15.
 
7.10 Audits/Inspections .
 
Upon reasonable notice and during normal business hours, each of the Credit Parties and their Subsidiaries will permit representatives appointed by the Administrative Agent or any Lender, including, without limitation, independent accountants, agents, attorneys, and appraisers to visit and inspect its property, including its books and records (except to the extent prohibited by law), its accounts receivable and inventory, its facilities and its other business assets, and to make photocopies or photographs thereof and to write down and record any information such
 
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representative obtains and shall permit the Administrative Agent or any Lender or their representatives to investigate and verify the accuracy of information provided to the Lenders and to discuss all such matters with the officers, employees and representatives of such Credit Party or Subsidiary; provided that after the occurrence and during the continuance of any Event of Default, such audits and inspections shall be at the expense of the Borrowers.
 
7.11 Financial Covenants .
 
(a) Consolidated Net Worth . Consolidated Net Worth at each Calculation Date shall be no less than the sum of $450,000,000, increased on a cumulative basis as of the last day of each fiscal quarter commencing with the last day of fiscal quarter June 30, 2003, by an amount equal to (i) 50% of Consolidated Net Income (provided such Consolidated Net Income is greater than zero) for the fiscal quarter then ended and (ii) 100% of Net Proceeds from an Equity Transaction for the fiscal quarter then ended.
 
(b) Consolidated Total Debt Ratio . The Consolidated Total Debt Ratio at the Closing Date and at each Calculation Date thereafter shall be no greater than (i) 3.5 to 1.0 for the fiscal quarter ending March 31, 2003 and each Calculation Date through September 30, 2004; (ii) 3.25 to 1.0 for each Calculation Date from December 31, 2004 through September 30, 2005; and (iii) 3.0 to 1.0 at each Calculation Date thereafter.
 
(c) Consolidated Senior Debt Ratio . The Consolidated Senior Debt Ratio at the Closing Date and at each Calculation Date thereafter shall be no greater than (i) 2.5 to 1.0 for the fiscal quarter ending March 31, 2003 and each Calculation Date thereafter through September 30, 2004; (ii) 2.25 to 1.0 for each Calculation Date from December 31, 2004 through September 30, 2005; and (iii) 2.0 to 1.0 at each Calculation Date thereafter.
 
(d) Consolidated Capital Charges Coverage Ratio . The Consolidated Capital Charges Coverage Ratio at each Calculation Date shall be no less than (i) 2.75 to 1.0 for the fiscal quarter ending March 31, 2003 and each Calculation Date from June 30, 2003 through December 31, 2003; and (ii) 3.0 to 1.0 at each Calculation Date thereafter.
 
7.12 Additional Credit Parties .
 
(a) As soon as practicable and in any event within 30 days after any Person becomes a Material Subsidiary, the Borrowers shall provide the Administrative Agent with written notice thereof setting forth information in reasonable detail describing all of the assets of such Person and shall (i) if such Person is a Domestic Subsidiary of a Credit Party, cause such Person to execute a Joinder Agreement in substantially the same form as Exhibit 7.12 , (ii) cause 100% (if such Person is a Domestic Subsidiary of a Credit Party) or 65% (if such Person is a direct Foreign Subsidiary of a Credit Party) of the Capital Stock of such Person to be delivered to the Administrative Agent (together with undated stock powers signed in blank (unless, with respect to a Foreign Subsidiary, such stock powers are deemed unnecessary by the Administrative Agent in its reasonable discretion under the law of the jurisdiction of incorporation of such Person)) and
 
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pledged to the Administrative Agent pursuant to an appropriate pledge agreement(s) in form acceptable to the Administrative Agent and cause such Person to deliver such other documentation as the Administrative Agent may reasonably request in connection with the foregoing, including, without limitation, appropriate certified resolutions and other organizational and authorizing documents of such Person, and favorable opinions of counsel to such Person all in form, content and scope reasonably satisfactory to the Administrative Agent.
 
(b) As soon as practicable and in any event within 30 days after any date on which any Domestic Subsidiary that does not individually constitute a Material Subsidiary (a “Non-Material Domestic Subsidiary”), constitutes, in the aggregate with all other Non-Material Domestic Subsidiaries, more than 15% of the consolidated assets of Speedway Motorsports and its consolidated Subsidiaries as of the end of the immediately preceding fiscal quarter or generates, in the aggregate with all other Non-Material Domestic Subsidiaries, more than 15% of the Consolidated EBITDA of Speedway Motorsports and its consolidated Subsidiaries for the period of four consecutive fiscal quarters ending as of the end of the immediately preceding fiscal quarter (the “ Threshold Requirement ”), the Borrowers shall provide the Administrative Agent with written notice thereof and cause such Domestic Subsidiary to provide an executed Joinder Agreement, together with the related deliveries set forth in clause (a)(ii) above, such that immediately after such joinder, the remaining Non-Material Domestic Subsidiaries shall not exceed the Threshold Requirement.
 
(c) Notwithstanding anything to the contrary contained herein, the Borrowers will promptly provide, or cause to be provided, to the Administrative Agent, an executed Joinder Agreement, together with the related deliveries set forth in clause (a)(ii) above, from any Subsidiary or Affiliate of Speedway Motorsports that gives a guaranty in respect of the Senior Subordinated Notes.
 
7.13 Ownership of Subsidiaries .
 
Except to the extent otherwise provided in Section 8.4(c), Section 8.11 and with respect to North Wilkesboro Speedway, Inc., Speedway Motorsports shall directly or indirectly, own at all times 100% of the Capital Stock of each of its Subsidiaries.
 
7.14 Redemption of Existing Notes .
 
Speedway Motorsports shall redeem the Existing Notes on or before June 30, 2003, using the proceeds received from the issuance of the Senior Subordinated Notes together with such other funds as may be necessary to complete such redemption.
 
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SECTION 8
 
NEGATIVE COVENANTS
 
Each Credit Party hereby covenants and agrees that, so long as this Credit Agreement is in effect or any amounts payable hereunder or under any other Credit Document shall remain outstanding, and until all of the Commitments hereunder shall have terminated:
 
8.1 Indebtedness .
 
None of the Credit Parties or their Subsidiaries will contract, create, incur, assume or permit to exist any Indebtedness, except:
 
(a) Indebtedness arising under this Credit Agreement and the other Credit Documents;
 
(b) Indebtedness of Speedway Motorsports and any of its Subsidiaries existing as of the Closing Date and set forth in Schedule 8.1 and any refinancings thereof for the same or less amount;
 
(c) purchase money Indebtedness (including Capital Leases) hereafter incurred by Speedway Motorsports and any of its Subsidiaries to finance the purchase of fixed assets provided (i) such Indebtedness when incurred shall not exceed the purchase price of the asset(s) financed; and (ii) no such Indebtedness shall be refinanced for a principal amount in excess of the principal balance outstanding thereon at the time of such refinancing;
 
(d) Indebtedness evidenced by, or any guaranty of, the Senior Subordinated Notes in an aggregate principal amount not to exceed $360,000,000;
 
(e) Indebtedness in respect of Hedge Agreements entered into with Lenders or any Affiliate of a lender in an aggregate notional amount for all such agreements not to exceed the aggregate Commitments;
 
(f) Intercompany Indebtedness;
 
(g) Indebtedness incurred or assumed in any transaction permitted by Section 8.4 hereof provided (i) such Indebtedness when incurred or assumed shall not exceed the purchase price of the asset(s) financed; and (ii) no such incurred or assumed Indebtedness shall be refinanced for a principal amount in excess of the principal balance outstanding thereon at the time of such refinancing;
 
provided , however, with respect to any Indebtedness proposed to be refinanced pursuant to clause (b) or incurred or refinanced pursuant to clauses (c), (f) or (g) hereof, such Indebtedness shall be permitted under this Section 8.1 only if the Administrative Agent shall have received written
 
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evidence from the Borrowers satisfactory to the Administrative Agent that such Indebtedness will be incurred or refinanced pursuant to a provision of the Indenture other than Section 4.09(c)(i) thereof.
 
8.2 Liens .
 
None of the Credit Parties or their Subsidiaries will contract, create, incur, assume or permit to exist any Lien with respect to any of its Property, except for Permitted Liens and Liens securing Indebtedness permitted under Sections 8.1(c) and (g) provided that such Liens relate solely to the specific Property being acquired.
 
8.3 Nature of Business .
 
None of the Credit Parties or their Subsidiaries will substantively alter the character or conduct of the business conducted by any such Person as of the Closing Date.
 
8.4 Consolidation, Merger, Sale or Purchase of Assets, etc .
 
None of the Credit Parties or their Subsidiaries will:
 
(a) dissolve, liquidate or wind up its affairs, or enter into any transaction of merger or consolidation; provided , however , that, so long as no Default or Event of Default would be directly or indirectly caused as a result thereof, (i) Speedway Motorsports may merge or consolidate with any of its Subsidiaries provided Speedway Motorsports is the surviving corporation (ii) Speedway Funding may merge or consolidate with any Subsidiary of Speedway Motorsports, provided Speedway Funding is the surviving entity, or (iii) any Subsidiary may merge or consolidate with any other Subsidiary (other than Speedway Funding), provided that, if either Subsidiary is a Credit Party, the surviving corporation or entity shall be a Credit Party.
 
(b) sell, lease, transfer or otherwise dispose of any Property other than (i) the sale of inventory in the ordinary course of business for fair consideration, (ii) the sale or disposition of machinery and equipment no longer used or useful in the conduct of such Person’s business, (iii) subject to the terms of Section 8.8 and 8.12, other sales and dispositions provided that (A) after giving effect to such sale or other disposition, the aggregate book value of assets sold or otherwise disposed of pursuant to this clause (iii) since the Closing Date does not exceed $10,000,000 and (B) after giving effect on a Pro Forma Basis to such sale or other disposition, no Default or Event of Default would exist hereunder; or
 
(c) except as otherwise permitted by Section 8.4(a) or 8.5, acquire all or any portion of the Capital Stock or securities of any other Person or purchase, lease or otherwise acquire (in a single transaction or a series of related transactions) all or any substantial part of the Property of any other Person provided , however , that, so long as no Default or Event of Default would be caused as a result thereof on an actual or Pro Forma
 
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Basis, then any Credit Party or any Subsidiary may (i) acquire an interest in additional motor speedways, whether by merger, stock purchase or asset purchase; provided, however, that the aggregate Cash Consideration paid for such acquisitions in any fiscal year shall not exceed 35% of the Consolidated Net Worth of Speedway Motorsports at the immediately preceding fiscal year end, and (ii) consummate other acquisitions consistent with the nature of the Borrowers’ business, whether by merger, stock purchase or asset purchase; provided, however, that the Cash Consideration paid for such other acquisitions shall not exceed $25,000,000 in the aggregate.
 
8.5 Advances, Investments, Loans, etc .
 
Except as permitted under Section 8.4(c), none of the Credit Parties or their Subsidiaries will make Investments in or advances or loans to any Person, except for Permitted Investments.
 
8.6 Restricted Payments .
 
None of the Credit Parties or their Subsidiaries will directly or indirectly declare, order, make or set apart any sum for or pay any Restricted Payment, except (i) to make dividends payable solely in the same class of Capital Stock of such Person, (ii) to make dividends payable to any Domestic Credit Party, (iii) provided no Default or Event of Default then exists or would be caused thereby, Speedway Motorsports may make dividends payable on its preferred and/or common stock and/or make stock repurchases of up to $17,500,000 in the aggregate annually, and (iv) provided (A) no Default or Event of Default then exists or would be caused thereby and (B) the Consolidated Capital Charges Ratio for the four quarter period ending as of the most recent Calculation Date (calculated for this purpose by including in the denominator any such equity and/or Indebtedness repurchases as if incurred during such prior four quarter period) is no less than 2.0 to 1.0, (1) the Credit Parties and their Subsidiaries may make (or give notice with respect thereto) any redemption, refund, refinance or exchange of any Indebtedness (other than Indebtedness pursuant to clause (a)(i) of the definition of “Intercompany Indebtedness”) and (2) the Credit Parties and their Subsidiaries may make (or give notice with respect thereto) any voluntary or optional payment or prepayment or acquisition for value of (including by way of depositing money or securities with the trustee with respect thereto before due for the purpose of paying when due) and Speedway Motorsports may repurchase equity and debt securities of up to the Maximum Permitted Amount during the term of this Credit Agreement. As used herein “Maximum Permitted Amount” shall mean $40,000,000 initially to be increased annually beginning with the fiscal year ending December 31, 2003 by 15% of Consolidated Net Income up to a maximum amount of $90,000,000.
 
8.7 Modifications of Other Agreements .
 
None of the Credit Parties or their Subsidiaries will (i) after the issuance thereof, amend or modify (or permit the amendment or modification of) any of the terms of any Indebtedness (other than this Credit Agreement) if such amendment or modification would add or change any terms in a manner adverse to the issuer of such Indebtedness (unless the consent of the issuer of such Indebtedness has been obtained) or to the Lenders, or shorten the final maturity or average
 
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life to maturity or require any payment to be made sooner than originally scheduled or increase the interest rate applicable thereto or change any subordination provision thereof, or (ii) amend, modify or change its articles of incorporation (or corporate charter or other similar organizational document) or bylaws (or other similar document) where such change to such organizational or similar documents would have a Material Adverse Effect.
 
8.8 Transactions with Affiliates .
 
Except for Intercompany Indebtedness and Permitted Investments, none of the Credit Parties or their Subsidiaries will enter into or permit to exist any transaction or series of transactions with any officer, director, shareholder, Subsidiary or Affiliate of such Person other than (a) advances of working capital to any Domestic Credit Party, (b) transfers of cash and assets to any Domestic Credit Parties, (c) transactions permitted by Sections 8.4, 8.5 and Section 8.6, (d) normal reimbursement of expenses of officers and directors, (e) other transactions for goods and services not to exceed $100,000 at any one time and (f) except as otherwise specifically limited in this Credit Agreement, other transactions which are entered into in the ordinary course of such Person’s business on terms and conditions substantially as favorable to such Person as would be obtainable by it in a comparable arms-length transactions with a Person other than an officer, director, shareholder, Subsidiary or Affiliate.
 
8.9 Fiscal Year .
 
None of the Credit Parties or their Subsidiaries will change its fiscal year.
 
8.10 Limitation on Restrictions on Dividends and Other Distributions, etc .
 
Except for the restrictions provided herein, none of the Credit Parties or their Subsidiaries will, directly or indirectly create or otherwise cause, incur, assume, suffer or permit to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any such Person to (a) pay dividends or make any other distribution on any of such Person’s Capital Stock, (b) subject to subordination provisions, pay any Indebtedness owed to the Borrowers or any other Credit Party, (c) make loans or advances to any Credit Party (other than loans or advances by Speedway Funding), (d) transfer any of its Property to any other Credit Party than in the ordinary course of business, or (e) grant Liens to the Administrative Agent for the benefit of the Lenders.
 
8.11 Issuance and Sale of Subsidiary Stock .
 
None of the Credit Parties or their Subsidiaries will, except to qualify directors where required by applicable law, sell, transfer or otherwise dispose of, any shares of Capital Stock of any of its Subsidiaries or permit any of its Subsidiaries to issue, sell or otherwise dispose of any shares of Capital Stock of any of its Subsidiaries.
 
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8.12 Sale Leasebacks .
 
Other than as provided in Section 8.4(b), none of the Credit Parties or their Subsidiaries will, directly or indirectly, become or remain liable as lessee or as guarantor or other surety with respect to any lease, whether an Operating Lease or a Capital Lease, of any Property (whether real or personal or mixed), whether now owned or hereafter acquired, (i) which such Person has sold or transferred or is to sell or transfer to any other Person or (ii) which such Person intends to use for substantially the same purpose as any other Property which has been sold or is to be sold or transferred by such Person to any other Person in connection with such lease.
 
8.13 Capital Expenditures .
 
Consolidated Capital Expenditures (exclusive of acquisitions permitted by Section 8.4(c) and any capital expenditures made in connection with pre-sold condominium units) for the fiscal year ending December 31, 2003 shall not exceed $90,000,000 and for each successive fiscal year thereafter shall not exceed $80,000,000.
 
8.14 No Further Negative Pledges .
 
Except prohibitions or restrictions (a) contained within this Credit Agreement or the other Credit Documents, (b) contained within the Indenture, (c) against other encumbrances on specific Property encumbered to secure payment of particular Indebtedness (which Indebtedness relates solely to such specific Property, and improvements and accretions thereto, and is otherwise permitted hereby), and (d) included in the terms of any Indebtedness permitted by Section 8.1(g) hereof with respect to prohibiting or restricting the creation or assumption of any Lien upon the properties or assets acquired with such Indebtedness, none of the Credit Parties or their Subsidiaries will enter into, assume or become subject to any agreement prohibiting or otherwise restricting (i) the creation or assumption of any Lien upon its properties or assets, whether now owned or hereafter acquired, or requiring the grant of any security for such obligation if security is given for some other obligation or (ii) the ability of any Subsidiary of Speedway Motorsports to (A) make Restricted Payments, loans or advances, or transfers of property or assets to Speedway Motorsports or any of its Subsidiaries, or (B) pay any Indebtedness of Speedway Motorsports or any of its Subsidiaries.
 
8.15 Designated Senior Indebtedness .
 
Neither Speedway Motorsports nor any of its Subsidiaries will designate any Indebtedness (other than Indebtedness arising under this Credit Agreement and the other Credit Documents) as “Designated Senior Indebtedness” (as such term is defined in the Indenture).
 
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SECTION 9
 
EVENTS OF DEFAULT
 
9.1 Events of Default .
 
An Event of Default shall exist upon the occurrence of any of the following specified events (each an “ Event of Default ”):
 
(a) Payment . Any Credit Party shall
 
(i) default in the payment when due of any principal of any of the Loans or of any reimbursement obligations arising from drawings under Letters of Credit, or
 
(ii) default in the payment when due of any interest on the Loans or on any reimbursement obligations arising from drawings under Letters of Credit, or of any Fees or other amounts owing hereunder, under any of the other Credit Documents or in connection herewith or therewith; or
 
(b) Representations . Any representation, warranty or statement made or deemed to be made by any Credit Party herein, in any of the other Credit Documents, or in any statement or certificate delivered or required to be delivered pursuant hereto or thereto shall prove untrue in any material respect on the date as of which it was deemed to have been made; or
 
(c) Covenants . Any Credit Party shall
 
(i) default in the due performance or observance of any term, covenant or agreement contained in Sections 7.1(g)(i), 7.2, 7.9, 7.10, 7.11, 7.12, 7.14 or 8.1 through 8.15, inclusive, or
 
(ii) default in the due performance or observance by it of any term, covenant or agreement (other than those referred to in subsections (a), (b) or (c)(i) of this Section 9.1) contained in this Credit Agreement and such default shall continue unremedied for a period of at least 30 days after the earlier of a responsible officer of a Credit Party becoming aware of such default or notice thereof by the Administrative Agent; or
 
(d) Other Credit Documents .
 
(i) Any Credit Party shall default in the due performance or observance of any term, covenant or agreement in any of the other Credit Documents (subject to applicable grace or cure periods) if any, or
 
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(ii) any Credit Document shall fail to be in full force and effect to give the Administrative Agent and/or the Lenders the liens, rights, powers and privileges purported to be created thereby; or
 
(e) Guaranties . The guaranty given by any Guarantor hereunder (including any Additional Credit Party) or any provision thereof shall cease to be in full force and effect, or any Guarantor (including any Additional Credit Party) hereunder or any Person acting by or on behalf of such Guarantor shall deny or disaffirm such Guarantor’s obligations under such guaranty; or
 
(f) Bankruptcy, etc . Any Credit Party or any Subsidiary shall commence a voluntary case concerning itself under the Bankruptcy Code; or an involuntary case is commenced against any Credit Party or any Subsidiary under the Bankruptcy Code and the petition is not dismissed within 60 days, after commencement of the case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge of all or substantially all of the property of any Credit Party or any Subsidiary; or any Credit Party or any Subsidiary commences any other proceeding under any reorganization, arrangement, adjustment of the debt, relief of creditors, dissolution, insolvency or similar law of any jurisdiction whether now or hereafter in effect relating to any Credit Party or any Subsidiary; or there is commenced against any Credit Party or any Subsidiary any such proceeding which remains undismissed for a period of 60 days; or any Credit Party or any Subsidiary is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered against any Credit Party or any Subsidiary; or any Credit Party or any Subsidiary suffers appointment of any custodian or the like for it or for any substantial part of its property to continue unchanged or unstayed for a period of 60 days; or any Credit Party or any Subsidiary makes a general assignment for the benefit of creditors; or any corporate action is taken by any Credit Party or any Subsidiary for the purpose of effecting any of the foregoing; or
 
(g) Defaults under Other Agreements . With respect to any Indebtedness (other than Indebtedness outstanding under this Credit Agreement) in excess of $5,000,000 in the aggregate for all of the Credit Parties and the Subsidiaries taken as a whole, (i) any Credit Party or any Subsidiary shall (A) default in any payment (beyond the applicable grace period with respect thereto, if any) with respect to any such Indebtedness, or (B) default in the observance or performance of any covenant or agreement relating to such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event or condition shall occur or condition exist, the effect of which default or other event or condition is to cause, or permit the holder or holders of such Indebtedness (or trustee or agent on behalf of such holders) to cause (determined without regard to whether any notice or lapse of time is required), any such Indebtedness to become due prior to its stated maturity; or (ii) any such Indebtedness shall be declared due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof; or
 
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(h) Judgments . One or more judgments or decrees shall be entered against any Credit Party or any Subsidiary involving a liability of $5,000,000 or more in the aggregate (to the extent not paid or fully covered by insurance provided by a carrier who has acknowledged coverage) and any such judgments or decrees shall not have been vacated, discharged or stayed or bonded pending appeal within 30 days from the entry thereof; or
 
(i) ERISA . Any of the following events or conditions that result in a Material Adverse Effect: (1) any “accumulated funding deficiency,” as such term is defined in Section 302 of ERISA and Section 412 of the Code, whether or not waived, shall exist with respect to any Plan, or any lien shall arise on the assets of any Credit Party, any Subsidiary or any ERISA Affiliate in favor of the PBGC or a Plan; (2) a Termination Event shall occur with respect to a Single Employer Plan, which is, in the reasonable opinion of the Administrative Agent, likely to result in the termination of such Plan for purposes of Title IV of ERISA; (3) a Termination Event shall occur with respect to a Multiemployer Plan or Multiple Employer Plan, which is, in the reasonable opinion of the Administrative Agent, likely to result in (i) the termination of such Plan for purposes of Title IV of ERISA, or (ii) any Credit Party, any Subsidiary or any ERISA Affiliate incurring any liability in connection with a withdrawal from, reorganization of (within the meaning of Section 4241 of ERISA), or insolvency (within the meaning of Section 4245 of ERISA) of such Plan; or (4) any prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) or breach of fiduciary responsibility shall occur which may subject any Credit Party, any Subsidiary or any ERISA Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any agreement or other instrument pursuant to which any Credit Party, any Subsidiary or any ERISA Affiliate has agreed or is required to indemnify any Person against any such liability; or
 
(j) Ownership . There shall occur a Change of Control.
 
9.2 Acceleration; Remedies .
 
Upon the occurrence of an Event of Default, and at any time thereafter unless and until such Event of Default has been waived by the Required Lenders or cured to the satisfaction of the Required Lenders (pursuant to the voting procedures in Section 11.6), the Administrative Agent shall, upon the request and direction of the Required Lenders, by written notice to the Credit Parties take any of the following actions without prejudice to the rights of the Administrative Agent or any Lender to enforce its claims against the Credit Parties, except as otherwise specifically provided for herein:
 
(i) Termination of Commitments . Declare the Commitments terminated, whereupon the Commitments shall be immediately terminated.
 
(ii) Acceleration . Declare the unpaid principal of and any accrued interest in respect of all Loans, the LOC Obligations (with accrued interest
 
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thereon) and any and all other indebtedness or obligations of any and every kind owing by the Borrowers to any of the Lenders hereunder to be due whereupon the same shall be immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers. The Administrative Agent may direct the Borrowers to immediately Cash Collateralize the then-aggregate amount of all LOC Obligations outstanding, whereupon the same shall immediately become due and payable.
 
(iii) Enforcement of Rights . Enforce any and all rights and interests created and existing under the Credit Documents and all rights of set-off.
 
Notwithstanding the foregoing, if an Event of Default specified in Section 9.1(f) shall occur, then the Commitments shall automatically terminate and all Loans, all reimbursement obligations arising from drawings under Letters of Credit, all accrued interest in respect thereof, all accrued and unpaid Fees and other indebtedness or obligations owing to the Lenders hereunder automatically shall immediately become due and payable and the obligation of the Borrowers to Cash Collateralize the LOC Obligations shall automatically become effective, in each case without the giving of any notice or other action by the Administrative Agent.
 
9.3 Application of Funds .
 
After the exercise of remedies provided for in Section 9.2 (or after the Loans have automatically become immediately due and payable and the LOC Obligations have automatically been required to be Cash Collateralized), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order:
 
First , to payment of that portion of the Borrowers’ Obligations constituting fees, indemnities, expenses and other amounts (including Attorney Costs and amounts payable under Section 3) payable to the Administrative Agent in its capacity as such;
 
Second , to payment of that portion of the Borrowers’ Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders (including Attorney Costs and amounts payable under Section 3), ratably among them in proportion to the amounts described in this clause Second payable to them;
 
Third , to payment of that portion of the Borrowers’ Obligations constituting accrued and unpaid interest on the Loans and LOC Borrowings, ratably among the Lenders in proportion to the respective amounts described in this clause Third payable to them;
 
Fourth , to payment of that portion of the Borrowers’ Obligations constituting unpaid principal of the Loans and LOC Borrowings, and breakage, termination or other amounts owing in respect of any Hedge Agreement between any Credit Party and any Lender, or any Affiliate of a Lender (to the extent such Hedge Agreement is permitted hereunder), ratably among the Lenders (and in the case of such Hedge Agreements,
 
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Affiliates of the Lenders, as applicable) in proportion to the respective amounts described in this clause Fourth held by them;
 
Fifth , to the Administrative Agent for the account of the Issuing Lender, to Cash Collateralize that portion of LOC Obligations comprised of the aggregate undrawn amount of Letters of Credit; and
 
Last , the balance, if any, after all of the Borrowers’ Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by law.
 
Subject to Section 2.3, amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as cash collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Borrowers’ Obligations, if any, in the order set forth above.
 
SECTION 10
 
AGENCY PROVISIONS
 
10.1 Appointment and Authorization of Administrative Agent .
 
(a) Each Lender hereby irrevocably appoints, designates and authorizes the Administrative Agent to take such action on its behalf under the provisions of this Credit Agreement and each other Credit Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Credit Agreement or any other Credit Document, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere herein or in any other Credit Document, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall the Administrative Agent have or be deemed to have any fiduciary relationship with any Lender or participant, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Credit Agreement or any other Credit Document or otherwise exist against the Administrative Agent. Without limiting the generality of the foregoing sentence, the use of the term “agent” herein and in the other Credit Documents with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.
 
(b) The Issuing Lender shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the Issuing Lender shall have all of the benefits and immunities (i) provided to the Administrative Agent in this Section 10 with respect to any acts taken or omissions suffered by the
 
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Issuing Lender in connection with Letters of Credit issued by it or proposed to be issued by it and the applications and agreements for letters of credit pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in this Section 10 and in the definition of “Agent-Related Person” included the Issuing Lender with respect to such acts or omissions, and (ii) as additionally provided herein with respect to the Issuing Lender.
 
10.2 Delegation of Duties .
 
The Administrative Agent may execute any of its duties under this Credit Agreement or any other Credit Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in the absence of gross negligence or willful misconduct.
 
10.3 Liability of Administrative Agent .
 
No Agent-Related Person shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Credit Agreement or any other Credit Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct in connection with its duties expressly set forth herein), or (b) be responsible in any manner to any Lender or participant for any recital, statement, representation or warranty made by any Credit Party or any officer thereof, contained herein or in any other Credit Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Credit Agreement or any other Credit Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Credit Agreement or any other Credit Document, or for any failure of any Credit Party or any other party to any Credit Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any Lender or participant to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Credit Agreement or any other Credit Document, or to inspect the properties, books or records of any Credit Party or any Affiliate thereof.
 
10.4 Reliance by Administrative Agent .
 
(a) The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, electronic mail message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to any Credit Party), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under any Credit Document unless it shall first receive such
 
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advice or concurrence of the Required Lenders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Credit Agreement or any other Credit Document in accordance with a request or consent of the Required Lenders (or such greater number of Lenders as may be expressly required hereby in any instance) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders.
 
(b) For purposes of determining compliance with the conditions specified in Section 5.1, each Lender that has signed this Credit Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.
 
10.5 Notice of Default .
 
The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of principal, interest and fees required to be paid to the Administrative Agent for the account of the Lenders, unless the Administrative Agent shall have received written notice from a Lender or the Borrowers referring to this Credit Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default.” The Administrative Agent will notify the Lenders of its receipt of any such notice. The Administrative Agent shall take such action with respect to such Default or Event of Default as may be directed by the requisite Lenders in accordance herewith; provided , however, that unless and until the Administrative Agent has received any such direction, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable or in the best interest of the Lenders.
 
10.6 Credit Decision; Disclosure of Information by Administrative Agent .
 
Each Lender acknowledges that no Agent-Related Person has made any representation or warranty to it, and that no act by the Administrative Agent hereafter taken, including any consent to and acceptance of any assignment or review of the affairs of any Credit Party or any Affiliate thereof, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender as to any matter, including whether Agent-Related Persons have disclosed material information in their possession. Each Lender represents to the Administrative Agent that it has, independently and without reliance upon any Agent-Related Person and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Credit Parties and their respective Subsidiaries, and all applicable bank or other regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Credit Agreement and to extend credit to the Borrower and the other Credit
 
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Parties hereunder. Each Lender also represents that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Credit Agreement and the other Credit Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrowers and the other Credit Parties. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent herein, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of any of the Credit Parties or any of their respective Affiliates that may come into the possession of any Agent-Related Person.
 
10.7 Indemnification of Administrative Agent .
 
The Lenders shall indemnify upon demand each Agent-Related Person (to the extent not reimbursed by or on behalf of any Credit Party and without limiting the obligation of any Credit Party to do so), pro rata, and hold harmless each Agent-Related Person from and against any and all Indemnified Liabilities incurred by it; provided, however, that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities to the extent determined in a final, nonappealable judgment by a court of competent jurisdiction to have resulted from such Agent-Related Person’s own gross negligence or willful misconduct; provided , however , that no action taken in accordance with the directions of the Required Lenders shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section. Without limitation of the foregoing, each Lender shall reimburse the Administrative Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by the Administrative Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Credit Agreement, any other Credit Document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent is not reimbursed for such expenses by or on behalf of the Borrowers. The undertaking in this Section shall survive termination of the aggregate Commitments, the payment of all other Obligations and the resignation of the Administrative Agent.
 
10.8 Administrative Agent in its Individual Capacity .
 
Bank of America and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with each of the Credit Parties and their respective Affiliates as though Bank of America were not the Administrative Agent or the Issuing Lender hereunder and without notice to or consent of the Lenders. The Lenders acknowledge that, pursuant to such activities, Bank of America or its Affiliates may receive information regarding any Credit Party or its Affiliates (including information that may be subject to confidentiality obligations in favor of such Credit Party or such Affiliate) and
 
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acknowledge that the Administrative Agent shall be under no obligation to provide such information to them. With respect to its Loans, Bank of America shall have the same rights and powers under this Credit Agreement as any other Lender and may exercise such rights and powers as though it were not the Administrative Agent or the Issuing Lender, and the terms “Lender” and “Lenders” include Bank of America in its individual capacity.
 
10.9 Successor Administrative Agent .
 
The Administrative Agent may resign as Administrative Agent upon thirty days’ notice to the Lenders; provided that any such resignation by Bank of America shall also constitute its resignation as Issuing Lender and Swingline Lender. If the Administrative Agent resigns under this Credit Agreement, the Required Lenders shall appoint from among the Lenders a successor administrative agent for the Lenders, which successor administrative agent shall be consented to by the Borrowers at all times other than during the existence of an Event of Default (which consent of the Borrowers shall not be unreasonably withheld or delayed). If no successor administrative agent is appointed prior to the effective date of the resignation of the Administrative Agent, the Administrative Agent may appoint, after consulting with the Lenders and the Borrowers, a successor administrative agent from among the Lenders. Upon the acceptance of its appointment as successor administrative agent hereunder, the Person acting as such successor administrative agent shall succeed to all the rights, powers and duties of the retiring Administrative Agent, Issuing Lender and Swingline Lender and the respective terms “Administrative Agent,” “Issuing Lender” and “Swingline Lender” thereafter shall mean such successor administrative agent, Letter of Credit issuer and swingline lender, and the retiring Administrative Agent’s appointment, powers and duties as Administrative Agent shall be terminated and the retiring Issuing Lender’s and Swingline Lender’s rights, powers and duties as such shall be terminated, without any other or further act or deed on the part of such retiring Issuing Lender or Swingline Lender or any other Lender, other than the obligation of the successor Issuing Lender to issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or to make other arrangements satisfactory to the retiring Issuing Lender to effectively assume the obligations of the retiring Issuing Lender with respect to such Letters of Credit. After any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this Section 10 and Sections 3.11 and 11.5 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Credit Agreement. If no successor administrative agent has accepted appointment as Administrative Agent by the date thirty days following a retiring Administrative Agent’s notice of resignation, the retiring Administrative Agent’s resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above.
 
10.10 Administrative Agent May File Proofs of Claim .
 
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Credit Party, the Administrative Agent (irrespective of whether the principal of any Loan or LOC
 
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Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrowers) shall be entitled and empowered, by intervention in such proceeding or otherwise:
 
(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, LOC Obligations and all other Obligations (other than obligations under Hedge Agreements to which the Administrative Agent is not a party) that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under this Credit Agreement or the other Credit Documents) allowed in such judicial proceeding; and
 
(b) to collect and receive any monies 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 proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under this Credit Agreement or the other Credit Documents.
 
Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Borrowers’ Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.
 
10.11 Guaranty Matters .
 
The Lenders irrevocably authorize the Administrative Agent, at its option and in its discretion:
 
(a) to release any Lien on any property granted to or held by the Administrative Agent under any Credit Document (i) upon termination of the Commitments and payment in full of all Borrowers’ Obligations (other than contingent indemnification obligations) and the expiration or termination of all Letters of Credit, (ii) that is sold or to be sold as part of or in connection with any sale permitted hereunder or under any other Credit Document, or (iii) if approved, authorized or ratified in writing by the requisite Lenders;
 
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(b) to subordinate any Lien on any property granted to or held by the Administrative Agent under any Credit Document to the holder of any Lien on such property that is permitted by Section 8.1 ; and
 
(c) to release any Guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder.
 
Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the authority of the Administrative Agent to release or subordinate its interest in particular property and to release any Guarantor from its obligations hereunder pursuant to this Section 10.11 .
 
10.12 Other Agents; Arrangers and Managers .
 
None of the Lenders or other Persons identified on the facing page or signature pages of this Credit Agreement as a “syndication agent,” “documentation agent,” “co-agent,” “book manager,” “lead manager,” “arranger,” “lead arranger” or “co-arranger” shall have any right, power, obligation, liability, responsibility or duty under this Credit Agreement other than, in the case of such Lenders, those applicable to all Lenders as such. Without limiting the foregoing, none of the Lenders or other Persons so identified shall have or be deemed to have any fiduciary relationship with any Lender. Each Lender acknowledges that it has not relied, and will not rely, on any of the Lenders or other Persons so identified in deciding to enter into this Credit Agreement or in taking or not taking action hereunder.
 
SECTION 11 
 
MISCELLANEOUS
 
11.1 Notices .
 
(a) General . Unless otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including by facsimile transmission). All such written notices shall be mailed, faxed or delivered, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made, to the address, facsimile number, electronic mail address or telephone number specified for the applicable party on Schedule 2.1(a) or, with respect to the Credit Parties, as set forth below (or in each case to such other address, facsimile number, electronic mail address or telephone number as shall be designated by such party in a notice to the other parties):
 
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if to the Borrowers or the Guarantors:
 
Speedway Motorsports, Inc.
P.O. Box 18747
Charlotte, North Carolina 28218
Attn: Chief Financial Officer
Telephone: (704) 532-3306
Telecopy: (704) 532-3312
 
with copies to:
 
Speedway Motorsports, Inc.
P.O. Box 600
Concord, North Carolina 28026-0600
Attn: Chief Financial Officer
 
Speedway Funding, LLC
c/o Griffin Corporate Services
2920 North Green Valley Parkway
Suite 3-321-8
Henderson, Nevada 89014
 
All such notices and other communications shall be deemed to be given or made upon the earlier to occur of (i) actual receipt by the relevant party hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on behalf of the relevant party hereto; (B) if delivered by mail, four Business Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed by telephone; and (D) if delivered by electronic mail (which form of delivery is subject to the provisions of subsection (c) below), when delivered; provided , however , that notices and other communications to the Administrative Agent, the Issuing Lender and the Swingline Lender pursuant to Section 2 shall not be effective until actually received by such Person. In no event shall a voicemail message be effective as a notice, communication or confirmation hereunder.
 
(b) Effectiveness of Facsimile Documents and Signatures . Credit Documents may be transmitted and/or signed by facsimile. The effectiveness of any such documents and signatures shall, subject to applicable law, have the same force and effect as manually signed originals and shall be binding on all Credit Parties, the Administrative Agent and the Lenders. The Administrative Agent may also require that any such documents and signatures be confirmed by a manually signed original thereof; provided , however , that the failure to request or deliver the same shall not limit the effectiveness of any facsimile document or signature.
 
(c) Limited Use of Electronic Mail . With respect to notices or deliveries permitted or required hereunder, electronic mail and internet and intranet websites may be used only to
 
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distribute routine communications, such as financial statements, and to distribute Credit Documents for execution by the parties thereto, and may not be used for any other purpose.
 
(d) Reliance by Administrative Agent and Lenders . The Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic Notices of Borrowing) purportedly given by or on behalf of the Borrowers even if (i) such notices were not made in a manner provided herein, were incomplete or were not preceded or followed by any other form of notice provided herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrowers shall indemnify each Agent–Related Person and each Lender from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrowers. All telephonic notices to and other communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.
 
11.2 Right of Set-Off .
 
In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, upon the occurrence of an Event of Default, each Lender is authorized at any time and from time to time, without presentment, demand, protest or other notice of any kind (all of which rights being hereby expressly waived), to set-off and to appropriate and apply any and all deposits (general or special) and any other indebtedness at any time held or owing by such Lender (including, without limitation branches, agencies or Affiliates of such Lender wherever located) to or for the credit or the account of any Credit Party against obligations and liabilities of such Credit Party to such Lender hereunder, under the Notes, the other Credit Documents or otherwise, irrespective of whether such Lender shall have made any demand hereunder and although such obligations, liabilities or claims, or any of them, may be contingent or unmatured, and any such set-off shall be deemed to have been made immediately upon the occurrence of an Event of Default even though such charge is made or entered on the books of such Lender subsequent thereto. Each of the Credit Parties hereby agrees that any Person purchasing a participation in the Loans and Commitments hereunder pursuant to Section 11.3(d) may exercise all rights of set-off with respect to its participation interest as fully as if such Person were a Lender hereunder.
 
11.3 Benefit of Agreement .
 
(a) The provisions of this Credit Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrowers may not assign or otherwise transfer any of their respective rights or obligations hereunder without the prior written consent of each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (f) or (g) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Credit Agreement, expressed or implied, shall be construed to confer upon any
 
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Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Indemnitees) any legal or equitable right, remedy or claim under or by reason of this Credit Agreement.
 
(b) Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Credit Agreement (including all or a portion of its Commitment and the Loans (including for purposes of this subsection (b), participations in LOC Obligations and in Swingline Loans) at the time owing to it); provided that (i) except in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $1 million unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrowers otherwise consent (each such consent not to be unreasonably withheld or delayed); (ii) any assignment of a Commitment must be approved by the Administrative Agent and, with respect to any assignment of a Revolving Commitment, the Issuing Lender and the Swingline Lender, unless the Person that is the proposed assignee is itself a Lender (whether or not the proposed assignee would otherwise qualify as an Eligible Assignee), and, so long as no Event of Default has occurred and is continuing, the Borrowers (each such approval not to be unreasonably withheld or delayed); and (iii) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500. Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Credit Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Credit Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Credit Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Credit Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Section 3 and Sections 11.5 and 11.9 with respect to facts and circumstances occurring prior to the effective date of such assignment). Upon request, the Borrowers shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Credit Agreement that does not comply with this subsection shall be treated for purposes of this Credit Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section.
 
(c) The Administrative Agent, acting solely for this purpose as an agent of the Borrowers, shall maintain at the Administrative Agent’s office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans and LOC Obligations
 
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owing to, each Lender pursuant to the terms hereof from time to time (the “ Register ”). The entries in the Register shall be conclusive absent manifest error, and the Borrowers, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Credit Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrowers and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
 
(d) Any Lender may at any time, without the consent of, or notice to, the Borrowers or the Administrative Agent, sell participations to any Person (other than a natural person or the Borrowers or any of the Borrowers’ Affiliates or Subsidiaries) (each, a “ Participant ”) in all or a portion of such Lender’s rights and/or obligations under this Credit Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender’s participations in LOC Obligations and/or Swingline Loans) owing to it); provided that (i) such Lender’s obligations under this Credit Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Credit Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Credit Agreement and to approve any amendment, modification or waiver of any provision of this Credit Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification that extends the time for, reduces the amount or alters the application of proceeds with respect to such obligations and payments required therein that directly affects such Participant. Subject to subsection (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Section 3 and Section 11.9 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.2 as though it were a Lender, provided such Participant agrees to be subject to Section 3.13 as though it were a Lender.
 
(e) A Participant shall not be entitled to receive any greater payment under Section 3, Section 11.2 or Section 11.9 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.10 unless the Borrowers are notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with Section 3.10 as though it were a Lender.
 
(f) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Credit Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
 
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(g) Notwithstanding anything to the contrary contained herein, any Lender that is a Fund may (without notice to or the consent of any of the parties hereto) create a security interest in all or any portion of the Loans owing to it and the Note, if any, held by it to the trustee for holders of obligations owed, or securities issued, by such Fund as security for such obligations or securities, provided that unless and until such trustee actually becomes a Lender in compliance with the other provisions of this Section 11.3, (i) no such pledge shall release the pledging Lender from any of its obligations under the Credit Documents and (ii) such trustee shall not be entitled to exercise any of the rights of a Lender under the Credit Documents even though such trustee may have acquired ownership rights with respect to the pledged interest through foreclosure or otherwise.
 
(h) Notwithstanding anything to the contrary contained herein, if at any time Bank of America assigns all of its Commitment and Loans pursuant to subsection (b) above, Bank of America may, (i) upon thirty days’ notice to the Borrowers and the Lenders, resign as Issuing Lender and/or (ii) upon thirty days’ notice to the Borrowers, resign as Swingline Lender. In the event of any such resignation as Issuing Lender or Swingline Lender, the Borrowers shall be entitled to appoint from among the Lenders a successor Issuer Lender or Swingline Lender hereunder; provided , however, that no failure by the Borrowers to appoint any such successor shall affect the resignation of Bank of America as Issuing Lender or Swingline Lender, as the case may be. If Bank of America resigns as Issuing Lender, it shall retain all the rights and obligations of the Issuing Lender hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as Issuing Lender and all LOC Obligations with respect thereto (including the right to require the Lenders to make Revolving Loans that are Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.3(d)). If Bank of America resigns as Swingline Lender, it shall retain all the rights of the Swingline Lender provided for hereunder with respect to Swingline Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Revolving Loans that are Base Rate Loans or fund risk participations in outstanding Swingline Loans pursuant to Section 2.4.
 
11.4 No Waiver; Remedies Cumulative .
 
No failure or delay on the part of the Administrative Agent or any Lender in exercising any right, power or privilege hereunder or under any other Credit Document and no course of dealing between any of the Credit Parties shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights and remedies provided herein are cumulative and not exclusive of any rights or remedies which the Administrative Agent or any Lender would otherwise have. No notice to or demand on any Credit Party in any case shall entitle the Borrowers or any other Credit Party to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Administrative Agent or the Lenders to any other or further action in any circumstances without notice or demand.
 
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11.5 Payment of Expenses, etc .
 
The Borrowers jointly and severally agree: (a) to pay directly to the provider thereof or to pay or reimburse the Administrative Agent for all costs and expenses incurred in connection with the development, preparation, negotiation and execution of this Credit Agreement and the other Credit Documents, the preservation of any rights or remedies under this Credit Agreement and the other Credit Documents, and any amendment, waiver, consent or other modification of the provisions hereof and thereof (whether or not the transactions contemplated hereby or thereby are consummated), and the consummation and administration of the transactions contemplated hereby and thereby, including all Attorney Costs, and (b) to pay or reimburse the Administrative Agent and each Lender for all costs and expenses incurred in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Credit Agreement or the other Credit Documents (including all such costs and expenses incurred during any “workout” or restructuring in respect of the Borrowers’ Obligations and during any legal proceeding, including any proceeding under the Bankruptcy Code or any other applicable insolvency or debtor relief law), including all Attorney Costs. The foregoing costs and expenses shall include all search, filing, recording, title insurance and appraisal charges and fees and taxes related thereto, and other out-of-pocket expenses incurred by the Administrative Agent and the cost of independent public accountants and other outside experts retained by the Administrative Agent or any Lender. All amounts due under this Section 11.5 shall be payable within ten Business Days after demand therefor. The agreements in this Section shall survive the termination of the aggregate Commitments and repayment of all other Borrowers’ Obligations.
 
11.6 Amendments, Waivers and Consents .
 
Neither this Credit Agreement nor any other Credit Document nor any of the terms hereof or thereof may be amended, changed, waived, discharged or terminated unless such amendment, change, waiver, discharge or termination is in writing signed by the Borrowers and the Required Lenders, provided that no such amendment, change, waiver, discharge or termination shall:
 
(a) unless also consented to by each Lender directly affected thereby, (i) extend or increase the Commitment of any Lender (it being understood that the amendment or waiver of an Event of Default, a mandatory reduction or a mandatory prepayment shall not constitute an increase or extension of Commitments), (ii) waive non-payment or postpone any date fixed by this Credit Agreement or any other Credit Document for any payment (excluding mandatory prepayments) of principal, interest, fees or other amounts due to any Lender, (iii) reduce the principal of, or the rate of interest specified herein on, any Loan, or any fees or other amounts payable hereunder or under any other Credit Document (provided that only the consent of the Required Lenders shall be necessary (A) to amend the definition of “Default Rate” or to waive any obligation of the Borrowers to pay interest at the Default Rate or (B) to amend any financial covenant hereunder even if the effect of such amendment would be to reduce the rate of interest on any Loan or to reduce any fee payable hereunder), (iv) change Section 3.12 or 3.13 in any manner that would alter pro rata sharing, (v) change any provision of this Section 11.6(a) or the definition of “Required Lenders” or any other provision hereof specifying the
 
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number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, (vi) release all or substantially all of the Collateral or all or substantially all of the Guarantors (other than as provided herein or as appropriate in connection with transactions permitted hereunder); (vii) release either of the Borrowers or consent to the assignment or transfer by either Borrower of its rights and obligations under any Credit Document;
 
(b) unless also consented to by Revolving Lenders holding in the aggregate more than 50% of the Revolving Commitments, or if the Revolving Commitments have been terminated or have expired, Revolving Lenders having more than 50% of the aggregate principal amount of the Revolving Obligations outstanding (taking into account in each case Participation Interests), (i) waive any Default or Event of Default for purposes of Section 5.2, (ii) amend the manner of application of a mandatory prepayment to the Revolving Obligations under Section 3.3(b), (iii) amend or waive the provisions of Section 5.2, Section 7.12, Section 8.1 through 8.14 inclusive, Section 9.1 through 9.3 inclusive or this Section 11.6(b);
 
(c) unless also consented to by Term Lenders having more than 50% of the aggregate principal amount of the Term Loan outstanding (taking into account Participation Interests pursuant to Section 3.13), (i) amend the manner of application of any mandatory prepayment to the Term Loan under Section 3.3(b), or (ii) amend or waive the provisions of this Section 11.6(c);
 
(d) unless also consented to by the Issuing Lender, no such amendment, waiver or consent shall directly affect the rights or duties of the Issuing Lender under this Credit Agreement or any Letter of Credit Documents relating to any Letter of Credit issued or to be issued by it;
 
(e) unless also consented to by the Swingline Lender, no such amendment, waiver or consent shall directly affect the rights or duties of the Swingline Lender under this Credit Agreement; and
 
(f) unless also consented to by the Administrative Agent, no such amendment, waiver or consent shall affect the rights or duties of the Administrative Agent under this Credit Agreement or any other Credit Document;
 
provided however, that notwithstanding anything to the contrary contained herein, (i) no Lender that is not then in compliance with its obligations hereunder shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such Lender, (ii) each Lender is entitled to vote as such Lender sees fit on any bankruptcy or insolvency reorganization plan that affects the Loans, (iii) each Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent provisions set forth herein, and (iv) the Required Lenders may consent to allow a Credit Party to use cash collateral in the context of a bankruptcy or insolvency proceeding.
 
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Notwithstanding the above, the right to deliver a “Payment Blockage Notice” (as such term is defined in the Indenture) shall reside solely with the Administrative Agent and the Administrative Agent shall deliver such Payment Blockage Notice only upon the direction of the Required Lenders.
 
11.7 Counterparts .
 
This Credit Agreement may be executed in any number of counterparts, each of which where so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. It shall not be necessary in making proof of this Credit Agreement to produce or account for more than one such counterpart.
 
11.8 Headings .
 
The headings of the sections and subsections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this Credit Agreement.
 
11.9 Indemnification .
 
Whether or not the transactions contemplated hereby are consummated, the Borrowers jointly and severally shall indemnify and hold harmless each Agent-Related Person, each Lender and their respective Affiliates, directors, officers, employees, counsel, agents, trustees, advisors and attorneys-in-fact (collectively the “ Indemnitees ”) from and against any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever that may at any time be imposed on, incurred by or asserted against any such Indemnitee in any way relating to or arising out of or in connection with (a) the execution, delivery, enforcement, performance or administration of any Credit Document or any other agreement, letter or instrument delivered in connection with the transactions contemplated thereby or the consummation of the transactions contemplated thereby, (b) any Commitment, Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the Issuing Lender to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit) or (c) any actual or threatened claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory (including any investigation of, preparation for, or defense of any pending or threatened claim, investigation, litigation or proceeding) and regardless of whether any Indemnitee is a party thereto (all the foregoing, collectively, the “ Indemnified Liabilities ”); provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses or disbursements are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee. No Indemnitee shall be liable for any damages arising from the use by others of any information or other materials obtained through
 
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IntraLinks or other similar information transmission systems in connection with this Credit Agreement, and no Indemnitee shall have any liability for any indirect or consequential damages relating to this Credit Agreement or any other Credit Document or arising out of its activities in connection herewith or therewith (whether before or after the Closing Date). All amounts due under this Section 11.9 shall be payable within ten Business Days after demand therefor.
 
11.10 Survival of Indemnification .
 
All indemnities set forth herein, including, without limitation, in Sections 3.9, 3.11, 10.7, 11.5 and 11.9 shall survive the execution and delivery of this Credit Agreement, the making of the Loans, the resignation of the Administrative Agent, the repayment of the Loans and other obligations under the Credit Documents and the termination of the Commitments hereunder.
 
11.11 Confidentiality .
 
Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of Confidential Information, except that Confidential Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Confidential Information and instructed to keep such Confidential Information confidential); (b) to the extent requested by any regulatory authority; (c) to the extent required by applicable law or regulations or by any subpoena or similar legal process; (d) to any other party to this Credit Agreement; (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Credit Agreement or the enforcement of rights hereunder; (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any Eligible Assignee of or Participant in, or any prospective Eligible Assignee of or Participant in, any of its rights or obligations under this Credit Agreement or (ii) any direct or indirect contractual counterparty or prospective counterparty (or such contractual counterparty’s or prospective counterparty’s professional advisor) to any credit derivative transaction relating to obligations of the Credit Parties; (g) with the consent of the Borrowers; (h) to the extent such Confidential Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent or any Lender on a nonconfidential basis from a source other than the Borrowers; (i) to the National Association of Insurance Commissioners or any other similar organization; or (j) to any nationally recognized rating agency that requires access to a Lender’s or an Affiliate’s investment portfolio in connection with ratings issued with respect to such Lender or Affiliate. In addition, the Administrative Agent and the Lenders may disclose the existence of this Credit Agreement and information about this Credit Agreement to market data collectors, similar service providers to the lending industry, and service providers to the Administrative Agent and the Lenders in connection with the administration and management of this Credit Agreement, the other Credit Documents, the Commitments, and the extensions of credit hereunder. Any Person required to maintain the confidentiality of Confidential Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Confidential Information as such Person would accord to its own confidential information.
 
98

For the purposes of this Section, “ Confidential Information ” means all information received from any Credit Party relating to any Credit Party or its business, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by any Credit Party; provided that, in the case of information received from a Credit Party after the date hereof, such information is clearly identified in writing at the time of delivery as confidential. Notwithstanding anything herein to the contrary, “Confidential Information” shall not include any information with respect to the “tax treatment” and “tax structure” (in each case, within the meaning of Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to the Administrative Agent or any Lender relating to such tax treatment and tax structure, and the Administrative Agent and each Lender may disclose to any and all Persons, without limitation of any kind (other than limitations provided by applicable law), any such information; provided that with respect to any document or similar item that contains information concerning the tax treatment or tax structure of the transaction as well as Confidential Information, this sentence shall only apply to such portions of the document or similar item that relate to the tax treatment or tax structure of the Loans, the Letters of Credit and the transactions contemplated hereby.
 
11.12 Governing Law; Submission to Jurisdiction; Venue .
 
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA. Any legal action or proceeding with respect to this Credit Agreement or any other Credit Document may be brought in the courts of the State of North Carolina, in Mecklenburg County, or of the United States for the Western District of North Carolina, and, by execution and delivery of this Credit Agreement, each of the Credit Parties hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of such courts. Each of the Credit Parties further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to it at the address for notices pursuant to Section 11.1, such service to become effective three days after such mailing. Nothing herein shall affect the right of the Administrative Agent to serve process in any other manner permitted by law or to commence legal proceedings or to otherwise proceed against any Credit Party in any other jurisdiction.
 
(b) Each of the Credit Parties hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Credit Agreement or any other Credit Document brought in the courts referred to in subsection (a) hereof and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.
 
99

11.13 WAIVER OF RIGHT TO TRIAL BY JURY .
 
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY CREDIT DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY CREDIT DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
 
11.14 Severability .
 
If any provision of any of the Credit Documents is determined to be illegal, invalid or unenforceable, such provision shall be fully severable and the remaining provisions shall remain in full force and effect and shall be construed without giving effect to the illegal, invalid or unenforceable provisions.
 
11.15 Entirety .
 
This Credit Agreement together with the other Credit Documents represent the entire agreement of the parties hereto and thereto, and supersede all prior agreements and understandings, oral or written, if any, including any commitment letters or correspondence relating to the Credit Documents or the transactions contemplated herein and therein.
 
11.16 Survival of Representations and Warranties .
 
All representations and warranties made hereunder and in any other Credit Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or Event of Default at the time of any extension of credit hereunder, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
 
100

11.17 Binding Effect; Termination .
 
(a) This Credit Agreement shall become effective at such time on or after the Closing Date when it shall have been executed by the Borrowers, the Guarantors and the Administrative Agent, and the Administrative Agent shall have received copies hereof (telefaxed or otherwise) which, when taken together, bear the signatures of each Lender, and thereafter this Credit Agreement shall be binding upon and inure to the benefit of the Borrowers, the Guarantors, the Administrative Agent and each Lender and their respective successors and assigns.
 
(b) The term of this Credit Agreement shall remain in effect until no Loans or any other amounts payable hereunder or under any of the other Credit Documents shall remain outstanding and until all of the Commitments hereunder shall have expired or been terminated.
 
11.18 Borrowers’ Obligations Joint and Several .
 
(a) Each of the Borrowers is accepting joint and several liability hereunder in consideration of the financial accommodation to be provided by the Lenders under this Credit Agreement, for the mutual benefit, directly and indirectly, of each of the Borrowers and in consideration of the undertakings of each of the Borrowers to accept joint and several liability for the obligations of each of them.
 
(b) Each of the Borrowers jointly and severally hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Borrower with respect to the payment and performance of all of the Borrowers’ Obligations, it being the intention of the parties hereto that all such Borrowers’ Obligations shall be the joint and several obligations of each of the Borrowers without preferences or distinction among them.
 
(c) If and to the extent that either of the Borrowers shall fail to make any payment with respect to any of the Borrowers’ Obligations as and when due or to perform any of the Borrowers’ Obligations in accordance with the terms thereof, then in each such event, the other Borrower will make such payment with respect to, or perform, such Borrowers’ Obligation.
 
(d) The obligations of each Borrower under the provisions of this Section 11.18 constitute full recourse obligations of the Borrowers, enforceable against the Borrowers to the full extent of their properties and assets, irrespective of the validity, regularity or enforceability of this Credit Agreement or any other circumstances whatsoever.
 
(e) Except as otherwise expressly provided herein, each Borrower hereby waives notice of acceptance of its joint and several liability, notice of any Loan made under this Credit Agreement, notice of occurrence of any Event of Default, or of any demand for any payment under this Credit Agreement, notice of any action at any time taken or omitted by any Lender under or in respect of any of the Borrowers’ Obligations, any requirement of diligence and,
 
101

generally, all demands, notices and other formalities of every kind in connection with this Credit Agreement. Each Borrower hereby assents to, and waives notice of, any extension or postponement of the time for the payment of any of the Borrowers’ Obligations, the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by any Lender at any time or times in respect of any default by either Borrower in the performance or satisfaction of any term, covenant, condition or provision of this Credit Agreement, any and all other indulgences whatsoever by any Lender in respect of any of the Borrowers’ Obligations, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of the Borrowers’ Obligations or the addition, substitution or release, in whole or in part, of any Borrower. Without limiting the generality of the foregoing, each Borrower assents to any other action or delay in acting or failure to act on the part of any Lender, including, without limitation, any failure strictly or diligently to assert any right or to pursue any remedy or to comply fully with the applicable laws or regulations thereunder which might, but for the provisions of this Section 11.18, afford grounds for terminating, discharging or relieving such Borrower, in whole or in part, from any of its obligations under this Section 11.18, it being the intention of each Borrower that, so long as any of the Obligations remain unsatisfied, the obligations of such Borrower under this Section 11.18 shall not be discharged except by performance and then only to the extent of such performance. The Borrowers’ Obligations of each Borrower under this Section 11.18 shall not be diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to either Borrower or any Lender. The joint and several liability of the Borrowers hereunder shall continue in full force and effect notwithstanding any absorption, merger, amalgamation or any other change whatsoever in the name, membership, constitution or place of formation of either Borrower or any Lender.
 
(f) The provisions of this Section 11.18 are made for the benefit of the Lenders and their respective successors and assigns, and may be enforced by any such Person from time to time against either of the Borrowers as often as occasion therefor may arise and without requirement on the part of any Lender first to marshal any of its claims or to exercise any of its rights against either of the other Borrowers or to exhaust any remedies available to it against the other Borrower or to resort to any other source or means of obtaining payment of any of the Borrowers’ Obligations or to elect any other remedy. The provisions of this Section 11.18 shall remain in effect until all the Obligations shall have been paid in full or otherwise fully satisfied. If at any time, any payment, or any part thereof, made in respect of any of the Borrowers’ Obligations, is rescinded or must otherwise be restored or returned by any Lender upon the insolvency, bankruptcy or reorganization of either of the Borrowers, or otherwise, the provisions of this Section 11.18 will forthwith be reinstated in effect, as though such payment had not been made.
 
(g) Notwithstanding any provision to the contrary contained herein or in any other of the Credit Documents, to the extent the joint obligations of a Borrower shall be adjudicated to be invalid or unenforceable for any reason (including, without limitation, because of any applicable state or federal law relating to fraudulent conveyances or transfers) then the obligations of each Borrower hereunder shall be limited to the maximum amount that is permissible under applicable law (whether federal or state and including, without limitation, the federal Bankruptcy Code).
 
102

Each of the parties hereto has caused a counterpart of this Credit Agreement to be duly executed and delivered as of the date first above written.
 
BORROWERS :
 
SPEEDWAY MOTORSPORTS, INC. , a Delaware corporation	
		
By	 	/s/    William R. Brooks
	
 	 	William R. Brooks	
		
Title 	 	CFO

SPEEDWAY FUNDING, LLC , a Delaware limited liability company	
		
By 	 	/s/    William R. Brooks
	
 	 	William R. Brooks	
		
Title 	 	CFO

GUARANTORS :
 
600 RACING, INC. , a North Carolina corporation	
		
By 	 	/s/    William R. Brooks
	
 	 	William R. Brooks	
		
Title 	 	CFO

ATLANTA MOTOR SPEEDWAY, INC. , a Georgia corporation	
		
By 	 	/s/    William R. Brooks
	
 	 	William R. Brooks	
		
Title 	 	CFO

[SIGNATURES CONTINUE]

BRISTOL MOTOR SPEEDWAY, INC. , a Tennessee corporation	
		
By 	 	/s/    William R. Brooks
	
 	 	William R. Brooks	
		
Title 	 	CFO

CHARLOTTE MOTOR SPEEDWAY, LLC , a North Carolina limited liability company	
		
By 	 	/s/    William R. Brooks
	
 	 	William R. Brooks	
		
Title 	 	CFO

INEX CORP. , a North Carolina corporation	
		
By 	 	/s/    William R. Brooks
	
 	 	William R. Brooks	
		
Title 	 	CFO

LAS VEGAS MOTOR SPEEDWAY, INC. , a Delaware corporation	
		
By 	 	/s/    William R. Brooks
	
 	 	William R. Brooks	
		
Title 	 	CFO

MOTORSPORTS BY MAIL, LLC, a North Carolina limited liability company	
		
By 	 	/s/    William R. Brooks
	
 	 	William R. Brooks	
		
Title 	 	CFO

[SIGNATURES CONTINUE]

NEVADA SPEEDWAY, LLC, a Delaware limited liability company	
		
By 	 	/s/    William R. Brooks
	
 	 	William R. Brooks	
		
Title 	 	CFO

SMI TRACKSIDE, LLC , a North Carolina limited liability company	
		
By 	 	/s/    William R. Brooks
	
 	 	William R. Brooks	
		
Title 	 	CFO

SPEEDWAY MEDIA, LLC , a North Carolina limited liability company	
		
By 	 	/s/    William R. Brooks
	
 	 	William R. Brooks	
		
Title 	 	CFO

SPEEDWAY PROPERTIES COMPANY, LLC, a Delaware limited liability company	
		
By 	 	/s/    William R. Brooks
	
 	 	William R. Brooks	
		
Title 	 	CFO

SPEEDWAY SONOMA, LLC, a Delaware limited liability company	
		
By 	 	/s/    William R. Brooks
	
 	 	William R. Brooks	
		
Title 	 	CFO

[SIGNATURES CONTINUE]

SPEEDWAY SYSTEMS LLC , a North Carolina limited liability company 	
		
By:	 	SPR, Inc.,	
 	 	its manager	

By 	 	/s/    William R. Brooks
	
 	 	William R. Brooks	
		
Title 	 	CFO

SPR, INC. , a Delaware corporation	
		
By 	 	/s/    William R. Brooks
	
 	 	William R. Brooks	
		
Title 	 	CFO

TEXAS MOTOR SPEEDWAY, INC. , a Texas corporation	
		
By 	 	/s/    William R. Brooks
	
 	 	William R. Brooks	
		
Title 	 	CFO

TRACKSIDE HOLDING CORPORATION, a North Carolina corporation	
		
By 	 	/s/    William R. Brooks
	
 	 	William R. Brooks	
		
Title 	 	CFO

[SIGNATURES CONTINUE]

ADMINISTRATIVE AGENT :
 
BANK OF AMERICA, N.A.	
		
By 	 	/s/ James E. Nash Jr.
	
Title 	 	James E. Nash, Jr.
Managing Director

SYNDICATION AGENT :
 
WACHOVIA BANK, NATIONAL ASSOCIATION	
		
By 	 	 
	
Title 	 	 

DOCUMENTATION AGENTS :
 
CREDIT LYONNAIS NEW YORK BRANCH	
		
By 	 	 
	
Title 	 	 

FLEET NATIONAL BANK	
		
By 	 	 
	
Title 	 	 

SUNTRUST BANK	
		
By 	 	 
	
Title 	 	 

[SIGNATURES CONTINUE]

ADMINISTRATIVE AGENT :
 
BANK OF AMERICA, N.A.	
		
By 	 	 
	
Title 	 	 

SYNDICATION AGENT :
 
WACHOVIA BANK, NATIONAL ASSOCIATION	
		
By 	 	/s/    John Bengough
	
Title 	 	Vice President

DOCUMENTATION AGENTS :
 
CREDIT LYONNAIS NEW YORK BRANCH	
		
By 	 	 
	
Title 	 	 

FLEET NATIONAL BANK	
		
By 	 	 
	
Title 	 	 

SUNTRUST BANK	
		
By 	 	 
	
Title 	 	 

[SIGNATURES CONTINUE]

ADMINISTRATIVE AGENT :
 
BANK OF AMERICA, N.A.	
		
By 	 	 
	
Title 	 	 

SYNDICATION AGENT :
 
WACHOVIA BANK, NATIONAL ASSOCIATION	
		
By 	 	 
	
Title 	 	 

DOCUMENTATION AGENTS :
 
CREDIT LYONNAIS NEW YORK BRANCH	
		
By 	 	/s/    Attila Koc
	
Title 	 	Attila Koc
Senior Vice President

FLEET NATIONAL BANK	
		
By 	 	 
	
Title 	 	 

SUNTRUST BANK	
		
By 	 	 
	
Title 	 	 

[SIGNATURES CONTINUE]

ADMINISTRATIVE AGENT :
 
BANK OF AMERICA, N.A.	
		
By 	 	 
	
Title 	 	 

SYNDICATION AGENT :
 
WACHOVIA BANK, NATIONAL ASSOCIATION	
		
By 	 	 
	
Title 	 	 

DOCUMENTATION AGENTS :
 
CREDIT LYONNAIS NEW YORK BRANCH	
		
By 	 	 
	
Title 	 	 

FLEET NATIONAL BANK	
		
By 	 	/s/    Peter Dorfman
	
 	 	Peter Dorfman	
Title 	 	Managing Director

SUNTRUST BANK	
		
By 	 	 
	
Title 	 	 

[SIGNATURES CONTINUE]

ADMINISTRATIVE AGENT :
 
BANK OF AMERICA, N.A.	
		
By 	 	 
	
Title 	 	 

SYNDICATION AGENT :
 
WACHOVIA BANK, NATIONAL ASSOCIATION	
		
By 	 	 
	
Title 	 	 

DOCUMENTATION AGENTS :
 
CREDIT LYONNAIS NEW YORK BRANCH	
		
By 	 	 
	
Title 	 	 

FLEET NATIONAL BANK	
		
By 	 	 
	
Title 	 	 

SUNTRUST BANK	
		
By 	 	/s/    Stephen Derby
	
 	 	Stephen Derby	
Title 	 	Director

[SIGNATURES CONTINUE]

LEAD ARRANGER
AND BOOK MANAGER :
 
BANC OF AMERICA SECURITIES LLC	
		
By 	 	/s/    James E. Nash, Jr.
	
Title 	 	James E. Nash, Jr.
Managing Director

LENDERS :
 
BANK OF AMERICA, N.A.	
		
By 	 	/s/    James E. Nash, Jr.
	
 	 	James E. Nash, Jr.	
Title 	 	Managing Director

BANK ONE, N.A.	
		
By 	 	 
	
Title 	 	 

COMERICA BANK	
		
By 	 	 
	
Title 	 	 

COMPASS BANK	
		
By 	 	 
	
Title 	 	 

CREDIT LYONNAIS NEW YORK BRANCH	
		
By 	 	 
	
Title 	 	 

[SIGNATURES CONTINUE]

LEAD ARRANGER
AND BOOK MANAGER :
 
BANC OF AMERICA SECURITIES LLC	
		
By 	 	 
	
Title 	 	 

LENDERS :
 
BANK OF AMERICA, N.A.	
		
By 	 	 
	
Title 	 	 

BANK ONE, N.A.	
		
By 	 	/s/    Robert Humphries

Title 	 	Vice President

COMERICA BANK	
		
By 	 	 
	
Title 	 	 

COMPASS BANK	
		
By 	 	 
	
Title 	 	 

CREDIT LYONNAIS NEW YORK BRANCH	
		
By 	 	 
	
Title 	 	 

[SIGNATURES CONTINUE]

LEAD ARRANGER
AND BOOK MANAGER :
 
BANC OF AMERICA SECURITIES LLC	
		
By 	 	 
	
Title 	 	 

LENDERS :
 
BANK OF AMERICA, N.A.	
		
By 	 	 
	
Title 	 	 

BANK ONE, N.A.	
		
By 	 	 

Title 	 	 

COMERICA BANK	
		
By 	 	/s/    Jeffrey M. Lafferty

Title 	 	Account Officer

COMPASS BANK	
		
By 	 	 
	
Title 	 	 

CREDIT LYONNAIS NEW YORK BRANCH	
		
By 	 	 
	
Title 	 	 

[SIGNATURES CONTINUE]

LEAD ARRANGER
AND BOOK MANAGER :
 
BANC OF AMERICA SECURITIES LLC	
		
By 	 	 
	
Title 	 	 

LENDERS :
 
BANK OF AMERICA, N.A.	
		
By 	 	 
	
Title 	 	 

BANK ONE, N.A.	
		
By 	 	 

Title 	 	 

COMERICA BANK	
		
By 	 	 

Title 	 	 

COMPASS BANK	
		
By 	 	/s/    T. Ray Sandefur

Title 	 	Senior Vice President

CREDIT LYONNAIS NEW YORK BRANCH	
		
By 	 	 
	
Title 	 	 

[SIGNATURES CONTINUE]

LEAD ARRANGER
AND BOOK MANAGER :
 
BANC OF AMERICA SECURITIES LLC	
		
By 	 	 
	
Title 	 	 

LENDERS :
 
BANK OF AMERICA, N.A.	
		
By 	 	 
	
Title 	 	 

BANK ONE, N.A.	
		
By 	 	 

Title 	 	 

COMERICA BANK	
		
By 	 	 

Title 	 	 

COMPASS BANK	
		
By 	 	 

Title 	 	 

CREDIT LYONNAIS NEW YORK BRANCH	
		
By 	 	/s/  Attila Koc
	
 	 	Attila Koc	
Title 	 	Senior Vice President

[SIGNATURES CONTINUE]

FIRST TENNESSEE BANK NATIONAL ASSOCIATION	
		
By 	 	/s/    D. Scott Peak
	
 	 	D. Scott Peak	
Title 	 	Vice President

FIRSTRUST BANK	
		
By 	 	 
	
Title 	 	 

FLEET NATIONAL BANK	
		
By 	 	 
	
Title 	 	 

GUARANTY BANK	
		
By 	 	 
	
Title 	 	 

RBC CENTURA BANK	
		
By 	 	 
	
Title 	 	 

SOUTH TRUST BANK	
		
By 	 	 
	
Title 	 	 

[SIGNATURES CONTINUE]

FIRST TENNESSEE BANK NATIONAL ASSOCIATION	
		
By 	 	 
	
Title 	 	 

FIRSTRUST BANK	
		
By 	 	/s/    Kent Nelson
	
 	 	Kent Nelson	
Title 	 	Senior Vice President

FLEET NATIONAL BANK	
		
By 	 	 
	
Title 	 	 

GUARANTY BANK	
		
By 	 	 
	
Title 	 	 

RBC CENTURA BANK	
		
By 	 	 
	
Title 	 	 

SOUTH TRUST BANK	
		
By 	 	 
	
Title 	 	 

[SIGNATURES CONTINUE]

FIRST TENNESSEE BANK NATIONAL ASSOCIATION	
		
By 	 	 
	
Title 	 	 

FIRSTRUST BANK	
		
By 	 	 
	
Title 	 	 

FLEET NATIONAL BANK	
		
By 	 	/s/    Peter Dorfman
	
 	 	Peter Dorfman	
Title 	 	Managing Director

GUARANTY BANK	
		
By 	 	 
	
Title 	 	 

RBC CENTURA BANK	
		
By 	 	 
	
Title 	 	 

SOUTH TRUST BANK	
		
By 	 	 
	
Title 	 	 

[SIGNATURES CONTINUE]

FIRST TENNESSEE BANK NATIONAL ASSOCIATION	
		
By 	 	 
	
Title 	 	 

FIRSTRUST BANK	
		
By 	 	 
	
Title 	 	 

FLEET NATIONAL BANK	
		
By 	 	 

Title 	 	 

GUARANTY BANK	
		
By 	 	/s/    Michael Ansolabehere
	
 	 	Michael Ansolabehere	
Title 	 	Vice President

RBC CENTURA BANK	
		
By 	 	 
	
Title 	 	 

SOUTH TRUST BANK	
		
By 	 	 
	
Title 	 	 

[SIGNATURES CONTINUE]

FIRST TENNESSEE BANK NATIONAL ASSOCIATION	
		
By 	 	 
	
Title 	 	 

FIRSTRUST BANK	
		
By 	 	 
	
Title 	 	 

FLEET NATIONAL BANK	
		
By 	 	 
	
Title 	 	 

GUARANTY BANK	
		
By 	 	 
	
Title 	 	 

RBC CENTURA BANK	
		
By 	 	/s/    David Faris

Title 	 	SVP

SOUTH TRUST BANK	
		
By 	 	 
	
Title 	 	 

[SIGNATURES CONTINUE]

FIRST TENNESSEE BANK NATIONAL ASSOCIATION	
		
By 	 	 
	
Title 	 	 

FIRSTRUST BANK	
		
By 	 	 
	
Title 	 	 

FLEET NATIONAL BANK	
		
By 	 	 
	
Title 	 	 

GUARANTY BANK	
		
By 	 	 
	
Title 	 	 

RBC CENTURA BANK	
		
By 	 	 

Title 	 	 

SOUTH TRUST BANK	
		
By 	 	/s/    David C. Ayscue
	
Title 	 	Group Vice President

[SIGNATURES CONTINUE]

SOVEREIGN BANK	
		
By 	 	/s/    Eric Ritter

Eric Ritter	
		
Title 	 	AVP

SUNTRUST BANK	
		
By 	 	 
	
Title 	 	 

WACHOVIA BANK, NATIONAL ASSOCIATION	
		
By 	 	 
	
Title 	 	 

WELLS FARGO BANK, N.A.	
		
By 	 	 
	
Title 	 	 

SOVEREIGN BANK	
		
By 	 	 
	
Title 	 	 

SUNTRUST BANK	
		
By 	 	/s/    Stephen Derby
	
 	 	Stephen Derby	
Title 	 	Director

WACHOVIA BANK, NATIONAL ASSOCIATION	
		
By 	 	 
	
Title 	 	 

WELLS FARGO BANK, N.A.	
		
By 	 	 
	
Title 	 	 

SOVEREIGN BANK	
		
By 	 	 
	
Title 	 	 

SUNTRUST BANK	
		
By 	 	 
	
Title 	 	 

WACHOVIA BANK, NATIONAL ASSOCIATION	
		
By 	 	/s/    John Bengough

Title 	 	Vice President

WELLS FARGO BANK, N.A.	
		
By 	 	 
	
Title 	 	 

SOVEREIGN BANK	
		
By 	 	 
	
Title 	 	 

SUNTRUST BANK	
		
By 	 	 
	
Title 	 	 

WACHOVIA BANK, NATIONAL ASSOCIATION	
		
By 	 	 
	
Title 	 	 

WELLS FARGO BANK, N.A.	
		
By 	 	/s/    Olga Brahaney
	
 	 	Olga Brahaney	
Title 	 	Asst Vice President

Schedule 2.1(e)
 
FORM OF REVOLVING NOTE
 
May      , 2003
 
FOR VALUE RECEIVED, SPEEDWAY MOTORSPORTS, INC., a Delaware corporation, and SPEEDWAY FUNDING, LLC, a Delaware limited liability company (each a “ Borrower ” and collectively the “ Borrowers ”), hereby jointly and severally promise to pay to the order of              , its successors and assigns (the “ Lender ”), at the office of Bank of America, N.A., as Administrative Agent (the “ Administrative Agent ”), at 101 N. Tryon Street, Independence Center, NC1-001-15-04, Charlotte, North Carolina 28255 (or at such other place of places as the holder hereof may designate), at the times set forth in the Credit Agreement dated as of the date hereof among the Borrowers, the Lenders and the Administrative Agent (as it may be amended, modified, extended or restated from time to time, the “ Credit Agreement ”; all capitalized terms not otherwise defined herein shall have the meanings set forth in the Credit Agreement), but in no event later than the Termination Date, in Dollars and in immediately available funds, the Lender’s Revolving Committed Amount or, if less, the aggregate unpaid principal amount of all Revolving Loans owing to the Lender pursuant to the Credit Agreement, and to pay interest thereon at the rates and as provided in the Credit Agreement.
 
Upon the occurrence and during the continuance of an Event of Default the balance outstanding hereunder shall bear interest as provided in Section 3.1 of the Credit Agreement. Further, in the event the payment of all sums due hereunder is accelerated under the terms of the Credit Agreement, this Note, and all other indebtedness of the Borrowers to the Lender shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby waived by the Borrowers.
 
In the event this Note is not paid when due at any stated or accelerated maturity, the Borrowers agrees to pay, in addition to the principal and interest, all costs of collection, including reasonable attorneys’ fees.
 
All borrowings evidenced by this Note and all payments and prepayments of the principal hereof and interest hereon and the respective dates thereof may be endorsed by the holder hereof on Schedule A attached hereto and incorporated herein by reference, or on a continuation thereof which shall be attached hereto and made a part hereof; provided , however , that any failure to endorse such information on such schedule or continuation thereof shall not in any manner affect the obligation of the Borrowers to make payments of principal and interest in accordance with the terms of this Note.
 
The Borrowers hereby waive demand, presentment, protest, notice of non-payment and protest and notice of any other kind with respect to this Note.
 
This Note shall be governed by, and construed and interpreted in accordance with, the laws of the State of North Carolina.

IN WITNESS WHEREOF, the Borrowers have caused this Note to be duly executed by its duly authorized officer as of the day and year first above written.
 
SPEEDWAY MOTORSPORTS, INC.	
		
By	 	 
	
Title	 	 

SPEEDWAY FUNDING, LLC	
		
By	 	 
	
Title	 	 

SCHEDULE A TO THE
NOTE
OF             
DATED May      , 2003
 
Date
	 	Amount
of
Loan
	 	Type
of
Loan
	  	Interest
Period
	  	Payments
	  	Unpaid
Principal
Balance
of Note
	  	Name of
Person
Making
Notation
	
	 		 		  		  	Principal
	  	Interest

 	 	 	 	 	  	 	  	 	  	 	  	 	  	 	

Schedule 2.2 (e)
 
FORM OF TERM NOTE
 
May      , 2003
 
FOR VALUE RECEIVED, SPEEDWAY MOTORSPORTS, INC., a Delaware corporation, and SPEEDWAY FUNDING, LLC, a Delaware limited liability company (each a “ Borrower ” and collectively the “ Borrowers ”), hereby jointly and severally promise to pay to the order of              , its successors and assigns (the “ Lender ”), at the office of Bank of America, N.A., as Administrative Agent (the “ Administrative Agent ”), at 101 N. Tryon Street, Independence Center, NC1-001-15-04, Charlotte, North Carolina 28255 (or at such other place of places as the holder hereof may designate), pursuant to the Credit Agreement dated as of the date hereof among the Borrowers, the Lenders and the Administrative Agent (as it may be amended, modified, extended or restated from time to time, the “ Credit Agreement ”; all capitalized terms not otherwise defined herein shall have the meanings set forth in the Credit Agreement), in Dollars and in immediate available funds, the Lender’s Term Loan Committed Amount or, if less, the aggregate unpaid principal amount of the Term Loan owing to the Lender pursuant to the Credit Agreement, and to pay interest thereon at the rates and as provided in the Credit Agreement.
 
Upon the occurrence and during the continuance of an Event of Default the balance outstanding hereunder shall bear interest as provided in Section 3.1 of the Credit Agreement. Further, in the event the payment of all sums due hereunder is accelerated under the terms of the Credit Agreement, this Term Note, and all other indebtedness of the Borrowers to the Lender shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby waived by the Borrowers.
 
In the event this Term Note is not paid when due at any stated or accelerated maturity, the Borrowers agrees to pay, in addition to the principal and interest, all costs of collection, including reasonable attorneys’ fees.
 
All borrowings evidenced by this Term Note and all payments and prepayments of the principal hereof and interest hereon and the respective dates thereof may be endorsed by the holder hereof on Schedule A attached hereto and incorporated herein by reference, or on a continuation thereof which shall be attached hereto and made a part hereof; provided , however , that any failure to endorse such information on such schedule or continuation thereof shall not in any manner affect the obligation of the Borrowers to make payments of principal and interest in accordance with the terms of this Term Note.
 
The Borrowers hereby waive demand, presentment, protest, notice of non-payment and protest and notice of any other kind with respect to this Term Note.
 
This Note shall be governed by, and construed and interpreted in accordance with, the laws of the State of North Carolina.

IN WITNESS WHEREOF, the Borrowers have caused this Term Note to be duly executed by its duly authorized officer as of the day and year first above written.
 
SPEEDWAY MOTORSPORTS, INC.	
		
By	 	 
	
Title	 	 

SPEEDWAY FUNDING, LLC	
		
By	 	 
	
Title	 	 

SCHEDULE A TO THE
TERM NOTE
OF             
DATED May      , 2003
 
Date
	 	Amount
of
Loan
	 	Type
of
Loan
	 	Interest
Period
	 	Payments
	 	Unpaid
Principal
Balance
of Note
	 	Name of
Person
Making
Notation
	
	 		 		 		 	Principal
	 	Interest

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

Schedule 2.4 (e)
 
SWINGLINE NOTE
 
May      , 2003
 
FOR VALUE RECEIVED, SPEEDWAY MOTORSPORTS, INC., a Delaware corporation, and SPEEDWAY FUNDING, LLC, a Delaware limited liability company (each a “ Borrower ” and collectively the “ Borrowers ”), hereby jointly and severally promise to pay to the order of BANK OF AMERICA, N.A., its successors and assigns (the “ Swingline Lender ”), at the office of Bank of America, N.A., as Administrative Agent (the “ Administrative Agent ”), at 101 N. Tryon Street, Independence Center, NC1-001-15-04, Charlotte, North Carolina 28255 (or at such other place of places as the holder hereof may designate), at the times set forth in the Credit Agreement dated as of the date hereof among the Borrowers, the Lenders and the Administrative Agent (as it may be amended, modified, extended or restated from time to time, the “ Credit Agreement ”; all capitalized terms not otherwise defined herein shall have the meanings set forth in the Credit Agreement), but in no event later than the Termination Date, in Dollars and in immediately available funds, the Swingline Committed Amount or, if less, the aggregate unpaid principal amount of all Loans owing to the Swingline Lender pursuant to the Credit Agreement, and to pay interest thereon at the rates and as provided in the Credit Agreement.
 
Upon the occurrence and during the continuance of an Event of Default the balance outstanding hereunder shall bear interest as provided in Section 3.1 of the Credit Agreement. Further, in the event the payment of all sums due hereunder is accelerated under the terms of the Credit Agreement, this Note, and all other indebtedness of the Borrowers to the Swingline Lender shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby waived by the Borrowers.
 
In the event this Note is not paid when due at any stated or accelerated maturity, the Borrowers agrees to pay, in addition to the principal and interest, all costs of collection, including reasonable attorneys’ fees.
 
All borrowings evidenced by this Note and all payments and prepayments of the principal hereof and interest hereon and the respective dates thereof may be endorsed by the holder hereof on Schedule A attached hereto and incorporated herein by reference, or on a continuation thereof which shall be attached hereto and made a part hereof; provided , however , that any failure to endorse such information on such schedule or continuation thereof shall not in any manner affect the obligation of the Borrowers to make payments of principal and interest in accordance with the terms of this Note.
 
The Borrowers hereby waive demand, presentment, protest, notice of non-payment and protest and notice of any other kind with respect to this Note.

This Note shall be governed by, and construed and interpreted in accordance with, the laws of the State of North Carolina.
 
IN WITNESS WHEREOF, the Borrowers have caused this Note to be duly executed by its duly authorized officer as of the day and year first above written.
 
SPEEDWAY MOTORSPORTS, INC.	
		
By	 	 
	
Title	 	 

SPEEDWAY FUNDING, LLC	
		
By	 	 
	
Title	 	 

SCHEDULE A TO THE
NOTE
OF BANK OF AMERICA, N.A.
DATED May      , 2003
 
Date
	 	Amount
of
Loan
	 	Type
of
Loan
	  	Interest
Period
	  	Payments
	  	Unpaid
Principal
Balance
of Note
	  	Name of
Person
Making
Notation
	
	 		 		  		  	Principal
	  	Interest

 	 	 	 	 	  	 	  	 	  	 	  	 	  	 	

EXHIBIT 10.2
 
PLEDGE AGREEMENT
 
THIS PLEDGE AGREEMENT dated as of May 16, 2003 (as amended and modified, the “ Pledge Agreement ” or this “ Agreement ”) by those parties identified as “Pledgors” on the signature pages hereto and such other parties as may become Pledgors hereunder after the date hereof (the “ Pledgors ”) in favor of BANK OF AMERICA, N.A., as Administrative Agent (in such capacity, the “ Administrative Agent ”) for the Lenders under the Credit Agreement described below and any Affiliates of Lenders which are party to any Hedging Agreements.
 
W I T N E S S E T H
 
WHEREAS, the Lenders have severally agreed to make loans and extensions of credit to Speedway Motorsports, Inc., a Delaware corporation (“ Speedway Motorsports ”), and Speedway Funding, LLC, a Delaware limited liability company (“ Speedway Funding ” — hereinafter Speedway Motorsports and Speedway Funding may be referred to collectively as the “ Borrowers ”), upon the terms and conditions provided in that Credit Agreement dated as of the date hereof (as amended and modified, the “ Credit Agreement ”) among the Borrowers, the Guarantors and Lenders identified therein and Bank of America, N.A., as Administrative Agent;
 
WHEREAS, it is a condition precedent to the effectiveness of the Credit Agreement and the obligation of the Lenders to make their respective loans and extensions of credit to the Borrowers thereunder that the Pledgors shall have executed and delivered this Pledge Agreement to the Administrative Agent for the ratable benefit of the Lenders;
 
NOW, THEREFORE, in consideration of the premises and to induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective loans and extensions of credit thereunder, the Pledgors hereby agree with the Administrative Agent, for the ratable benefit of the Lenders, as follows:
 
1. Defined Terms . (a) Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement; provided, for purposes hereof, “Lender” shall include any Affiliate of a Lender that has entered into a Hedge Agreement with any Credit Party.
 
(b) The following terms shall have the following meanings:
 
“ Collateral ”: the Pledged Stock and all Proceeds thereof.
 
“ Collateral Account ”: any account established to hold money Proceeds, maintained under the sole dominion and control of the Administrative Agent, subject to withdrawal by the Administrative Agent for the account of the Lenders as provided in Section 8(a) hereof.
 
“ Issuers ”: the collective reference to the companies identified on Schedule 1 hereto as the issuers of the Pledged Stock; individually, each an “ Issuer .”

“ Pledged Stock ”: the shares of capital stock listed on Schedule 1 hereto, together with all stock certificates, options or rights of any nature whatsoever that may be issued or granted by any Issuer to a Pledgor in respect of the Pledged Stock while this Agreement is in effect, including but not limited to the following:
 
(i) all shares, securities, membership interests or other equity interests representing a dividend on any of the Pledged Stock, or representing a distribution or return of capital upon or in respect of the Pledged Stock, or resulting from a stock split, revision, reclassification or other exchange therefor, and any subscriptions, warrants, rights or options issued to the holder of, or otherwise in respect of, the Pledged Stock; and
 
(ii) without affecting the obligations of the Pledgor under any provision prohibiting such action hereunder or under the Credit Agreement, in the event of any consolidation or merger involving the Issuer in which the Issuer is not the surviving entity, all Capital Stock of the successor entity formed by or resulting from such consolidation or merger.
 
“ Proceeds ”: all “proceeds” as such term is defined in the Uniform Commercial Code as in effect in the State of North Carolina on the date hereof.
 
“ Secured Obligations ”: the collective reference to the following:
 
(a) All Borrowers’ Obligations; and
 
(b) the prompt payment, performance and observance by the Guarantors of all obligations of the Guarantors under the Credit Agreement and any other Credit Documents to which any of the Guarantors is a party (including, without limitation, payment of their guaranty obligations under the Credit Agreement).
 
“ Securities Act ”: the Securities Act of 1933, as amended.
 
“ Uniform Commercial Code ” or “ UCC ”: the Uniform Commercial Code from time to time in effect in the State of North Carolina.
 
(c) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and section and paragraph references are to this Agreement unless otherwise specified.
 
(d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.
 
2. Pledge; Grant of Security Interest . Each of the Pledgors hereby delivers to the Administrative Agent, for the ratable benefit of the Lenders, all the Pledged Stock and hereby
 
2

grants to the Administrative Agent, for the ratable benefit of the Lenders, a first security interest in the Collateral, as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Secured Obligations.
 
Without limiting the generality of the foregoing, it is hereby specifically understood and agreed that the Pledgor may from time to time hereafter deliver additional Capital Stock to the Administrative Agent as collateral security for the Secured Obligations. Upon delivery to the Administrative Agent, such additional Capital Stock shall be deemed to be part of the Collateral and shall be subject to the terms of this Pledge Agreement whether or not Schedule 1 is amended to refer to such additional Capital Stock.
 
3. Stock Powers . Concurrently with the delivery to the Administrative Agent of each certificate representing one or more shares of Pledged Stock, each of the Pledgors shall deliver an undated stock power covering such certificate, duly executed in blank with, if the Administrative Agent so requests, signature guaranteed.
 
4. Representations and Warranties . Each Pledgor represents and warrants that:
 
(a) Each Pledged Stock constitutes (i) 100% of the issued and outstanding shares of all classes of capital stock of each Domestic Subsidiary of the Borrowers and (ii) 65% (or such greater percentage which would not result in material adverse tax consequences) of the issued and outstanding capital stock entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding capital stock not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) of each Foreign Subsidiary of the Borrowers.
 
(b) All of the Pledged Stock has been duly and validly issued and are fully paid and nonassessable.
 
(c) The Pledgor is the record and beneficial owner of, and has good and marketable title to, the Pledged Stock of such Pledgor, free of any and all Liens or options in favor of, or claims of, any other Person, except the security interests created by this Agreement.
 
(d) Upon delivery to the Administrative Agent of any stock certificates evidencing the Pledged Stock, the security interest created by this Agreement will constitute a valid, perfected first priority security interest in the Collateral, enforceable in accordance with its terms against all creditors of the Pledgor and any Persons purporting to purchase any Collateral from the Pledgor, except as affected by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.
 
3

(e) Except as previously disclosed to the Administrative Agent, none of the Pledged Stock consisting of partnership or limited liability company interests (i) is dealt in or traded on a securities exchange or in a securities market, (ii) by its terms expressly provides that it is a security governed by Article 8 of the UCC, (iii) is an investment company security, (iv) is held in a securities account or (v) constitutes a “Security (as such term is defined in the UCC).
 
5. Covenants . Each Pledgor covenants and agrees with the Administrative Agent and the Lenders that, from and after the date of this Agreement until the Secured Obligations have been satisfied in full and the Commitments have been terminated:
 
(a) If the Pledgor shall, as a result of its ownership of the Pledged Stock, become entitled to receive or shall receive any stock certificate (including, without limitation, any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), option or rights, whether in addition to, in substitution of, as a conversion of, or in exchange for any shares of the Pledged Stock, or otherwise in respect thereof, the Pledgor shall accept the same as the agent of the Administrative Agent and the Lenders, hold the same in trust for the Administrative Agent and the Lenders and deliver the same forthwith to the Administrative Agent in the exact form received, duly indorsed by the Pledgor to the Administrative Agent, if required, together with an undated stock power covering such certificate duly executed in blank by the Pledgor and with, if the Administrative Agent so requests, signature guaranteed, to be held by the Administrative Agent, subject to the terms hereof, as additional collateral security for the Secured Obligations. Any sums paid to a Pledgor upon or in respect of the Pledged Stock upon the liquidation or dissolution of any Issuer shall be paid over to the Administrative Agent to be held by it hereunder as additional collateral security for the Secured Obligations, and in case any distribution of capital shall be made on or in respect of the Pledged Stock or any property shall be distributed upon or with respect to the Pledged Stock pursuant to the recapitalization or reclassification of the capital of the Issuer or pursuant to the reorganization thereof, the property so distributed shall be delivered to the Administrative Agent to be held by it hereunder as additional collateral security for the Secured Obligations. If any sums of money or property so paid or distributed in respect of the Pledged Stock shall be received by the Pledgor, the Pledgor shall, until such money or property is paid or delivered to the Administrative Agent, hold such money or property in trust for the Lenders, segregated from other funds of the Pledgor, as additional collateral security for the Secured Obligations.
 
(b) Without the prior written consent of the Administrative Agent, the Pledgor will not (i) vote to enable, or take any other action to permit, any Issuer to issue any stock or other equity securities of any nature or to issue any other securities convertible into or granting the right to purchase or exchange for any stock or equity securities of any nature of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Collateral, (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Collateral, or
 
4

any interest therein, except for the security interests created by this Agreement or (iv) enter into any agreement or undertaking restricting the right or ability of the Pledgor or the Administrative Agent to sell, assign or transfer any of the Collateral.
 
(c) The Pledgor shall maintain the security interests created by this Agreement as first, perfected security interests and shall defend such security interests against claims and demands of all Persons whomsoever. At any time and from time to time, upon the written request of the Administrative Agent, and at the sole expense of the Pledgor, the Pledgor will promptly and duly execute and deliver such further instruments and documents and take such further actions as the Administrative Agent may reasonably request for the purposes of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted. If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any promissory note, other instrument or chattel paper, such promissory note, instrument or chattel paper shall be immediately delivered to the Administrative Agent, duly endorsed in a manner satisfactory to the Administrative Agent, to be held as Collateral pursuant to this Agreement.
 
(d) The Pledgor shall pay, and save the Administrative Agent and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement, except for any such liabilities which result from the gross negligence or willful misconduct of the Administrative Agent.
 
(e) The Pledgor shall not, without executing and delivering, or causing to be executed and delivered, to the Administrative Agent such agreements, documents and instruments as the Administrative Agent may require, issue or acquire any Capital Stock consisting of an interest in a partnership or a limited liability company that (i) is dealt in or traded on a securities exchange or in a securities market, (ii) by its terms expressly provides that it is a security governed by Article 8 of the UCC, (iii) is an investment company security, (iv) is held in a securities account or (v) constitutes a “Security (as such term is defined in the UCC).
 
6. Cash Dividends; Voting Rights . Unless an Event of Default has occurred and the Administrative Agent has given notice to the Pledgors of the Administrative Agent’s intent to exercise its corresponding rights pursuant to Section 7 hereof, the Pledgors shall be permitted to receive all cash dividends, to the extent permitted in the Credit Agreement, in respect of the Pledged Stock and to exercise all voting and corporate rights with respect to the Pledged Stock; provided , however , that no vote shall be cast or corporate right exercised or other action taken which, in the Administrative Agent’s reasonable judgment, would impair the Collateral or which would be inconsistent with or result in any violation of any provision of the Credit Agreement, this Agreement or any other Credit Document.
 
7. Rights of the Lenders and the Administrative Agent . (a) All money Proceeds received by the Administrative Agent hereunder shall be held by the Administrative Agent for
 
5

the benefit of the Lenders in a Collateral Account. All Proceeds while held by the Administrative Agent in a Collateral Account (or by the Pledgors in trust for the Administrative Agent and the Lenders) shall continue to be held as collateral security for all the Secured Obligations and shall not constitute payment thereof until applied as provided in Section 8(a) hereof.
 
(b) At any time after an Event of Default has occurred and the Administrative Agent has given notice to the Pledgors of its intent to exercise the following rights to the Pledgors, (i) the Administrative Agent shall have the right to receive any and all cash dividends paid in respect of the Pledged Stock and make application thereof to the Secured Obligations in the order set forth is Section 9.3 of the Credit Agreement, and (ii) all of the Pledged Stock shall be registered in the name of the Administrative Agent or its nominee, and the Administrative Agent or its nominee may thereafter exercise (A) all voting, corporate and other rights pertaining to the Pledged Stock at any meeting of shareholders of any Issuer or otherwise and (B) any and all rights of conversion, exchange, subscription and any other rights, privileges or options pertaining to the Pledged Stock as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Pledged Stock upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate structure of any Issuer, or upon the exercise by any Pledgor or the Administrative Agent of any right, privilege or option pertaining to the Pledged Stock, and in connection therewith, the right to deposit and deliver any and all of the Pledged Stock with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative Agent may determine), all without liability except to account for property actually received by it, but the Administrative Agent shall have no duty to the Pledgors to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.
 
8. Remedies . (a) At any time after an Event of Default has occurred, at the Administrative Agent’s election, the Administrative Agent may apply all or any part of Proceeds held in any Collateral Account in payment of the Secured Obligations in the order set forth in Section 9.3 of the Credit Agreement.
 
(b) At any time after an Event of Default has occurred, the Administrative Agent, on behalf of the Lenders, may exercise, in addition to all other rights and remedies granted in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Secured Obligations, all rights and remedies of a secured party under the Uniform Commercial Code. Without limiting the generality of the foregoing, the Administrative Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon the Pledgors or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, assign, give an option or options to purchase or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, in the over-the-counter market, at any exchange, broker’s board or office of the Administrative Agent or any Lender or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit
 
6

risk. The Administrative Agent or any Lender shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in any Pledgor, which right or equity of redemption is hereby waived and released. The Administrative Agent shall apply any Proceeds from time to time held by it and the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale, after deducting all reasonable costs and expenses of every kind incurred in respect thereof or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Administrative Agent and the Lenders hereunder, including, without limitation, reasonable attorneys’ fees and disbursements of counsel to the Administrative Agent, to the payment in whole or in part of the Secured Obligations, in the order set forth in Section 9.3 of the Credit Agreement, and only after such application and after the payment by the Administrative Agent of any other amount required by any provision of law, need the Administrative Agent account for the surplus, if any, to any Pledgor. To the extent permitted by applicable law, each Pledgor waives all claims, damages and demands it may acquire against the Administrative Agent or any Lender arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 20 days before such sale or other disposition. The Pledgors shall remain liable for any deficiency if the proceeds of any sale or other disposition of Collateral are insufficient to pay the Secured Obligations and the fees and disbursements of any attorneys employed by the Administrative Agent or any Lender to collect such deficiency.
 
9. Registration Rights; Private Sales . (a) If the Administrative Agent shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to Section 8 hereof, and if in the opinion of the Administrative Agent it is necessary or advisable to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the Securities Act, the Pledgors will cause the Issuer thereof to (i) execute and deliver, and cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the opinion of the Administrative Agent, necessary or advisable to register the Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act, (ii) to use its best efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of one year from the date of the first public offering of the Pledged Stock, or that portion thereof to be sold, and (iii) to make all amendments thereto and/or to the related prospectus which, in the opinion of the Administrative Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto. Each Pledgor acknowledges and agrees to cause such Issuer to comply with the provisions of the securities or “Blue Sky” laws of any and all jurisdiction which the Administrative Agent shall designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the Securities Act.
 
(b) Each Pledgor recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obligated to
 
7

agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Pledgor agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer agrees to do so.
 
(c) Each Pledgor further agrees to use its best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Stock pursuant to Sections 8 and 9(a) valid and binding and in compliance with any and all other applicable Requirements of Law. Each Pledgor further agrees that a breach of any of the covenants contained in Sections 8 and 9(a) will cause irreparable injury to the Administrative Agent and the Lenders, that the Administrative Agent and the Lenders have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in Sections 8 and 9(a) shall be specifically enforceable against such Pledgor, and such Pledgor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred.
 
10. Irrevocable Authorization and Instruction to Issuer . Each Pledgor hereby authorizes and instructs each Issuer to comply with any instruction received by it from the Administrative Agent in writing that (a) states that an Event of Default has occurred and (b) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such Pledgor, and such Pledgor agrees that each Issuer shall be fully protected by the Pledgors in so complying.
 
11. Administrative Agent’s Appointment as Attorney-in-Fact . (a) Each Pledgor hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent of the Administrative Agent, with full power of substitution, as its true and lawful attorney-in-fact with fully irrevocable power and authority in the place and stead of such Pledgor and in the name of such Pledgor or in the Administrative Agent’s own name, from time to time in the Administrative Agent’s discretion, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, including, without limitation, any financing statements, endorsements, assignments or other instruments of transfer.
 
(b) Each Pledgor hereby ratifies all that said attorneys shall lawfully do or cause to be done pursuant to the power of attorney granted in Section 11(a) hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until the Secured Obligations have been satisfied in full and the Commitments have been terminated.
 
12. Duty of Administrative Agent . The Administrative Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under
 
8

Section 9-207 of the Uniform Commercial Code or otherwise, shall be to deal with it in the same manner as the Administrative Agent deals with similar securities and property for its own account, except that the Administrative Agent shall have no obligation to invest funds held in any Collateral Account and may hold the same as demand deposits. Neither the Administrative Agent, any Lender nor any of their respective directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Pledgor or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof.
 
13. Execution of Financing Statements . Pursuant to Section 9-708 of the Uniform Commercial Code, each Pledgor authorizes the Administrative Agent to prepare and file financing statements with respect to the Collateral in such form and in such filing offices as the Administrative Agent reasonably determines appropriate to perfect the security interests of the Administrative Agent under this Agreement. Such financing statements may describe the collateral in the same manner as described herein or may contain an indication or description of collateral that describes such property in any other manner as the Administrative Agent may determine is necessary or advisable to ensure the perfection of the security interest in the collateral granted to the Administrative Agent in connection herewith.
 
14. Authority of Administrative Agent . Each Pledgor acknowledges that the rights and responsibilities of the Administrative Agent under this Agreement with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Administrative Agent and the Lenders, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Administrative Agent and such Pledgor, the Administrative Agent shall be conclusively presumed to be acting as agent for the Lenders with full and valid authority so to act or refrain from acting, and neither any Pledgor nor any Issuer shall be under any obligation, or entitlement, to make any inquiry respecting such authority.
 
15. Notices . All notices shall be given or made in accordance with Section 11.1 of the Credit Agreement.
 
16. Severability . Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
 
17. Amendments in Writing; No Waiver; Cumulative Remedies . (a) None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except by a written instrument executed by the Pledgors and the Administrative Agent, provided that any provision of this Agreement may be waived by the Administrative Agent and
 
9

the Lenders in a letter or agreement executed by the Administrative Agent or by facsimile transmission from the Administrative Agent.
 
(b) Neither the Administrative Agent nor any Lender shall by any act (except by a written instrument pursuant to Section 17(a) hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default or in any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay in exercising on the part of the Administrative Agent or any Lender, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Administrative Agent or any Lender of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent or such Lender would otherwise have on any future occasion.
 
(c) The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.
 
18. Section Headings . The section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.
 
19. Successors and Assigns . This Agreement shall be binding upon the successors and assigns of the Pledgors and shall inure to the benefit of the Administrative Agent and the Lenders and their successors and assigns, provided that the Pledgors may not assign any of their rights or obligations under this Agreement without the prior written consent of the Administrative Agent and any such purported assignment without such prior written consent shall be null and void.
 
20. Term of Agreement . This Agreement and the security interests granted hereunder shall remain in full force and effect until the Secured Obligations have been satisfied in full and the Commitments have been terminated, at which time the Administrative Agent shall release and terminate the security interests granted to it hereunder. Upon such release and termination, (i) the Pledgors shall be entitled to the return, at the Pledgors’ expense, of any and all funds in the Collateral Account and such of the Collateral held by the Administrative Agent as shall not have been sold or otherwise applied pursuant to the terms hereof and (ii) the Administrative Agent shall, at the Pledgors’ expense, execute and deliver to the Borrowers such UCC termination statements and other documents as the Borrower shall reasonably request to evidence such release and termination.
 
21. Joint and Several Obligations of Pledgors .
 
(a) Each of the Pledgors is accepting joint and several liability hereunder in consideration of the financial accommodation to be provided by the holders of the Secured Obligations, for the mutual benefit, directly and indirectly, of each of the
 
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Pledgors and in consideration of the undertaking of each of the Pledgors to accept joint and several liability for the obligations of each of them.
 
(b) Each of the Pledgors jointly and severally hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Pledgors with respect to the payment and performance of all of the Secured Obligations arising under this Pledge Agreement, the other Credit Documents and any other documents relating to the Secured Obligations, it being the intention of the parties hereto that all the Secured Obligations shall be the joint and several obligations of each of the Pledgors without preferences or distinction among them.
 
(c) Notwithstanding an provision to the contrary contained herein, in any other of the Credit Documents or in any other documents relating to the Secured Oblations the obligations of each Guarantor under the Credit Agreement and the other Credit Documents shall be limited to an aggregate amount equal to the largest amount that would not render such obligations subject to avoidance under Section 548 of the Bankruptcy Code or any comparable provisions of any applicable state law.
 
22. GOVERNING LAW . THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH CAROLINA.
 
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IN WITNESS WHEREOF, the undersigned have caused this Pledge Agreement to be duly executed and delivered as of the date first above written.
 
PLEDGORS:	 	 	
		
 	 	CHARLOTTE MOTOR SPEEDWAY, LLC ,
a North Carolina limited liability company	
			
 	 	By:	 	/s/ William R. Brooks
	
 	 	Name:	 	        William R. Brooks	
 	 	Title:	 	        Chief Financial Officer	
 	 	 
LAS VEGAS MOTOR SPEEDWAY, INC. ,
a Delaware corporation	
			
 	 	By:	 	/s/ William R. Brooks
	
 	 	Name:	 	        William R. Brooks	
 	 	Title:	 	        Chief Financial Officer	
 	 	 
SPEEDWAY MOTORSPORTS, INC. ,
a Delaware corporation	
			
 	 	By:	 	/s/ William R. Brooks
	
 	 	Name:	 	        William R. Brooks	
 	 	Title:	 	        Chief Financial Officer	
 	 	 
SPEEDWAY PROPERTIES COMPANY, LLC,
a Delaware limited liability company	
			
 	 	By:     	 	 	
			
 	 	By:	 	/s/ William R. Brooks
	
 	 	Name:	 	        William R. Brooks	
 	 	Title:	 	        Chief Financial Officer	
 	 	 
SPEEDWAY SONOMA, LLC ,
a Delaware limited liability company	
			
 	 	By:	 	/s/ William R. Brooks
	
 	 	Name:	 	        William R. Brooks	
 	 	Title:	 	        Chief Financial Officer	

 	 	SPEEDWAY SYSTEMS LLC ,
a North Carolina limited liability company	
			
 	 	By:	 	/s/ William R. Brooks
	
 	 	Name:	 	        William R. Brooks	
 	 	Title:	 	        Chief Financial Officer	
 	 	 
SPR, INC. ,
a Delaware corporation	
			
 	 	By:	 	/s/ William R. Brooks
	
 	 	Name:	 	        William R. Brooks	
 	 	Title:	 	        Chief Financial Officer	
 	 	 
TRACKSIDE HOLDING CORPORATION ,
a North Carolina corporation	
			
 	 	By:	 	/s/ William R. Brooks
	
 	 	Name:	 	        William R. Brooks	
 	 	Title:	 	        Chief Financial Officer	
ADMINISTRATIVE
AGENT:	 	 	

BANK OF AMERICA, N.A. ,
as Administrative Agent	
			
 	 	By:	 	/s/ James E. Nash, Jr.
	
 	 	Name:	 	        James E. Nash, Jr.	
 	 	Title:	 	        Managing Director	

Schedule 1
 
Description of Pledged Stock
 
Pledgor
	    	Issuer
	    	Cert. No.
	    	No. of
Shares
	
Speedway Motorsports, Inc.	    	Atlanta Motor Speedway, Inc.	    	3053	    	6,300	
Speedway Motorsports, Inc.	    	Bristol Motor Speedway, Inc.	    	27	    	2,000	
Speedway Motorsports, Inc.	    	Charlotte Motor Speedway, LLC	    	N/A	    	N/A	
Speedway Motorsports, Inc.	    	Las Vegas Motor Speedway, Inc.	    	1	    	100	
Speedway Motorsports, Inc.	    	Texas Motor Speedway, Inc.	    	1	    	1,000	
Speedway Motorsports, Inc.	    	SPR, Inc.	    	2	    	50,000	
Charlotte Motor Speedway, LLC	    	INEX Corp.	    	1	    	100	
Charlotte Motor Speedway, LLC	    	600 Racing, Inc.	    	5	    	5,000	
Las Vegas Motor Speedway, Inc.	    	Nevada Speedway, LLC	    	N/A	    	N/A	
Las Vegas Motor Speedway, Inc.	    	Speedway Funding, LLC	    	N/A	    	N/A	
Speedway Properties Company, LLC	    	Speedway Media, LLC	    	N/A	    	N/A	
Speedway Sonoma, LLC	    	Motorsports By Mail, LLC	    	N/A	    	N/A	
Speedway Systems LLC	    	Trackside Holding Corporation	    	1	    	100	
SPR, Inc.	    	Speedway Properties Company, LLC	    	N/A	    	N/A	
SPR, Inc.	    	Speedway Sonoma, LLC	    	N/A	    	N/A	
SPR, Inc.	    	Speedway Systems LLC	    	N/A	    	N/A	
Trackside Holding Corporation	    	SMI Trackside, LLC	    	N/A	    	N/A	

SCHEDULE 2
 
Form of Irrevocable Stock Power
 
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
 
the following shares of capital stock of                                               , a                      corporation:
 
Certificate No.	    	No. of Shares	
 
and irrevocably appoints
 
its agent and attorney-in-fact to transfer all or any part of such capital stock and to take all necessary and appropriate action to effect any such transfer. The agent and attorney-in-fact may substitute and appoint one or more persons to act for him.
 
Date:	  	                                                                              ,	
		
 	  	a                                               corporation	
		
 	  	By:                                                                        	
		
 	  	Name:	
		
 	  	Title:	
 
Witnessed by:	    	[Signature Guaranteed:]	

 

EXHIBIT 10.3
EXECUTION COPY
 
REGISTRATION RIGHTS AGREEMENT
 
by and among
 
Speedway Motorsports, Inc.
 
and the Guarantors named herein
 
and
 
Banc of America Securities LLC
Wachovia Securities, Inc.
Credit Lyonnais Securities (USA) Inc.
Fleet Securities, Inc.
SunTrust Capital Markets Inc.
 
Dated as of May 16, 2003

EXECUTION COPY
 
Registration Rights Agreement
 
This Registration Rights Agreement (this “ Agreement ”) is made and entered into as of May 16, 2003, by and among Speedway Motorsports, Inc., a Delaware corporation (the “ Company ”), the guarantors listed herein (the “Guarantors”) and Banc of America Securities LLC, Wachovia Securities, Inc., Credit Lyonnais Securities (USA) Inc., Fleet Securities, Inc. and SunTrust Capital Markets Inc. (each an “ Initial Purchaser ” and, collectively, the “ Initial Purchasers ”), each of whom has agreed to purchase the Company’s 6¾% Senior Subordinated Notes due 2013 (the “ Initial Notes ”) pursuant to the Purchase Agreement (as defined below).
 
This Agreement is made pursuant to the Purchase Agreement, dated as of May 8, 2003 (the “Purchase Agreement”), by and among the Company and the Initial Purchasers (i) for your benefit and for the benefit of each other Initial Purchaser and (ii) for the benefit of the holders from time to time of the Notes (including you and each other Initial Purchaser). In order to induce the Initial Purchasers to purchase the Initial Notes, the Company has agreed to provide the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the obligations of the Initial Purchasers set forth in Section 5 (h) of the Purchase Agreement.
 
The parties hereby agree as follows:
 
Section 1. Definitions
 
As used in this Agreement, the following capitalized terms shall have the following meanings:
 
Additional Interest Payment Date : With respect to the Initial Notes, each Interest Payment Date.
 
Broker-Dealer : Any broker or dealer registered under the Exchange Act.
 
Closing Date : The date of this Agreement.
 
Commission : The Securities and Exchange Commission.
 
Consummate : A Registered Exchange Offer shall be deemed “Consummated” for purposes of this Agreement upon the occurrence of (i) the filing and effectiveness under the Securities Act of the Exchange Offer Registration Statement relating to the Exchange Notes to be issued in the Exchange Offer, (ii) the maintenance of such Registration Statement continuously effective and the keeping of the Exchange Offer open for a period not less than the minimum period required pursuant to Section 3(b) hereof, and (iii) the delivery by the Company to the Registrar under the Indenture of Exchange Notes in the same aggregate principal amount as the aggregate principal amount of Initial Notes that were tendered by Holders thereof pursuant to the Exchange Offer.
 
Effectiveness Target Date : As defined in Section 5.
 
Exchange Act : The Securities Exchange Act of 1934, as amended.
 
Exchange Notes : The 6  3 / 4 % Senior Subordinated Notes due 2013, substantially identical under the Indenture to the Initial Notes, to be issued to Holders in exchange for Transfer Restricted Securities pursuant to this Agreement.
 
Exchange Offer : The registration by the Company under the Securities Act of the Exchange Notes pursuant to a Registration Statement pursuant to which the Company offers the Holders of all

outstanding Transfer Restricted Securities the opportunity to exchange all such outstanding Transfer Restricted Securities held by such Holders for Exchange Notes in an aggregate principal amount equal to the aggregate principal amount of the Transfer Restricted Securities tendered in such exchange offer by such Holders.
 
Exchange Offer Registration Statement : The Registration Statement relating to the Exchange Offer, including the related Prospectus.
 
Exempt Resales : The transactions in which the Initial Purchasers propose to sell the Initial Notes to certain “qualified institutional buyers,” as such term is defined in Rule 144A under the Securities Act, and to certain non-U.S. persons pursuant to Regulation S under the Securities Act.
 
Holders : As defined in Section 2(b) hereof.
 
Indemnified Holder : As defined in Section 8(a) hereof.
 
Indenture : The Indenture, dated as of May 16, 2003, among the Company and U.S. Bank National Association, as trustee (the “ Trustee ”), pursuant to which the Notes are to be issued, as such Indenture is amended or supplemented from time to time in accordance with the terms thereof.
 
Initial Purchaser : As defined in the preamble hereto.
 
Initial Notes : The 6¾% Senior Subordinated Notes due 2013, of the same series under the Indenture as the Exchange Notes, for so long as such securities constitute Transfer Restricted Securities.
 
Initial Placement : The issuance and sale by the Company of the Initial Notes to the Initial Purchasers pursuant to the Purchase Agreement.
 
Interest Payment Date : As defined in the Notes.
 
NASD : National Association of Securities Dealers, Inc.
 
Notes : The Initial Notes and the Exchange Notes.
 
Person : An individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof.
 
Prospectus : The prospectus included in a Registration Statement, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such Prospectus.
 
Registration Default : As defined in Section 5 hereof.
 
Registration Statement : Any registration statement of the Company relating to (a) an offering of Exchange Notes pursuant to an Exchange Offer or (b) the registration for resale of Transfer Restricted Securities pursuant to the Shelf Registration Statement, which is filed pursuant to the provisions of this Agreement, in each case, including the Prospectus included therein, all amendments and supplements thereto (including post-effective amendments) and all exhibits and material incorporated by reference therein.
 
Securities Act : The Securities Act of 1933, as amended.
 
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Shelf Filing Deadline : As defined in Section 4 hereof.
 
Shelf Registration Statement : As defined in Section 4 hereof.
 
Trust Indenture Act : The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa — 77bbbb) as in effect on the date of the Indenture.
 
Transfer Restricted Securities : Each Note, until the earliest to occur of (a) the date on which such Note is exchanged in the Exchange Offer and entitled to be resold to the public by the Holder thereof without complying with the prospectus delivery requirements of the Securities Act, (b) the date on which such Note has been effectively registered under the Securities Act and disposed of in accordance with a Shelf Registration Statement and (c) the date on which such Note is distributed to the public pursuant to Rule 144 under the Securities Act or by a Broker-Dealer pursuant to the “Plan of Distribution” contemplated by the Exchange Offer Registration Statement (including delivery of the Prospectus contained therein).
 
Underwritten Registration or Underwritten Offering : A registration in which securities of the Company are sold to an underwriter for reoffering to the public.
 
Section 2. Securities Subject To This Agreement
 
(a) Transfer Restricted Securities . The securities entitled to the benefits of this Agreement are the Transfer Restricted Securities.
 
(b) Holders of Transfer Restricted Securities . A Person is deemed to be a holder of Transfer Restricted Securities (each, a “Holder”) whenever such Person owns Transfer Restricted Securities.
 
Section 3. Registered Exchange Offer
 
(a) Unless the Exchange Offer shall not be permissible under applicable law or Commission policy (after the procedures set forth in Section 6(a) below have been complied with), the Company and the Guarantor shall (i) cause to be filed with the Commission as soon as practicable after the Closing Date, but in no event later than 90 days after the Closing Date, a Registration Statement under the Securities Act relating to the Exchange Notes and the Exchange Offer, (ii) use their reasonable best efforts to cause such Registration Statement to become effective at the earliest possible time, but in no event later than 150 days after the Closing Date, (iii) in connection with the foregoing, file (A) all pre-effective amendments to such Registration Statement as may be necessary in order to cause such Registration Statement to become effective, (B) if applicable, a post-effective amendment to such Registration Statement pursuant to Rule 430A under the Securities Act and (C) cause all necessary filings in connection with the registration and qualification of the Exchange Notes to be made under the Blue Sky laws of such jurisdictions as are necessary to permit Consummation of the Exchange Offer, and (iv) upon the effectiveness of such Registration Statement, commence the Exchange Offer. The Exchange Offer shall be on the appropriate form permitting registration of the Exchange Notes to be offered in exchange for the Transfer Restricted Securities and to permit resales of Notes held by Broker-Dealers as contemplated by Section 3(c) below.
 
(b) The Company shall cause the Exchange Offer Registration Statement to be effective continuously and shall keep the Exchange Offer open for a period of not less than the minimum period required under applicable federal and state securities laws to Consummate the Exchange Offer; provided, however , that in no event shall such period be less than 20 business days after the date notice of the Exchange Offer is mailed to the Holders. The Company shall cause the Exchange Offer to comply with all applicable federal and state securities laws. No securities other than the Notes shall be included in the Exchange Offer Registration Statement. The Company shall use its reasonable best efforts to cause the Exchange Offer to be Consummated on the earliest practicable date after the Exchange Offer Registration Statement has become
 
3

effective, but in no event later than 30 business days after the Exchange Offer Registration Statement has become effective.
 
(c) The Company shall indicate in a “Plan of Distribution” section contained in the Prospectus forming a part of the Exchange Offer Registration Statement that any Broker-Dealer who holds Initial Notes that are Transfer Restricted Securities and that were acquired for its own account as a result of market-making activities or other trading activities (other than Transfer Restricted Securities acquired directly from the Company), may exchange such Initial Notes pursuant to the Exchange Offer; however, such Broker-Dealer may be deemed to be an “underwriter” within the meaning of the Securities Act and must, therefore, deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of the Exchange Notes received by such Broker-Dealer in the Exchange Offer, which prospectus delivery requirement may be satisfied by the delivery by such Broker-Dealer of the Prospectus contained in the Exchange Offer Registration Statement. Such “Plan of Distribution” section shall also contain all other information with respect to such resales by Broker-Dealers that the Commission may require in order to permit such resales pursuant thereto, but such “Plan of Distribution” shall not name any such Broker-Dealer or disclose the amount of Notes held by any such Broker-Dealer except to the extent required by applicable law, regulation or the Commission as a result of a change in policy after the date of this Agreement.
 
The Company and the Guarantors shall use their reasonable best efforts to keep the Exchange Offer Registration Statement continuously effective, supplemented and amended as required by the provisions of Section 6(c) below to the extent necessary to ensure that it is available for resales of Notes acquired by Broker-Dealers for their own accounts as a result of market-making activities or other trading activities, and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, for a period ending on the earlier of (i) 365 days from the date on which the Exchange Offer Registration Statement is declared effective and (ii) the date on which a Broker-Dealer is no longer required to deliver a prospectus in connection with market-making or other trading activities.
 
The Company shall provide sufficient copies of the latest version of such Prospectus to Broker-Dealers promptly upon request at any time during such 365-day (or shorter as provided in the foregoing sentence) period in order to facilitate such resales.
 
Section 4. Shelf Registration
 
(a) Shelf Registration . If (i) the Company and the Guarantors are not required to file an Exchange Offer Registration Statement or to consummate the Exchange Offer because the Exchange Offer is not permitted by applicable law or Commission policy (after the procedures set forth in Section 6(a) below have been complied with), (ii) for any reason the Exchange Offer is not Consummated within 150 days after the Closing Date, (iii) with respect to any Holder of Transfer Restricted Securities (A) such Holder is prohibited by applicable law or Commission policy from participating in the Exchange Offer, or (B) such Holder may not resell the Exchange Notes acquired by it in the Exchange Offer to the public without delivering a prospectus and that the Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder, or (C) such Holder is a Broker-Dealer and holds Initial Notes acquired directly from the Company or one of its affiliates, or (iv) an Initial Purchaser requests, then, upon such Holder’s or Initial Purchaser’s request, the Company and the Guarantors shall
 
(x) cause to be filed a shelf registration statement pursuant to Rule 415 under the Securities Act, which may be an amendment to the Exchange Offer Registration Statement (in either event, the “ Shelf Registration Statement ”), on or prior to the earliest to occur of (1) the 45th day after the date on which the Company determines that it is not required to file the Exchange Offer Registration Statement, (2) 150 days after the Closing Date (in the case of clause (ii) above) and (3) the 45th day after the date on which the Company receives notice from a Holder of Transfer Restricted Securities or an Initial Purchaser as contemplated by
 
4

clause (iii) and (iv) above (such earliest date being the “ Shelf Filing Deadline ”), which Shelf Registration Statement shall provide for resales of all Transfer Restricted Securities the Holders of which shall have provided the information required pursuant to Section 4(b) hereof; and
 
(y) use their reasonable best efforts to cause such Shelf Registration Statement to be declared effective by the Commission on or before the 90th day after the Shelf Filing Deadline.
 
The Company and the Guarantors shall use their reasonable best efforts to keep such Shelf Registration Statement continuously effective, supplemented and amended as required by the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is available for resales of Notes by the Holders of Transfer Restricted Securities entitled to the benefit of this Section 4(a), and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of at least two years following the effective date of such Shelf Registration Statement (or shorter period that will terminate when all the Notes covered by such Shelf Registration Statement have been sold pursuant to such Shelf Registration Statement). To the extent the Company is required to include any Notes in a Shelf Registration Statement, the Company may include such Notes on any other shelf registration statement otherwise being filed by the Company with respect to other of its securities, so long as all of the procedures described herein with respect to the Shelf Registration Statement are adhered to.
 
(b) Provision by Holders of Certain Information in Connection with the Shelf Registration Statement . No Holder of Transfer Restricted Securities may include any of its Transfer Restricted Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to the Company in writing, within 20 business days after receipt of a request therefor, such information as the Company may reasonably request for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus included therein. Each Holder as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading.
 
Section 5. Additional Interest
 
If (i) any of the Registration Statements required by this Agreement is not filed with the Commission on or prior to the date specified for such filing in this Agreement, (ii) any of such Registration Statements has not been declared effective by the Commission on or prior to the date specified for such effectiveness in this Agreement (the “ Effectiveness Target Date ”), (iii) the Exchange Offer has not been Consummated within 30 business days after the Effectiveness Target Date with respect to the Exchange Offer Registration Statement or (iv) any Registration Statement required by this Agreement is filed and declared effective but shall thereafter cease to be effective or fail to be usable for its intended purpose without being succeeded immediately by a post-effective amendment to such Registration Statement that cures such failure and that is itself immediately declared effective (each such event referred to in clauses (i) through (iv), a “ Registration Default ”), the Company hereby agrees that the interest rate borne by the Notes shall be increased by $0.05 per week per $1,000 principal amount of Notes during the 90-day period immediately following the occurrence of any Registration Default and shall increase by $0.05 per week per $1,000 principal amount at the end of each subsequent 90-day period, but in no event shall the total of all such increases exceed $0.30 per week per $1,000 principal amount of Notes. Any additional interest payable pursuant to this Section 5 is herein referred to as “Additional Interest” or “Liquidated Damages”. Following the cure of all Registration Defaults relating to any particular Notes, the interest rate borne by the relevant Notes will be reduced to the original interest rate borne by such Notes; provided, however, that, if after any such reduction in interest rate, a different Registration Default occurs, the interest rate borne by the relevant Notes shall again be increased pursuant to the foregoing provisions.
 
5

All obligations of the Company and the Guarantors set forth in the preceding paragraph that are outstanding with respect to any Transfer Restricted Security at the time such security ceases to be a Transfer Restricted Security shall survive until such time as all such obligations with respect to such Note shall have been satisfied in full.
 
Section 6. Registration Procedures
 
(a) Exchange Offer Registration Statement . In connection with the Exchange Offer, the Company and the Guarantors shall comply with all of the provisions of Section 6(c) below, shall use their best efforts to effect such exchange to permit the sale of Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof, and shall comply with all of the following provisions:
 
(i) If in the reasonable opinion of counsel to the Company there is a question as to whether the Exchange Offer is permitted by applicable law, the Company and the Guarantors hereby agree to seek a no-action letter or other favorable decision from the Commission allowing the Company and the Guarantors to Consummate an Exchange Offer for such Initial Notes. The Company and the Guarantors each hereby agrees to pursue the issuance of such a decision to the Commission staff level but shall not be required to take commercially unreasonable action to effect a change of Commission policy. The Company and the Guarantors each hereby agrees, however, to (A) participate in telephonic conferences with the Commission, (B) deliver to the Commission staff an analysis prepared by counsel to the Company setting forth the legal bases, if any, upon which such counsel has concluded that such an Exchange Offer should be permitted and (C) diligently pursue a favorable resolution by the Commission staff of such submission.
 
(ii) As a condition to its participation in the Exchange Offer pursuant to the terms of this Agreement, each Holder of Transfer Restricted Securities shall furnish, upon the request of the Company, prior to the Consummation thereof, a written representation to the Company (which may be contained in the letter of transmittal contemplated by the Exchange Offer Registration Statement) to the effect that (A) it is not an affiliate of the Company, (B) it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any person to participate in, a distribution of the Exchange Notes to be issued in the Exchange Offer and (C) it is acquiring the Exchange Notes in its ordinary course of business. In addition, all such Holders of Transfer Restricted Securities shall otherwise cooperate in the Company’s preparations for the Exchange Offer. Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such Holder using the Exchange Offer to participate in a distribution of the securities to be acquired in the Exchange Offer (1) could not under Commission policy as in effect on the date of this Agreement rely on the position of the Commission enunciated in Morgan Stanley and Co., Inc . (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the Commission’s letter to Shearman & Sterling dated July 2, 1993, and similar no-action letters (which may include any no-action letter obtained pursuant to clause (i) above), and (2) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction and that such a secondary resale transaction should be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K if the resales are of Exchange Notes obtained by such Holder in exchange for Initial Notes acquired by such Holder directly from the Company.
 
(b) Shelf Registration Statement . In connection with the Shelf Registration Statement, the Company and the Guarantors shall comply with all the provisions of Section 6(c) below and shall use their reasonable best efforts to effect such registration to permit the sale of the Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof, and pursuant thereto the Company will as expeditiously as possible prepare and file with the Commission a Registration Statement relating to the registration on any appropriate form under the Securities Act, which form shall be available for the sale of the Transfer Restricted Securities in accordance with the intended method or methods of distribution thereof.
 
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(c) General Provisions . In connection with any Registration Statement and any Prospectus required by this Agreement to permit the sale or resale of Transfer Restricted Securities (including, without limitation, any Registration Statement and the related Prospectus required to permit resales of Notes by Broker-Dealers), the Company shall:
 
(i) use its reasonable best efforts to keep such Registration Statement continuously effective and provide all requisite financial statements (including, if required by the Securities Act or any regulation thereunder, financial statements of the Guarantors for the period specified in Section 3 or 4 of this Agreement, as applicable; upon the occurrence of any event that would cause any such Registration Statement or the Prospectus contained therein (A) to contain a material misstatement or omission or (B) not to be effective and usable for resale of Transfer Restricted Securities during the period required by this Agreement, the Company shall file promptly an appropriate amendment to such Registration Statement, in the case of clause (A), correcting any such misstatement or omission, and, in the case of either clause (A) or (B), use its reasonable best efforts to cause such amendment to be declared effective and such Registration Statement and the related Prospectus to become usable for their intended purpose(s) as soon as practicable thereafter;
 
(ii) prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement as may be necessary to keep the Registration Statement effective for the applicable period set forth in Section 3 or 4 hereof, as applicable, or such shorter period as will terminate when all Transfer Restricted Securities covered by such Registration Statement have been sold; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act, and to comply fully with the applicable provisions of Rules 424 and 430A under the Securities Act in a timely manner; and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus;
 
(iii) advise the underwriter(s), if any, and selling Holders promptly and, if requested by such Persons, to confirm such advice in writing, (A) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to any Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Securities Act or of the suspension by any state securities commission of the qualification of the Transfer Restricted Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto, or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Registration Statement or the Prospectus in order to make the statements therein not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Transfer Restricted Securities under state securities or Blue Sky laws, the Company and the Guarantors shall use their best efforts to obtain the withdrawal or lifting of such order at the earliest possible time;
 
(iv) furnish without charge to each of the Initial Purchasers, each selling Holder named in any Registration Statement, and each of the underwriter(s), if any, before filing with the Commission, copies of any Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or Prospectus (including all documents incorporated by reference after the initial filing of such Registration Statement), which documents will be subject to the review of such Holders and underwriter(s) in connection with such sale, if any, for a period of at least five business days, and the Company will not file any such Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus (including all such documents incorporated by
 
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reference) to which a Holder of Transfer Restricted Securities covered by such Registration Statement or the underwriter(s), if any, shall reasonably object in writing within five business days after the receipt thereof (such objection to be deemed timely made upon confirmation of telecopy transmission within such period);
 
(v) to the extent practicable, promptly prior to the filing of any document that is to be incorporated by reference into a Registration Statement or Prospectus, make available, and if requested, provide copies of such document to the Initial Purchasers, each selling Holder named in any Registration Statement, and to the underwriter(s), if any, make the Company’s management, officers and other representatives available and management, officers and other representatives of the Guarantors available for discussion of such document and other customary due diligence matters, and include such information in such document prior to the filing thereof as such selling Holders or underwriter(s), if any, reasonably may request;
 
(vi) make available at reasonable times for inspection by the selling Holders, any managing underwriter participating in any disposition pursuant to such Registration Statement and any attorney or accountant retained by such selling Holders or any of the underwriter(s), all financial and other records, pertinent corporate documents and properties of the Company and each of the Guarantors and cause the Company’s and the Guarantors officers, directors and employees to supply all information reasonably requested by any such Holder, underwriter, attorney or accountant in connection with such Registration Statement subsequent to the filing thereof and prior to its effectiveness and make available, to the extent reasonable under the circumstances, the Company’s management, officers and other representatives for meetings with investors typical for roadshows of underwritten securities to the extent requested by any Holder, Initial Purchaser or underwriter;
 
(vii) if requested by any selling Holders or the underwriter(s), if any, promptly incorporate in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such selling Holders and underwriter(s), if any, may reasonably request to have included therein, including, without limitation, information relating to the “Plan of Distribution” of the Transfer Restricted Securities, information with respect to the principal amount of Transfer Restricted Securities being sold to such underwriter(s), the purchase price being paid therefor and any other terms of the offering of the Transfer Restricted Securities to be sold in such offering; and 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;
 
(viii) use their best efforts to cause the Transfer Restricted Securities covered by the Registration Statement to be rated with the appropriate rating agencies, if not rated and so requested by the Holders of a majority in aggregate principal amount of Notes covered thereby or the underwriter(s), if any;
 
(ix) furnish to each selling Holder and each of the underwriter(s), if any, without charge, at least one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including financial statements and schedules, all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference);
 
(x) deliver to each selling Holder and each of the underwriter(s), if any, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; the Company and the Guarantors hereby consent to the use of the Prospectus and any amendment or supplement thereto by each of the selling Holders and each of the underwriter(s), if any, in connection with the offering and the sale of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto;
 
(xi) enter into, and cause the Guarantors to enter into, such agreements (including an underwriting agreement), and make, and cause the Guarantors to make, such representations and warranties, and take all such other actions in connection therewith in order to expedite or facilitate the disposition of the Transfer Restricted Securities pursuant to any Registration Statement contemplated by this Agreement, all to
 
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such extent as may be requested by any Initial Purchaser or by any Holder of Transfer Restricted Securities or underwriter in connection with any sale or resale pursuant to any Registration Statement contemplated by this Agreement; and whether or not an underwriting agreement is entered into and whether or not the registration is an Underwritten Registration, the Company and the Guarantors shall:
 
(A) furnish to each Initial Purchaser, each selling Holder and each underwriter, if any, in such substance and scope as they may request and as are customarily made by issuers to underwriters in primary underwritten offerings, upon the date of the Consummation of the Exchange Offer and, if applicable, the effectiveness of the Shelf Registration Statement:
 
(1) a certificate, dated the date of Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration Statement, as the case may be, signed by (y) the President or any Vice President and (z) a principal financial or accounting officer of each of the Company and the Guarantors, confirming, as of the date thereof, the matters set forth in paragraphs (i), (ii) and (iii) of Section 5 (e) of the Purchase Agreement and such other matters as such parties may reasonably request;
 
(2) an opinion, dated the date of Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration Statement, as the case may be, of counsel for the Company and the Guarantors, covering the matters set forth in paragraph (c) of Section 5 of the Purchase Agreement and such other matters as such parties may reasonably request, and in any event including a statement to the effect that such counsel has participated in conferences with officers and other representatives of the Company and representatives of the independent public accountants for the Company in connection with the preparation of such Registration Statement and the related Prospectus and have considered the matters required to be stated therein and the statements contained therein, although such counsel has not independently verified the accuracy, completeness or fairness of such statements; and that such counsel advises that, on the basis of the foregoing, no facts came to such counsel’s attention that caused such counsel to believe that the applicable Registration Statement, at the time such Registration Statement or any post-effective amendment thereto became effective, and, in the case of the Exchange Offer Registration Statement, as of the date of Consummation, 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 not misleading, or that the Prospectus contained in such Registration Statement as of its date and, in the case of the opinion dated the date of Consummation of the Exchange Offer, as of the date of Consummation, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Without limiting the foregoing, such counsel may state further that such counsel assumes no responsibility for, and has not independently verified, the accuracy, completeness or fairness of the financial statements, notes and schedules and other financial data included in any Registration Statement contemplated by this Agreement or the related Prospectus; and
 
(3) a customary comfort letter, dated as of the date of Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration Statement, as the case may be, from the Company’s independent accountants, in the customary form and covering matters of the type customarily covered in comfort letters by underwriters in connection with primary underwritten offerings, and affirming the matters set forth in the comfort letters delivered pursuant to Section 5(a) of the Purchase Agreement, without exception;
 
(B) set forth in full or incorporate by reference in the underwriting agreement, if any, the indemnification provisions and procedures of Section 8 hereof with respect to all parties to be indemnified pursuant to said Section; and
 
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(C) deliver such other documents and certificates as may be reasonably requested by such parties to evidence compliance with clause (A) above and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company or the Guarantors pursuant to this clause (xi), if any.
 
If at any time the representations and warranties of the Company and the Guarantors contemplated in clause (A)(1) above cease to be true and correct, the Company or the Guarantors shall so advise the Initial Purchasers and the underwriter(s), if any, and each selling Holder promptly and, if requested by such Persons, shall confirm such advice in writing;
 
(xii) prior to any public offering of Transfer Restricted Securities, cooperate with, and cause the Guarantor to cooperate with, the selling Holders, the underwriter(s), if any, and their respective counsel in connection with the registration and qualification of the Transfer Restricted Securities under the securities or Blue Sky laws of such jurisdictions as the selling Holders or underwriter(s) may request and 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 neither the Company nor the Guarantors shall be required to register or qualify as a foreign corporation where it is not then so qualified or to take any action that would subject it to the service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not then so subject;
 
(xiii) issue, upon the request of any Holder of Initial Notes covered by the Shelf Registration Statement, Exchange Notes, having an aggregate principal amount equal to the aggregate principal amount of Initial Notes surrendered to the Company by such Holder in exchange therefor or being sold by such Holder; such Exchange Notes to be registered in the name of such Holder or in the name of the purchaser(s) of such Notes, as the case may be; in return, the Initial Notes held by such Holder shall be surrendered to the Company for cancellation;
 
(xiv) cooperate with, and cause the Guarantors to cooperate with, the selling Holders and the underwriter(s), if any, to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities to be sold and not bearing any restrictive legends; and enable such Transfer Restricted Securities to be in such denominations and registered in such names as the Holders or the underwriter(s), if any, may request at least two business days prior to any sale of Transfer Restricted Securities made by such underwriter(s);
 
(xv) use its best efforts to cause the Transfer Restricted Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter(s), if any, to consummate the disposition of such Transfer Restricted Securities;
 
(xvi) if any fact or event contemplated by clause (c)(iii)(D) above shall exist or have occurred, prepare a supplement or post-effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Transfer Restricted Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading;
 
(xvii) provide a CUSIP number for all Notes not later than the effective date of the Registration Statement and provide the Trustee under the Indenture with printed certificates for the Transfer Restricted Securities which are in a form eligible for deposit with the Depository Trust Company and take all other action necessary to ensure that all Notes are eligible for deposit with the Depository Trust Company;
 
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(xviii) cooperate and assist in any filings required to be made with the NASD and in the performance of any due diligence investigation by any underwriter (including any “qualified independent underwriter”) that is required to be retained in accordance with the rules and regulations of the NASD, and use its reasonable best efforts to cause such Registration Statement to become effective and approved by such governmental agencies or authorities as may be necessary to enable the Holders selling Transfer Restricted Securities to consummate the disposition of such Transfer Restricted Securities;
 
(xix) otherwise use its best efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders, as soon as practicable, a consolidated earnings statement meeting the requirements of Rule 158 (which need not be audited) for the twelve-month period (A) commencing at the end of any fiscal quarter in which Transfer Restricted Securities are sold to underwriters in a firm or best efforts Underwritten Offering or (B) if not sold to underwriters in such an offering, beginning with the first month of the Company’s first fiscal quarter commencing after the effective date of the Registration Statement;
 
(xx) cause the Indenture to be qualified under the Trust Indenture Act not later than the effective date of the first Registration Statement required by this Agreement, and, in connection therewith, cooperate, and cause the Guarantor to cooperate with, with the Trustee and the Holders of Notes to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and to execute, and cause the Guarantors to execute, and use its reasonable best efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner; and
 
(xxi) provide promptly to each Holder upon request each document filed with the Commission pursuant to the requirements of Section 13 and Section 15 of the Exchange Act.
 
Each Holder agrees by acquisition of a Transfer Restricted Security that, upon receipt of any notice from the Company of the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith discontinue disposition of Transfer Restricted Securities pursuant to the applicable Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof, or until it is advised in writing (the “ Advice ”) by the Company that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus. If so directed by the Company, each Holder 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 such Transfer Restricted Securities that was current at the time of receipt of such notice. In the event the Company shall give any such notice, the time period regarding the effectiveness of such Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to Section 6(c)(iii)(D) hereof to and including the date when each selling Holder covered by such Registration Statement shall have received the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof or shall have received the Advice.
 
Section 7. Registration Expenses
 
(a) All expenses incident to the Company’s or the Guarantors’ performance of or compliance with this Agreement will be borne by the Company or the Guarantors, regardless of whether a Registration Statement becomes effective, including without limitation: (i) all registration and filing fees and expenses (including filings made by any Initial Purchaser or Holder with the NASD (and, if applicable, the fees and expenses of any “qualified independent underwriter” and its counsel that may be required by the rules and regulations of the NASD)); (ii) all fees and expenses of compliance with federal securities and state Blue Sky or securities laws; (iii) all expenses of printing (including printing certificates for the Exchange Notes to be issued in the Exchange Offer and printing of Prospectuses), messenger and delivery services and telephone;
 
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(iv) all fees and disbursements of counsel for the Company, the Guarantors and, subject to Section 7(b) below, the Holders of Transfer Restricted Securities; (v) all application and filing fees in connection with listing the Exchange Notes on a national securities exchange or automated quotation system pursuant to the requirements thereof; and (vi) all fees and disbursements of independent certified public accountants of the Company and the Guarantors (including the expenses of any special audit and comfort letters required by or incident to such performance).
 
The Company will, in any event, bear its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Company.
 
(b) In connection with any Registration Statement required by this Agreement (including, without limitation, the Exchange Offer Registration Statement and the Shelf Registration Statement), the Company will reimburse the Initial Purchasers and the Holders of Transfer Restricted Securities being tendered in the Exchange Offer and/or resold pursuant to the “Plan of Distribution” contained in the Exchange Offer Registration Statement or registered pursuant to the Shelf Registration Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel, who shall be Fried, Frank, Harris, Shriver & Jacobson or such other counsel as may be chosen by the Holders of a majority in principal amount of the Transfer Restricted Securities for whose benefit such Registration Statement is being prepared.
 
Section 8. Indemnification
 
(a) The Company agrees and the Guarantors, jointly and severally, agree to indemnify and hold harmless (i) each Holder and (ii) each person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) any Holder (any of the persons referred to in this clause (ii) being hereinafter referred to as a “controlling person”) and (iii) the respective officers, directors, partners, employees, representatives and agents of any Holder or any controlling person (any person referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an “ Indemnified Holder ”), to the fullest extent lawful, from and against any and all losses, claims, damages, liabilities, judgments, actions and expenses (including without limitation and as incurred, reimbursement of all reasonable costs of investigating, preparing, pursuing, settling, compromising, paying or defending any claim or action, or any investigation or proceeding by any governmental agency or body, commenced or threatened, including the reasonable fees and expenses of counsel to any Indemnified Holder), directly or indirectly caused by, related to, based upon, arising out of or in connection with any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or Prospectus (or any amendment or supplement thereto), or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or expenses are caused by an untrue statement or omission or alleged untrue statement or omission that is made in reliance upon and in conformity with information relating to any of the Holders furnished in writing to the Company by any of the Holders expressly for use therein. This indemnity agreement shall be in addition to any liability which the Company may otherwise have.
 
In case any action or proceeding (including any governmental or regulatory investigation or proceeding) shall be brought or asserted against any of the Indemnified Holders with respect to which indemnity may be sought against the Company or the Guarantors, such Indemnified Holder (or the Indemnified Holder controlled by such controlling person) shall promptly notify the Company and the Guarantors in writing ( provided , that the failure to give such notice (i) will not relieve the Company or the Guarantors from liability under paragraph (a) above unless and only to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of its rights and defenses and (ii) will not, in any event, release the indemnifying party from its other obligations pursuant to this Agreement). Such Indemnified Holder shall have the right to employ its own counsel in any such action and the fees and expenses of such counsel shall be paid, as incurred, by the Company and the Guarantors (regardless of whether it is ultimately determined that an Indemnified Holder is not entitled to indemnification hereunder). The
 
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Company and the Guarantors shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for such Indemnified Holders, which firm shall be designated by the Holders. The Company shall be liable for any settlement of any such action or proceeding effected with the Company’s and the Guarantors’ prior written consent, which consent shall not be withheld unreasonably, and the Company and the Guarantors agree to indemnify and hold harmless any Indemnified Holder from and against any loss, claim, damage, liability or expense by reason of any settlement of any action effected with the written consent of the Company and the Guarantors. The Company shall not, without the prior written consent of each Indemnified Holder, settle or compromise or consent to the entry of judgment in or otherwise seek to terminate any pending or threatened action, claim, litigation or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not any Indemnified Holder is a party thereto), unless such settlement, compromise, consent or termination includes an unconditional release of each Indemnified Holder from all liability arising out of such action, claim, litigation or proceeding.
 
(b) Each Holder of Transfer Restricted Securities agrees, severally and not jointly, to indemnify and hold harmless the Company and the Guarantors and their respective directors, officers of the Company who sign a Registration Statement, and any person controlling (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) the Company and the Guarantors, and the respective offices, directors, partners, employees, representatives and agents of each such person, to the same extent as the foregoing indemnity from the Company and the Guarantors to each of the Indemnified Holders, but only with respect to claims and actions based on information relating to such Holder furnished in writing by such Holder expressly for use in any Registration Statement. In case any action or proceeding shall be brought against the Company or the Guarantors or their directors or officers or any such controlling person in respect of which indemnity may be sought against a Holder of Transfer Restricted Securities, such Holder shall have the rights and duties given the Company and the Guarantors, and the Company and the Guarantors, or their directors or officers or such controlling person shall have the rights and duties given to each Holder by the preceding paragraph. In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the proceeds received by such Holder upon the sale of the Securities giving rise to such indemnification obligation.
 
(c) If the indemnification provided for in this Section 8 is unavailable to an indemnified party under Section 8(a) or Section 8(b) hereof (other than by reason of exceptions provided in those Sections) in respect of any losses, claims, damages, liabilities, judgments, actions or expenses referred to therein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors, on the one hand, and the Holders, on the other hand, from the Initial Placement (which in the case of the Company and the Guarantors shall be deemed to be equal to the total gross proceeds from the Initial Placement as set forth on the cover page of the Offering Memorandum), and such Registration Statement, or if such allocation is not permitted by applicable law, the relative fault of the Company and the Guarantors on the one hand, and of the Indemnified Holder, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of the Company and the Guarantors on the one hand and of the Indemnified Holder on the other 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 and the Guarantors or by the Indemnified Holder and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in the second paragraph of Section 8(a), any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim.
 
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The Company, the Guarantor and each Holder of Transfer Restricted Securities agree that it would not be just and equitable if contribution pursuant to this Section 8(c) were 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 account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, 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 Section 8, none of the Holders (and its related Indemnified Holders) shall be required to contribute, in the aggregate, any amount in excess of the amount by which the total discount and fees received by such Holder with respect to the Initial Notes exceeds the amount of any damages which such Holder 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 Holders’ obligations to contribute pursuant to this Section 8(c) are several in proportion to the respective principal amount of Initial Notes held by each of the Holders hereunder and not joint.
 
Section 9. Rule 144A
 
The Company and the Guarantors each hereby agree with each Holder, for so long as any Transfer Restricted Securities remain outstanding, to make available to any Holder or beneficial owner of Transfer Restricted Securities in connection with any sale thereof and any prospective purchaser of such Transfer Restricted Securities from such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A.
 
Section 10. Participation In Underwritten Registrations
 
No Holder may participate in any Underwritten Registration hereunder unless such Holder (a) agrees to sell such Holder’s Transfer Restricted Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents required under the terms of such underwriting arrangements.
 
Section 11. Selection Of Underwriters
 
The Holders of Transfer Restricted Securities covered by the Shelf Registration Statement who desire to do so may sell such Transfer Restricted Securities in an Underwritten Offering. In any such Underwritten Offering, the investment banker or investment bankers and manager or managers that will administer the offering will be selected by the Holders of a majority in aggregate principal amount of the Transfer Restricted Securities included in such offering; provided , that such investment bankers and managers must be reasonably satisfactory to the Company.
 
Section 12. Miscellaneous
 
(a) Remedies . The Company and the Guarantors each hereby agree that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agree to waive the defense in any action for specific performance that a remedy at law would be adequate.
 
(b) No Inconsistent Agreements . The Company will not, and will cause the Guarantors not to on or after the date of this Agreement enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof.
 
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Neither the Company nor the Guarantors have entered into any agreement granting any registration rights with respect to its securities to any Person. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company’s securities under any agreement in effect on the date hereof.
 
(c) Adjustments Affecting the Notes . The Company will not take any action, or permit any change to occur, with respect to the Notes that would materially and adversely affect the ability of the Holders to Consummate any Exchange Offer.
 
(d) Amendments and Waivers . The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless the Company has obtained the written consent of Holders of a majority of the outstanding principal amount of Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of Holders whose securities are being tendered pursuant to the Exchange Offer and that does not affect directly or indirectly the rights of other Holders whose securities are not being tendered pursuant to such Exchange Offer may be given by the Holders of a majority of the outstanding principal amount of Transfer Restricted Securities being tendered or registered; provided that, with respect to any matter that directly or indirectly affects the rights of any Initial Purchaser hereunder, the Company shall obtain the written consent of each such Initial Purchaser with respect to which such amendment, qualification, supplement, waiver, consent or departure is to be effective.
 
(e) Notices . All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), telex, telecopier, or air courier guaranteeing overnight delivery:
 
(i) if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar under the Indenture; and
 
(ii) if to the Company:
 
Speedway Motorsports, Inc.
5401 East Independence Blvd.
Charlotte, North Carolina 28212
Telecopier No.: (704) 455-2168
Attention: Marylaurel E. Wilks, Esq.
 
With a copy to:
 
Parker, Poe, Adams & Bernstein L.L.P.
Three Wachovia Center
401 South Tryon Street, Suite 3000
 
Charlotte, North Carolina 28202
Telecopier No.: (704) 334-4706
Attention: Peter J. Shea, Esq.
 
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, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and on the next business day, if timely delivered to an air courier guaranteeing overnight delivery.
 
Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address specified in the Indenture.
 
15

(f) Successors and Assigns . This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including without limitation and without the need for an express assignment, subsequent Holders of Transfer Restricted Securities; provided, however , that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign acquired Transfer Restricted Securities from such Holder.
 
(g) 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.
 
(h) Headings . The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
 
(i) GOVERNING LAW . THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF.
 
(j) Severability . In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.
 
(k) Entire Agreement . This Agreement together with the Purchase Agreement, the Indenture, the Notes and any related documents, is intended by the parties as a final expression of their agreement and 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. 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 Transfer Restricted Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.
 
16

IN WITNESS WHEREOF , the parties have executed this Agreement as of the date first written above.
 
SPEEDWAY MOTORSPORTS, INC ., a Delaware
corporation	
		
By:	 	/s/    William R. Brooks
	
Name:	 	William R. Brooks	
Title:	 	Chief Financial Officer, Vice President and Treasurer	
 
SPEEDWAY FUNDING, LLC. , a Delaware limited
liability corporation	
		
By:	 	/s/    William R. Brooks
	
Name:	 	William R. Brooks	
Title:	 	President	
 
600 RACING, INC. , a North Carolina corporation	
		
By:	 	/s/    William R. Brooks
	
Name:	 	William R. Brooks	
Title:	 	Vice President	
 
ATLANTA MOTOR SPEEDWAY, INC. , a Georgia corporation	
		
By:	 	/s/    William R. Brooks
	
Name:	 	William R. Brooks	
Title:	 	Vice President	
 
BRISTOL MOTOR SPEEDWAY, INC ., a Tennessee corporation	
		
By:	 	/s/    William R. Brooks
	
Name:	 	William R. Brooks:	
Title:	 	Vice President	
 
CHARLOTTE MOTOR SPEEDWAY, LLC, a North Carolina limited liability company	
		
By:	 	/s/    William R. Brooks
	
Name:	 	William R. Brooks	
Title:	 	Vice President	
 
17

INEX CORP. , a North Carolina corporation	
		
By:	 	/s/    William R. Brooks
	
By:	 	William R. Brooks	
Title:	 	Vice President	
	
LAS VEGAS MOTOR SPEEDWAY, INC ., a Delaware corporation	
		
By:	 	/s/    William R. Brooks
	
Name:	 	William R. Brooks	
Title:	 	Vice President	
	
NEVADA SPEEDWAY LLC , a Delaware limited liability corporation	
		
By:	 	/s/    William R. Brooks
	
Name:	 	William R. Brooks	
Title:	 	Vice President	
	
SPEEDWAY SYSTEMS, LLC , a North Carolina limited liability company	
		
By:	 	 	
By:	 	/s/    William R. Brooks
	
Name:	 	William R. Brooks	
Title:	 	Vice President	
	
SPR, INC. , a Delaware corporation	
		
By:	 	/s/    William R. Brooks
	
Name:	 	William R. Brooks	
Title:	 	Vice President	
	
TEXAS MOTOR SPEEDWAY, INC ., a Texas corporation	
		
By:	 	/s/    William R. Brooks
	
Name:	 	William R. Brooks	
Title:	 	Vice President	
 
18

SPEEDWAY PROPERTIES COMPANY, LLC , a Delaware limited liability corporation	
		
By:	 	/s/    William R. Brooks
	
Name:	 	William R. Brooks	
Title:	 	President	
	
SPEEDWAY SONOMA, LLC , a Delaware limited liability company	
		
By:	 	 
/s/    William R. Brooks
	
Name:	 	William R. Brooks	
Title:	 	Vice President	
	
SPEEDWAY MEDIA, LLC , a North Carolina limited liability company	
		
By:	 	/s/    William R. Brooks
	
Name:	 	William R. Brooks	
Title:	 	Vice President	
	
TRACKSIDE HOLDING CORPORATION , a North Carolina corporation	
		
By:	 	/s/    William R. Brooks
	
Name:	 	William R. Brooks	
Title:	 	Vice President	
	
MOTORSPORTS BY MAIL, LLC , a North Carolina limited liability company	
		
By:	 	/s/    William R. Brooks
	
Name:	 	William R. Brooks	
Title:	 	President	
	
SMI TRACKSIDE, LLC , a North Carolina limited liability company	
		
By:	 	/s/    William R. Brooks
	
Name:	 	William R. Brooks	
Title:	 	Vice President	
 
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The foregoing Registration Rights Agreement is hereby
confirmed and accepted as of the date first above written.
 
BANC OF AMERICA SECURITIES LLC
WACHOVIA SECURITIES, INC.
CREDIT LYONNAIS SECURITIES (USA) INC.
FLEET SECURITIES, INC
SUNTRUST CAPITAL MARKETS, INC.
 
By: BANC OF AMERICA SECURITIES LLC

By:	 	          /s/    James G. Rose, Jr.
	
 	 	Name:    James G. Rose, Jr.	
 	 	Title:      Managing Director	
 
20

EXHIBIT 10.4
 
EXECUTION COPY
 
Speedway Motorsports, Inc.
 
and
 
The Guarantors named herein

$230,000,000
 
6.75% Senior Subordinated Notes due 2013

Purchase Agreement
 
dated May 8, 2003

 
Banc of America Securities LLC
 
Wachovia Securities, Inc.
 
Credit Lyonnais Securities (USA) Inc.
 
Fleet Securities, Inc.
 
SunTrust Capital Markets, Inc.

Table of Contents
 
SECTION 1.      Representations and Warranties	  	2 	
 	 	(a)	  	No Registration Required	  	2	
 	 	(b)	  	No Integration of Offerings or General Solicitation	  	3	
 	 	(c)	  	Eligibility for Resale under Rule 144A	  	3	
 	 	(d)	  	The Offering Memorandum and the Preliminary Offering Memorandum	  	3	
 	 	(e)	  	Incorporated Documents	  	4	
 	 	(f)	  	The Purchase Agreement	  	4	
 	 	(g)	  	The Registration Rights Agreement and DTC Agreement	  	4	
 	 	(h)	  	Authorization of the Securities and the Exchange Securities	  	4	
 	 	(i)	  	Authorization of the Indenture	  	5	
 	 	(j)	  	Description of the Securities, the Indenture and Existing Credit Agreement	  	5	
 	 	(k)	  	No Material Adverse Change	  	5	
 	 	(l)	  	Independent Accountants	  	6	
 	 	(m)	  	    Preparation of the Financial Statements	  	6	
 	 	(n)	  	Incorporation and Good Standing of the Company and the Guarantors	  	6	
 	 	(o)	  	Capitalization and Other Capital Stock Matters	  	6	
 	 	(p)	  	Stock Exchange Listing	  	7	
 	 	(q)	  	Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required	  	7	
 	 	(r)	  	No Material Actions or Proceedings	  	8	
 	 	(s)	  	Intellectual Property Rights	  	8	
 	 	(t)	  	All Necessary Permits, etc	  	8	
 	 	(u)	  	Title to Properties	  	8	
 	 	(v)	  	Tax Law Compliance	  	9	
 	 	(w)	  	    Company Not an “Investment Company”	  	9	
 	 	(x)	  	Insurance	  	9	
 	 	(y)	  	No Price Stabilization or Manipulation	  	9	
 	 	(z)	  	Solvency	  	9	
 	 	(aa)	  	    No Unlawful Contributions or Other Payments	  	10	
 	 	(bb)	  	    Disclosure Controls	  	10	
 	 	(cc)	  	    MD&A	  	10	
 	 	(dd)	  	    Company’s Accounting System	  	10	
 	 	(ee)	  	    Compliance with Environmental Laws	  	10	
 	 	(ff)	  	    ERISA Compliance	  	11	
 	 	(gg)	  	    No Default in Senior Indebtedness	  	11	
 	 	(hh)	  	    NASCAR Relationship and Contracts	  	12	
 	 	(ii)	  	    Operative Subsidiaries	  	12	
 	 	(jj)	  	    Credit Facility	  	12	
 	 	(kk)	  	    Compliance with Regulation S	  	12	
SECTION 2.      Purchase, Sale and Delivery of the Securities.	  	12 	
 	 	(a)	  	The Securities	  	12	
 	 	(b)	  	The Closing Date	  	13	
 	 	(c)	  	Delivery of the Securities	  	13	
 	 	(d)	  	Delivery of Offering Memorandum to the Initial Purchasers	  	13	
 	 	(e)	  	Initial Purchasers as Qualified Institutional Buyers	  	13	
SECTION 3.      Additional Covenants	  	13 	
 	 	(a)	  	Initial Purchasers’ Review of Proposed Amendments and Supplements	  	13	
 	 	(b)	  	Additional Information, Amendments and Supplements to the Offering Memorandum and Other Securities Act Matters	  	14	
 	 	(c)	  	Copies of the Offering Memorandum	  	14	
 	 	(d)	  	Blue Sky Compliance	  	14	
 
i

 	 	(e)	  	Use of Proceeds	  	15	
 	 	(f)	  	The Depositary	  	15	
 	 	(g)	  	Additional Issuer Information	  	15	
 	 	(h)	  	Agreement Not To Offer or Sell Additional Securities	  	15	
 	 	(i)	  	Future Reports to the Initial Purchasers	  	15	
 	 	(j)	  	No Integration	  	16	
 	 	(k)	  	Legended Securities	  	16	
 	 	(l)	  	PORTAL	  	16	
SECTION 4.      Payment of Expenses	  	16 	
SECTION 5.      Conditions of the Obligations of the Initial Purchasers	  	17 	
 	 	(a)	  	Accountants’ Comfort Letter	  	17	
 	 	(b)	  	No Material Adverse Change or Ratings Agency Change	  	17	
 	 	(c)	  	Opinion of Counsel for the Company	  	17	
 	 	(d)	  	Opinion of Counsel for the Initial Purchasers	  	18	
 	 	(e)	  	Officers’ Certificate	  	18	
 	 	(f)	  	Bring-down Comfort Letter	  	18	
 	 	(g)	  	PORTAL Listing	  	18	
 	 	(h)	  	Other Agreements	  	18	
 	 	(i)	  	Additional Documents	  	18	
SECTION 6.      Reimbursement of Initial Purchasers’ Expenses	  	19 	
SECTION 7.      Offer, Sale and Resale Procedures	  	19 	
SECTION 8.      Indemnification.	  	20 	
 	 	(a)	  	Indemnification of the Initial Purchasers	  	20	
 	 	(b)	  	Indemnification of the Company, its Directors and Officers	  	21	
 	 	(c)	  	Notifications and Other Indemnification Procedures	  	22	
 	 	(d)	  	Settlements	  	22	
SECTION 9.      Contribution.	  	23 	
SECTION 10.    Termination of this Agreement	  	24 	
SECTION 11.    Representations and Indemnities to Survive Delivery	  	24 	
SECTION 12.    Notices	  	24 	
SECTION 13.    Successors	  	25 	
SECTION 14.    Partial Unenforceability	  	25 	
SECTION 15.    Governing Law Provisions	  	26 	
 	 	(a)	  	Consent to Jurisdiction	  	26	
SECTION 16.    Default of One or More of the Several Initial Purchasers	  	26 	
SECTION 17.    General Provisions	  	27 	
 
ii

Purchase Agreement
 
May 8, 2003
 
BANC OF AMERICA SECURITIES LLC
WACHOVIA SECURITIES, INC.
CREDIT LYONNAIS SECURITIES (USA) INC.
FLEET SECURITIES, INC.
SUNTRUST CAPITAL MARKETS, INC.
 
    As Initial Purchasers
c/o BANC OF AMERICA SECURITIES LLC
600 Montgomery Street
San Francisco, California 94111
 
Ladies and Gentlemen:
 
Introductory. Speedway Motorsports, Inc., a Delaware corporation (the “Company”), proposes to issue and sell to the several Initial Purchasers named in Schedule A (the “Initial Purchasers”), acting severally and not jointly, the respective amounts set forth in such Schedule A of a $230,000,000 aggregate principal amount of the Company’s 6.75% Senior Subordinated Notes due 2013 (the “Notes”). Banc of America Securities LLC, Wachovia Securities, Inc. and Credit Lyonnais Securities (USA) Inc. have agreed to act as the several Initial Purchasers in connection with the offering and sale of the Notes.
 
The Notes will be issued pursuant to an indenture, to be dated as of May 16, 2003 (the “Indenture”), among the Company, the Guarantors (defined below) and U.S. Bank National Association, as trustee (the “Trustee”). Notes issued in book-entry form will be issued in the name of Cede & Co., as nominee of The Depository Trust Company (the “Depositary”) pursuant to a DTC letter of representations, to be dated as of the Closing Date (as defined in Section 2) (the “DTC Agreement”), among the Company, the Trustee and the Depositary.
 
The holders of the Notes will be entitled to the benefits of a registration rights agreement, to be dated as of May 16, 2003 (the “Registration Rights Agreement”), among the Company, the Guarantors and the Initial Purchasers, pursuant to which the Company and the Guarantors will agree to file, within 90 days of the Closing Date, a registration statement with the Commission registering the Exchange Securities under the Securities Act.
 
The payment of principal, premium and Liquidated Damages (as defined in the Indenture), if any, and interest on the Notes and the Exchange Notes (as defined below) will be fully and unconditionally guaranteed on a senior subordinated unsecured basis, jointly and severally by (i) substantially all of the operative subsidiaries of the Company (except for Oil-Chem Research Corporation) and (ii) any subsidiary of the Company formed or acquired after the Closing Date or any other subsidiary that executes an additional guarantee in accordance with the terms of the Indenture, and their respective successors and assigns (collectively, the “Guarantors”), pursuant to their guarantees (the “Guarantees”). The Notes and the Guarantees attached thereto are herein collectively referred to as the “Securities”; and the Exchange Notes

and the Guarantees attached thereto are herein collectively referred to as the “Exchange Securities.”
 
The Company and the Guarantors understand that the Initial Purchasers propose to make an offering of the Securities on the terms and in the manner set forth herein and in the Offering Memorandum (as defined below) and agree that the Initial Purchasers may resell, subject to the conditions set forth herein, all or a portion of the Securities to purchasers (the “Subsequent Purchasers”) at any time after the date of this Agreement. The Securities are to be offered and sold to or through the Initial Purchasers without being registered with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933 (as amended, the “Securities Act,” which term, as used herein, includes the rules and regulations of the Commission promulgated thereunder), in reliance upon exemptions therefrom. The terms of the Securities and the Indenture will require that investors who acquire Securities expressly agree that Securities may only be resold or otherwise transferred, after the date hereof, if such Securities are registered for sale under the Securities Act or if an exemption from the registration requirements of the Securities Act is available (including the exemptions afforded by Rule 144A (“Rule 144A”) or Regulation S (“Regulation S”) thereunder).
 
The Company and the Guarantors have prepared and delivered to each Initial Purchaser copies of a Preliminary Offering Memorandum, dated May 2, 2003 (the “Preliminary Offering Memorandum”), and have prepared and will deliver to each Initial Purchaser, copies of the Offering Memorandum, dated May 8, 2003, describing the terms of the Securities, each for use by such Initial Purchaser in connection with its solicitation of offers to purchase the Securities. As used herein, the “Offering Memorandum” shall mean, with respect to any date or time referred to in this Agreement, the Company’s Offering Memorandum, dated May 8, 2003, including amendments or supplements thereto and any exhibits thereto, in the most recent form that has been prepared and delivered by the Company and the Guarantors to the Initial Purchasers in connection with their solicitation of offers to purchase Securities.
 
All references in this Agreement to financial statements and schedules and other information which is “contained,” “included” or “stated” in the Offering Memorandum or the Preliminary Offering Memorandum (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which are incorporated by reference in the Offering Memorandum or the Preliminary Offering Memorandum; and all references in this Agreement to amendments or supplements to the Offering Memorandum or the Preliminary Offering Memorandum shall be deemed to mean and include the filing of any document under the Securities Exchange Act of 1934 (as amended, the “Exchange Act,” which term, as used herein, includes the rules and regulations of the Commission promulgated thereunder) which is incorporated or deemed to be incorporated by reference in the Offering Memorandum or the Preliminary Offering Memorandum.
 
The Company and the Guarantors hereby confirm their respective agreements with the Initial Purchasers as follows:
 
SECTION 1. Representations and Warranties . Each of the Company and the Guarantors, jointly and severally, hereby represents, warrants and covenants to each Initial Purchaser as follows:
 
(a) No Registration Required . Subject to compliance by the Initial Purchasers with the representations and warranties set forth in Section 2 hereof and with the procedures set forth in Section 7 hereof, it is not necessary in connection with the offer,
 
2

sale and delivery of the Securities to the Initial Purchasers and to each Subsequent Purchaser in the manner contemplated by this Agreement and the Offering Memorandum to register the Securities under the Securities Act or, until such time as the Exchange Securities are issued pursuant to an effective registration statement, to qualify the Indenture under the Trust Indenture Act of 1939 (the “Trust Indenture Act,” which term, as used herein, includes the rules and regulations of the Commission promulgated thereunder).
 
(b) No Integration of Offerings or General Solicitation . The Company has not, and none of the Company’s subsidiaries or Affiliates (as such term is defined in Rule 501 under the Securities Act (each, an “Affiliate”)) have, directly or indirectly, solicited any offer to buy or offered to sell, and will not, directly or indirectly, solicit any offer to buy or offer to sell, in the United States or to any United States citizen or resident, any security which is or would be integrated with the sale of the Securities in a manner that would require the Securities to be registered under the Securities Act. None of the Company, the Guarantors, any of their subsidiaries or Affiliates, or any person acting on its or any of their behalf (other than the Initial Purchasers, as to whom the Company and the Guarantors make no representation or warranty) has engaged or will engage, in connection with the offering of the Securities, in any form of general solicitation or general advertising within the meaning of Rule 502 under the Securities Act. With respect to those Securities sold in reliance upon Regulation S, (i) none of the Company, the Guarantors, any of their subsidiaries or Affiliates or any person acting on its or any of their behalf (other than the Initial Purchasers, as to whom the Company and the Guarantors make no representation or warranty) has engaged or will engage in any directed selling efforts within the meaning of Regulation S and (ii) each of the Company, the Guarantors, any of their subsidiaries or Affiliates and any person acting on its or their behalf (other than the Initial Purchasers, as to whom the Company and the Guarantors make no representation or warranty) has complied and will comply with the offering restrictions set forth in Regulation S.
 
(c) Eligibility for Resale under Rule 144A . The Securities are eligible for resale pursuant to Rule 144A and will not be, at the Closing 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.
 
(d) The Offering Memorandum and the Preliminary Offering Memorandum . Each of the Offering Memorandum and Preliminary Offering Memorandum does not, and at the Closing Date will not, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that this representation, warranty and agreement shall not apply to statements in or omissions from the Offering Memorandum or Preliminary Offering Memorandum made in reliance upon and in conformity with information furnished to the Company or any Guarantor in writing by any Initial Purchaser through Banc of America Securities LLC expressly for use in the Offering Memorandum. Each of the Preliminary Offering Memorandum and the Offering Memorandum, as of its date, contains all the information specified in, and meeting the requirements of, Rule 144A. Neither the Company nor any of the Guarantors have distributed, and the Company and the Guarantors will not distribute, prior to the later of the Closing Date and the completion of the Initial Purchasers’ distribution of the Securities, any offering material in connection with the
 
3

offering and sale of the Securities other than the Preliminary Offering Memorandum or the Offering Memorandum.
 
(e) Incorporated Documents . The Offering Memorandum and Preliminary Offering Memorandum as delivered from time to time shall incorporate by reference each Current Report of the Company on Form 8-K filed with the Commission until the termination of the offering. The documents incorporated or deemed to be incorporated by reference in the Offering Memorandum or Preliminary Offering Memorandum at the time they were or hereafter are filed with the Commission (collectively, the “Incorporated Documents”), if any, complied and will comply in all material respects with the requirements of the Exchange Act (except for the Form 8-K filed with the Commission on May 5, 2003 which did not include a signature page).
 
(f) The Purchase Agreement . This Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of, the Company and each of the Guarantors, enforceable in accordance with its terms, except as rights to indemnification hereunder may be limited by applicable law and except as the enforcement hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles.
 
(g) The Registration Rights Agreement and DTC Agreement . The Registration Rights Agreement has been duly authorized by the Company and each of the Guarantors and, at the Closing Date, will be duly executed and delivered by, and will be a valid and binding agreement of, the Company and each of the Guarantors, enforceable in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles and except as rights to indemnification under the Registration Rights Agreement may be limited by applicable law. At the Closing Date, the DTC Agreement will be duly authorized, executed and delivered by, and will be a valid and binding agreement of, the Company, enforceable in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles. Pursuant to the Registration Rights Agreement, the Company and the Guarantors each will agree to file with the Commission, under the circumstances set forth therein, (i) a registration statement under the Securities Act relating to another series of debt securities of the Company with terms substantially identical to the Notes (the “Exchange Notes”) to be offered in exchange for the Notes (the “Exchange Offer”) and (ii) to the extent required by the Registration Rights Agreement, a shelf registration statement pursuant to Rule 415 of the Securities Act relating to the resale by certain holders of the Notes, and in each case, to use its reasonable best efforts to cause such registration statements to be declared effective.
 
(h) Authorization of the Securities and the Exchange Securities . (i) The Notes to be purchased by the Initial Purchasers from the Company are in the form contemplated by the Indenture, have been duly authorized for issuance and sale pursuant to this Agreement and the Indenture and, at the Closing Date, will have been duly executed by the Company and, when authenticated in the manner provided for in the Indenture and delivered against payment of the purchase price therefor, will constitute valid and binding agreements of the Company, enforceable in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and
 
4

remedies of creditors or by general equitable principles and will be entitled to the benefits of the Indenture. (ii) The Exchange Notes have been duly and validly authorized for issuance by the Company, and when issued and authenticated in accordance with the terms of the Indenture, the Registration Rights Agreement and the Exchange Offer, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting enforcement of the rights and remedies of creditors or by general principles of equity and will be entitled to the benefits of the Indenture. (iii) The Guarantees of the Notes and the Exchange Notes are in the respective forms contemplated by the Indenture, have been duly authorized for issuance and sale pursuant to this Agreement and the Indenture and, at the Closing Date, will have been duly executed by each of the Guarantors and, when the Notes have been authenticated in the manner provided for in the Indenture and delivered against payment of the purchase price therefor, will constitute valid and binding agreements of the Guarantors, enforceable in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles and will be entitled to the benefits of the Indenture.
 
(i) Authorization of the Indenture . The Indenture has been duly authorized by the Company and each of the Guarantors and, at the Closing Date, will have been duly executed and delivered by the Company and each of the Guarantors and will constitute a valid and binding agreement of the Company and each of the Guarantors, enforceable against the Company and each of the Guarantors in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles.
 
(j) Description of the Securities, the Indenture and Existing Credit Agreement . The Notes, the Exchange Notes, the Guarantees of the Notes and the Exchange Notes, the Indenture and the Credit Agreement dated as of May 28, 1999, as amended by and among the Company, as borrowers and the lenders named therein, including NationsBank, N.A., as agent for the lenders and a lender, and First Union National Bank, as co-agent (the “Existing Credit Agreement”) will conform in all material respects to the respective statements relating thereto contained in the Offering Memorandum.
 
(k) No Material Adverse Change . Except as otherwise disclosed in the Offering Memorandum, subsequent to the respective dates as of which information is given in the Offering Memorandum: (i) there has been no material adverse change, or any development that could reasonably be expected to result in a material adverse change, in the condition, financial or otherwise, or in the earnings, business, operations or prospects, whether or not arising from transactions in the ordinary course of business, of the Company and its subsidiaries, considered as one entity (any such change is called a “Material Adverse Change”); (ii) the Company and its subsidiaries, considered as one entity, have not incurred any material liability or obligation, indirect, direct or contingent, not in the ordinary course of business nor entered into any material transaction or agreement not in the ordinary course of business; and (iii) there has been no dividend or distribution of any kind declared, paid or made by the Company or, except for dividends paid to the Company or other subsidiaries, any of its subsidiaries on
 
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any class of capital stock or repurchase or redemption by the Company or any of its subsidiaries of any class of capital stock.
 
(l) Independent Accountants. Deloitte & Touche LLP, who have expressed their opinion with respect to the financial statements (which term as used in this Agreement includes the related notes thereto) included in the Offering Memorandum, are independent public or certified public accountants within the meaning of Regulation S-X under the Securities Act and the Exchange Act.
 
(m) Preparation of the Financial Statements. The financial statements, together with the related schedules and notes, included and or incorporated by reference in the Offering Memorandum present fairly the consolidated financial position of the Company and its subsidiaries as of and at the dates indicated and the results of their operations and cash flows for the periods specified. Such financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved, in all material respects, except as may be expressly stated in the related notes thereto. The financial data set forth in the Offering Memorandum under the captions “Offering Memorandum Summary—Summary Historical Financial Data” and “Selected Historical Financial Data” fairly present the information set forth therein on a basis consistent with that of the audited financial statements contained in the Offering Memorandum.
 
(n) Incorporation and Good Standing of the Company and the Guarantors. Each of the Company and the Guarantors has been duly incorporated or formed and is validly existing as a corporation or limited liability company in good standing under the laws of the jurisdiction of its incorporation or formation and has corporate or limited liability company power and authority to own, lease and operate its properties and to conduct its business as described in the Offering Memorandum and to enter into and perform its obligations under each of this Agreement, the Registration Rights Agreement, the DTC Agreement, the Securities, the Exchange Securities and the Indenture. Each of the Company and each of the Guarantors is duly qualified as a foreign corporation or limited liability company, as applicable, to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except for such jurisdictions where the failure to so qualify or to be in good standing would not, individually or in the aggregate, result in a Material Adverse Change. All of the issued and outstanding capital stock or limited liability company interests of each Guarantor has been duly authorized and validly issued, is fully paid and nonassessable and is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim, except for security interests, pledges, liens or encumbrances in favor of the Company’s senior bank lenders. The Company does not own or control, directly or indirectly, any corporation, association or other entity other than the subsidiaries listed in Exhibit 21 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002.
 
(o) Capitalization and Other Capital Stock Matters. At December 31, 2002, on a consolidated basis, after giving pro forma effect to the issuance and sale of the Securities pursuant hereto, the Company would have an authorized and outstanding capitalization as set forth in the Offering Memorandum under the caption “Capitalization” (other than for subsequent issuances of capital stock, if any, pursuant to employee benefit plans or upon exercise of outstanding options). All of the outstanding
 
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shares of Common Stock of the Company have been duly authorized and validly issued, are fully paid and nonassessable and have been issued in compliance with federal and state securities laws. None of the outstanding shares of Common Stock of the Company were issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company. There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Company or any of its subsidiaries other than options to acquire shares under the Company’s employee benefit plans.
 
(p) Stock Exchange Listing. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is listed on the New York Stock Exchange (the “NYSE”), and the Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or delisting the Common Stock from the NYSE, nor has the Company received any notification that the Commission or the NYSE is contemplating terminating such registration or listing.
 
(q) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required. Neither the Company nor any of its Guarantors is in violation of its charter or by-laws or is in default (or, with the giving of notice or lapse of time, would be in default) (“Default”) under any indenture, mortgage, loan or credit agreement, note, contract, franchise, lease or other instrument to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound (including, without limitation, the Company’s Existing Credit Agreement and the Company’s 8 1/2% Senior Subordinated Notes due 2007 (the “Existing Notes”)) (except as which will be cured or remedied by the Closing Date) or to which any of the property or assets of the Company or any of its subsidiaries is subject (each, an “Existing Instrument”), except for such Defaults as would not, individually or in the aggregate, result in a Material Adverse Change. The execution, delivery and performance of this Agreement, the Registration Rights Agreement, the DTC Agreement and the Indenture by the Company and each Guarantor party thereto, and the issuance and delivery of the Securities or the Exchange Securities, and consummation of the transactions contemplated hereby and thereby and by the Offering Memorandum have been duly authorized by all necessary corporate action and (i) will not result in any violation of the provisions of the charter or by-laws of the Company or any subsidiary, (ii) will not conflict with or constitute a breach of, or Default or a Debt Repayment Triggering Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, or require the consent of any other party to, any Existing Instrument, except for such conflicts, breaches, Defaults, liens, charges or encumbrances as would not, individually or in the aggregate, result in a Material Adverse Change, and (iii) will not result in any violation of any law, administrative regulation or administrative or court decree applicable to the Company or any subsidiary. No consent, approval, authorization or other order of, or registration or filing with, any court or other governmental or regulatory authority or agency, is required for the Company’s or any Guarantor’s execution, delivery and performance of this Agreement, the Registration Rights Agreement, the DTC Agreement, the Indenture, or the issuance and delivery of the Securities or the Exchange Securities, or consummation of the transactions contemplated hereby and thereby and by the Offering Memorandum, except such as have been obtained or made by the Company and are in full force and effect under the Securities Act, applicable state securities or blue sky laws and except such as may be
 
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required by federal and state securities laws with respect to the Company’s obligations under the Registration Rights Agreement. As used herein, a “Debt Repayment Triggering Event” means any event or condition which gives, or with the giving of notice or lapse of time would give, the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its subsidiaries.
 
(r) No Material Actions or Proceedings. There are no legal or governmental actions, suits or proceedings pending or, to the best of the Company’s or any Guarantor’s knowledge, threatened against or affecting the Company or any of its subsidiaries, which has as the subject thereof any property owned or leased by the Company or any of its subsidiaries, where in any such case there is a reasonable possibility that such action, suit or proceeding might be determined adversely to the Company or such subsidiary and any such action, suit or proceeding, if so determined adversely, would reasonably be expected to result in a Material Adverse Change or adversely affect the consummation of the transactions contemplated by this Agreement, except as otherwise disclosed in the Offering Memorandum. No material labor dispute with the employees of the Company or any of its subsidiaries, or with the employees of any principal supplier of the Company, exists or, to the best of the Company’s knowledge, is threatened or imminent.
 
(s) Intellectual Property Rights. The Company and its Guarantors own or possess sufficient trademarks, trade names, patent rights, copyrights, licenses, approvals, trade secrets and other similar rights (collectively, “Intellectual Property Rights”) reasonably necessary to conduct their businesses as now conducted; and the expected expiration of any of such Intellectual Property Rights would not result in a Material Adverse Change. Neither the Company nor any of its subsidiaries has received any notice of infringement or conflict with asserted Intellectual Property Rights of others, which infringement or conflict, if the subject of an unfavorable decision, would result in a Material Adverse Change.
 
(t) All Necessary Permits, etc. The Company and each Guarantor possess such valid and current certificates, authorizations or permits issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct their respective businesses, and neither the Company nor any subsidiary has received any notice of proceedings relating to the revocation or modification of, or non-compliance with, any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, could result in a Material Adverse Change.
 
(u) Title to Properties. The Company and each of its subsidiaries has good and marketable title to all the properties and assets reflected as owned in the financial statements referred to in Section 1 above (or elsewhere in the Offering Memorandum), in each case free and clear of any security interests, mortgages, liens, encumbrances, equities, claims and other defects, except such as do not materially and adversely affect the value of such property and do not materially interfere with the use made or proposed to be made of such property by the Company or such subsidiary. The real property, improvements, equipment and personal property held under lease by the Company or any subsidiary are held under valid and enforceable leases, with such exceptions as are not material and do not materially interfere with the use made or proposed to be made of such real property, improvements, equipment or personal property by the Company or such subsidiary.
 
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(v) Tax Law Compliance. The Company and its Guarantors have filed all necessary federal, state and foreign income and franchise tax returns and have paid all taxes required to be paid by any of them and, if due and payable, any related or similar assessment, fine or penalty levied against any of them, except where any such failure would not materially and adversely affect the Company. The Company has made adequate charges, accruals and reserves in the applicable financial statements referred to in Section 1 above in respect of all federal, state and foreign income and franchise taxes for all periods as to which the tax liability of the Company or any of its subsidiaries has not been finally determined.
 
(w) Company Not an “Investment Company”. The Company has been advised of the rules and requirements under the Investment Company Act of 1940, as amended (the “Investment Company Act”). The Company is not, and after receipt of payment for the Securities will not be, an “investment company” within the meaning of Investment Company Act and will conduct its business in a manner so that it will not become subject to the Investment Company Act.
 
(x) Insurance. Each of the Company and its subsidiaries are insured with policies in such amounts and with such deductibles and policy limits and covering such risks as are generally deemed adequate, appropriate and customary for their businesses including, but not limited to, policies covering liabilities for injuries at motorsports events and real and personal property owned or leased by the Company and its subsidiaries against theft, damage, destruction, acts of terrorism and vandalism and earthquakes. The Company’s insurers each have strong financial ratings from A.M. Best, Standard & Poor, or Moody’s. The Company believes it has adequate, sufficient and appropriate coverage under its policies to cover all of its known litigation such that there is no need to establish a reserve for any such litigation under generally accepted accounting principals, except as otherwise disclosed in the Offering Memorandum. The Company has no reason to believe that it or any subsidiary will not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain adequate and comparable coverage from recognized insurers as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Change. Neither of the Company nor any subsidiary has been denied any insurance coverage which it has sought or for which it has applied.
 
(y) No Price Stabilization or Manipulation. The Company has not taken and will not take, directly or indirectly, any action designed to or that might be reasonably expected to cause or result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.
 
(z) Solvency. The Company and each of the Guarantors is, and immediately after the Closing Date will be, Solvent. As used herein, the term “Solvent” means, with respect to the Company or any Guarantor on a particular date, that on such date (i) the fair market value of the assets of the Company or such Guarantor, as the case may be, is greater than the total amount of liabilities (including contingent liabilities) of the Company or such Guarantor, as the case may be, (ii) the present fair salable value of the assets of the Company or such Guarantor, as the case may be, is greater than the amount that will be required to pay the probable liabilities of the Company or such Guarantor, as the case may be, on its debts as they become absolute and matured, (iii) the Company or such Guarantor, as the case may be, is able to realize upon its assets and pay its debts and
 
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other liabilities, including contingent obligations, as they mature and (iv) the Company or such Guarantor, as the case may be, does not have unreasonably small capital.
 
(aa) No Unlawful Contributions or Other Payments. Neither the Company nor any of its subsidiaries nor, to the best of the Company’s and the Guarantors’ knowledge, any employee or agent of the Company or any subsidiary, has made any contribution or other payment to any official of, or candidate for, any federal, state or foreign office in violation of any law or of the character necessary to be disclosed in the Offering Memorandum in order to make the statements therein not misleading.
 
(bb) Disclosure Controls. The Company and its consolidated subsidiaries employ disclosure controls and procedures that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and is accumulated and communicated to the Company’s management, including its principal executive officer or officers and principal financial officer or officers, as appropriate to allow timely decisions regarding disclosure.
 
(cc) MD&A. There are no transactions, arrangements or other relationships, including but not limited to off balance sheet transactions, which would be required to be included in the Offering Memorandum if the Offering Memorandum was a registration statement on Form S-1 by the Commission’s “Statement About Management’s Discussion and Analysis of Financial Condition and Results of Operations” (January 22, 2002) which are not so described or described as required.
 
(dd) Company’s Accounting System. The Company on a consolidated basis, and each of the Company’s subsidiaries, maintains a system of accounting controls sufficient to provide reasonable assurances 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; (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences; (v) material information relating to the Company and its consolidated subsidiaries is promptly made known to the officers responsible for establishing and maintaining the system of internal accounting controls; and (vi) any significant deficiencies or weaknesses in the design or operation of internal accounting controls which could adversely affect the Company’s ability to record, process, summarize and report financial data, and any fraud whether or not material that involves management or other employees who have a significant role in internal controls, are adequately and promptly disclosed to the Company’s independent auditors and the audit committee of the Company’s board of directors.
 
(ee) Compliance with Environmental Laws. Except as would not, individually or in the aggregate, result in a Material Adverse Change and except as otherwise disclosed in the Offering Memorandum (i) neither the Company nor any of its subsidiaries is in violation of any federal, state, local or foreign law or regulation relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or
 
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wildlife, including without limitation, laws and regulations relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum and petroleum products (collectively, “Materials of Environmental Concern”), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Materials of Environmental Concern (collectively, “Environmental Laws”), which violation includes, but is not limited to, noncompliance with any permits or other governmental authorizations required for the operation of the business of the Company or its subsidiaries under applicable Environmental Laws, or noncompliance with the terms and conditions thereof, nor has the Company or any of its subsidiaries received any written communication, whether from a governmental authority, citizens group, employee or otherwise, that alleges that the Company or any of its subsidiaries is in violation of any Environmental Law; (ii) there is no claim, action or cause of action filed with a court or governmental authority, no investigation with respect to which the Company has received written notice, and no written notice by any person or entity alleging potential liability for investigatory costs, cleanup costs, governmental responses costs, natural resources damages, property damages, personal injuries, attorneys’ fees or penalties arising out of, based on or resulting from the presence, or release into the environment, of any Material of Environmental Concern at any location owned, leased or operated by the Company or any of its subsidiaries, now or in the past (collectively, “Environmental Claims”), pending or, to the best of the Company’s and the Guarantors’ knowledge, threatened against the Company or any of its subsidiaries or any person or entity whose liability for any Environmental Claim the Company or any of its subsidiaries has retained or assumed either contractually or by operation of law; (iii) to the best of the Company’s and the Guarantors’ knowledge, there are no past or present actions, activities, circumstances, conditions, events or incidents, including, without limitation, the release, emission, discharge, presence or disposal of any Material of Environmental Concern, that reasonably could result in a violation of any Environmental Law or form the basis of a potential Environmental Claim against the Company or any of its subsidiaries or against any person or entity whose liability for any Environmental Claim the Company or any of its subsidiaries has retained or assumed either contractually or by operation of law, and (iv) the Company has reasonably concluded that there are no costs or liabilities (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties) associated with the effect of compliance with Environmental Laws (after giving effect to the amount of established reserves, if any).
 
(ff) ERISA Compliance. The Company and its subsidiaries and any “employee benefit plan” (as defined under the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ERISA”)) established or maintained by the Company, its subsidiaries or their “ERISA Affiliates” (as defined below) are in compliance in all material respects with ERISA. “ERISA Affiliate” means, with respect to the Company or a subsidiary, any member of any group of organizations described in Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder (the “Code”) of which the Company or such subsidiary is a member.
 
(gg) No Default in Senior Indebtedness. No event of default exists under any contract, indenture, mortgage, loan agreement, note, lease or other agreement or
 
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instrument constituting Senior Indebtedness (as defined in the Indenture) (except as which will be cured or remedied by the Closing Date).
 
(hh) NASCAR Relationship and Contracts. The disclosure in the Offering Memorandum accurately and fairly describes in all respects (i) the sanctioning agreements between the Company and the National Association of Stock Car Auto Racing, Inc. (“Nascar”); (ii) the broadcasting agreements between the NBC Sports, Fox, Turner Sports and FX networks and Nascar; and (iii) the ancillary rights package for Nascar.com, the Nascar Channel, international and satellite broadcasting, Nascar images, SportsVision, FanScan and specialty pay-per view telecasts.
 
(ii) Operative Subsidiaries. The Guarantors are all of the operative subsidiaries of the Company (other than Oil-Chem Research Corporation).
 
(jj) Credit Facility. The 2003 Credit Facility (as defined in the Offering Memorandum) has been duly and validly authorized by the Company and the guarantors thereto and, when duly executed and delivered by the Company and the guarantors thereto, will be the valid and legally binding obligation of the Company and the guarantors thereto, enforceable in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles. As of the date hereof, the Company could borrow the fully committed amounts under the covenants or proposed covenants under each of the Existing Credit Agreement and the 2003 Credit Facility and be in compliance with all applicable covenants of each agreement.
 
(kk) Compliance with Regulation S. The Company, the Guarantors and their respective subsidiaries and Affiliates and all persons acting on their behalf (other than the Initial Purchasers, as to whom the Company and the Guarantors make no representation) have complied with and will comply with the offering restrictions requirements of Regulation S in connection with the offering of the Securities outside the United States and, in connection therewith, the Offering Memorandum will contain the disclosure required by Rule 902.
 
Each of the Company and the Guarantors is a “reporting issuer,” as defined in Rule 902 under the Securities Act.
 
Any certificate signed by an officer of the Company or any Guarantor and delivered to the Initial Purchasers or to counsel for the Initial Purchasers shall be deemed to be a representation and warranty by the Company or such Guarantor to each Initial Purchaser as to the matters set forth therein.
 
SECTION 2. Purchase, Sale and Delivery of the Securities.
 
(a) The Securities. The Company and the Guarantors agree to issue and sell to the several Initial Purchasers, severally and not jointly, all of the Securities upon the terms herein set forth. On the basis of the representations, warranties and agreements of the Company and the Guarantors herein contained, and upon the terms but subject to the conditions herein set forth, the Initial Purchasers agree, severally and not jointly, to purchase from the Company and the Guarantors the aggregate principal amount of
 
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Securities set forth opposite their names on Schedule A , at a purchase price of 97.625% of the principal amount thereof payable on the Closing Date.
 
(b) The Closing Date. Delivery of certificates for the Securities in definitive form to be purchased by the Initial Purchasers and payment therefor shall be made at the offices of Parker, Poe, Adams & Bernstein L.L.P., Three Wachovia Center, 401 South Tryon Street, Suite 3000, Charlotte, NC 28202 (or such other place as may be agreed to by the Company and the Initial Purchasers) at 9:00 a.m. New York City time, on May 16, 2003 or such other time and date as the Initial Purchasers shall designate by notice to the Company (the time and date of such closing are called the “Closing Date”). The Company hereby acknowledges that circumstances under which the Initial Purchasers may provide notice to postpone the Closing Date as originally scheduled include, but are in no way limited to, any determination by the Company or the Initial Purchasers to recirculate to investors copies of an amended or supplemented Offering Memorandum or a delay as contemplated by the provisions of Section 16.
 
(c) Delivery of the Securities. The Company shall deliver, or cause to be delivered, to Banc of America Securities LLC for the accounts of the several Initial Purchasers certificates for the Securities and the Guarantees at the Closing Date against the irrevocable release of a wire transfer of immediately available funds for the amount of the purchase price therefor. The certificates for the Securities shall be in such denominations and registered in the name of Cede & Co., as nominee of the Depository, pursuant to the DTC Agreement, and shall be made available for inspection on the business day preceding the Closing Date at a location in New York City, as the Initial Purchasers may designate. Time shall be of the essence, and delivery at the time and place specified in this Agreement is a further condition to the obligations of the Initial Purchasers.
 
(d) Delivery of Offering Memorandum to the Initial Purchasers. Not later than 12:00 noon (eastern time) on the business day following the date of this Agreement or such other date as reasonably agreed to by the parties, the Company shall deliver or cause to be delivered copies of the Offering Memorandum in such quantities and at such places as the Initial Purchasers shall reasonably request.
 
(e) Initial Purchasers as Qualified Institutional Buyers. Each Initial Purchaser severally and not jointly represents and warrants to, and agrees with, the Company that it is a “qualified institutional buyer” within the meaning of Rule 144A (a “Qualified Institutional Buyer”) and an “accredited investor” within the meaning of Rule 501 under the Securities Act (an “Accredited Investor”).
 
SECTION 3. Additional Covenants. Each of the Company and the Guarantors, jointly and severally, further covenants and agrees with each Initial Purchaser as follows:
 
(a) Initial Purchasers’ Review of Proposed Amendments and Supplements. Prior to amending or supplementing the Offering Memorandum (including any amendment or supplement through incorporation by reference of any report filed under the Exchange Act), until the earlier of (i) the Closing Date or (ii) the completion of the placement of the Securities by the Initial Purchasers with the Subsequent Purchasers, the Company and the Guarantors shall furnish to the Initial Purchasers for review a copy of each such proposed amendment or supplement, and the
 
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Company and the Guarantors shall not use any such proposed amendment or supplement to which the Initial Purchasers reasonably object.
 
(b) Additional Information, Amendments and Supplements to the Offering Memorandum and Other Securities Act Matters. The Company and the Guarantors will immediately notify each Initial Purchaser, and confirm such notice in writing, of (x) any filing made by the Company or any Guarantor with any securities exchange or any other regulatory body in the United States or any other jurisdiction or (y) any press release issued by the Company or any Guarantor. If, prior to the completion of the placement of the Securities by the Initial Purchasers with the Subsequent Purchasers, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Offering Memorandum in order to make the statements therein, in the light of the circumstances when the Offering Memorandum is delivered to a purchaser, not misleading, or if in the opinion of the Initial Purchasers or counsel for the Initial Purchasers it is otherwise necessary to amend or supplement the Offering Memorandum to comply with law, the Company and the Guarantors agree to promptly prepare (subject to Section 3 hereof), and furnish at its own expense to the Initial Purchasers, amendments or supplements to the Offering Memorandum so that the statements in the Offering Memorandum as so amended or supplemented will not, in the light of the circumstances when the Offering Memorandum is delivered to a purchaser, be misleading or so that the Offering Memorandum, as amended or supplemented, will comply with law.
 
Following the consummation of the Exchange Offer or the effectiveness of an applicable shelf registration statement and for so long as the Securities are outstanding if, in the reasonable judgment of the Initial Purchasers, the Initial Purchasers or any of their affiliates (as such term is defined in the rules and regulations under the Securities Act) are required to deliver a prospectus in connection with sales of, or market-making activities with respect to, such securities, to periodically amend the applicable registration statement so that the information contained therein complies with the requirements of Section 10 of the Securities Act, to amend the applicable registration statement or supplement the related prospectus or the documents incorporated therein when necessary to reflect any material changes in the information provided therein so that the registration statement and the prospectus 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 the light of the circumstances existing as of the date the prospectus is so delivered, not misleading and to provide the Initial Purchasers with copies of each amendment or supplement filed and such other documents as the Initial Purchasers may reasonably request.
 
The Company and the Guarantors hereby expressly acknowledge that the indemnification and contribution provisions of Sections 8 and 9 hereof are specifically applicable and relate to each offering memorandum, registration statement, prospectus, amendment or supplement referred to in this Section 3.
 
(c) Copies of the Offering Memorandum. The Company and the Guarantors agree to furnish the Initial Purchasers, without charge, as many copies of the Offering Memorandum and any amendments and supplements thereto as they shall have reasonably requested.
 
(d) Blue Sky Compliance. The Company and the Guarantors shall cooperate with the Initial Purchasers and counsel for the Initial Purchasers to qualify or register the
 
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Securities for sale under (or obtain exemptions from the application of) the Blue Sky or state securities laws of those jurisdictions designated by the Initial Purchasers, shall comply with such laws and shall continue such qualifications, registrations and exemptions in effect so long as required for the distribution of the Securities. The Company and each of the Guarantors shall not be required to qualify as a foreign corporation or to take any action that would subject it to general service of process in any such jurisdiction where it is not presently qualified or where it would be subject to taxation as a foreign corporation. The Company and the Guarantors will advise the Initial Purchasers promptly of the suspension of the qualification or registration of (or any such exemption relating to) the Securities for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending such qualification, registration or exemption, the Company shall use its best efforts to obtain the withdrawal thereof at the earliest possible moment.
 
(e) Use of Proceeds. The Company and the Guarantors shall apply the net proceeds from the sale of the Securities sold in the manner described under the caption “Use of Proceeds” in the Offering Memorandum.
 
(f) The Depositary. The Company will cooperate with the Initial Purchasers and use its best efforts to permit the Securities to be eligible for clearance and settlement through the facilities of the Depositary.
 
(g) Additional Issuer Information. Prior to the completion of the placement of the Securities by the Initial Purchasers with the Subsequent Purchasers, the Company shall file, on a timely basis, with the Commission and the New York Stock Exchange all reports and documents required to be filed under Section 13 or 15 of the Exchange Act. Additionally, at any time when the Company is not subject to Section 13 or 15 of the Exchange Act, for the benefit of holders and beneficial owners from time to time of Securities, the Company shall furnish, at its expense, upon request, to holders and beneficial owners of Securities and prospective purchasers of Securities information (“Additional Issuer Information”) satisfying the requirements of subsection (d) of Rule 144A.
 
(h) Agreement Not To Offer or Sell Additional Securities. During the period of 180 days following the date of the Offering Memorandum, the Company and each of the Guarantors will not, without the prior written consent of Banc of America Securities LLC (which consent may be withheld at the sole discretion of Banc of America Securities LLC), directly or indirectly, sell, offer, contract or grant any option to sell, pledge, transfer or establish an open “put equivalent position” within the meaning of Rule 16a-1 under the Exchange Act, or otherwise dispose of or transfer, or announce the offering of, or file any registration statement under the Securities Act in respect of, any debt securities of the Company or securities exchangeable for or convertible into debt securities of the Company (other than as contemplated by this Agreement and to register the Exchange Securities).
 
(i) Future Reports to the Initial Purchasers. For so long as any Securities or Exchange Securities remain outstanding, the Company will furnish to Banc of America Securities LLC, to the extent not available on EDGAR (i) as soon as practicable after the end of each fiscal year, copies of the Annual Report of the Company and the Guarantors containing the balance sheet of the Company and the Guarantors on a consolidated basis
 
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as of the close of such fiscal year and statements of income, stockholders’ equity and cash flows for the year then ended and the opinion thereon of the Company’s and the Guarantors’ independent public or certified public accountants; (ii) as soon as practicable after the filing thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other report filed by the Company with the Commission, the NASD or any securities exchange; and (iii) as soon as available, copies of any report or communication of the Company mailed generally to holders of its capital stock or debt securities (including the holders of the Securities).
 
(j) No Integration. The Company agrees that it will not and will cause its Affiliates and subsidiaries not to make any offer or sale of securities of the Company or any of its subsidiaries of any class if, as a result of the doctrine of “integration” referred to in Rule 502 under the Securities Act, such offer or sale would render invalid (for the purpose of (i) the sale of the Securities by the Company to the Initial Purchasers, (ii) the resale of the Securities by the Initial Purchasers to Subsequent Purchasers or (iii) the resale of the Securities by such Subsequent Purchasers to others) the exemption from the registration requirements of the Securities Act provided by Section 4 thereof or by Rule 144A or by Regulation S thereunder or otherwise.
 
(k) Legended Securities. Each certificate for a Note will bear a legend substantially similar to the legend contained in “Notice to Investors” in the Offering Memorandum for the time period and upon the other terms stated in the Offering Memorandum.
 
(l) PORTAL. The Company will use its best efforts to cause such Notes to be eligible for the National Association of Securities Dealers, Inc. PORTAL market (the “PORTAL market”).
 
Banc of America Securities LLC, on behalf of the several Initial Purchasers, may, in its sole discretion, waive in writing the performance by the Company or Guarantors of any one or more of the foregoing covenants or extend the time for their performance.
 
SECTION 4. Payment of Expenses. The Company and the Guarantors agree to pay all costs, fees and expenses incurred in connection with the performance of their obligations hereunder and in connection with the transactions contemplated hereby, including without limitation (i) all expenses incident to the issuance and delivery of the Securities (including all printing and engraving costs), (ii) all necessary issue, transfer and other stamp taxes in connection with the issuance and sale of the Securities to the Initial Purchasers, (iii) all fees and expenses of the Company’s and the Guarantors’ counsel, independent public or certified public accountants and other advisors, (iv) all costs and expenses incurred in connection with the preparation, printing, filing, shipping and distribution of each preliminary Offering Memorandum and the Offering Memorandum (including financial statements and exhibits), and all amendments and supplements thereto, this Agreement, the Registration Rights Agreement, the Indenture, the DTC Agreement, and the Notes and the Guarantees, (v) all filing fees, attorneys’ fees and expenses incurred by the Company or the Initial Purchasers in connection with qualifying or registering (or obtaining exemptions from the qualification or registration of) all or any part of the Securities for offer and sale under the Blue Sky laws and, if requested by the Initial Purchasers, preparing and printing a “Blue Sky Survey” or memorandum, and any supplements thereto, advising the Initial Purchasers of such qualifications, registrations and exemptions, (vi) the fees and expenses of the Trustee, including the fees and disbursements of counsel for the Trustee in connection with the Indenture, the Securities and the Exchange
 
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Securities, (vii) any fees payable in connection with the rating of the Securities or the Exchange Securities with the ratings agencies and the listing of the Securities with the PORTAL market, (viii) any filing fees incident to, and any reasonable fees and disbursements of counsel to the Initial Purchasers in connection with the review by the National Association of Securities Dealers, Inc., if any, of the terms of the sale of the Securities or the Exchange Securities, (ix) all fees and expenses (including reasonable fees and expenses of counsel) of the Company and the Guarantors in connection with approval of the Securities by DTC for “book-entry” transfer, and the performance by the Company and the Guarantors their respective other obligations under this Agreement and (x) one half of the fees and expenses associated with the rental of an airplane for use by the Company and the Initial Purchasers for marketing the securities. Except as provided in this Section 4, Section 6, Section 8 and Section 9 hereof, the Initial Purchasers shall pay their own expenses.
 
SECTION 5. Conditions of the Obligations of the Initial Purchasers. The obligations of the several Initial Purchasers to purchase and pay for the Securities as provided herein on the Closing Date shall be subject to the accuracy of the representations and warranties on the part of the Company and each of the Guarantors set forth in Section 1 hereof as of the date hereof and as of the Closing Date as though then made and to the timely performance by the Company and each of the Guarantors of their respective covenants and other obligations hereunder, and to each of the following additional conditions:
 
(a) Accountants’ Comfort Letter. On the date hereof, the Initial Purchasers shall have received from Deloitte & Touche LLP, independent public or certified public accountants for the Company, a letter dated the date hereof addressed to the Initial Purchasers, in form and substance satisfactory to the Initial Purchasers, containing statements and information of the type ordinarily included in accountant’s “comfort letters” to Initial Purchasers, delivered according to Statement of Auditing Standards Nos. 72 and 76 (or any successor bulletins), with respect to the audited and unaudited financial statements and certain financial information contained in the Offering Memorandum.
 
(b) No Material Adverse Change or Ratings Agency Change. For the period from and after the date of this Agreement and prior to the Closing Date:
 
(i) in the judgment of the Initial Purchasers there shall not have occurred any Material Adverse Change; and
 
(ii) there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any securities of the Company or any of its subsidiaries by any “nationally recognized statistical rating organization” as such term is defined for purposes of Rule 436 under the Securities Act.
 
(c) Opinion of Counsel for the Company. On the Closing Date the Initial Purchasers shall have received the favorable opinion of Parker, Poe, Adams & Bernstein L.L.P., counsel for the Company, dated as of such Closing Date, substantially in the form attached as Exhibit A .
 
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(d) Opinion of Counsel for the Initial Purchasers. On the Closing Date the Initial Purchasers shall have received the favorable opinion of Fried, Frank, Harris, Shriver & Jacobson, counsel for the Initial Purchasers, dated as of such Closing Date, with respect to such matters as may be reasonably requested by the Initial Purchasers.
 
(e) Officers’ Certificate. On the Closing Date the Initial Purchasers shall have received a written certificate executed by the Chairman of the Board, Chief Executive Officer or President of the Company and the Chief Financial Officer or Chief Accounting Officer of the Company, dated as of the Closing Date, to the effect set forth in subsection (b)(ii) of this Section 5, and further to the effect that:
 
(i) for the period from and after the date of this Agreement and prior to the Closing Date there has not occurred any Material Adverse Change;
 
(ii) the representations, warranties and covenants of the Company and the Guarantors set forth in Section 1 of this Agreement are true and correct with the same force and effect as though expressly made on and as of the Closing Date; and
 
(iii) the Company and the Guarantors have complied with all the agreements and satisfied all the conditions on their part to be performed or satisfied at or prior to the Closing Date.
 
(f) Bring-down Comfort Letter. On the Closing Date the Initial Purchasers shall have received from Deloitte & Touche LLP, independent public or certified public accountants for the Company, a letter dated such date, in form and substance satisfactory to the Initial Purchasers, to the effect that they reaffirm the statements made in the letter furnished by them pursuant to subsection (a) of this Section 5, except that the specified date referred to therein for the carrying out of procedures shall be no more than three business days prior to the Closing Date.
 
(g) PORTAL Listing. At the Closing Date the Notes shall have been designated for trading on the PORTAL market.
 
(h) Other Agreements. The Company and the Guarantors shall have entered into the Registration Rights Agreement and the Indenture and the Initial Purchasers shall have received executed counterparts thereof.
 
(i) Additional Documents. On or before the Closing Date, the Initial Purchasers and counsel for the Initial Purchasers shall have received such information, documents and opinions as they may reasonably require for the purposes of enabling them to pass upon the issuance and sale of the Securities as contemplated herein, or in order to evidence the accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained.
 
If any condition specified in this Section 5 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Initial Purchasers by notice to the Company and the Guarantors at any time on or prior to the Closing Date, which termination shall be without liability on the part of any party to any other party, except that Section 4, Section 6, Section 8 and Section 9 shall at all times be effective and shall survive such termination.
 
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SECTION 6. Reimbursement of Initial Purchasers’ Expenses. If this Agreement is terminated by the Initial Purchasers pursuant to Section 5, or if the sale to the Initial Purchasers of the Securities on the Closing Date is not consummated because of any refusal, inability or failure on the part of the Company or any of the Guarantors to perform any agreement herein or to comply with any provision hereof, the Company agrees to reimburse the Initial Purchasers (or such Initial Purchasers as have terminated this Agreement with respect to themselves), severally, upon demand for all out-of-pocket expenses that shall have been reasonably incurred by the Initial Purchasers in connection with the proposed purchase and the offering and sale of the Securities, including but not limited to fees and disbursements of counsel, printing expenses, travel expenses, postage, facsimile and telephone charges.
 
SECTION 7. Offer, Sale and Resale Procedures. Each of the Initial Purchasers, on the one hand, and the Company and each of the Guarantors, on the other hand, hereby establish and agree to observe the following procedures in connection with the offer and sale of the Securities:
 
(A) Offers and sales of the Securities will be made only by the Initial Purchasers or Affiliates thereof qualified to do so in the jurisdictions in which such offers or sales are made. Each such offer or sale shall only be made to persons whom the offeror or seller reasonably believes to be qualified institutional buyers (as defined in Rule 144A under the Securities Act) or non-U.S. persons outside the United States to whom the offeror or seller reasonably believes offers and sales of the Securities may be made in reliance upon Regulation S under the Securities Act, upon the terms and conditions set forth in Annex I hereto, which Annex I is hereby expressly made a part hereof.
 
(B) No general solicitation or general advertising (within the meaning of Rule 502 under the Securities Act) will be used in the United States in connection with the offering of the Securities.
 
(C) Upon original issuance by the Company, and until such time as the same is no longer required under the applicable requirements of the Securities Act, the Securities (and all securities issued in exchange therefor or in substitution thereof, other than the Exchange Securities) shall bear the following legend:
 
“THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY TO A PERSON WHOM 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, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
 
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QUALIFIED INSTITUTIONAL BUYER 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 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) 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), TO THE COMPANY OR 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 THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY EVIDENCED HEREBY.”
 
Following the sale of the Securities by the Initial Purchasers to Subsequent Purchasers pursuant to the terms hereof, the Initial Purchasers shall not be liable or responsible to the Company or any Guarantor for any losses, damages or liabilities suffered or incurred by the Company or any Guarantor, including any losses, damages or liabilities under the Securities Act, arising from or relating to any resale or transfer of any Security.
 
SECTION 8. Indemnification.
 
(a) Indemnification of the Initial Purchasers. The Company and each Guarantor, jointly and severally, agree to indemnify and hold harmless each Initial Purchaser, its directors, officers and employees, and each person, if any, who controls any Initial Purchaser within the meaning of the Securities Act and the Exchange Act against any loss, claim, damage, liability or expense, as incurred, to which such Initial Purchaser or such controlling person may become subject, under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of the Company), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based (i) upon any 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 the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; or (ii) in whole or in part upon any inaccuracy in the representations and warranties of the Company or any Guarantor contained herein; or (iii) in whole or in part upon any failure of the Company or any Guarantor to perform its obligations hereunder or under law; or (iv) any act or failure to act or any alleged act or failure to act by any Initial Purchaser in connection with, or relating in any manner to, the offering contemplated hereby, and which is included as part of or referred to in any loss, claim, damage, liability or action arising out of or based upon any matter covered by
 
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clause (i) above, provided that the Company and the Guarantors shall not be liable under this clause (iv) to the extent that a court of competent jurisdiction shall have determined by a final judgment that such loss, claim, damage, liability or action resulted directly from any such acts or failures to act undertaken or omitted to be taken by such Initial Purchaser through its gross negligence or willful misconduct; and to reimburse each Initial Purchaser and each such controlling person for any and all expenses (including the fees and disbursements of counsel chosen by Banc of America Securities LLC) as such expenses are reasonably incurred by such Initial Purchaser or such controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however , that the foregoing indemnity agreement shall not apply to any loss, claim, damage, liability or expense to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Company or any Guarantor by the Initial Purchasers expressly for use in any Preliminary Offering Memorandum or the Offering Memorandum (or any amendment or supplement thereto). The indemnity agreement set forth in this Section 8 shall be in addition to any liabilities that the Company and each of the Guarantors may otherwise have.
 
(b) Indemnification of the Company, its Directors and Officers. Each Initial Purchaser agrees, severally and not jointly, to indemnify and hold harmless the Company and each of its directors and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act, against any loss, claim, damage, liability or expense, as incurred, to which the Company or any such director, or controlling person may become subject, under the Securities Act, the Exchange Act, or other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of such Initial Purchaser), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based upon any untrue or alleged untrue statement of a material fact contained in any Preliminary Offering Memorandum or the Offering Memorandum (or any amendment or supplement thereto), or arises out of or is 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 any Preliminary Offering Memorandum or the Offering Memorandum (or any amendment or supplement thereto), in reliance upon and in conformity with written information furnished to the Company by the Initial Purchasers expressly for use therein; and to reimburse the Company, or any such director or controlling person for any legal and other expenses reasonably incurred by the Company, or any such director or controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action. The Company hereby acknowledges that the only information that the Initial Purchasers have furnished to the Company expressly for use in any Preliminary Offering Memorandum or the Offering Memorandum (or any amendment or supplement thereto) are the statements in the fifth and eighth paragraphs under the caption “Plan of Distribution” in the Offering Memorandum ; and the Initial Purchasers confirm that such statements are correct. The indemnity agreement set forth in this Section 8 shall be in addition to any liabilities that each Initial Purchaser may otherwise have.
 
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(c) Notifications and Other Indemnification Procedures. Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof, but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party for contribution or otherwise than under the indemnity agreement contained in this Section 8 or to the extent it is not prejudiced as a proximate result of such failure. In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate in and, to the extent that it shall elect, jointly with all other indemnifying parties similarly notified, by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that a conflict may arise between the positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of such indemnifying party’s election so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party 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 (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel (together with local counsel), approved by the indemnifying party (Banc of America Securities LLC in the case of Section 8 and Section 9), representing the indemnified parties who are parties to such action) or (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action, in each of which cases the fees and expenses of counsel shall be at the expense of the indemnifying party.
 
(d) Settlements. The indemnifying party under this Section 8 shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by Section 8 hereof, 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. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment in any pending or threatened
 
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action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity was or could have been sought hereunder by such indemnified party, unless such settlement, compromise or consent (i) includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. 
 
SECTION 9. Contribution.
 
If the indemnification provided for in Section 8 is for any reason held to be unavailable to or otherwise insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified party, as incurred, as a result of any losses, claims, damages, liabilities or expenses referred to therein (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, in connection with the statements or omissions or inaccuracies in the representations and warranties herein which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, in connection with the offering of the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses) received by the Company and the Guarantors, and the total discount and fees received by the Initial Purchasers bear to the aggregate initial offering price of the Securities. The relative fault of the Company or any Guarantor, on the one hand, and the Initial Purchasers, on the other hand, shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact or any such inaccurate or alleged inaccurate representation or warranty relates to information supplied by the Company or any Guarantor, on the one hand, or the Initial Purchasers, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
 
The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in Section 8, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The provisions set forth in Section 8 with respect to notice of commencement of any action shall apply if a claim for contribution is to be made under this Section 9; provided, however, that no additional notice shall be required with respect to any action for which notice has been given under Section 8 for purposes of indemnification.
 
The Company, the Guarantors and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to this Section 9 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 account of the equitable considerations referred to in this Section 9.
 
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Notwithstanding the provisions of this Section 9, no Initial Purchaser shall be required to contribute any amount in excess of the discount received by such Initial Purchaser in connection with the Securities distributed by it. No person guilty of fraudulent misrepresentation (within the meaning of Section 11 of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Initial Purchasers’ obligations to contribute pursuant to this Section 9 are several, and not joint, in proportion to their respective commitments as set forth opposite their names in Schedule A . For purposes of this Section 9, each director, officer and employee of an Initial Purchaser and each person, if any, who controls an Initial Purchaser within the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as such Initial Purchaser, and each director of the Company, and each of the Guarantors and each person, if any, who controls the Company or any of the Guarantors within the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as the Company.
 
SECTION 10. Termination of this Agreement. Prior to the Closing Date, this Agreement may be terminated by the Initial Purchasers by notice given to the Company if at any time (i) trading or quotation in any of the Company’s securities shall have been suspended or limited by the Commission or by the New York Stock Exchange, or trading in securities generally on either the Nasdaq Stock Market or the New York Stock Exchange shall have been suspended or limited, or minimum or maximum prices shall have been generally established on any of such stock exchanges by the Commission or the NASD; (ii) a general banking moratorium shall have been declared by any of federal, New York, Delaware or California authorities; (iii) there shall have occurred any outbreak or escalation of national or international hostilities or any crisis or calamity, or any change in the United States or international financial markets, or any substantial change or development involving a prospective substantial change in United States’ or international political, financial or economic conditions, as in the judgment of the Initial Purchasers is material and adverse and makes it impracticable or inadvisable to market the Securities in the manner and on the terms described in the Offering Memorandum or to enforce contracts for the sale of securities; (iv) in the judgment of the Initial Purchasers there shall have occurred any Material Adverse Change; or (v) the Company shall have sustained a loss by strike, fire, flood, earthquake, accident or other calamity of such character as in the judgment of the Initial Purchasers may interfere materially with the conduct of the business and operations of the Company regardless of whether or not such loss shall have been insured. Any termination pursuant to this Section 10 shall be without liability on the part of (i) the Company to any Initial Purchaser, except that the Company shall be obligated to reimburse the expenses of the Initial Purchasers pursuant to Sections 4 and 6 hereof, (ii) any Initial Purchaser to the Company, or (iii) of any party hereto to any other party except that the provisions of Section 8 and Section 9 shall at all times be effective and shall survive such termination.
 
SECTION 11. Representations and Indemnities to Survive Delivery. The respective indemnities, agreements, representations, warranties and other statements of the Company and each of the Guarantors, of their respective officers and of the several Initial Purchasers set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Initial Purchaser or the Company or any of the Guarantors or any of its or their partners, officers or directors or any controlling person, as the case may be, and will survive delivery of and payment for the Securities sold hereunder and any termination of this Agreement.
 
SECTION 12. Notices. All communications hereunder shall be in writing and shall be mailed, hand delivered or telecopied and confirmed to the parties hereto as follows:
 
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If to the Initial Purchasers:
 
Banc of America Securities LLC
9 West 57th Street
New York, NY 10019
 
Facsimile: (212) 847-5038
Attention: James G. Rose, Jr.
 
with a copy to:
 
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
 
Facsimile: (212) 859-4000
Attention: Valerie Ford Jacob, Esq.
 
If to the Company or any of the Guarantors:
 
Speedway Motorsports, Inc.
5401 East Independence Blvd.
Charlotte, North Carolina 28212
 
Facsimile: (704) 455-2168
Attention: Marylaurel E. Wilks, Esq.
 
with a copy to:
 
Parker, Poe, Adams & Bernstein L.L.P.
Three Wachovia Center
401 South Tryon Street, Suite 3000
Charlotte, North Carolina 28202
 
Facsimile: (704) 334-4706
Attention: Peter J. Shea, Esq.
 
Any party hereto may change the address for receipt of communications by giving written notice to the others.
 
SECTION 13. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto, including any substitute Initial Purchasers pursuant to Section 16 hereof, and to the benefit of the employees, officers and directors and controlling persons referred to in Section 8 and Section 9, and in each case their respective successors, and no other person will have any right or obligation hereunder. The term “successors” shall not include any purchaser of the Securities as such from any of the Initial Purchasers merely by reason of such purchase.
 
SECTION 14. Partial Unenforceability. The invalidity or unenforceability of any Section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other Section, paragraph or provision hereof. If any Section, paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to
 
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be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.
 
SECTION 15. Governing Law Provisions. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
 
(a) Consent to Jurisdiction. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby (“Related Proceedings”) may be instituted in the federal courts of the United States of America located in the City and County of New York or the courts of the State of New York in each case located in the City and County of New York (collectively, the “Specified Courts”), and each party irrevocably submits to the non-exclusive jurisdiction (except for proceedings instituted in regard to the enforcement of a judgment of any such court (a “Related Judgment”), as to which such jurisdiction is non-exclusive) of such courts in any such suit, action or proceeding. Service of any process, summons, notice or document by mail to such party’s address set forth above shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or other proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit, action or other proceeding brought in any such court has been brought in an inconvenient forum.
 
SECTION 16. Default of One or More of the Several Initial Purchasers. If any one or more of the several Initial Purchasers shall fail or refuse to purchase Securities that it or they have agreed to purchase hereunder on the Closing Date, and the principal amount of Securities which such defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase does not exceed 10% of the principal amount of the Securities to be purchased on such date, the other Initial Purchasers shall be obligated, severally, in the proportions that the number of Securities set forth opposite their respective names on Schedule A bears to the principal amount of Securities set forth opposite the names of all such non-defaulting Initial Purchasers, or in such other proportions as may be specified by the Initial Purchasers with the consent of the non-defaulting Initial Purchasers, to purchase the Securities which such defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase on such date. If any one or more of the Initial Purchasers shall fail or refuse to purchase Securities and the principal amount of Securities with respect to which such default occurs exceeds 10% of the principal amount of Securities to be purchased on the Closing Date, and arrangements satisfactory to the Initial Purchasers and the Company for the purchase of such Securities are not made within 48 hours after such default, this Agreement shall terminate without liability of any party to any other party except that the provisions of Section 8 and Section 9 shall at all times be effective and shall survive such termination. In any such case either the Initial Purchasers or the Company shall have the right to postpone the Closing Date, as the case may be, but in no event for longer than seven days in order that the required changes, if any, to the Offering Memorandum or any other documents or arrangements may be effected.
 
As used in this Agreement, the term “Initial Purchaser” shall be deemed to include any person substituted for a defaulting Initial Purchaser under this Section 10. Any action taken under this Section 16 shall not relieve any defaulting Initial Purchaser from liability in respect of any default of such Initial Purchaser under this Agreement.
 
26

SECTION 17. General Provisions. This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof. This Agreement may be executed in two or more counterparts, each one of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement may not be amended or modified unless in writing by all of the parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit. The Table of Contents and the section headings herein are for the convenience of the parties only and shall not affect the construction or interpretation of this Agreement.
 
If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to the Company the enclosed copies hereof, whereupon this instrument, along with all counterparts hereof, shall become a binding agreement in accordance with its terms.
 
Very truly yours,	
	
SPEEDWAY MOTORSPORTS, INC. , a
Delaware corporation	
		
By:	 	/s/    William R. Brooks        

Name: William R. Brooks	
Title:   Chief Financial Officer, Vice President
and Treasurer	
 
SPEEDWAY FUNDING, LLC. , a Delaware
limited liability corporation	
		
By:	 	/s/    William R. Brooks

Name: William R. Brooks	
Title:    President	
 
600 RACING, INC. , a North Carolina
corporation	
		
By:	 	/s/    William R. Brooks

Name: William R. Brooks	
Title:    Vice President	
 
27

 
ATLANTA MOTOR SPEEDWAY, INC. , a
Georgia corporation	
		
By:	 	/s/    William R. Brooks

Name: William R. Brooks	
Title:    Vice President	
 
BRISTOL MOTOR SPEEDWAY, INC. , a
Tennessee corporation	
		
By:	 	/s/    William R. Brooks

Name: William R. Brooks:	
Title:    Vice President	
 
CHARLOTTE MOTOR SPEEDWAY, LLC , a
North Carolina limited liability company	
		
By:	 	/s/    William R. Brooks

Name: William R. Brooks	
Title:    Vice President	
 
INEX CORP. a North Carolina corporation	
		
By:	 	/s/    William R. Brooks

By:      William R. Brooks	
Title:    Vice President	
 
LAS VEGAS MOTOR SPEEDWAY, INC. , a
Delaware corporation	
		
By:	 	/s/    William R. Brooks

Name:  William R. Brooks	
Title:     Vice President	
 
28

NEVADA SPEEDWAY LLC , a Delaware
limited liability corporation	
		
By:	 	/s/    William R. Brooks

Name: William R. Brooks	
Title:    Vice President	
 
SPEEDWAY SYSTEMS, LLC , a North Carolina
limited liability company	
	
By:	
By:	 	/s/    William R. Brooks

Name: William R. Brooks	
Title:    Vice President	
 
SPR, INC. , a Delaware corporation	
		
By:	 	/s/    William R. Brooks

Name: William R. Brooks	
Title:    Vice President	
 
TEXAS MOTOR SPEEDWAY, INC. , a Texas
corporation	
		
By:	 	/s/    William R. Brooks

Name: William R. Brooks	
Title:    Vice President	
 
SPEEDWAY PROPERTIES COMPANY, LLC , a
Delaware limited liability corporation	
		
By:	 	/s/    William R. Brooks

Name: William R. Brooks	
Title:    President	
 
29

SPEEDWAY SONOMA, LLC , a Delaware
limited liability company	
		
By:	 	/s/    William R. Brooks

Name: William R. Brooks	
Title:    Vice President	
 
SPEEDWAY MEDIA, LLC , a North Carolina
limited liability company	
		
By:	 	/s/    William R. Brooks

Name: William R. Brooks	
Title:    Vice President	
 
TRACKSIDE HOLDING CORPORATION , a
North Carolina corporation	
		
By:	 	/s/    William R. Brooks

Name: William R. Brooks	
Title:    Vice President	
 
MOTORSPORTS BY MAIL, LLC , a North
Carolina limited liability company	
		
By:	 	/s/    William R. Brooks

Name: William R. Brooks	
Title:    President	
 
SMI TRACKSIDE, LLC , a North Carolina
limited liability company	
		
By:	 	/s/    William R. Brooks

By:      William R. Brooks	
Title:    Vice President	
 
30

The foregoing Purchase Agreement is hereby confirmed and accepted by the Initial Purchasers as of the date first above written.
 
BANC OF AMERICA SECURITIES LLC
WACHOVIA SECURITIES, INC.
CREDIT LYONNAIS SECURITIES (USA) INC.
FLEET SECURITIES, INC.
SUNTRUST CAPITAL MARKETS, INC.
 
By: Banc of America Securities LLC
		
By:	 	/s/    James G. Rose, Jr.        
	
 	 	James G. Rose, Jr.
Managing Director	

31

SCHEDULE A
 
Initial Purchasers	  	Aggregate
Principal Amount
of Securities to be
Purchased	
Banc of America Securities LLC	  	$	142,268,041	
Wachovia Securities, Inc.	  	$	59,278,351	
Credit Lyonnais Securities (USA) Inc.	  	$	14,226,804	
Fleet Securities, Inc.	  	$	7,113,402	
SunTrust Capital Markets, Inc.	  	$	7,113,402	
		
Total	  	$	230,000,000	

EXHIBIT A
 
Opinion of Parker, Poe, Adams & Berstein L.L.P. to be delivered pursuant to Section 5 of the Purchase Agreement.
 
(i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware.
 
(ii) The Company has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Offering Memorandum and to enter into and perform its obligations under the Purchase Agreement, the Registration Rights Agreement, the Indenture, the Securities, the Exchange Securities and the DTC Agreement.
 
(iii) The Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except for such jurisdictions where the failure to so qualify or to be in good standing would not, individually or in the aggregate, result in a Material Adverse Change.
 
(iv) Each Guarantor has been duly incorporated and is validly existing as a corporation or limited liability company (as applicable) in good standing under the laws of the jurisdiction of its incorporation or formation, has corporate or limited liability company power and authority to own, lease and operate its properties and to conduct its business as described in the Offering Memorandum and to enter into and perform its obligations under the Agreement, the Registration Rights Agreement, the Indenture, the Securities, and, to the best knowledge of such counsel, is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except for such jurisdictions where the failure to so qualify or to be in good standing would not, individually or in the aggregate, result in a Material Adverse Change.
 
(v) All of the issued and outstanding capital stock or limited liability company interests of each Guarantor has been duly authorized and validly issued, is fully paid and non-assessable and is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance or, to the best knowledge of such counsel, any pending or threatened claim except for security interests, pledges, liens or encumbrances in favor of the Company’s senior lenders.
 
(vi) All of the outstanding shares of Common Stock of the Company have been duly authorized and validly issued, are fully paid and nonassessable and, to the best of such counsel’s knowledge, have been issued in compliance with the registration and qualification requirements of federal and state securities laws.
 
(vii) The Purchase Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of, the Company and each Guarantor, enforceable in accordance with its terms, except as rights to indemnification thereunder may be limited by applicable law and except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles.
 
A-1

(viii) The Registration Rights Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of, the Company and each Guarantor, enforceable in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles and except as rights to indemnification under the Registration Rights Agreement may be limited by applicable law.
 
(ix) The DTC Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of the Company, enforceable in accordance with its terms.
 
(x) The Indenture has been duly authorized, executed and delivered by the Company and each Guarantor and (assuming the due authorization, execution and delivery thereof by the Trustee) constitutes a valid and binding agreement of the Company and each Guarantor, enforceable against the Company and each Guarantor in accordance with its terms.
 
(xi) The Notes are in the form contemplated by the Indenture, have been duly authorized by the Company for issuance and sale pursuant to the Agreement and the Indenture and, when executed by the Company and authenticated by the Trustee in the manner provided in the Indenture (assuming the due authorization, execution and delivery of the Indenture by the Trustee) and delivered against payment of the purchase price therefor, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms.
 
(xii) The Exchange Notes have been duly and validly authorized for issuance by the Company, and when issued and authenticated in accordance with the terms of the Indenture, the Registration Rights Agreement and the Exchange Offer, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms.
 
(xiii) The Guarantees of the Notes and the Exchange Notes are in the respective forms contemplated by the Indenture, have been duly authorized for issuance and sale pursuant to this Agreement and the Indenture and, at the Closing Date, will have been duly executed by each of the Guarantors and, when the Notes have been authenticated in the manner provided for in the Indenture and delivered against payment of the purchase price therefor, will constitute valid and binding agreements of the Guarantors, enforceable in accordance with their terms.
 
(xiv) The Securities, the Guarantees and the Indenture conform in all material respects to the descriptions thereof contained in the Offering Memorandum.
 
(xv) The documents incorporated by reference in the Offering Memorandum (other than the financial statements and supporting schedules therein, as to which no opinion need be rendered), when they were filed with the Commission, complied as to form in all material respects with the requirements of the Exchange Act (except for the Form 8-K filed with the Commission on May 5, 2003 which did not include a signature page).
 
(xvi) The statements in the Offering Memorandum under the captions “Description of Certain Indebtedness,” “Certain Transactions,” “Certain United States Federal Tax Considerations” and “Notice to Investors,” insofar as such statements constitute matters of law, summaries of legal matters, the Company’s charter or by-law provisions, documents or legal
 
A-2

proceedings, or legal conclusions, have been reviewed by us and fairly present, in all material respects, the matters referred to therein.
 
(xvii) No consent, approval, authorization or other order of, or registration or filing with, any court or other governmental or regulatory authority or agency, is required for the Company’s and each Guarantor’s execution, delivery and performance of the Agreement, the Registration Rights Agreement, the DTC Agreement or the Indenture, or the issuance and delivery of the Securities, the Guarantees or the Exchange Securities, or consummation of the transactions contemplated thereby and by the Offering Memorandum, except such as have been obtained or made by the Company or any of the Guarantors and are in full force and effect under the Securities Act, applicable state securities or blue sky laws and except such as may be required by federal and state securities laws with respect to the Company’s or each of the Guarantors’ obligations under the Registration Rights Agreement.
 
(xviii) The execution and delivery of the Purchase Agreement, the Registration Rights Agreement, the DTC Agreement, the Securities, the Exchange Securities and the Indenture by the Company and each of the Guarantor party thereto and the performance by the Company and each of the Guarantors of their respective obligations thereunder (other than performance by the Company and each of the Guarantors party thereto obligations under the indemnification sections of the Purchase Agreement, as to which we render no opinion) (i) have been duly authorized by all necessary corporate or limited liability company (as appropriate) action on the part of the Company and each of the Guarantors party thereto; (ii) will not result in any violation of the provisions of the charter or by-laws of the Company or any Guarantor; (iii) will not constitute a breach of, or Default or a Debt Repayment Triggering Event under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to an existing credit agreement, or any other material Existing Instrument; or (iv) will not result in any violation of any law, statue, rule or administrative regulation or administrative or court decree applicable to the Company or any subsidiary.
 
(xix) None of the Company nor any of the Guarantors is, or after receipt of payment for the Securities will be, an “investment company” within the meaning of Investment Company Act.
 
(xx) Neither the Company nor any subsidiary is in violation of its charter or by-laws or any law, administrative regulation or administrative or court decree applicable to the Company or any subsidiary or is in Default in the performance or observance of any obligation, agreement, covenant or condition contained in any material Existing Instrument, except in each such case for such violations or Defaults as would not, individually or in the aggregate, result in a Material Adverse Change.
 
(xxi) Assuming the accuracy of the representations, warranties and covenants of the Company, the Guarantors and the Initial Purchasers contained in the Purchase Agreement, no registration of the Notes or the Guarantees under the Securities Act, and no qualification of an indenture under the Trust Indenture Act with respect thereto, is required in connection with the purchase of the Securities by the Initial Purchasers or the initial resale of the Securities by the Initial Purchasers to Qualified Institutional Buyers or pursuant to Regulation S under the Securities Act in the manner contemplated by the Agreement and the Offering Memorandum other than any registration or qualification that may be required in connection with the Exchange
 
A-3

Offer contemplated by the Offering Memorandum or in connection with the Registration Rights Agreement. We need express no opinion, however, as to when or under what circumstances any Initial Notes initially sold by the Initial Purchasers may be reoffered or resold.
 
In addition, we have participated in conferences with officers and other representatives of the Company and the Guarantors, representatives of the independent public or certified public accountants for the Company and with representatives of the Initial Purchasers at which the contents of the Offering Memorandum, and any supplements or amendments thereto, and related matters were discussed and, although we are not passing upon and do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Offering Memorandum (other than as specified above), and any supplements or amendments thereto, on the basis of the foregoing, nothing has come to our attention that causes us to believe that the Offering Memorandum, as of its date or at the Closing Date, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (it being understood that we express no belief as to the financial statements or other financial data derived therefrom, included in the Offering Memorandum or any amendments or supplements thereto).
 
In rendering such opinion, such counsel may rely as to matters involving the application of laws of any jurisdiction other than the General Corporation Law of the State of Delaware, the laws of the State of New York or the federal law of the United States, to the extent they deem proper and specified in such opinion, upon the opinion (which shall be dated the Closing Date shall be satisfactory in form and substance to the Initial Purchasers, shall expressly state that the Initial Purchasers may rely on such opinion as if it were addressed to them and shall be furnished to the Initial Purchasers) of other counsel of good standing whom they believe to be reliable and who are satisfactory to counsel for the Initial Purchasers; provided, however, that such counsel shall further state that they believe that they and the Initial Purchasers are justified in relying upon such opinion of other counsel, and as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Company and public officials.
 
A-4

ANNEX I
 
Each Initial Purchaser understands that:
 
(i) Such Initial Purchaser agrees that it has not offered or sold and will not offer or sell the Securities in the United States or to, or for the benefit or account of, a U.S. Person (other than a distributor), in each case, as defined in Rule 902 under the Securities Act as part of its distribution at any time and (ii) otherwise until 40 days after the later of the commencement of the offering of the Securities pursuant hereto and the Closing Date, other than in accordance with Regulation S of the Securities Act or another exemption from the registration requirements of the Securities Act. Such Initial Purchaser agrees that, during such 40-day restricted period, it will not cause any advertisement with respect to the Securities (including any “tombstone” advertisement) to be published in any newspaper or periodical or posted in any public place and will not issue any circular relating to the Securities, except such advertisements as are permitted by and include the statements required by Regulation S.
 
Such Initial Purchaser agrees that, at or prior to confirmation of a sale of Securities by it to any distributor, dealer or person receiving a selling concession, fee or other remuneration during the 40-day restricted period referred to in Rule 903 under the Securities Act, it will send to such distributor, dealer or person receiving a selling concession, fee or other remuneration a confirmation or notice to substantially the following effect:
 
“The Securities covered hereby have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered and sold within the United States or to, or for the account or benefit of, U.S. persons, as part of your distribution at any time or (ii) otherwise until 40 days after the later of the date the Notes were first offered to persons other than “distributors” (as defined in Regulation S) in reliance upon Regulation S and the Closing Date, except in either case in accordance with Regulation S under the Securities Act (or Rule 144A or to Accredited Institutions in transactions that are exempt from the registration requirements of the Securities Act), and in connection with any subsequent sale by you of the Notes covered hereby in reliance on Regulation S during the period referred to above to any distributor, dealer or person receiving a selling concession, fee or other remuneration, you must deliver a notice to substantially the foregoing effect. Terms used above have the meanings assigned to them in Regulation S.”
 
Annex I-1

EXHIBIT 31.1
 
SPEEDWAY MOTORSPORTS, INC.
 
CHIEF EXECUTIVE OFFICER CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
 
I, O. Bruton Smith, certify that:
 
 	1.	 	I have reviewed this Quarterly Report on Form 10-Q of Speedway Motorsports, Inc.;	
 
 	2.	 	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	
 
 	3.	 	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	
 
 	4.	 	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:	
 
 	a)	 	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	
 
 	b)	 	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	
 
 	c)	 	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	
 
 	5.	 	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):	
 
 	a)	 	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	
 
 	b)	 	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.	
 
Date: August 5, 2003	 	 	 	By:	 	/s/ O. Bruton Smith
	
 	 	 	 	 	 	 	 	O. Bruton Smith
Chairman and Chief Executive Officer	

EXHIBIT 31.2
 
SPEEDWAY MOTORSPORTS, INC.
 
CHIEF FINANCIAL OFFICER CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
 
I, William R. Brooks, certify that:
 
 	1.	 	I have reviewed this Quarterly Report on Form 10-Q of Speedway Motorsports, Inc.;	
 
 	2.	 	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	
 
 	3.	 	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	
 
 	4.	 	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:	
 
 	a)	 	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	
 
 	b)	 	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	
 
 	c)	 	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	
 
 	5.	 	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):	
 
 	a)	 	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	
 
 	b)	 	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.	
 
Date: August 5, 2003	 	 	 	By:	 	/s/ William R. Brooks
	
 	 	 	 	 	 	 	 	William R. Brooks
Vice President and Chief Financial Officer	

Exhibit 32.1
 
SPEEDWAY MOTORSPORTS, INC.
 
CHIEF EXECUTIVE OFFICER CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
In connection with the Quarterly Report of Speedway Motorsports, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2003 as filed with the Security and Exchange Commission on the date hereof (the “Report”), the undersigned, O. Bruton Smith, Chairman of the Board and Chief Executive Officer of the Company, does hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
 	(1)	 	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and	
 
 	(2)	 	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.	
 
Date: August 5, 2003	 	 	 	By:	 	/s/ O. Bruton Smith
	
 	 	 	 	 	 	 	 	O. Bruton Smith
Chairman and Chief Executive Officer	
 
A signed original of this written statement required by Section 906 has been provided to, and will be retained by, Speedway Motorsports, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2
 
SPEEDWAY MOTORSPORTS, INC.
 
CHIEF FINANCIAL OFFICER CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
In connection with the Quarterly Report of Speedway Motorsports, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2003 as filed with the Security and Exchange Commission on the date hereof (the “Report”), the undersigned, William R. Brooks, Vice President and Chief Financial Officer of the Company, does hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
 	(1)	 	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and	
 
 	(2)	 	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.	
 
Date: August 5, 2003	 	By:	 	/s/ William R. Brooks

William R. Brooks
Vice President and Chief Financial Officer	
 
A signed original of this written statement required by Section 906 has been provided to, and will be retained by, Speedway Motorsports, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.