Form 10-Q

See accompanying notes.

INTERNATIONAL SPEEDWAY CORPORATION
Condensed Consolidated Statements of Operations

			Three Months Ended August 31,
			2002		2003
			(Unaudited)

			(In Thousands, Except Per Share Amounts)
REVENUES:
	Admissions, net		$	57,099	$	62,689
	Motorsports related income			57,752		74,873
	Food, beverage and merchandise income			18,418		21,615
	Other income			3,127		1,451

				136,396		160,628

EXPENSES:
	Direct expenses:
		Prize and point fund monies and NASCAR sanction fees		19,844		26,329
		Motorsports related expenses		26,520		31,573
		Food, beverage and merchandise expenses		10,629		12,053
	General and administrative expenses			19,906		20,652
	Depreciation and amortization			10,412		10,978

				87,311		101,585

Operating income				49,085		59,043
Interest income				297		561
Interest expense				(5,785)		(5,834)
Equity in net income from equity investments				4,538		5,176

Income before income taxes				48,135		58,946
Income taxes				18,580		22,993

Net income			$	29,555	$	35,953

Basic earnings per share			$	0.56	$	0.68


Diluted earnings per share			$	0.56	$	0.68


Dividends per share			$	0.00	$	0.00


Basic weighted average shares outstanding				53,041,210		53,064,693


Diluted weighted average shares outstanding				53,100,736		53,135,632

See accompanying notes.

INTERNATIONAL SPEEDWAY CORPORATION
Condensed Consolidated Statements of Operations

			Nine Months Ended August 31,
			2002		2003
			(Unaudited)

			(In Thousands, Except Per Share Amounts)
REVENUES:
	Admissions, net		$	151,167	$	153,376
	Motorsports related income			173,256		200,556
	Food, beverage and merchandise income			48,681		52,819
	Other income			5,798		4,326

				378,902		411,077

EXPENSES:
	Direct expenses:
		Prize and point fund monies and NASCAR sanction fees		62,722		73,700
		Motorsports related expenses		71,067		75,912
		Food, beverage and merchandise expenses		26,947		29,547
	General and administrative expenses			58,579		61,390
	Depreciation and amortization			30,641		32,500
	Homestead-Miami Speedway track reconfiguration			-		2,829

				249,956		275,878

Operating income				128,946		135,199
Interest income				921		1,269
Interest expense				(18,280)		(17,617)
Equity in net income from equity investments				1,260		2,154

Income before income taxes and cumulative effect of accounting change				112,847		121,005
Income taxes				43,559		47,196

Income before cumulative effect of accounting change				69,288		73,809
Cumulative effect of accounting change – company operations				(513,827)		-
Cumulative effect of accounting change – equity investment				(3,422)		-

Net (loss) income			$	(447,961)	$	73,809

See accompanying notes.

INTERNATIONAL SPEEDWAY CORPORATION
Condensed Consolidated Statements of Operations (continued)

	Nine Months Ended August 31,
	2002		2003
	(Unaudited)

	(In Thousands, Except Per Share Amounts)

Basic earnings per share before cumulative effect of accounting change	$	1.31	$	1.39
Cumulative effect of accounting change		(9.75)		-

Basic (loss) earnings per share	$	(8.44)	$	1.39


Diluted earnings per share before cumulative effect of accounting change	$	1.30	$	1.39
Cumulative effect of accounting change		(9.74)		-

Diluted (loss) earnings per share	$	(8.44)	$	1.39


Dividends per share	$	0.06	$	0.06


Basic weighted average shares outstanding		53,035,006		53,054,252


Diluted weighted average shares outstanding		53,098,217		53,127,718

See accompanying notes.

INTERNATIONAL SPEEDWAY CORPORATION
Condensed Consolidated Statement of Shareholders’ Equity

			Class A Common Stock $.01 Par Value		Class B Common Stock $.01 Par Value		Additional Paid-in Capital		Retained Earnings (Deficit)		Accumulated Other Comprehensive (Loss)		Unearned Compensation- Restricted Stock		Total Shareholders’ Equity

			(In Thousands)

Balance at November 30, 2002			$	253	$	279	$	693,463	$	(67,641)	$	(874)	$	(3,155)	$	622,325
Activity 12/1/02 – 8/31/03 – unaudited:
	Comprehensive income
		Net income		-		-		-		73,809		-		-		73,809
		Interest rate swap		-		-		-		-		300		-		300

	Total comprehensive income															74,109
	Cash dividends ($.06 per share)			-		-		-		(3,193)		-		-		(3,193)
	Restricted stock grant			-		-		1,595		-		-		(1,595)		-
	Reacquisition of previously issued
		common stock		-		-		(325)		(11)		-		-		(336)
	Conversion of Class B Common Stock
		to Class A Common Stock		28		(28)		-		-		-		-		-
	Amortization of unearned compensation			-		-		-		-		-		1,280		1,280

Balance at August 31, 2003 – unaudited			$	281	$	251	$	694,733	$	2,964	$	(574)	$	(3,470)	$	694,185

See accompanying notes.

INTERNATIONAL SPEEDWAY CORPORATION
Condensed Consolidated Statements of Cash Flows

				Nine Months Ended August 31,
				2002		2003
				(Unaudited)

				(In Thousands)
OPERATING ACTIVITIES
Net (loss) income				$	(447,961)	$	73,809
	Adjustments to reconcile net (loss) income to net cash provided by
		operating activities:
		Cumulative effect of accounting change			517,249		-
		Depreciation and amortization			30,641		32,500
		Amortization of unearned compensation			1,087		1,280
		Amortization of financing costs			1,252		240
		Deferred income taxes			19,902		25,958
		Undistributed income from equity investments			(1,260)		(2,154)
		Homestead-Miami Speedway track reconfiguration			-		2,829
		Other, net			(1,606)		(49)
		Changes in operating assets and liabilities:
			Receivables, net		(3,400)		(11,735)
			Inventories, prepaid expenses and other current assets		(12,044)		(11,723)
			Accounts payable and other current liabilities		3,162		4,185
			Deferred income		26,705		32,359
			Income taxes payable		9,610		8,987

Net cash provided by operating activities					143,337		156,486

INVESTING ACTIVITIES
	Capital expenditures				(36,802)		(42,116)
	Proceeds from asset disposals				399		178
	Proceeds from affiliate				-		4,075
	Proceeds from short-term investments				200		200
	Purchases of short-term investments				(200)		(200)
	Proceeds from restricted investments				1,263		-
	Other, net				(383)		(1,034)

Net cash used in investing activities					(35,523)		(38,897)

FINANCING ACTIVITIES
	Payment of long-term debt				(9,050)		(5,500)
	Cash dividends paid				(3,191)		(3,193)
	Reacquisition of previously issued common stock				(831)		(336)
	Payments under credit facilities				(70,000)		-
	Proceeds from interest rate swap				3,213		-

Net cash used in financing activities					(79,859)		(9,029)

Net increase in cash and cash equivalents					27,955		108,560
Cash and cash equivalents at beginning of period					71,004		109,263

Cash and cash equivalents at end of period				$	98,959	$	217,823

See accompanying notes.

International Speedway Corporation
Notes to Condensed Consolidated Financial Statements
August 31, 2003
(Unaudited)

1. Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in compliance with Rule 10-01 of Regulation S-X and generally accepted accounting principles but do not include all of the information and disclosures required for complete financial statements. The statements should be read in conjunction with the consolidated financial statements and notes thereto included in the latest annual report on Form 10-K for International Speedway Corporation and its wholly-owned subsidiaries (the "Company"). In management's opinion, the statements include all adjustments which are necessary for a fair presentation of the results for the interim periods. All such adjustments are of a normal recurring nature. Certain reclassifications have been made to conform to the financial presentation at August 31, 2003.

Because of the seasonal concentration of racing events, the results of operations for the three- and nine-month periods ended August 31, 2002 and 2003 are not indicative of the results to be expected for the year.

Stock-Based Compensation: The Company has a long-term incentive stock plan which it accounts for under the recognition and measurement principles of Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. The Company recognizes stock-based employee compensation cost on its restricted shares awarded over their vesting periods equal to the fair market value of these shares on the date of award. No stock-based employee compensation cost is reflected in net income (loss) relating to stock options as all options granted under the plan have an exercise price equal to the market value of the underlying common stock on the date of grant.

The following table illustrates the effect on net income (loss) and earnings (loss) per share if the Company had applied the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” to stock based employee compensation for the three- and nine-month periods ended August 31 (in thousands, except per share amounts):

	Three Months Ended August 31,		Nine Months Ended August 31,
	2002	2003	2002	2003

Net income (loss), as reported	$ 29,555	$ 35,953	$ (447,961)	$ 73,809
Add: Stock-based employee compensation
expense included in reported net (loss)
income, net of related tax effects	243	268	667	781
Deduct: Total stock-based employee
compensation expense determined under
fair value based method for all awards,
net of related tax effects	(306)	(323)	(825)	(957)

Pro forma net income (loss)	$ 29,492	$ 35,898	$ (448,119)	$ 73,633

Earnings (loss) per share:
Basic - as reported	$ 0.56	$ 0.68	$ (8.44)	$ 1.39

Basic – pro forma	$ 0.56	$ 0.68	$ (8.45)	$ 1.39

	Three Months Ended August 31,		Nine Months Ended August 31,
	2002	2003	2002	2003

Diluted - as reported	$ 0.56	$ 0.68	$ (8.44)	$ 1.39

Diluted – pro forma	$ 0.56	$ 0.68	$ (8.44)	$ 1.39

2. Accounting Change

The Company adopted Statement of Financial Accounting Standard (“SFAS”) No. 142, “Goodwill and Other Intangible Assets,” in the first quarter of 2002. Based on an independent appraisal firm’s valuation of the reporting unit level fair value using discounted cash flows, which reflect changes in certain assumptions after the date of the acquisitions, and the identification of qualifying intangibles, the Company recorded a non-cash after-tax charge of $513.8 million as a cumulative effect of accounting change for the write-off of goodwill in the first quarter of 2002.

Raceway Associates, LLC (“Raceway Associates”) which owns and operates Chicagoland Speedway and Route 66 Raceway and in which the Company holds a 37.5% indirect equity interest, also adopted SFAS No. 142 in the first quarter of 2002. During the second quarter of fiscal 2002, Raceway Associates completed the valuation of its Route 66 Raceway reporting unit using discounted cash flows, which reflect changes in certain assumptions after the date of Raceway Associates’ formation, that indicated impairment of the goodwill associated with Route 66 Raceway. The Company’s proportionate share of Raceway Associates’ cumulative effect of accounting change related to the write-off of goodwill totaled approximately $3.4 million after-tax. In accordance with SFAS No. 3 “Reporting Accounting Changes in Interim Financial Statements” the Company recognized this impairment in the first quarter of 2002.

3. New Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 143, “Accounting for Asset Retirement Obligations.” SFAS No. 143 establishes accounting standards for the recognition and measurement of an asset retirement obligation and its associated asset retirement cost. It also provides accounting guidance for legal obligations associated with the retirement of tangible long-lived assets. The Company’s adoption of SFAS No. 143 in fiscal 2003 did not have a material impact on its financial position or results of operations.

In August 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long Lived Assets.” Consistent with prior guidance SFAS No. 144 continues to require a three-step approach for recognizing and measuring the impairment of assets to be held and used. Assets to be sold must be stated at the lower of the asset’s carrying amount or fair value, and depreciation is no longer recognized. The Company’s adoption of SFAS No. 144 in fiscal 2003 did not have a material impact on its financial position or results of operations.

In April 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections as of April 2002.” With the rescission of SFAS No. 4, gains and losses from the extinguishment of debt should be classified as extraordinary items only if they meet the criteria in APB Opinion No. 30. Applying the provisions of APB Opinion No. 30 will distinguish transactions that are part of an entity’s recurring operations from those that are unusual or infrequent and that meet the criteria for classification as an extraordinary item. SFAS No. 145 amends SFAS No. 13 to require that certain lease modifications that have economic effects similar to sale-leaseback transactions be accounted for in the same manner as sale-leaseback transactions. This amendment is consistent with the FASB’s goal of requiring similar accounting treatment for transactions that have similar economic effects. SFAS No. 145 also makes technical corrections to existing pronouncements. While those corrections are not substantive in nature, in some instances, they may change accounting practice. The Company’s adoption of SFAS No. 145 in fiscal 2003 did not have a material impact on its financial position or results of operations.

In July 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” SFAS No. 146 replaces current accounting literature and requires the recognition of costs associated with exit or disposal activities when they are incurred, rather than at the date of a commitment to an exit or disposal plan. SFAS No. 146 is to be applied prospectively to exit or disposal activities initiated after December 31, 2002. The Company’s adoption of SFAS No. 146 in fiscal 2003 did not have a material impact on its financial position or results of operations.

In November 2002, the FASB issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.” This interpretation elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The Company has applied the disclosure provisions of this interpretation in these condensed consolidated financial statements and the accompanying notes. The Company’s adoption of this interpretation in fiscal 2003 did not have a material impact on its financial position or results of operations.

In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure – an amendment of FASB Statement No. 123.” SFAS No. 148 amends SFAS No. 123, “Accounting for Stock-Based Compensation,” 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 Company has applied the disclosure provisions in SFAS No. 148 in these condensed consolidated financial statements and the accompanying notes.

In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities.” This interpretation of Accounting Research Bulletin No. 51, “Consolidated Financial Statements,” addresses consolidation by business enterprises of variable interest entities. Under current practice, two enterprises generally have been included in consolidated financial statements because one enterprise controls the other through voting interests. This interpretation defines the concept of “variable interests” and requires existing unconsolidated variable interest entities to be consolidated by their primary beneficiaries if the entities do not effectively disperse the risks among the parties involved. This interpretation applies immediately to variable interest entities created after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after that date. It appl ies in the first fiscal year or interim period ending after December 15, 2003, to variable interest entities in which an enterprise holds a variable interest that it acquired before February 1, 2003. If it is reasonably possible that an enterprise will consolidate or disclose information about a variable interest entity when this interpretation becomes effective, the enterprise shall disclose information about those entities in all financial statements issued after January 31, 2003. The interpretation may be applied prospectively with a cumulative-effect adjustment as of the date on which it is first applied or by restating previously issued financial statements for one or more years with a cumulative-effect adjustment as of the beginning of the first year restated. The Company is currently evaluating the impact, if any, of the adoption of this interpretation on its financial position and results of operations.

In April 2003, the FASB amended and clarified financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts and hedging activities under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” through the issuance of SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” SFAS No. 149 is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. The Company’s adoption of SFAS No. 149 in fiscal 2003 did not have a material impact on its financial position or results of operations.

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.” SFAS No. 150 modifies the accounting for certain financial instruments that, under previous guidance, issuers could account for as equity. SFAS No. 150 requires that those instruments be classified as liabilities in statements of financial position. Most of the guidance in SFAS No. 150 is effective for all financial instruments entered into or modified after May 31, 2003 or otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. The adoption of SFAS No. 150 is not expected to have a material impact on the Company’s financial position or results of operations.

4. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share for the three- and nine-month periods ending August 31 (in thousands, except share amounts):

	Three Months Ended August 31,		Nine Months Ended August 31,
	2002	2003	2002	2003

Basic and diluted numerator:
Income before cumulative effect of
accounting change	$ 29,555	$ 35,953	$ 69,288	$ 73,809
Cumulative effect of accounting change	-	-	(517,249)	-

Net income (loss)	$ 29,555	$ 35,953	$ (447,961)	$ 73,809

Basic earnings per share calculation:
Denominator
Weighted average shares outstanding	53,041,210	53,064,693	53,035,006	53,054,252

Basic earnings per share
Income before cumulative effect of
accounting change	$ 0.56	$ 0.68	$ 1.31	$ 1.39
Cumulative effect of accounting change	-	-	(9.75)	-

Net income (loss)	$ 0.56	$ 0.68	$ (8.44)	$ 1.39

Diluted earnings per share calculation:
Weighted average shares outstanding	53,041,210	53,064,693	53,035,006	53,054,252
Common stock options	746	1,225	2,028	834
Contingently issuable shares	58,780	69,714	61,183	72,632

Diluted weighted average shares
outstanding	53,100,736	53,135,632	53,098,217	53,127,718

	Three Months Ended August 31,		Nine Months Ended August 31,
	2002	2003	2002	2003

Diluted earnings per share
Income before cumulative effect of
accounting change	$ 0.56	$ 0.68	$ 1.30	$ 1.39
Cumulative effect of accounting change	-	-	(9.74)	-

Net income (loss)	$ 0.56	$ 0.68	$ (8.44)	$ 1.39

During the periods presented shares that could potentially dilute future earnings per share were not included in the computation of diluted earnings per share as to do so would have been anti-dilutive. These shares totaled 47,419 and 59,334 during the three months ended August 31, 2002 and 2003, respectively, and 32,906 and 53,636 for the nine months ended August 31, 2002 and 2003, respectively.

5. Goodwill and Intangible Assets

The gross carrying value and accumulated amortization of the major classes of intangible assets relating to the Motorsports Events segment are as follows (in thousands):

	November 30, 2002
	Gross Carrying Amount	Accumulated Amortization

Amortized intangible assets:
Food, beverage and merchandise contracts	$ 35	$ 8

Total amortized intangible assets	$ 35	$ 8

Non-amortized intangible assets:
Water rights	$ 535
Liquor licenses	153

Total non-amortized intangible assets	$ 688

	August 31, 2003
	Gross Carrying Amount	Accumulated Amortization

Amortized intangible assets:
Food, beverage and merchandise contracts	$ 248	$ 29

Total amortized intangible assets	$ 248	$ 29

Non-amortized intangible assets:
Water rights	$ 535
Liquor licenses	263

Total non-amortized intangible assets	$ 798

The following table presents current and expected amortization expense of the existing intangible assets as of August 31, 2003 for each of the following periods (in thousands):

Aggregate amortization expense:
For the nine months ended August 31, 2003	$ 21
Estimated amortization expense for the year ending November 30:
2003	32
2004	45
2005	44
2006	38
2007	38

There were no changes in the carrying amount of goodwill for the nine months ended August 31, 2003.

6. Long-Term Debt

Long-term debt consists of the following (in thousands):

	November 30, 2002	August 31, 2003

Senior Notes, including premium of $2,626 and $1,576	$ 227,626	$ 226,576
TIF bond debt service funding commitment, net of
discount of $1,405 and $1,346	68,755	68,814
Term debt	19,000	13,500

	315,381	308,890
Less: current portion	5,775	6,775

	$ 309,606	$ 302,115

The Company’s $225 million principal amount of unsecured senior notes (“Senior Notes”) bear interest at 7.875% and rank equally with all of the Company’s other senior unsecured and unsubordinated indebtedness. The Senior Notes require semi-annual interest payments through maturity on October 15, 2004. The Senior Notes may be redeemed in whole or in part, at the option of the Company, at any time or from time to time at a redemption price as defined in the indenture. The Company’s subsidiaries are guarantors of the Senior Notes. The Senior Notes also contain various restrictive covenants.

In January 1999, the Unified Government of Wyandotte County/Kansas City, Kansas (“Unified Government”), issued approximately $71.3 million in taxable special obligation revenue (“TIF”) bonds in connection with the financing of construction of Kansas Speedway. At August 31, 2003, outstanding principal on the TIF bonds are comprised of a $20.5 million, 6.15% term bond due December 1, 2017 and a $49.7 million, 6.75% term bond due December 1, 2027. The TIF bonds are repaid by the Unified Government with payments made in lieu of property taxes (“Funding Commitment”) by the Company’s wholly-owned subsidiary, Kansas Speedway Corporation (“KSC”). Principal (mandatory redemption) payments per the Funding Commitment are payable by KSC on October 1 of each year. The semi-annual interest component of the Funding Commitment is payable on April 1 and October 1 of each year. KSC granted a mortgage and security interest in the Kan sas project for its Funding Commitment obligation. The bond financing documents contain various restrictive covenants. The Company has agreed to guarantee KSC’s Funding Commitment until certain financial conditions have been met.

At August 31, 2003 the Company had a $250 million revolving credit facility (“Credit Facility”) scheduled to mature on March 31, 2004, which accrued interest at LIBOR plus 50 -100 basis points, based on certain financial criteria. At August 31, 2003, the Company did not have any borrowings outstanding under the Credit Facility. On September 12, 2003 the Company entered into a $300 million revolving credit facility (“2003 Credit Facility”). Upon execution of the 2003 Credit Facility, the Company terminated its then existing $250 million Credit Facility. The 2003 Credit Facility is scheduled to mature in September 2008, and accrues interest at LIBOR plus 62.5 – 150 basis points, based on the Company’s highest debt rating as determined by specified rating agencies. The 2003 Credit Facility contains various restrictive covenants.

The Company’s Miami subsidiary has a $15 million credit facility (“Miami Credit Facility”) and a $13.5 million term loan (“Term Loan”). The Miami Credit Facility and Term Loan are guaranteed by the Company and have the same interest terms and restrictive covenants as the Company’s Credit Facility. The Miami Credit Facility matures on December 31, 2004. At August 31, 2003, the Company did not have any borrowings outstanding under the Miami Credit Facility. The Term Loan is payable in annual installments of $6.5 million at December 31, 2003 and $7.0 million at December 31, 2004. The Company’s Miami subsidiary has an interest rate swap agreement that effectively fixes the floating rate on the outstanding balance under the Term Loan at 5.6% plus 50 –100 basis points, based on certain consolidated financial criteria of the Company, for the remainder of the loan period. In October 2003, the Company permanentl y reduced the full amount of the borrowings available under the Miami Credit Facility. There was no reduction in the amount of or change in the payment schedule for the Term Loan.

Total interest incurred by the Company was approximately $5.8 million for each of the three months ended August 31, 2002 and 2003, and $18.3 million and $17.6 million for the nine months ended August 31, 2002 and 2003, respectively. Total interest capitalized for the three months ended August 31, 2002 and 2003, was approximately $83,000 and $157,000 respectively, and approximately $273,000 and $395,000 for the nine months ended August 31, 2002 and 2003, respectively.

Financing costs of approximately $6.3 million, net of accumulated amortization, have been deferred and are included in other assets at August 31, 2003. These costs are being amortized on an effective yield method over the life of the related financing.

7. Related Party Disclosures and Transactions

All of the racing events that take place during the Company's fiscal year are sanctioned by various racing organizations such as the American Historic Racing Motorcycle Association ("AHRMA"), the American Motorcyclist Association ("AMA"), the Automobile Racing Club of America ("ARCA"), Championship Auto Racing Teams ("CART"), the Championship Cup Series ("CCS"), the Federation Internationale de l'Automobile ("FIA"), the Federation Internationale Motocycliste ("FIM"), the Grand American Road Racing Association ("Grand American"), Historic Sportscar Racing ("HSR"), the International Race of Champions ("IROC"), the Indy Racing League ("IRL"), the National Association for Stock Car Auto Racing, Inc. ("NASCAR"), the Sports Car Club of America ("SCCA"), the Sportscar Vintage Racing Association ("SVRA"), the United States Auto Club ("USAC" ;), and the World Karting Association ("WKA"). NASCAR, which sanctions some of the Company's principal racing events, is a member of the France Family Group, which controls approximately 60% of the combined voting power of the outstanding stock of the Company, and some members of which serve as directors and officers. Standard NASCAR sanction agreements require racetrack operators to pay sanction fees and prize and point fund monies for each sanctioned event conducted. The prize and point fund monies are distributed by NASCAR to participants in the events. Prize and point fund monies paid by the Company to NASCAR for disbursement to competitors, which are exclusive of NASCAR sanction fees, totaled approximately $16.8 million and $22.4 million for the three months ended August 31, 2002 and 2003, respectively, and approximately $54.0 million and $63.4 million for the nine months ended August 31, 2002 and 2003, respectively.

8. Long-Term Stock Incentive Plan

In January 2003 and April 2003, the Company awarded and issued a total of 683 and 39,194 restricted shares of the Company’s Class A Common Stock, respectively, to certain managers under the Company’s Long-Term Stock Incentive Plan (the “1996 Plan”). The shares of restricted stock issued in January 2003, vested in July 2003. The shares of restricted stock issued in April 2003, vest at the rate of 50% on the third anniversary of the award date and the remaining 50% on the fifth anniversary of the award date.

The market value of the shares at the date of award has been recorded as “Unearned compensation – restricted stock,” which is shown as a separate component of shareholders’ equity in the accompanying condensed consolidated balance sheets. The unearned compensation is being amortized over the vesting periods of the shares. In accordance with APB Opinion 25, the Company will recognize a compensation charge over the vesting periods equal to the fair market value of these shares on the date of award. The total compensation charge recognized as expense totaled approximately $397,000 and $439,000, for the three months ended August 31, 2002 and 2003, respectively, and approximately $1.1 million and $1.3 million for the nine months ended August 31, 2002 and 2003, respectively.

A portion of each non-employee director’s compensation consists of awards of options to acquire shares of the Company’s Class A Common Stock under the 1996 Plan for their services as directors. The Company granted a total of 11,915 options to purchase the Company’s Class A Common Stock to the non-employee directors at an exercise price of $39.79 per share, in April 2003 and 1,014 options to purchase the Company’s Class A Common Stock at an exercise price of $41.10 per share to a newly-elected non-employee director in September 2003. All of these options become exercisable on April 9, 2004, and expire on April 9, 2013.

9. Commitments and Contingencies

In October 2002, the Unified Government issued additional subordinate sales tax special obligation revenue bonds (“2002 STAR Bonds”) totaling approximately $6.3 million to reimburse the Company for certain construction already completed on the second phase of the Kansas Speedway project and to fund certain additional construction. The 2002 STAR Bonds, which require annual debt service payments and are due December 1, 2022, will be retired with state and local taxes generated within the Kansas Speedway’s boundaries and are not the Company’s obligation. KSC has agreed to guarantee the payment of principal, any required premium and interest on the 2002 STAR Bonds. At August 31, 2003, the Unified Government had $6.3 million in 2002 STAR Bonds outstanding. Under a keepwell agreement, the Company has agreed to provide financial assistance to KSC, if necessary, to support KSC’s guarantee of the 2002 STAR Bonds.

The Company is a member of Motorsports Alliance (owned 50% by the Company and 50% by Indianapolis Motor Speedway LLC) which owns 75% of Raceway Associates. Raceway Associates owns and operates Chicagoland Speedway and Route 66 Raceway. Raceway Associates has a term loan arrangement, which requires quarterly principal and interest payments and matures November 15, 2012, and a $15 million secured revolving credit facility, which matures September 15, 2005. At August 31, 2003, Raceway Associates had approximately $44.0 million outstanding under its term loan and $2.0 million outstanding under its credit facility. Under a keepwell agreement, the members of Motorsports Alliance have agreed to provide financial assistance to Raceway Associates, if necessary, on a pro rata basis to support performance under its term loan and credit facility.

In connection with the Company’s automobile and workers’ compensation insurance coverages, in March 2003, the Company issued a standby letter of credit agreement in favor of the insurer. The letter of credit, which expires on December 15, 2003, increases to a maximum of approximately $1.0 million and is automatically renewed on an annual basis. At August 31, 2003, there are no amounts drawn on the standby letter of credit.

The Company is from time to time a party to routine 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 results of operations.

In addition to such routine litigation incident to its business, the Company has been party to other legal proceedings.

Current Litigation

In February 2002 the Company was served in a proceeding filed in the United States District Court for the Eastern District of Texas. The complaint in the case has been amended twice and is presently styled Francis> Ferko, and Russell Vaughn as Shareholders of Speedway Motorsports, Inc. vs. National Association of [sic] Stock Car Auto Racing, Inc., International Speedway Corporation, and Speedway Motorsports, Inc.. The overall gist of the suit is that Texas Motor Speedway should have a second NASCAR Winston Cup Series date annually and that NASCAR should be required by the court to grant Texas Motor Speedway a second NASCAR Winston Cup Series date annually. The portion of this suit that is brought against the Company alleges that it conspired with NASCAR and members of the France Family to “refuse to offer a new Winston Cup race date to any non-ISC owned track whenever ISC has desired to host an additional Winston Cup race.” T he suit seeks unspecified monetary damages from the Company which are claimed to have resulted to Speedway Motorsports from the alleged conspiracy as well as treble damages under the anti-trust laws. Fact discovery is now complete pursuant to the current pretrial scheduling order. However, there are several discovery motions currently pending before the Court, the resolution of which may have the effect of reopening fact discovery in the coming months to a limited extent in order to address the issues before the Court. In addition, the parties have agreed that each side may depose up to an additional three witnesses, not previously deposed, appearing on the opposing side’s ultimate trial witness list. Therefore, there is the possibility of an additional six fact witness depositions occurring prior to trial. Other than the pending motions and the possible additional fact witnesses the main focus in the next few months will be on expert discovery. The Company continues to be lieve the suit to be without merit and intends to continue to vigorously pursue the defense of the matter.

10. Homestead-Miami Speedway Track Reconfiguration

In May 2003, the Company began a major track reconfiguration project at Homestead-Miami Speedway to increase the track banking to a maximum of 20 degrees in the turns through an innovative variable-degree banking system, which is expected to enhance the quality of the racing entertainment at this facility. The reconfiguration project is anticipated to be completed for the NASCAR Winston Cup, Busch and Craftsman Truck series events in the fourth quarter of fiscal 2003. In order to complete the track reconfiguration, certain assets, which were not fully depreciated, were removed. As a result, the Company recorded a non-cash before-tax charge of approximately $2.8 million, representing the net book value of the assets which were removed, in the second quarter of fiscal 2003.

11. Segment Reporting

The following tables provide segment reporting of the Company for the three- and nine-month periods ended August 31, 2002 and 2003 (in thousands):

	Three Months Ended August 31, 2002

	Motorsport Events	All Other	Total

Revenues	$ 127,907	$ 10,766	$ 138,673
Depreciation and amortization	9,075	1,337	10,412
Operating income	45,813	3,272	49,085
Capital expenditures	9,772	4,064	13,836
Total assets	1,020,797	143,152	1,163,949
Equity investments	30,505	-	30,505

	Three Months Ended August 31, 2003

	Motorsport Events	All Other	Total

Revenues	$ 151,874	$ 11,611	$ 163,485
Depreciation and amortization	9,614	1,364	10,978
Operating income	55,153	3,890	59,043
Capital expenditures	18,188	1,154	19,342
Total assets	1,097,667	194,864	1,292,531
Equity investments	33,306	-	33,306

	Nine Months Ended August 31, 2002

	Motorsport Events	All Other	Total

Revenues	$ 356,218	$ 29,582	$ 385,800
Depreciation and amortization	26,910	3,731	30,641
Operating income	120,626	8,320	128,946
Capital expenditures	30,875	5,927	36,802

	Nine Months Ended August 31, 2003

	Motorsport Events	All Other	Total

Revenues	$ 389,389	$ 29,968	$ 419,357
Depreciation and amortization	28,322	4,178	32,500
Operating income	127,963	7,236	135,199
Capital expenditures	38,353	3,763	42,116

Intersegment revenues were approximately $2.3 million and $2.9 million for the three months ended August 31, 2002 and 2003, respectively and approximately $6.9 million and $8.3 million for the nine months ended August 31, 2002 and 2003, respectively.

As a result of the adoption of SFAS No. 142, the Motorsports Events segment recorded a non-cash after-tax charge of $517.2 million as a cumulative effect of accounting change for the write-off of goodwill in the first quarter of fiscal 2002.

12. Condensed Consolidating Financial Statements

In connection with the Senior Notes, the Company is required to provide condensed consolidating financial information for its subsidiary guarantors. All of the Company’s subsidiaries have, jointly and severally, fully and unconditionally guaranteed, to each holder of Senior Notes and the trustee under the Indenture for the Senior Notes, the full and prompt performance of the Company’s obligations under the indenture and the Senior Notes, including the payment of principal of (or premium, if any, on) and interest on the Senior Notes, on an equal and ratable basis.

The subsidiary guarantees are unsecured obligations of each subsidiary guarantor and rank equally in right of payment with all senior indebtedness of that subsidiary guarantor and senior in right of payment to all subordinated indebtedness of that subsidiary guarantor. The subsidiary guarantees are effectively subordinated to any secured indebtedness of the subsidiary guarantor with respect to the assets securing the indebtedness.

In the absence of both default and notice, there are no restrictions imposed by the Company’s Credit Facility, Senior Notes, or guarantees on the Company’s ability to obtain funds from its subsidiaries by dividend or loan.

Included are condensed consolidating balance sheets as of November 30, 2002 and August 31, 2003, the condensed consolidating statements of operations for the three- and nine-month periods ended August 31, 2002 and 2003 and the condensed consolidating statements of cash flows for the nine-month periods ended August 31, 2002 and 2003, of: (a) the Parent; (b) the guarantor subsidiaries; (c) elimination entries necessary to consolidate Parent with guarantor subsidiaries; and (d) the Company on a consolidated basis (in thousands).

	Condensed Consolidating Balance Sheet as of November 30, 2002

	Parent Company	Combined Guarantor Subsidiaries	Eliminations	Consolidated

Current assets	$ 13,226	$ 144,981	$ (9,604)	$ 148,603
Property and equipment, net	130,857	728,239	-	859,096
Advances to and investments in subsidiaries	1,460,352	423,909	(1,884,261)	-
Other assets	13,723	134,549	-	148,272

Total Assets	$ 1,618,158	$ 1,431,678	$ (1,893,865)	$ 1,155,971


Current liabilities	$ (3,455)	$ 147,285	$ (7,327)	$ 136,503
Long-term debt	653,687	13,085	(357,166)	309,606
Deferred income taxes	34,423	40,520	-	74,943
Other liabilities	11	12,583	-	12,594
Total shareholders' equity	933,492	1,218,205	(1,529,372)	622,325

Total Liabilities and Shareholders’ Equity	$ 1,618,158	$ 1,431,678	$ (1,893,865)	$ 1,155,971


	Condensed Consolidating Balance Sheet as of August 31, 2003

	Parent Company	Combined Guarantor Subsidiaries	Eliminations	Consolidated

Current assets	$ 24,728	$ 267,315	$ (11,436)	$ 280,607
Property and equipment, net	128,065	737,747	-	865,812
Advances to and investments in subsidiaries	1,445,252	432,209	(1,877,461)	-
Other assets	13,427	132,685	-	146,112

Total Assets	$ 1,611,472	$ 1,569,956	$ (1,888,897)	$ 1,292,531


Current liabilities	$ 20,699	$ 172,433	$ (10,564)	$ 182,568
Long-term debt	658,785	(8,455)	(348,215)	302,115
Deferred income taxes	58,478	42,423	-	100,901
Other liabilities	13	12,749	-	12,762
Total shareholders' equity	873,497	1,350,806	(1,530,118)	694,185

Total Liabilities and Shareholders’ Equity	$ 1,611,472	$ 1,569,956	$ (1,888,897)	$ 1,292,531

	Condensed Consolidating Statement of Operations For The Three Months Ended August 31, 2002

	Parent Company	Combined Guarantor Subsidiaries	Eliminations	Consolidated

Total revenues	$ 490	$ 152,889	$ (16,983)	$ 136,396
Total expenses	5,785	98,509	(16,983)	87,311
Operating (loss) income	(5,295)	54,380	-	49,085
Interest and other (expense) income, net	(5,134)	6,919	(2,735)	(950)
Net (loss) income	(23,790)	56,080	(2,735)	29,555

	Condensed Consolidating Statement of Operations For The Three Months Ended August 31, 2003

	Parent Company	Combined Guarantor Subsidiaries	Eliminations	Consolidated

Total revenues	$ 502	$ 188,659	$ (28,533)	$ 160,628
Total expenses	6,629	123,489	(28,533)	101,585
Operating (loss) income	(6,127)	65,170	-	59,043
Interest and other (expense) income, net	(4,030)	7,343	(3,410)	(97)
Net (loss) income	(27,293)	66,656	(3,410)	35,953

	Condensed Consolidating Statement of Operations For The Nine Months Ended August 31, 2002

	Parent Company	Combined Guarantor Subsidiaries	Eliminations	Consolidated

Total revenues	$ 1,465	$ 440,536	$ (63,099)	$ 378,902
Total expenses	16,942	296,113	(63,099)	249,956
Operating (loss) income	(15,477)	144,423	-	128,946
Interest and other income (expense), net	28,323	7,547	(51,969)	(16,099)
(Loss) income before cumulative effect of
accounting change	(14,445)	135,702	(51,969)	69,288
Net loss	(14,445)	(381,547)	(51,969)	(447,961)

	Condensed Consolidating Statement of Operations For The Nine Months Ended August 31, 2003

	Parent Company	Combined Guarantor Subsidiaries	Eliminations	Consolidated

Total revenues	$ 1,528	$ 500,723	$ (91,174)	$ 411,077
Total expenses	21,380	345,672	(91,174)	275,878
Operating (loss) income	(19,852)	155,051	-	135,199
Interest and other (expense) income, net	(8,809)	8,625	(14,010)	(14,194)
Net (loss) income	(57,746)	145,565	(14,010)	73,809

	Condensed Consolidating Statement of Cash Flows For The Nine Months Ended August 31, 2002

	Parent Company	Combined Guarantor Subsidiaries	Eliminations	Consolidated

Net cash provided by operating activities	$ 17,064	$ 185,699	$ (59,426)	$ 143,337
Net cash provided by (used in) investing activities	49,749	(144,698)	59,426	(35,523)
Net cash used in financing activities	(70,809)	(9,050)	-	(79,859)

	Condensed Consolidating Statement of Cash Flows For The Nine Months Ended August 31, 2003

	Parent Company	Combined Guarantor Subsidiaries	Eliminations	Consolidated

Net cash (used in) provided by operating activities	$ (8,262)	$ 180,163	$ (15,415)	$ 156,486
Net cash provided by (used in) investing activities	21,591	(75,903)	15,415	(38,897)
Net cash used in financing activities	(3,529)	(5,500)	-	(9,029)

PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

General

We derive revenues primarily from (i) admissions to racing events and motorsports activities held at our facilities, (ii) revenue generated in conjunction with or as a result of motorsports events and activities conducted at our facilities, and (iii) catering, concession and merchandising services during or as a result of these events and activities.

"Admissions" revenue includes ticket sales for all of our racing events, activities at DAYTONA USA and other motorsports activities and amusement.

"Motorsports related income" primarily includes television, radio and ancillary rights fees, promotion and sponsorship fees, hospitality rentals (including luxury suites, chalets and the hospitality portion of club seating), advertising revenues, royalties from licenses of our trademarks and track rentals. Our revenues from corporate sponsorships are paid in accordance with negotiated contracts, with the identities of sponsors and the terms of sponsorship changing from time to time. Since 2001, NASCAR contracts directly with certain network providers for television rights to the entire NASCAR Winston Cup (NASCAR Nextel Cup starting in 2004) and Busch series schedules. NASCAR’s current broadcast contracts with NBC Sports and Turner Sports extend through 2006 and through 2008 with FOX and its FX cable network. Event promoters share in the television rights fees in accordance with the provision of the sanction agreement for each NA SCAR Winston Cup and Busch Series event. Under the terms of this arrangement, NASCAR retains 10% of the gross broadcast rights fees allocated to each NASCAR Winston Cup or Busch series event as a component of its sanction fees and remits the remaining 90% to the event promoter. The event promoter pays 25% of the gross broadcast rights fees allocated to the event as part of awards to the competitors.

"Food, beverage and merchandise income" includes revenues from concession stands, hospitality catering, direct sales of souvenirs, programs and other merchandise and fees paid by third party vendors for the right to occupy space to sell souvenirs and concessions at our facilities.

“Direct expenses” include (i) prize and point fund monies and NASCAR sanction fees, (ii) motorsports related expenses, which include costs of competition paid to sanctioning bodies other than NASCAR, labor, advertising and other expenses associated with the promotion of our motorsports events and activities, and (iii) food, beverage and merchandise expenses, consisting primarily of labor and costs of goods sold.

Critical Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management continually reviews its accounting policies, how they are applied and how they are reported and disclosed in the financial statements. The following is a summary of our more significant accounting estimates and how they are applied in the preparation of the financial statements.

Advance ticket sales and event-related revenues for future events are deferred until earned. The recognition of event-related expenses is matched with the recognition of event-related revenues. Revenues and related expenses from the sale of merchandise to retail customers, catalog and internet sales and direct sales to dealers are recognized at the time of sale. We believe that our revenue recognition policies follow guidance issued by the Securities and Exchange Commission in Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements.”

We review the valuation of our accounts receivable on a monthly basis. The allowance for doubtful accounts is estimated based on historical experience of write-offs and future expectations of conditions that might impact the collectibility of accounts.

Our consolidated balance sheets include significant amounts of long-lived assets and goodwill. Current accounting standards require testing these assets for impairment based on assumptions regarding our future business outlook. While we continue to review and analyze many factors that can impact our business prospects in the future, our analyses are subjective and are based on conditions existing at and trends leading up to the time the assumptions are made. Actual results could differ materially from these assumptions. Our judgments with regard to our future business prospects could impact whether or not an impairment is deemed to have occurred, as well as the timing of the recognition of such an impairment charge.

We use a combination of insurance and self-insurance for a number of risks including general liability, workers’ compensation, vehicle liability and employee-related health care benefits. Liabilities associated with the risks that we retain are estimated by considering various historical trends and forward looking assumptions. The estimated accruals for these liabilities could be significantly affected if future occurrences and claims differ from these assumptions and historical trends.

From time to time we utilize derivative instruments in the form of interest rate swaps to assist in managing our interest rate risk. We do not enter into any derivative instruments for trading purposes. All of our derivative instruments qualify, or have qualified, for the use of the “short-cut” method of accounting to assess hedge effectiveness in accordance with Statement of Financial Accounting Standard (“SFAS”) No. 133, as amended, and are recognized in our consolidated balance sheet at their fair value. The fair value of our derivative investments are based on quoted market prices at the date of measurement.

Our estimates of deferred income taxes and the significant items giving rise to deferred tax liabilities reflect our assessment of actual future taxes to be paid on items reflected in our financial statements, giving consideration to both timing and probability of realization. Actual income taxes could vary significantly from these estimates due to future changes in income tax law or changes or adjustments resulting from final review of our tax returns by taxing authorities, which could also adversely impact our cash flow.

Our determination of the treatment of contingent liabilities in the financial statements is based on our view of the expected outcome of the applicable contingency. In the ordinary course of business we consult with legal counsel on matters related to litigation and other experts both within and outside our Company. We accrue a liability if the likelihood of an adverse outcome is probable of occurrence and the amount is estimable. We disclose the matter but do not accrue a liability if either the likelihood of an adverse outcome is only reasonably possible or an estimate is not determinable.

Future Trends in Operating Results

Our success has been, and is expected to remain, dependent on maintaining good working relationships with the organizations that sanction events at our facilities, particularly with NASCAR, whose sanctioned events at our wholly-owned facilities accounted for approximately 84% of our revenues in fiscal 2002. In June 2003, NASCAR announced that Nextel Communications will become the title sponsor of NASCAR’s premier national series under a ten-year agreement beginning in 2004. NASCAR also announced that the NASCAR Nextel Cup Series will consist of 36 championship points races at 23 tracks in 19 states in 2004. Nextel will replace R.J. Reynolds’ Winston brand as title sponsor of NASCAR’s Cup series. R.J. Reynolds has sponsored the NASCAR Winston Cup Series since 1971. We view this announcement as a positive development for the sport’s fans, promoters, team s, sponsors and broadcast partners.

In January 2003, NASCAR announced it would entertain and discuss proposals from track operators regarding potential realignment of NASCAR Winston Cup Series dates to more geographically diverse and potentially more desirable markets where there may be greater demand resulting in an opportunity for increased revenues to the track operators. In June 2003 we announced that NASCAR approved our proposal for realignment of NASCAR Nextel Cup (formerly Winston Cup) Series dates between our North Carolina, Darlington and California facilities for the 2004 season. As a result of the realignment, The California Speedway (“California”) will host an additional NASCAR Nextel Cup Series event weekend during the Labor Day weekend, Darlington Raceway (“Darlington”) will host NASCAR Nextel Cup Series race weekends in March and November and North C arolina Speedway (“North Carolina”) will host one NASCAR Nextel Cup Series event weekend in February. We believe that this realignment will result in a net positive impact to our fiscal 2004 revenue and earnings and will provide an opportunity to increase the sport’s exposure in the highly desirable southern California market, which will benefit the sport’s fans, teams, sponsors and television broadcast partners as well.

Fiscal 2001 was our first year under NASCAR’s multi-year consolidated television broadcast rights agreements with NBC Sports, Turner Sports, FOX and FX. These agreements cover the domestic broadcast of NASCAR’s entire Winston Cup (Nextel Cup starting in 2004) and Busch series racing seasons from 2001 through 2006. As a result, our combined television broadcast and ancillary rights revenues increased approximately 84% in fiscal 2001, approximately 15% in fiscal 2002 and are expected to increase approximately 16% in fiscal 2003 as compared to the respective prior fiscal years. We expect media rights revenues, as well as variable costs tied to the percentage of broadcast rights fees required to be paid to competitors as part of NASCAR Winston Cup (NASCAR Nextel Cup starting in 2004) and Busch series sanction agreements, to continue to increase based on NASCAR’s announcement that the annual increase in the domestic television rights fees will range between 15% and 21% from 2001 through 2006. It is currently expected that our combined television broadcast and ancillary rights revenues will increase approximately 21% in fiscal 2004 as compared to fiscal 2003.

NASCAR prize and point fund monies, as well as sanction fees, ("NASCAR direct expenses") are outlined in the sanction agreement for each event and are negotiated in advance of an event. As previously discussed, included in these NASCAR direct expenses are 25% of the television broadcast rights fees allocated to our NASCAR Winston Cup (NASCAR Nextel Cup starting in 2004) and Busch series events as part of prize and point fund money. These annually-negotiated contractual amounts paid to NASCAR contribute to the support and growth of the sport of NASCAR stock car racing through payments to the teams and sanction fees paid to NASCAR. As such, we do not expect these costs to decrease in the future as a percentage of admissions and motorsports related income. We anticipate any operating margin improvement to come primarily from economies of scale and controlling costs in areas such as motorsports related and general and administrative expenses.

Current and future economic conditions may make it more difficult in the short term to increase our revenues from corporate marketing partnerships than it has been in recent years. However, we believe that our presence in key markets and impressive portfolio of events are beneficial as we continue to pursue renewal and expansion of existing marketing partnerships and establishing new corporate marketing partners. We believe that revenues from our corporate marketing partnerships will continue to grow over the long term.

An important component of our operating strategy has been our long-standing practice of focusing closely on supply and demand regarding additional capacity at our facilities. We continually evaluate the demand for our most popular racing events in order to add capacity that we believe will provide an acceptable rate of return on invested capital. Through prudent expansion, we attempt to keep demand at a higher level than supply, which stimulates ticket renewals and advance sales. Advance ticket sales result in earlier cash flow and reduce the potential negative impact of actual and forecasted inclement weather on ticket sales. While we will join with sponsors and offer promotions to generate additional ticket sales, we avoid rewarding last-minute ticket buyers by discounting tickets. We believe it is more important to encourage advance ticket sales and maintain price integrity to achieve long-term growth than to recognize short-term incremental revenue.&nb sp; We recognize that a number of factors relating to discretionary consumer spending, including economic conditions affecting disposable consumer income such as employment and other lifestyle and business conditions, can negatively impact attendance at our events. Based upon current and potential future economic conditions we have instituted only modest increases in our weighted average ticket prices in fiscal 2003. In addition, we have limited the expansion of capacity at our facilities for our 2003 events to a total of approximately 3,100 and 1,500 net additional grandstand seats at Richmond International Raceway (“Richmond”) and Kansas Speedway (“Kansas”), respectively, and six net additional luxury suites at Richmond. These additional seats and suites have been sold on a season basis for fiscal 2003. As well, our currently approved capital projects include an additional approximately 1,400 seats at Richmond that will be marketed on a season basis for fisca l 2004.We will continue to evaluate expansion opportunities, as well as the pricing of our tickets and other products, on an ongoing basis. Over the long term, we plan to continue to expand capacity at our speedways.

Our future operating results could be adversely impacted by the postponement or cancellation of a major motorsports event. A postponement or cancellation could be caused by a number of factors, including inclement weather, a general postponement or cancellation of all major sporting events in this country (as occurred following the September 11, 2001 terrorist attacks), by a terrorist attack at any mass gathering or fear of such an attack, by conditions resulting from the recent war with Iraq or by other acts or prospects of war.

Seasonality and Quarterly Results

We derive most of our income from a limited number of NASCAR-sanctioned races. As a result, our business has been, and is expected to remain, highly seasonal based on the timing of major racing events. For example, one of our NASCAR Winston Cup Series (NASCAR Nextel Cup Series starting in 2004) races is traditionally held on the Sunday preceding Labor Day. Accordingly, the revenues and expenses for that race and/or the related supporting events may be recognized in either the fiscal quarter ending August 31 or the fiscal quarter ending November 30. Further, schedule changes as determined by NASCAR or other sanctioning bodies, as well as the acquisition of additional, or divestiture of existing, motorsports facilities could impact the timing of our major events in comparison to prior or future periods.

Comparison of the Results for the Three and Nine Months Ended August 31, 2003 to the Results for the Three and Nine Months Ended August 31, 2002.

The following table sets forth, for each of the indicated periods, certain selected statement of operations data as a percentage of total revenues:

	Three Months Ended		Nine Months Ended
	August 31,		August 31,
	2002	2003	2002	2003
	(Unaudited)

Revenues:
Admissions, net	41.9%	39.0%	39.9%	37.3%
Motorsports related income	42.3	46.6	45.7	48.8
Food, beverage and merchandise income	13.5	13.5	12.9	12.8
Other income	2.3	0.9	1.5	1.1

Total revenues	100.0	100.0	100.0	100.0
Expenses:
Direct expenses:
Prize and point fund monies and NASCAR
sanction fees	14.6	16.4	16.5	17.9
Motorsports related expenses	19.5	19.7	18.8	18.5
Food, beverage and merchandise expenses	7.7	7.4	7.1	7.2
General and administrative expenses	14.6	12.9	15.5	14.9
Depreciation and amortization	7.6	6.8	8.1	7.9
Homestead-Miami Speedway track reconfiguration	-	-	-	0.7

Total expenses	64.0	63.2	66.0	67.1

Operating income	36.0	36.8	34.0	32.9
Interest income	0.2	0.3	0.3	0.3
Interest expense	(4.2)	(3.6)	(4.8)	(4.3)
Equity in net loss from equity investments	3.3	3.2	0.3	0.5

Income before income taxes and cumulative effect
of accounting change	35.3	36.7	29.8	29.4
Income taxes	13.6	14.3	11.5	11.4

Income before cumulative effect of accounting change	21.7	22.4	18.3	18.0
Cumulative effect of accounting change	-	-	(136.5)	-

Net income (loss)	21.7%	22.4%	(118.2)%	18.0%

During fiscal 2003, inclement weather, and/or the threat of inclement weather, adversely impacted many of our major events including:

· Several events during Speedweeks 2003, including the Daytona 500;

· The February NASCAR events at North Carolina, including its NASCAR Busch series event, which was rescheduled to the following Monday;

· The March motorcycle events at Daytona International Speedway (“Daytona”), including its Daytona 200 Superbike event that was rescheduled to the following Monday;

· The March NASCAR events at Darlington, including its NASCAR Busch series event, which was rescheduled to the following Monday;

· The April NASCAR events at Talladega Superspeedway (“Talladega”) where we believe race week sales were impacted by the threat of inclement weather; and

· The August events, including the NASCAR Winston Cup event, at Watkins Glen International (“Watkins Glen”).

In addition, we believe that the ongoing economic downturn, coupled with ongoing geopolitical issues, has had a significant negative impact on attendance-related revenues year-to-date in fiscal 2003.

Our results, as compared to the same periods of the prior year, were impacted by the timing of the following events:

· The fall NASCAR Winston Cup event at Darlington, historically scheduled for the Sunday of Labor Day weekend, is recorded in our third quarter in fiscal 2003 as compared to our fourth quarter in fiscal 2002;

· The inaugural Dale Earnhardt Tribute Concert to benefit the Dale Earnhardt Foundation was hosted at Daytona in June 2003 for which Daytona made donations, received a rental fee and provided certain event support services, and our Americrown subsidiary provided certain concessions, catering and merchandising services;

· Nazareth Speedway (“Nazareth”) conducted an Indy Racing League (“IRL”) event in the second quarter of fiscal 2002. That event was conducted in the third quarter of fiscal 2003; and

· California conducted an IRL event in the second quarter of fiscal 2002. That event will be conducted in the fourth quarter of fiscal 2003.

Admissions revenue increased from approximately $ 57.1 million to approximately $62.7 million, or 9.8%, for the three months ended August 31, 2003, as compared to the three months ended August 31, 2002. This increase was primarily attributable to the timing of the sold out fall NASCAR Winston Cup event at Darlington and, to a lesser extent, the timing of the IRL event at Nazareth. An increase in the weighted average price of tickets sold for our two sold out NASCAR Winston Cup events at Michigan International Speedway (“Michigan”), as well as the Pepsi 400 at Daytona also contributed to the increase. These increases were partially offset by the impact of inclement weather at our Watkins Glen events in the current year and admission decreases for certain support events and other ancillary activities.

Admissions revenue increased from approximately $151.2 million to $153.4 million, or 1.5%, for the nine months ended August 31, 2003, as compared to the nine months ended August 31, 2002. The increase was primarily attributable to the timing of the sold out fall NASCAR Winston Cup event at Darlington. An increase in seating capacity and attendance at Richmond and an increase in the weighted average price of tickets sold for many of our NASCAR events conducted during the period, including the Daytona 500 and our sold out NASCAR Winston Cup Series events at Michigan, California and Richmond, also contributed to the increase. These increases were partially offset by a decrease in attendance for certain events, including those noted above which were impacted by inclement weather.

Motorsports related income increased approximately $17.1 million, or 29.6%, and approximately $27.3 million, or 15.8%, for the three months and nine months ended August 31, 2003, respectively, as compared to the same periods of the prior year. Substantially all of the increases during the three and nine month periods were attributable to the television broadcast rights fees for the NASCAR Winston Cup and Busch series events conducted during the respective periods and the timing of the fall NASCAR Winston Cup event at Darlington. Sponsorship and hospitality revenues also contributed to the increases. These increases were partially offset by a decrease in the entitlement fees for the August NASCAR Winston Cup event at Michigan. In addition, the timing of the IRL event at California negatively impacted the comparison of the current year nine month period to the same period of the prior year.

Food, beverage and merchandise income increased approximately $3.2 million, or 17.4%, and approximately $4.1 million, or 8.5%, for the three months and nine months ended August 31, 2003, respectively, as compared to the same periods of the prior year. The timing of the fall NASCAR Winston Cup event at Darlington and sales at the Dale Earnhardt Tribute Concert contributed significantly to the increase. In addition, our Americrown subsidiary’s assumption of food concession and catering operations at California, which were operated by a third party vendor that paid California a commission in prior years, as well as $1.6 million of non-recurring income related to our ongoing activities to audit third party vendors contributed significantly to the increase during the nine months ended August 31, 2003. These increases were partially offset by the lower food, beverage and merchandise sales attributable to previously discussed attendance de creases. In addition, the timing of the IRL event at California negatively impacted the comparison of the current year nine month period to the same period of the prior year.

Other income decreased approximately $1.7 million, or 53.6%, and $1.5 million, or 25.4%, for the three months and nine months ended August 31, 2002, respectively, as compared to the same periods of the prior year. This decrease was primarily attributable to a gain on the sale of real property in the third quarter of fiscal 2002.

Prize and point fund monies and NASCAR sanction fees increased approximately $6.5 million, or 32.7%, and approximately $11.0 million, or 17.5%, for the three months and nine months ended August 31, 2003, respectively, as compared to the same periods of the prior year. The timing of the fall NASCAR Winston Cup event at Darlington contributed significantly to the increases. Excluding the timing of the Darlington event, over three-quarters of the increases were due to increased prize and point fund monies paid by NASCAR to participants in events during the periods. Over one-half of these increases were attributable to the increased television broadcast rights fees for the NASCAR Winston Cup and Busch series events conducted during the three and nine month periods, as standard NASCAR sanctioning agreements require that a specified percentage of broadcast rights fees be paid to competitors.

Motorsports related expenses increased approximately $5.1 million, or 19.1%, and $4.8 million, or 6.8%, for the three months and nine months ended August 31, 2003, respectively, as compared to the same periods of the prior year. The increase during the three-month period was primarily related to the timing of the IRL event at Nazareth , the fall NASCAR Winston Cup event at Darlington, expenses related to the Dale Earnhardt Tribute Concert at Daytona and increases in other event related costs including insurance and consumer marketing related costs. The increase during the nine-month period was primarily related to the timing of the fall NASCAR Winston Cup event at Darlington, expenses related to the Dale Earnhardt Tribute Concert at Daytona and increases in other consumer marketing and event related costs including insurance, partially offset by the timing of the IRL event at California. Motorsports related expenses as a perce ntage of combined admissions and motorsports related income remained relatively constant as compared to the same periods in the prior year as the increase in television broadcast rights fees were partially offset by the previously discussed increased costs.

Food, beverage and merchandise expense increased approximately $1.4 million, or 13.4%, and approximately $2.6 million, or 9.6%, for the three months and nine months ended August 31, 2003, respectively, as compared to the same periods of the prior year. The timing of the fall NASCAR Winston Cup event at Darlington and the costs associated with sales at the Dale Earnhardt Tribute concert contributed significantly to these increases. In addition, costs associated with our Americrown subsidiary’s assumption of food concession and catering operations at California, which were operated by a third party vendor that paid California a commission in prior years, contributed significantly to the increase during the nine months ended August 31, 2003. These increases were partially offset by decreased product and other variable costs associated with decreased sales at certain events. Food, beverage and merchandise expenses as a percentage of foo d, beverage and merchandise income were approximately 55.8% and 55.9% for the three months and nine months ended August 31, 2003, respectively, as compared to approximately 57.7% and 55.4% for the same periods in the prior year. The margin improvement in the current year three-month period, as compared to the same period of the prior year, is primarily due to the timing of the Darlington event, the elimination of certain lower margin operations in the current year and other operating efficiencies. The slight decrease in margin for the nine-month period, as compared to the same period of the prior year, was primarily attributable to the expenses related to the assumption of food concession and catering operations at California, holding certain retail price points constant despite increasing product costs, and the relationship of decreased sales to certain fixed costs. This decrease is partially offset for the nine months ended August 31, 2003 by the previously discussed nonrecurring income r elated to our ongoing activities to audit third party vendors’ sales reports for prior years.

General and administrative expenses increased approximately $746,000, or 3.7%, and approximately $2.8 million, or 4.8%, for the three months and nine months ended August 31, 2003, respectively, as compared to the same periods of the prior year. These increases were primarily attributable to costs associated with certain ongoing legal proceedings (see Part II – Other Information “Legal Proceedings”) and other expenses related to the expansion of our ongoing business. General and administrative expenses as a percentage of total revenues decreased to approximately 12.9% and 14.9% for the three months and nine months ended August 31, 2003, respectively, as compared to approximately 14.6% and 15.5% for the same periods in the prior year. These decreases are primarily the result of increased television broadcast rights fees and the increased revenue resulting from the timing of the fall NASCAR event at Darlington, partially of fset by the previously discussed increases in general and administrative expenses.

Depreciation and amortization expense increased approximately $566,000, or 5.4%, and approximately $1.9 million, or 6.1%, for the three months and nine months ended August 31, 2003, respectively, as compared to the same periods of the prior year. These increases were primarily attributable to recently implemented strategic initiatives and ongoing capital improvements at our facilities.

During the second quarter of fiscal 2003 we recorded a non-cash before-tax charge of approximately $2.8 million for the net book value of certain undepreciated assets removed in connection with a major track reconfiguration project at Homestead-Miami Speedway (“Miami”). The project will increase the track banking to a maximum of 20 degrees in the turns through an innovative variable-degree banking system, which is expected to enhance the quality of the racing entertainment at this facility. We anticipate that the reconfiguration project will be completed for our fourth quarter NASCAR Winston Cup, Busch and Craftsman Truck series events.

Interest income increased by approximately $264,000, or 88.9%, and approximately $348,000, or 37.8%, for the three months and nine months ended August 31, 2003, as compared to the same periods of the prior year. These increases were primarily due to higher cash balances in the current year.

Interest expense increased by approximately $49,000, or 0.8%, and decreased approximately $663,000, or 3.6%, for the three months and nine months ended August 31, 2003, respectively, as compared to the same periods of the prior year. The decrease in interest expense resulting from the payoff of our revolving credit facilities in the prior year was partially offset in the three-month period and more than offset in the nine-month period by an increase in interest expense from our Senior Notes due to an interest rate swap agreement in place in the prior year that was terminated in August 2002.

Equity in net income from equity investments represents our pro rata share of the current income from our 37.5% equity investment in Raceway Associates, LLC (“Raceway Associates”). Raceway Associates owns and operates Chicagoland Speedway and Route 66 Raceway. Due to the seasonal concentration of Raceway Associates’ motorsports events, the results for the three months and nine months ended August 31, 2003 are not indicative of the results expected for the year.

The increases in our effective income tax rates for the three months and nine months ended August 31, 2003, as compared to the same periods of the prior year, were primarily attributable to an increase in our blended state tax rate.

As a result of the foregoing, our net income for the three months ended August 31, 2003 increased to approximately $36.0 million as compared to $29.6 million for the same period of the prior year. Our income before cumulative effect of accounting change for the nine months ended August 31, 2003, increased to approximately $73.8 million as compared to approximately $69.3 million for the nine months ended August 31, 2002.

The cumulative effect of accounting change recognized in the first quarter of fiscal 2002 consists of the non-cash after-tax charges associated with our write-off of goodwill, as well as the write-off of goodwill by Raceway Associates, upon adoption of SFAS No. 142 on December 1, 2001.

Liquidity and Capital Resources

General

We have historically generated sufficient cash flow from operations to fund our working capital needs and capital expenditures at existing facilities, as well as to pay an annual cash dividend. In addition, we have used the proceeds from offerings of our Class A Common Stock, the net proceeds from the issuance of senior notes (“Senior Notes”), borrowings under our credit facilities and state and local mechanisms to fund acquisitions and development projects. At August 31, 2003 we had $225.0 million principal amount of Senior Notes outstanding, total borrowings of approximately $13.5 million under a term loan, and a debt service funding commitment of approximately $68.8 million, net of discount, related to the taxable special obligation revenue (“TIF”) bonds issued by the Unified Government of Wyandotte County/Kansas City, Kansas (“Unified Government”). We had working capital of approximately $98.0 million and $12.1 million at A ugust 31, 2003 and November 30, 2002, respectively.

Cash Flows

Net cash provided by operating activities was approximately $156.5 million for the nine months ended August 31, 2003, compared to approximately $143.3 million for the nine months ended August 31, 2002. The difference between our net income of approximately $73.8 million and the $156.5 million of operating cash flow was primarily attributable to:

· depreciation and amortization of $32.5 million;

· an increase in deferred income of $32.4 million;

· deferred income taxes of $26.0 million;

· an increase in income taxes payable of $9.0 million;

· an increase in accounts payable and other current liabilities of $4.2 million;

· a pre-tax charge in connection with the Miami track reconfiguration of $2.8 million; and

· amortization of unearned compensation of $1.3 million

These differences are partially offset by an increase in receivables of $11.7 million, an increase in inventories, prepaid expenses and other current assets of $11.7 million and an undistributed gain from equity investments of $2.2 million.

Net cash used in investing activities was approximately $38.9 million for the nine months ended August 31, 2003, compared to approximately $35.5 million for the nine months ended August 31, 2002. Our use of cash for investing activities reflects $42.1 million in capital expenditures partially offset by $4.1 million in proceeds from Raceway Associates as repayment of previous advances.

Net cash used in financing activities was approximately $9.0 million for the nine months ended August 31, 2003, compared to approximately $79.9 million for the nine months ended August 31, 2002. Our use of cash for financing activities reflects payments on our term loan of $5.5 million, $3.2 million in cash dividends paid and $336,000 used to reacquire previously issued common stock.

Capital Expenditures

Capital expenditures totaled approximately $42.1 million for the nine months ended August 31, 2003, compared to $36.8 million for the nine months ended August 31, 2002. Capital expenditures during the nine months ended August 31, 2003, were related to increased grandstand seating capacity, construction of six additional luxury suites and installation of SAFER (steel and foam energy reduction) walls at Richmond, the track reconfiguration project at Miami, the purchase of equipment and other assets associated with our food, beverage and merchandising operations at California, acquisition of land and land improvements for expansion of parking, camping capacity and other uses, work on the new pedestrian/vehicular tunnel at Phoenix International Raceway (“Phoenix”), increased grandstand seating capacity at Kansas and a variety of other improvements and renovations to our facilities.

Based on capital projects currently approved we expect to make capital expenditures totaling approximately $99.0 million subsequent to August 31, 2003, which are expected to be completed within the next 24 months. These projects include the completion of the reconfiguration project at Miami and the pedestrian/vehicular tunnel at Phoenix, track lighting at California and Darlington, acquisition of land and land improvements for expansion of parking, camping capacity and other uses and a variety of other improvements and renovations to our facilities.

As a result of these currently approved projects and current year capital expenditures made through August 31, 2003, we expect our total fiscal 2003 capital expenditures will be approximately $80 - $85 million.

We review the capital expenditure program periodically and modify it as required to meet current business needs.

Future Liquidity

Our $225 million principal amount of unsecured Senior Notes bear interest at 7.875% and rank equally with all of our other senior unsecured and unsubordinated indebtedness. The Senior Notes require semi-annual interest payments through maturity on October 15, 2004. The Senior Notes may be redeemed in whole or in part, at our option, at any time or from time to time at a redemption price as defined in the indenture. Our subsidiaries are guarantors of the Senior Notes.

In January 1999, the Unified Government issued approximately $71.3 million in TIF bonds in connection with the financing of construction of Kansas Speedway. At August 31, 2003, outstanding principal on the TIF bonds are comprised of a $20.5 million, 6.15% term bond due December 1, 2017 and a $49.7 million, 6.75% term bond due December 1, 2027. The TIF bonds are repaid by the Unified Government with payments made in lieu of property taxes (“Funding Commitment”) by our wholly-owned subsidiary, Kansas Speedway Corporation. Principal (mandatory redemption) payments per the Funding Commitment are payable by Kansas Speedway Corporation on October 1 of each year. The semi-annual interest component of the Funding Commitment is payable on April 1 and October 1 of each year. Kansas Speedway Corporation granted a mortgage and security interest in the Kansas project for its Funding Commitment obligation. We have agreed to guarantee Kansas Speedway Corporation’s Funding Commitment until certain financial conditions have been met. In October 2002, the Unified Government issued additional subordinate sales tax special obligation revenue bonds (“2002 STAR Bonds”) totaling approximately $6.3 million to reimburse us for certain construction already completed on the second phase of the Kansas Speedway project and to fund certain additional construction. The 2002 STAR Bonds, which require annual debt service payments and are due December 1, 2022, will be retired with state and local taxes generated within the Kansas Speedway’s boundaries and are not our obligation. Kansas Speedway Corporation has agreed to guarantee the payment of principal, any required premium and interest on the 2002 STAR Bonds. At August 31, 2003, the Unified Government had $6.3 million in 2002 STAR Bonds outstanding. Under a keepwell agreement, we have agreed to provide financial assistance to Kansas Speedway Corporation, if necessary, to support its guarantee of the 2002 STAR Bonds.

On September 12, 2003 we entered into a $300 million revolving credit facility (“2003 Credit Facility”). Upon execution of the 2003 Credit Facility, we terminated our then existing $250 million credit facility. We did not have any borrowings outstanding under the $250 million credit facility. The 2003 Credit Facility is scheduled to mature in September 2008, and accrues interest at LIBOR plus 62.5 – 150 basis points, based on our highest debt rating as determined by specified rating agencies.

Our Miami subsidiary has a $15 million credit facility (“Miami Credit Facility”) and a $13.5 million term loan (“Term Loan”). The Miami Credit Facility and Term Loan are guaranteed by us and have the same interest terms and restrictive covenants as our Credit Facility. The Miami Credit Facility matures on December 31, 2004. At August 31, 2003, our Miami subsidiary did not have any borrowings outstanding under the Miami Credit Facility. The Term Loan is payable in annual installments of $6.5 million at December 31, 2003 and $7.0 million at December 31. 2004. Our Miami subsidiary has an interest rate swap agreement that effectively fixes the floating rate on the outstanding balance under the Term Loan at 5.60% plus 50-100 basis points, based on certain consolidated financial criteria, for the remainder of the loan period. In October 2003, we permanently reduced the full amount of the borrowings available under the Miami Credit Facilit y. There was no reduction in the amount of or change in the payment schedule for the Term Loan.

We are a member of Motorsports Alliance, LLC (“Motorsports Alliance”) (owned 50% by us and 50% by Indianapolis Motor Speedway LLC) which owns 75% of Raceway Associates. Raceway Associates owns and operates Chicagoland Speedway and Route 66 Raceway. Raceway Associates has a term loan arrangement, which requires quarterly principal and interest payments and matures November 15, 2012, and a $15 million secured revolving credit facility, which matures September 15, 2005. At August 31, 2003, Raceway Associates had approximately $44.0 million outstanding under its term loan and $2.0 million outstanding under its credit facility. Under a keepwell agreement, the members of Motorsports Alliance have agreed to provide financial assistance to Raceway Associates, if necessary, on a pro rata basis to support performance under its term loan and credit facility.

At August 31, 2003, we had contractual cash obligations to repay debt, to make payments under operating agreements, leases and commercial commitments in the form of guarantees and unused lines of credit.

Payments due under these long-term obligations are as follows as of August 31, 2003 (in thousands):

		Obligations Due by Period

	Total	Less Than One Year	2-3 Years	4-5 Years	After 5 Years

Long-term debt	$ 308,660	$ 6,775	$ 232,895	$ 1,405	$ 67,585
Track facility operating agreement	45,315	2,220	4,440	4,440	34,215
Other operating leases	6,338	2,345	2,722	577	694

Total Contractual Cash Obligations	$ 360,313	$ 11,340	$ 240,057	$ 6,422	$ 102,494

Commercial commitment expirations are as follows as of August 31, 2003 (in thousands):

		Commitment Expiration by Period

	Total	Less Than One Year	2-3 Years	4-5 Years	After 5 Years

Guarantees	$ 6,320	$ 560	$ 1,490	$ 1,050	$ 3,220
Keepwell agreements	23,000	2,400	5,800	4,800	10,000
Unused credit facilities (1)	265,773	250,773	15,000	-	-

Total Commercial Commitments	$ 295,093	$ 253,733	$ 22,290	$ 5,850	$ 13,220

(1) On September 12, 2003 the $250 million credit facility, scheduled to mature in March 2004, was terminated and we entered into the $300 million 2003 Credit Facility, which matures in September 2008. In October 2003, we permanently reduced the full amount of the borrowings available under the $15 million Miami Credit Facility, which is scheduled to mature in December 2004.

During fiscal 1999, we announced our intention to search for a site for a major motorsports facility in the New York metropolitan area. Our efforts have included, through a wholly-owned subsidiary, negotiations with the New Jersey Sports and Exposition Authority regarding the development of a motorsports facility at the Meadowlands Sports Complex in New Jersey. While we continue to discuss the possibility of a motorsports facility with Meadowlands officials, we are also currently evaluating alternative sites in the New York metropolitan area.

Our cash flow from operations consists primarily of ticket, hospitality, catering and concession sales and contracted revenues arising from television broadcast rights and marketing partnerships. While we expect our strong operating cash flow to continue in the future, our financial results depend significantly on a number of factors relating to consumer and corporate spending, including economic conditions affecting marketing dollars available from the motorsports industry’s principal sponsors. Consumer and corporate spending could be adversely affected by economic, security and other lifestyle conditions, resulting in lower than expected future operating cash flows. General economic conditions were significantly and negatively impacted by the September 11, 2001, terrorist attacks and the recent war with Iraq and could be similarly affected by any future attacks or fear of such attacks, or by conditions resulting from other acts o r prospects of war. Any future attacks or wars or related threats could also increase our expenses related to insurance, security or other related matters. In addition, the Internal Revenue Service (the “Service”) is currently performing a periodic examination of our federal income tax returns for the years ended November 30, 1999, 2000 and 2001 and is examining the tax depreciation treatment for a significant portion of our motorsports entertainment facility assets. In accordance with SFAS No. 109 “Accounting for Income Taxes” we have accrued a deferred tax liability based on the differences between our financial reporting and tax bases of such assets in our condensed consolidated balance sheet as of August 31, 2003. We believe that our application of the federal income tax regulations in question, which have been applied consistently since being adopted in 1986 and have been subjected to previous Service audits, is appropriate and we intend to vigorously defe nd the merits of our position, if necessary. While an adverse resolution of these matters could result in a material negative impact on cash flow, we believe that we have provided adequate reserves as part of our deferred tax liability in our condensed consolidated financial statements as of August 31, 2003 and, as a result, do not expect that such an outcome would have a material adverse effect on results of operations.

While the items discussed above could adversely affect our financial success and future cash flow, we believe that cash flows from operations, along with existing cash and available borrowings under our existing credit facilities, will be sufficient to fund:

· operations and approved capital projects at existing facilities for the foreseeable future;

· payments required in connection with the funding of the Unified Government’s debt service requirements related to the TIF bonds;

· payments related to our existing debt service commitments;

· any potential payments associated with our debt guarantees and keepwell agreements;

· any adjustment that may ultimately occur as a result of the examination by the Service; and

· the fees and expenses incurred in connection with the current legal proceeding discussed in Part II – Other Information under Legal Proceedings.

We intend to pursue further development and/or acquisition opportunities (including the possible development of new motorsports facilities, including the New York metropolitan and other areas) the timing, size and success, as well as associated potential capital commitments of which, are unknown at this time. Accordingly, a material acceleration in our growth strategy could require us to obtain additional capital through debt and/or equity financings. Although there can be no assurance, we believe that adequate debt and equity financing will be available on satisfactory terms.

Inflation

We do not believe that inflation has had a material impact on our operating costs and earnings.

Factors That May Affect Operating Results

This report and the documents incorporated by reference may 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. You can identify a forward-looking statement by our use of the words “anticipate,” “estimate,” “expect,” “may,” “believe,” “objective,” “projection,” “forecast,” “goal,” and similar expressions. These forward-looking statements include our statements regarding the timing of future events, our anticipated future operations and our anticipated future financial position and cash requirements. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we do not know whether our expectations will prove correct. We disclose the important factors that could cause our actual results to differ from our expectations in cautionary statements made in this report and in other filings we have made with the Securities and Exchange Commission. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors described in this report and other factors set forth in or incorporated by reference in this report.

Many of these factors are beyond our ability to control or predict. We caution you not to put undue reliance on forward-looking statements or to project any future results based on such statements or on present or prior earnings levels. Some of the factors that could cause the actual results to differ materially are attached to this report as an exhibit. Additional information concerning these, or other factors that could cause the actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company’s annual report on form 10-K and other Securities and Exchange Commission filings. Copies of those filings are available from us and/or the Securities and Exchange Commission.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK.

During the nine months ended August 31, 2003 there have been no material changes in our market risk exposures.

ITEM 4. CONTROL AND PROCEDURES

Subsequent to August 31, 2003 and prior to the filing of this report, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures under the supervision of and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer. Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures, subject to limitations as noted below, were effective at August 31, 2003, and during the period prior to the filing of this report. There have been no significant changes in our internal controls or in other factors that could significantly affect internal controls subsequent to August 31, 2003.

Our management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure control procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

PART II - OTHER INFORMATION

ITEM 1. Legal Proceedings

From time to time we are a party to routine litigation incidental to our business. We do not believe that the resolution of any or all of such litigation is likely to have a material adverse effect on our financial condition or results of operations.

In February 2002 we were served in a proceeding filed in the United States District Court for the Eastern District of Texas. The complaint in the case has been amended twice and is presently styled Francis Ferko, and Russell Vaughn as Shareholders of Speedway Motorsports, Inc. vs. National Association of [sic] Stock Car Auto Racing, Inc., International Speedway Corporation, and Speedway Motorsports, Inc. The overall gist of the suit is that Texas Motor Speedway should have a second NASCAR Winston Cup Series date annually and that NASCAR should be required by the court to grant Texas Motor Speedway a second NASCAR Winston Cup Series date annually. The portion of this suit that is brought against us alleges that we conspired with NASCAR and members of the France Family to “refuse to offer a new Winston Cup race date to any non-ISC owned track whenever ISC has desired to host an additional Winston Cup race.” The suit seeks unspecified monetary damages from ISC that are claimed to have resulted to Speedway Motorsports from the alleged conspiracy as well as treble damages under the anti-trust laws. Fact discovery is now complete pursuant to the current pretrial scheduling order. However, there are several discovery motions currently pending before the Court, the resolution of which may have the effect of reopening fact discovery in the coming months to a limited extent in order to address the issues before the Court. In addition, the parties have agreed that each side may depose up to an additional three witnesses, not previously deposed, appearing on the opposing side’s ultimate trial witness list. Therefore, there is the possibility of an additional six fact witness depositions occurring prior to trial. Other than the pending motions and the possible additional fact witnesses the main focus in the next few months will be on expert discovery. We continue to believe the suit to be without merit and intend to continue to vigorously pursue the defense of the matter.

ITEM 6. Exhibits and Reports on Form 8-K

(a) Exhibits:

Exhibit Number	Description of Exhibit
3.1	Articles of Amendment of the Restated and Amended Articles of Incorporation of the Company, as filed with the Florida Department of State on July 26, 1999 (incorporated by reference from exhibit 3.1 of the Company’s Report on Form 8-K dated July 26, 1999)
3.2	Conformed copy of Amended and Restated Articles of Incorporation of the Company, as amended as of July 26, 1999 (incorporated by reference from exhibit 3.2 of the Company’s Report on Form 8-K dated July 26, 1999)
3.3	Conformed copy of Amended and Restated By-Laws of the Company, as amended as of April 9, 2003. (incorporated by reference from exhibit 3.3 of the Company’s Report on Form 10-Q dated April 10, 2003)
4	Conformed copy of the $300,000,000 Credit Agreement dated as of September 12, 2003 among International Speedway Corporation, a Florida corporation, the Subsidiaries of the Borrower, the lenders identified therein and Wachovia Bank, National Association, as Administrative Agent for the Lenders.
99.1	Certification required by Section 906 of Sarbanes-Oxley Act of 2002
99.2	Additional Factors That May Affect Operating Results

(b) Reports on Form 8-K

On June 13, 2003 we filed a report on Form 8-K that reported under Item 9 the issuance of a press release on June 13, 2003 that announced that NASCAR had approved our proposal for the realignment of NASCAR Winston Cup Series (NASCAR Nextel Cup Series starting in 2004) dates among our North Carolina, Darlington and California facilities. The release reported that in the 2004 season as a result of the realignment, California Speedway will host an additional Winston Cup event weekend during the Labor Day weekend, Darlington Raceway will host race Winston Cup race weekends in March and November, and North Carolina Speedway will host one Winston Cup event weekend in February.

On July 9, 2003 we filed a report on Form 8-K that reported under Item 9 the issuance of a press release on July 9, 2003 that reported earnings results for the second quarter ended May 31, 2003.

On September 3, 2003 we filed a report on Form 8-K that reported under Item 9 the issuance of a press release that Bill Graves, President and Chief Executive Officer of the American Trucking Association had joined our Board of Directors.

On September 15, 2003 we filed a report on Form 8-K that reported under Item 9 the issuance of a press release on September 12, 2003 that we had closed on a five year $300 million revolving credit facility.

On October 8, 2003 we filed a report on Form 8-K that reported under Items 9 and 12 the issuance of a press release that reported earnings results for the third quarter and nine months ended August 31, 2003 and which updated our expectations for revenues and earnings for the fourth quarter ending November 30, 2003.

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.

		INTERNATIONAL SPEEDWAY CORPORATION (Registrant)
Date:	10/10/2003	/s/ Susan G. Schandel
		Susan G. Schandel, Vice President & Chief Financial Officer

Certifications

(appear on following pages)

I, James C. France, certify that:

1. I have reviewed this quarterly report on Form 10-Q of International Speedway Corporation;

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(s) 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;

c) 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

d) 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(s) 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 functions):

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: October 10, 2003

/s/ James C. France
James C. France
Chief Executive Officer

I, Susan G. Schandel, certify that:

1. I have reviewed this quarterly report on Form 10-Q of International Speedway Corporation;

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: October 10, 2003

/s/ Susan G. Schandel

Susan G. Schandel
Vice President & Chief Financial Officer

I, Daniel W. Houser, certify that:

1. I have reviewed this quarterly report on Form 10-Q of International Speedway Corporation;

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: October 10, 2003

/s/ Daniel W. Houser
Daniel W. Houser
Controller & Chief Accounting Officer

W I T N E S S E T H:

WHEREAS, the Borrower has requested that the Lenders make loans and other financial accommodations to the Borrower in the amount of up to $300,000,000, as more particularly described herein; and

WHEREAS, the Lenders have agreed to make such loans and other financial accommodations to the Borrower on the terms and conditions contained herein.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto hereby agree as follows:

ARTICLE I DEFINITIONS

Section 1.1 Defined Terms.

As used in this Credit Agreement, terms defined in the first paragraph of this Credit Agreement have the meanings therein indicated, and the following terms have the following meanings:

“Acquisition”, by any Person, shall mean the acquisition by such Person of a majority of the Capital Stock or all or substantially all of the Property of another Person, whether or not involving a merger or consolidation with such Person.

“Administrative Agent” shall have the meaning set forth in the first paragraph of this Credit Agreement and any successors in such capacity.

“Affiliate” shall mean as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, a Person shall be deemed to be “controlled by” a Person if such Person possesses, directly or indirectly, power either (a) to vote 25% or more of the securities having ordinary voting power for the election of directors of such Person or (b) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise. All Subsidiaries shall be deemed to be Affiliates.

“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof: “Prime Rate” shall mean, at any time, the rate of interest per annum publicly announced from time to time by Wachovia at its principal office in Charlotte, North Carolina as its prime rate. Each change in the Prime Rate shall be effective as of the opening of business on the day such change in the Prime Rate occurs. The parties hereto acknowledge that the rate announced publicly by Wachovia as its Prime Rate is an index or base rate and shall not necessarily be its lowest or best rate charged to its customers or other banks. “Federal Funds Effective Rate” shall mean, for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds b rokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published on the next succeeding Business Day, the average of the quotations for the day of such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it. If for any reason the Administrative Agent shall have determined (which determination shall be conclusive in the absence of manifest error) that it is unable to ascertain the Federal Funds Effective Rate, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms above, the Alternate Base Rate shall be determined without regard to clause (b) of the first sentence of this definition until the circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the opening of business on the date of such change.

“Alternate Base Rate Loans” shall mean Loans that bear interest at an interest rate based on the Alternate Base Rate.

“Applicable Margin” shall mean, for any day, the rate per annum set forth below opposite the applicable Level then in effect based on the Borrower’s then current Debt Rating, it being understood that the Applicable Margin for (i) Loans which are LIBOR Rate Loans shall be the percentage set forth under the column “LIBOR Rate Margin,” (ii) the Commitment Fee shall be the percentage set forth under the column “Commitment Fee” and (iii) the Utilization Fee shall be the percentage set forth under the column “Utilization Fee”:

Level	Debt Rating	LIBOR Rate Margin	Commitment Fee	Utilization Fee
I	BBB+ and/or Baa1 or higher	0.625%	0.125%	0.125%
II	BBB and/or Baa2	0.750%	0.150%	0.125%
III	BBB- and/or Baa3	0.875%	0.200%	0.125%
IV	BB+ and/or Ba1 or lower	1.500%	0.300%	0.250%

Any change in the Applicable Margin due to a change in the Debt Rating shall be effective on the effective date of such change in the Debt Rating (each such date an “Interest Determination Date”). The Applicable Margin shall be effective from each Interest Determination Date until the next such Interest Determination Date. The initial Applicable Margin shall be set at Level III until the end of the first full fiscal quarter following the Closing Date.

If (a) only one of S&P and Moody’s at any time of determination shall have in effect a Debt Rating, the Applicable Margin shall be determined by reference to the available Debt Rating, (b) neither S&P nor Moody’s (or their successors) at any time of determination shall have in effect a Debt Rating, the Applicable Margin will be set in accordance with a leverage based pricing grid to be determined at such time by the Borrower and the Lenders in good faith, (c) there is a one level difference between the Debt Ratings established by S&P and Moody’s, then the level corresponding to the higher Debt Rating shall be used, (d) there is a greater than one level difference between the Debt Ratings established by S&P and Moody’s, then the level immediately above the lower Debt Rating shall be used, and (e) any rating established by S&P or Moody’s shall be changed, such change shall be effective as of the date on which such change is first announced publicly by the rating agency making s uch change.

“Asset Disposition” shall mean the disposition of any or all of the assets (including, without limitation, the Capital Stock of a Subsidiary or any ownership interest in a joint venture) of the Borrower or any Subsidiary whether by sale, lease, transfer or otherwise.

“Bankruptcy Code” shall mean the Bankruptcy Code in Title 11 of the United States Code, as amended, modified, succeeded or replaced from time to time.

“Borrower” shall have the meaning set forth in the first paragraph of this Credit Agreement.

“Borrowing Date” shall mean, in respect of any Loan, the date such Loan is made.

“Business Day” shall mean a day other than a Saturday, Sunday or other day on which commercial banks in Charlotte, North Carolina or New York, New York are authorized or required by law to close; provided, however, that when used in connection with a rate determination, borrowing or payment in respect of a LIBOR Rate Loan, the term “Business Day” shall also exclude any day on which banks in London, England are not open for dealings in Dollar deposits in the London interbank market.

“Capital Lease” shall mean any lease of property, real or personal, the obligations with respect to which are required to be capitalized on a balance sheet of the lessee in accordance with GAAP.

“Capital Stock” shall mean (a) in the case of a corporation, capital stock, (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, (c) in the case of a partnership, partnership interests (whether general or limited), (d) in the case of a limited liability company, membership interests and (e) 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 Equivalents” shall mean (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 (“Government Obligations”), (b) U.S. dollar denominated (or foreign currency fully hedged) time deposits, certificates of deposit, Eurodollar time deposits and Eurodollar certificates of deposit of (y) any domestic commercial bank of recognized standing having capital and surplus in excess of $250,000,000 or (z) 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 Bank”), in each case with maturities of not more than 364 days from the date of acquisition, (c) U.S . dollar denominated deposits in and cash management functions with non-Approved Banks domiciled in the United States of America provided that the aggregate amount of such deposits with any single non-Approved Bank shall not exceed $15,000,000 for more than fourteen (14) consecutive calendar days, (d) commercial paper and variable or fixed rate notes issued by any Approved Bank (or by the parent company thereof) or any variable rate notes issued by, or guaranteed by any domestic corporation rated A-1 (or the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or better by Moody’s and maturing within twelve months of the date of acquisition and (e) repurchase agreements with a bank or trust company (including a Lender) or a 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.

“Chicago Agreements” shall mean the existing guaranty and keepwell agreements executed by the Borrower for the benefit of Motorsports Alliance LLC and/or Raceway Associates, LLC.

“Closing Date” shall mean the date of this Credit Agreement.

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

“Commitment” shall mean the Revolving Commitment, the LOC Commitment and the Swingline Commitment, individually or collectively, as appropriate.

“Commitment Fee” shall have the meaning set forth in Section 2.4(a).

“Commitment Percentage” shall mean the Revolving Commitment Percentage and/or LOC Commitment Percentage, as appropriate.

“Commitment Period” shall mean the period from and including the Closing Date to but not including the Revolving Commitment Termination Date.

“Commitment Transfer Supplement” shall mean a Commitment Transfer Supplement, substantially in the form of Schedule 9.6(c).

“Commonly Controlled Entity” shall mean an entity, whether or not incorporated, which is under common control with the Borrower within the meaning of Section 4001 of ERISA or is part of a group which includes the Borrower and which is treated as a single employer under Section 414 of the Code.

“Consistent Basis” shall mean the application of GAAP on a basis consistent with the most recent audited consolidated financial statements of the Borrower delivered to the Lenders in accordance with the terms hereof, except for any inconsistency explicitly disclosed in any financial statements delivered pursuant to Section 5.1(a) and 5.1(b).

“Consolidated EBITDA” shall mean, for any period, the sum of (a) Consolidated Net Income for such period, plus (b) an amount which, in the determination of Consolidated Net Income for such period, has been deducted for (i) Consolidated Interest Expense, (ii) total federal, state, local and foreign income, value added and similar taxes, (iii) depreciation and amortization expense (including, without limitation, the amortization of finance charges) and (iv) non-recurring non-cash charges (excluding non-recurring non-cash charges resulting in reserves from which future cash expenditures will be made), including, but not limited to, (A) charges incurred in accordance with SFAS 141 and 142 and (B) charges (whether or not given effect on a cumulative or retroactive basis) resulting from the adoption of, or any change to, accounting rules and standards, in each case as determined in accordance with GAAP, minus (c) to the extent included in the determination of Consolidated Net Inc ome for such period, Consolidated Interest Income, plus/minus (d) to the extent included in the determination of Consolidated Net Income for such period, losses or earnings attributable to minority equity Investments by the Borrower and its Subsidiaries in unconsolidated Subsidiaries and joint ventures, minus (e) to the extent included in the determination of Consolidated Net Income for such period, non-recurring non-cash gains (whether or not given effect on a cumulative or retroactive basis) resulting from the adoption of, or any change to, accounting rules and standards, as determined in accordance with GAAP.

“Consolidated Funded Indebtedness” shall mean indebtedness constituting money borrowed by the Borrower or any of its Subsidiaries that shall have been or should be, in accordance with GAAP, recorded or classified as a liability, on a consolidated basis. For purposes of this definition, indebtedness shall specifically include endorsements, Guaranty Obligations, unfunded vested benefits and capital or financing lease obligations, and shall specifically exclude trade accounts payable, current and long-term deferred income, current and deferred income taxes payable, capitalized payments in lieu of property taxes in accordance with GAAP, liabilities arising as a result of outstanding gift certificates and any loyalty-rewards obligations and expenses accrued in the ordinary course of business.

“Consolidated Interest Expense” shall mean, for any period, all interest expense of the Borrower and its Subsidiaries including the interest component under Capital Leases, as determined in accordance with GAAP. Except as expressly provided otherwise, the applicable period shall be for the four consecutive quarters ending as of the date of the most recent annual or quarterly financial statements provided to the Lenders pursuant to Section 5.1(a) or 5.1(b).

“Consolidated Interest Income” shall mean, for any period, all interest income of the Borrower and its Subsidiaries, as determined in accordance with GAAP. Except as expressly provided otherwise, the applicable period shall be for the four consecutive quarters ending as of the date of the most recent annual or quarterly financial statements provided to the Lenders pursuant to Section 5.1(a) or 5.1(b).

“Consolidated Net Income” shall mean, for any period, net income (excluding extraordinary items) after taxes for such period of the Borrower and its Subsidiaries on a consolidated basis, as determined in accordance with GAAP.

“Contractual Obligation” shall mean, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or undertaking to which such Person is a party or by which it or any of its property is bound.

“Credit Agreement” shall mean this Credit Agreement, as amended, modified or supplemented from time to time in accordance with its terms.

“Credit Documents” shall mean this Credit Agreement, each of the Notes, any Joinder Agreement, the Letters of Credit and the LOC Documents.

“Credit Party” shall mean any of the Borrower and the Guarantors.

“Credit Party Obligations” shall mean, without duplication, (a) all of the obligations of the Credit Parties to the Lenders (including the Issuing Lender) and the Administrative Agent, whenever arising, under this Credit Agreement, the Notes or any of the other Credit Documents (including, but not limited to, any interest accruing after the occurrence of a filing of a petition of bankruptcy under the Bankruptcy Code with respect to any Credit Party, regardless of whether such interest is an allowed claim under the Bankruptcy Code) and (b) all liabilities and obligations, whenever arising, owing from the Credit Parties to any Lender, or any Affiliate of a Lender, arising under any Hedging Agreement.

“Debt Issuance” shall mean the issuance of any Indebtedness for borrowed money by the Borrower or any of its Subsidiaries (excluding, for purposes hereof, any Equity Issuance or any Indebtedness of the Borrower and its Subsidiaries permitted to be incurred pursuant to Section 6.1 hereof).

“Debt Rating” shall mean (a) the debt rating for the Borrower’s senior, unsecured, non-credit enhanced long term indebtedness for money borrowed as determined by Moody’s or S&P, or (b) if at any time there is no debt rating contemplated by clause (a) in effect because the Borrower has no senior, unsecured, non-credit enhanced long term indebtedness outstanding, the debt issuer rating for the Borrower as determined by Moody’s or S&P.

“Default” shall mean any of the events specified in Section 7.1, whether or not any requirement for the giving of notice or the lapse of time, or both, or any other condition, has been satisfied.

“Defaulting Lender” shall mean, at any time, any Lender that, at such time (a) has failed to make a Loan required pursuant to the terms of this Credit Agreement, including the funding of a Participation Interest in accordance with the terms hereof, (b) has failed to pay to the Administrative Agent or any Lender an amount owed by such Lender pursuant to the terms of this Credit Agreement, or (c) has been deemed insolvent or has become subject to a bankruptcy or insolvency proceeding or to a receiver, trustee or similar official.

“Dollars” and “$” shall mean dollars in lawful currency of the United States of America.

“Domestic Lending Office” shall mean, initially, the office of each Lender designated as such Lender’s Domestic Lending Office shown on Schedule 9.2; and thereafter, such other office of such Lender as such Lender may from time to time specify to the Administrative Agent and the Borrower as the office of such Lender at which Alternate Base Rate Loans of such Lender are to be made.

“Domestic Subsidiary” shall mean any Subsidiary that is organized and existing under the laws of the United States or any state or commonwealth thereof or under the laws of the District of Columbia.

“Environmental Laws” shall mean any and all applicable foreign, Federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority or other Requirement of Law (including common law) regulating, relating to or imposing liability or standards of conduct concerning protection of human health or the environment, as now or may at any time be in effect during the term of this Credit Agreement.

“Equity Issuance” shall mean any issuance by the Borrower or any Subsidiary to any Person which is not the Borrower of (a) shares of its Capital Stock, (b) any shares of its Capital Stock pursuant to the exercise of options or warrants or (c) any shares of its Capital Stock pursuant to the conversion of any debt securities to equity. The term “Equity Issuance” shall not include any Asset Disposition, any Debt Issuance or the issuance of common stock of the Borrower’s Subsidiaries to its officers, directors or employees in connection with stock offering plans and other benefit plans of such Subsidiaries.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.

“Eurodollar Reserve Percentage” shall mean for any day, the percentage (expressed as a decimal and rounded upwards, if necessary, to the next higher 1/100th of 1%) which is in effect for such day as prescribed by the Federal Reserve Board (or any successor) for determining the maximum reserve requirement (including without limitation any basic, supplemental or emergency reserves) in respect of Eurocurrency liabilities, as defined in Regulation D of such Board as in effect from time to time, or any similar category of liabilities for a member bank of the Federal Reserve System in New York City.

“Event of Default” shall mean any of the events specified in Section 7.1; provided, however, that any requirement for the giving of notice or the lapse of time, or both, or any other condition, has been satisfied.

“Existing Credit Facility” shall mean the credit facility evidenced by that certain Credit Agreement, dated as of July 21, 1999, among the Borrower, certain Subsidiaries of the Borrower party thereto, as guarantors, the lenders party thereto, SunTrust Bank, South Florida, N.A., as documentation agent, and Wachovia (formerly known as First Union National Bank), as administrative agent, as amended or modified.

“Extension of Credit” shall mean, as to any Lender, the making of a Loan by such Lender or the issuance of, or participation in, a Letter of Credit by such Lender.

“Federal Funds Effective Rate” shall have the meaning set forth in the definition of “Alternate Base Rate”.

“Fee Letter” shall mean the letter agreement dated July 23, 2003 addressed to the Borrower from Wachovia, as amended, modified or otherwise supplemented by mutual consent.

“France Family” shall mean the France Family Group as defined in the Borrower’s most recent quarterly or annual filing with the SEC.

“GAAP” shall mean generally accepted accounting principles in effect in the United States of America applied on a Consistent Basis; subject, however, in the case of determination of compliance with the financial covenants set out in Section 5.8 and for calculations related to the negative covenants set forth in Article VI, to the provisions of Section 1.3.

“Government Acts” shall have the meaning set forth in Section 2.18.

“Governmental Authority” shall mean any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

“Guarantor” shall mean any of the Domestic Subsidiaries identified as a “Guarantor” on the signature pages hereto and the Additional Credit Parties which execute a Joinder Agreement, together with their successors and permitted assigns.

“Guaranty Obligations” shall mean, 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, (a) to purchase any such Indebtedness or any property constituting security therefor, (b) to advance or provide funds or other 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 (excluding the Homestead Keepwell Agreement), maintenance agreements, comfort letters or similar agreements or arrangements) for the benefit of any holder of Indebtedness of such other Person, (c) to lease or purchase Property, securities or serv ices primarily for the purpose of assuring the holder of such Indebtedness, or (d) 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 in the documentation related thereto) 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.

“Guaranty” shall mean the guaranty of the Guarantors set forth in Article X.

“Hedging Agreements” shall mean, with respect to any Person, any agreement entered into to protect such Person against fluctuations in interest rates, or currency or raw materials values, including, without limitation, any interest rate swap, cap or collar agreement or similar arrangement between such Person and one or more counterparties, any foreign currency exchange agreement, currency protection agreements, commodity purchase or option agreements or other interest or exchange rate or commodity price hedging agreements.

“Homestead Keepwell Agreement” shall mean that certain Keepwell Agreement dated as of December, 1998 with respect to Homestead - Miami Speedway, L.L.C.

“Indebtedness” of a Person shall mean all indebtedness (other than indebtedness to suppliers for the purchase of products and merchandise incurred in the ordinary course of business), including, without limitation, (a) indebtedness for borrowed money; indebtedness for (or deferred purchase price in connection with) the acquisition of property or assets; indebtedness obligations evidenced by debentures, notes or other similar instruments; reimbursement or other similar obligations arising in connection with letters of credit, surety bonds or reimbursement obligations therefor; and indebtedness of third parties secured by any lien, pledge or other encumbrance on the property or assets of the Person in question, whether or not such indebtedness is assumed; (b) all liability by way of endorsements (other than for collection or deposit in the ordinary course of business); (c) all guarantees of indebtedness (including any ‘keepwell’ or other agreement, contingent or otherwise, to p urchase any obligation representing such indebtedness or property constituting security therefor, or to advance or supply funds for such purpose or to maintain working capital or any other balance sheet or income statement condition, or otherwise to assure a creditor against loss in respect of indebtedness or obligations of others, or any other arrangement in substance affecting any of the foregoing); (d) liabilities in respect of unfunded vested benefits under plans covered by Title IV of ERISA; and (e) obligations as lessee under leases (including synthetic leases, tax retention operating leases, off-balance sheet loans or similar off-balance sheet financing product) which shall have been or should be, in accordance with GAAP, recorded or classified as capital leases or financing leases; provided that, for purposes of this Credit Agreement, the Homestead Keepwell Agreement shall not be Indebtedness of the Borrower.

“Insolvency” shall mean, with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of such term as used in Section 4245 of ERISA.

“Insolvent” shall mean being in a condition of Insolvency.

“Interest Coverage Ratio” shall mean, with respect to the Borrower and its Subsidiaries on a consolidated basis for the twelve month period ending on the last day of any fiscal quarter of the Borrower and its Subsidiaries, the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense for such period; provided, however, the Interest Coverage Ratio may be adjusted from time to time with the mutual consent of the Borrower and the Required Lenders to reflect the postponement of major race events into subsequent accounting periods, the rescheduling of major race events and the occurrence of major race events in different fiscal accounting periods in different calendar and/or fiscal years. For purposes of computing the Interest Coverage Ratio for any applicable twelve month period of determination, the acquisition of a Subsidiary during such twelve month period shall be deemed to have occurred as of the first day of such twelve month period.

“Interest Payment Date” shall mean (a) as to any Alternate Base Rate Loan or Swingline Loan, the last day of each November, February, May and August and on the Revolving Commitment Termination Date, (b) as to any LIBOR Rate Loan having an Interest Period of three months or less, the last day of such Interest Period, and (c) as to any LIBOR Rate Loan having an Interest Period longer than three months, the day which is three months after the first day of such Interest Period and the last day of such Interest Period.

“Interest Period” shall mean, with respect to any LIBOR Rate Loan, (a) initially, the period commencing on the Borrowing Date or conversion date, as the case may be, with respect to such LIBOR Rate Loan and ending one, two, three or six months thereafter, as selected by the Borrower in the notice of borrowing or notice of conversion given with respect thereto and (b) thereafter, each period commencing on the last day of the immediately preceding Interest Period applicable to such LIBOR Rate Loan and ending one, two, three or six months thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent not less than three Business Days prior to the last day of the then current Interest Period with respect thereto; provided, however, (i) if any Interest Period pertaining to a LIBOR Rate Loan would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extens ion would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day, (ii) any Interest Period pertaining to a LIBOR Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the relevant calendar month, (iii) if the Borrower shall fail to give notice as provided above, the Borrower shall be deemed to have selected a Alternate Base Rate Loan to replace the affected LIBOR Rate Loan, (iv) any Interest Period in respect of any Loan that would otherwise extend beyond the Revolving Commitment Termination Date is at least equal to the amount of such principal amortization payment due on such date, and (v) no more than six (6) LIBOR Rate Loans may be in effect at any time. For purposes hereof, LIBOR Rate Loans with different Interest Periods shall be consider ed as separate LIBOR Rate Loans, even if they shall 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 LIBOR Rate Loan with a single Interest Period.

“Issuing Lender” shall mean Wachovia.

“Issuing Lender Costs” shall have the meaning set forth in Section 2.4(d).

“Joinder Agreement” shall mean a Joinder Agreement substantially in the form of Schedule 5.9, executed and delivered by a Domestic Subsidiary of the Borrower to become a Guarantor hereunder in accordance with the provisions of Section 5.9.

“Lender” shall have the meaning set forth in the first paragraph of this Credit Agreement.

“Letters of Credit” shall mean any letter of credit issued by the Issuing Lender pursuant to the terms hereof, as such Letters of Credit may be amended, modified, extended, renewed or replaced from time to time.

“Letter of Credit Fee” shall have the meaning set forth in Section 2.4(c).

“Leverage Ratio” shall mean, with respect to the Borrower and its Subsidiaries on a consolidated basis for the twelve month period ending on the last day of any fiscal quarter, the ratio of (a) Consolidated Funded Indebtedness on the last day of such period to (b) Consolidated EBITDA for such period; provided, however, the Leverage Ratio may be adjusted from time to time with the mutual consent of the Borrower and the Required Lenders to reflect the postponement of major race events into subsequent accounting periods, the rescheduling of major race events and the occurrence of major race events in different fiscal accounting periods in different calendar and/or fiscal years. For purposes of computing the Leverage Ratio for any applicable twelve month period of determination, the acquisition of a Subsidiary during such twelve month period shall be deemed to have occurred as of the first day of such twelve month period.

“LIBOR” shall mean, for any LIBOR Rate Loan for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 A.M. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period. If for any reason such rate is not available, the term “LIBOR” shall mean, for any LIBOR Rate Loan for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 A.M. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%). If, for any reason, neither of such rates is available, then “LIBOR” shall mean the rate per annum at which, as determined by the Administrative Agent, Dollars in an amount comparable to the Loans then requested are being offered to leading banks at approximately 11:00 A.M. London time, two (2) Business Days prior to the commencement of the applicable Interest Period for settlement in immediately available funds by leading banks in the London interbank market for a period equal to the Interest Period selected.

“LIBOR Lending Office” shall mean, initially, the office of each Lender designated as such Lender’s LIBOR Lending Office shown on Schedule 9.2; and thereafter, such other office of such Lender as such Lender may from time to time specify to the Administrative Agent and the Borrower as the office of such Lender at which the LIBOR Rate Loans of such Lender are to be made.

“LIBOR Market Index Rate” shall mean, for any day, the one-month LIBOR rate for such day; provided that if such day is not a Business Day, then for the immediately preceding Business Day.

“LIBOR Rate” shall mean a rate per annum (rounded upwards, if necessary, to the next higher 1/100th of 1%) determined by the Administrative Agent pursuant to the following formula:

LIBOR Rate = LIBOR

1.00 - Eurodollar Reserve Percentage

“LIBOR Rate Loan” shall mean Loans the rate of interest applicable to which is based on the LIBOR Rate.

“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any Capital Lease having substantially the same economic effect as any of the foregoing).

“Loan” shall mean a Revolving Loan and/or a Swingline Loan, as appropriate.

“LOC Commitment” shall mean the commitment of the Issuing Lender to issue Letters of Credit and with respect to each Lender, the commitment of such Lender to purchase participation interests in the Letters of Credit up to such Lender’s LOC Committed Amount as specified in Schedule 2.1(a).

“LOC Committed Amount” shall mean, collectively, the aggregate amount of all of the LOC Commitments of the Lenders to issue and participate in Letters of Credit as referenced in Section 2.3 and, individually, the amount of each Lender’s LOC Commitment as specified in Schedule 2.1(a).

“LOC Documents” shall mean, 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 (a) the rights and obligations of the parties concerned or (b) any collateral security for such obligations.

“LOC Obligations” shall mean, at any time, the sum of (a) 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 (b) the aggregate amount of all drawings under Letters of Credit honored by the Issuing Lender but not theretofore reimbursed.

“Mandatory Borrowing” shall have the meaning set forth in Section 2.2(b)(ii) or Section 2.3(e), as the context may require.

“Material Adverse Effect” shall mean a material adverse effect on (a) the business, operations, property, condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole, (b) the ability of the Borrower and the Guarantors taken as a whole to perform their obligations, when such obligations are required to be performed, under this Credit Agreement, any of the Notes or any other Credit Document or (c) the validity or enforceability of this Credit Agreement, any of the Notes or any of the other Credit Documents or the rights or remedies of the Administrative Agent or the Lenders hereunder or thereunder.

“Moody’s” shall mean Moody’s Investors Service, Inc.

“Multiemployer Plan” shall mean a Plan which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“NASCAR” shall mean the National Association for Stock Car Auto Racing, Inc.

“Note” or “Notes” shall mean the Revolving Notes and/or the Swingline Note, collectively, separately or individually, as appropriate.

“Notice of Borrowing” shall mean the written notice of borrowing as referenced and defined in Section 2.1(b)(i) or 2.2(b)(i), as appropriate.

“Notice of Conversion” shall mean the written notice of extension or conversion as referenced and defined in Section 2.9.

“Obligations” shall mean, collectively, Loans and LOC Obligations.

“Participant” shall have the meaning set forth in Section 9.6(b).

“Participation Interest” shall mean the purchase by a Lender of a participation interest in Swingline Loans as provided in Section 2.2(b)(ii) or in Letters of Credit as provided in Section 2.3.

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA.

“Permitted Acquisition” shall mean an Acquisition by the Borrower or any Subsidiary of the Borrower for the fair market value of the Capital Stock or Property acquired; provided that (a) the Capital Stock or Property acquired in such Acquisition is related to the motorsports entertainment industry or if not related to the motorsports entertainment industry, the total amount of such acquisitions in any fiscal year shall not exceed five percent (5%) of Total Shareholders’ Equity; (b) in the case of an Acquisition of the Capital Stock of another Person, the board of directors (or other comparable governing body) of such other Person shall have duly approved such Acquisition; (c) the representations and warranties made by the Borrower in any Credit Document shall be true and correct in all material respects at and as if made as of the date of such Acquisition (after giving effect thereto) except to the extent such representations and warranties expressly relate to an earli er date and no Default or Event of Default exists as of the date of such Acquisition (after giving effect thereto); and (d) with respect to any Acquisition exceeding twenty-five percent (25%) of Total Shareholders’ Equity for which the Borrower or any of its Subsidiaries has incurred Indebtedness for purposes of consummating such Acquisition, the Borrower shall have delivered to the Administrative Agent a Pro Forma Compliance Certificate demonstrating that, upon giving effect to such Acquisition on a Pro Forma Basis, the Borrower will be in compliance with Section 5.8(a).

“Permitted Investments” shall mean: (a) cash and Cash Equivalents; (b) receivables owing to the Borrower or any of its Subsidiaries or any receivables and advances to suppliers, in each case if created, acquired or made in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; (c) investments in and loans to any Credit Parties; (d) investments (including debt obligations) received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business; (e) investments existing as of the Closing Date and set forth in Schedule 6.5; (f) Permitted Acquisitions; (g) investments received or assumed in connection with a Permitted Acquisition; (h) minority investments in motorsports facilities or related motorsports businesses so long as any such investments, in the aggregate, do not have a Mater ial Adverse Effect; (i) other loans, advances and/or investments in or to non-wholly owned Subsidiaries which are not Guarantors to the extent permitted in accordance with the proviso set forth in clause (j) below, and (j) additional loans, advances and/or investments of a nature not contemplated by the foregoing clauses hereof; provided that such loans, advances and/or investments made pursuant to this clause (j), together with the loans, advances and/or investments made pursuant to clause (i) above, shall not exceed (A) on an annual basis, an amount equal to ten percent (10%) of the Total Shareholders’ Equity and (B) on an aggregate basis, an amount equal to twenty-five percent (25%) of the Total Shareholders’ Equity. As used herein, “investment” shall mean all investments, in cash or by delivery of property, made, directly or indirectly in, to or from any Person, whether by acquisition of shares of Capital Stock, property, assets, indebtedness or other obligations or securities or by loan advance, capital contribution or otherwise.

“Permitted Liens” shall mean: (a) Liens existing as of the Closing Date and set forth on Schedule 6.2; provided that (i) no such Lien shall at any time be extended to or cover any Property other than the Property subject thereto on the Closing Date (provided, however, that Liens on new Property which arise in replacement of Liens on previously owned Property to the extent that such new Property is acquired through like-kind exchanges shall be permitted hereunder) and (ii) the principal amount of the Indebtedness secured by such Liens shall not be extended, renewed, refunded or refinanced; (b) 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 los s on account thereof); (c) 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 unfiled and no other action has been taken to enforce the same or 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); (d) Liens (other than Liens created or imposed under ERISA) incurred or deposits made 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); (e) Liens in connection with attachments or judgments (including judgment or appeal bonds); provided that the judgments secured shall, within 30 days after the entry thereof, have been discharged or execution thereof stayed pending appeal, or shall have been discharged within 30 days after the expiration of any such stay; (f) 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; (g) Liens securing purchase money Indebtedness (including Capital Leases); provided that any such Lien attaches only to the Property financed and such Lien attaches thereto concurrently with or within 90 days after the acquisition thereof; (h) leases or subleases granted to others n ot interfering in any material respect with the business of the Borrower and its Subsidiaries; (i) any interest of title of a lessor under, and Liens arising from UCC financing statements (or equivalent filings, registrations or agreements in foreign jurisdictions) relating to, leases permitted by this Credit Agreement; (j) normal and customary rights of setoff upon deposits of cash in favor of banks or other depository institutions; (k) inchoate Liens arising under ERISA to secure current service pension liabilities as they are incurred under the provisions of any Plan; and (l) Liens incurred or assumed in connection with a Permitted Acquisition; provided that such Liens shall only encumber Property acquired in such Permitted Acquisition.

“Person” shall mean an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

“Plan” shall mean, at any particular time, any employee benefit plan which is covered by Title IV of ERISA and in respect of which the Borrower or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Prime Rate” shall have the meaning set forth in the definition of Alternate Base Rate.

“Pro Forma Basis” shall mean, for purposes of calculating compliance with Section 5.8(a) in respect of a Permitted Acquisition, that such Permitted Acquisition shall be deemed to have occurred as of the first day of the four fiscal-quarter period ending as of the most recent fiscal quarter end preceding the date of such Permitted Acquisition with respect to which the Administrative Agent has received the information required pursuant to Section 5.1. In connection with any calculation of the Leverage Ratio set forth in Section 5.8(a), upon giving effect to a Permitted Acquisition on a Pro Forma Basis, (a) any Indebtedness incurred by the Borrower in connection with such Permitted Acquisition (i) shall be deemed to have been incurred as of the first day of the applicable period and (ii) if such Indebtedness has a floating or formula rate, shall have an implied rate of interest for the applicable period for purposes of this definition determined by utilizing the rate which is or would be in effect with respect to such Indebtedness as at the relevant date of determination, (b) income statement items (whether positive or negative) attributable to the Property or Person acquired in such Permitted Acquisition shall be included to the extent relating to the relevant period and (c) pro forma adjustments may be included to the extent that such adjustments give effect to events that are (i) directly attributable to such Permitted Acquisition, (ii) expected to continue to be applicable to the Borrower and (iii) factually supportable.

“Pro Forma Compliance Certificate” shall mean, if required to be provided in accordance with the terms of this Credit Agreement, a certificate of a Responsible Officer of the Borrower delivered to the Administrative Agent in connection with any Permitted Acquisition and containing reasonably detailed calculations, upon giving effect to the applicable Permitted Acquisition on a Pro Forma Basis, of the Leverage Ratio as of the most recent fiscal quarter end preceding the date of the applicable transaction with respect to which the Administrative Agent shall have received the financial information required pursuant to Section 5.1.

“Property” shall mean any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

“Purchasing Lenders” shall have the meaning set forth in Section 9.6(c).

“Register” shall have the meaning set forth in Section 9.6(d).

“Reorganization” shall mean, with respect to any Multiemployer Plan, the condition that such Plan is in reorganization within the meaning of such term as used in Section 4241 of ERISA.

“Replaced Lender” shall mean any Lender that is required to assign all or a portion of its rights, obligations, Loans and Commitments hereunder pursuant to the terms of Section 2.19 or Section 9.18.

“Replacement Lender” shall mean, with respect to the exercise by the Borrower of its rights under Section 2.19 or Section 9.18, any existing Lender or a new Lender designated by the Borrower and reasonably approved by the Administrative Agent or, if the Administrative Agent is also the Replaced Lender, by Lenders holding in the aggregate more than 50% of all Revolving Loans and LOC Obligations (of the Lenders that are not the Replaced Lender and, with respect to the exercise by the Borrower of its rights under Section 9.18, that are not party to the applicable merger) then outstanding at such time plus the aggregate unused Revolving Commitments (of the Lenders that are not the Replaced Lender and, with respect to the exercise by the Borrower of its rights under Section 9.18, that are not party to the applicable merger) at such time.

“Reportable Event” shall mean any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty-day notice period is waived under PBGC Reg. §4043.

“Required Lenders” shall mean Lenders holding in the aggregate more than 50% of all Revolving Loans and LOC Obligations then outstanding at such time plus the aggregate unused Revolving Commitments at such time (treating for purposes hereof in the case of Swingline Loans and LOC Obligations, in the case of the Swingline Lender and the Issuing Lender, only the portion of the Swingline Loans and the LOC Obligations of the Swingline Lender and the Issuing Lender, respectively, which is not subject to the Participation Interests of the other Lenders and, in the case of the Lenders other than the Swingline Lender and the Issuing Lender, the Participation Interests of such Lenders in Swingline Loans and LOC Obligations hereunder as direct Obligations); provided, however, that if any Lender shall be a Defaulting Lender at such time, then there shall be excluded from the determination of Required Lenders, Obligations (including Participation Interests) owing to such Defaulti ng Lender and such Defaulting Lender’s Commitments, or after termination of the Commitments, the principal balance of the Obligations owing to such Defaulting Lender.

“Requirement of Law” shall mean, as to any Person, the Certificate of Incorporation and By-laws or other organizational or governing documents of such Person, and each 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 any of its property or to which such Person or any of its property is subject.

“Responsible Officer” shall mean, with respect to the Borrower, the Chairman of the Board of Directors, the Chief Executive Officer, the President, the Executive Vice President, the Chief Financial Officer, the Chief Accounting Officer, the Chief Operating Officer and/or other officers of the Borrower as may be agreed to by the Administrative Agent from time to time.

“Revolving Commitment” shall mean, with respect to each Lender, the commitment of such Lender to make Revolving Loans in an aggregate principal amount at any time outstanding up to such Lender’s Revolving Committed Amount as specified in Schedule 2.1(a), as such amount may be reduced from time to time in accordance with the provisions hereof.

“Revolving Commitment Termination Date” shall mean September 12, 2008.

“Revolving Committed Amount” shall mean, collectively, the aggregate amount of all Revolving Commitments as referenced in Section 2.1(a), as such amount may be reduced from time to time in accordance with the provisions hereof, and, individually, the amount of each Lender’s Revolving Commitment as specified on Schedule 2.1(a).

“Revolving Loans” shall have the meaning set forth in Section 2.1.

“Revolving Note” or “Revolving Notes” shall mean the promissory notes of the Borrower in favor of each of the Lenders evidencing the Revolving Loans provided pursuant to Section 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.

“S&P” shall mean Standard & Poor’s Ratings Group, a division of McGraw Hill, Inc.

“Sale Leaseback Transaction” shall mean any direct or indirect arrangement with any Person or to which any such Person is a party, providing for the leasing to a Credit Party of any Property, whether owned by such Credit Party as of the Closing Date or later acquired, which has been or is to be sold or transferred by such Credit Party to such Person or to any other Person from whom funds have been, or are to be, advanced by such Person on the security of such Property.

“SEC” shall mean the Securities and Exchange Commission or any successor thereto.

“Senior Note Indenture” shall mean (a) that certain indenture agreement, dated as of October 6, 1999, among the Borrower and the holders party thereto and all documents and instruments executed in connection with any such indenture agreement and (b) any other indenture agreement (or similar agreement) entered into the Borrower with respect to the issuance of Senior Notes, and all documents and instruments execution in connection with any such indenture agreement (or similar agreement).

“Senior Notes” shall mean (a) the senior unsecured notes issued by the Borrower in an aggregate principal amount of $225,000,000 pursuant to the Senior Note Indenture, as refinanced, renewed or extended from time to time and (b) any other senior unsecured notes issued by the Borrower from time to time.

“Single Employer Plan” shall mean any Plan which is not a Multiemployer Plan.

“Specified Sales” shall mean (a) the sale, transfer, lease or other disposition of inventory and materials in the ordinary course of business and (b) the sale, transfer or other disposition of Permitted Investments described in clause (a) of the definition thereof.

“Subsidiary” shall mean, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Credit Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower. For purposes of this Credit Agreement, all Subsidiaries are also Affiliates.

“Swingline Commitment” shall mean 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 Lenders to purchase participation interests in the Swingline Loans as provided in Section 2.2(b)(ii), as such amounts may be reduced from time to time in accordance with the provisions hereof.

“Swingline Committed Amount” shall mean the amount of the Swingline Lender’s Swingline Commitment as specified in Section 2.2(a).

“Swingline Lender” shall mean Wachovia, in its capacity as such.

“Swingline Loan” or “Swingline Loans” shall have the meaning set forth in Section 2.2(a).

“Swingline Note” shall mean the promissory note of the Borrower in favor of the Swingline Lender evidencing the Swingline Loans provided pursuant to Section 2.2(d), as such promissory note may be amended, modified, supplemented, extended, renewed or replaced from time to time.

“Tax Exempt Certificate” shall have the meaning set forth in Section 2.17.

“Taxes” shall have the meaning set forth in Section 2.17.

“Total Shareholders’ Equity” shall mean the Total Shareholders’ Equity as stated in the most recent financial statement delivered to the Administrative Agent and the Lenders pursuant to Section 5.1(a) or 5.1(b), subject to any adjustments thereto in accordance with the terms of Section 1.3.

“Tranche” shall mean the collective reference to LIBOR Rate Loans whose Interest Periods begin and end on the same day. A Tranche may sometimes be referred to as a “LIBOR Tranche”.

“Transfer Effective Date” shall have the meaning set forth in each Commitment Transfer Supplement.

“Type” shall mean, as to any Loan, its nature as an Alternate Base Rate Loan, LIBOR Rate Loan or Swingline Loan, as the case may be.

“Utilization Fee” shall have the meaning set forth in Section 2.4(b).

“Voting Stock” shall mean, 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.

“Wachovia” shall mean Wachovia Bank, National Association, together with its successors and assigns.

Section 1.2 Other Definitional Provisions.

(a) Unless otherwise specified therein, all terms defined in this Credit Agreement shall have the defined meanings when used in the Notes or other Credit Documents or any certificate or other document made or delivered pursuant hereto.

(b) The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Credit Agreement shall refer to this Credit Agreement as a whole and not to any particular provision of this Credit Agreement, and Section, subsection, Schedule and Exhibit references are to this Credit Agreement unless otherwise specified.

(c) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

Section 1.3 Accounting Terms.

Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP applied on a Consistent Basis; provided that, if the Borrower notifies the Administrative Agent that it wishes to amend any covenant in Section 5.8 to eliminate the effect of any change in GAAP on the operation of such covenant (or if the Administrative Agent notifies the Borrower that the Required Lenders wish to amend Section 5.8 for such purpose), then the Borrower’s compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower and the Required Lenders. With respect to (a) calculations of the financial covenants set forth in Section 5.8 (including, without limitation, calculations of such financial covenants on a Pro Forma Basis in connection with a Permitted Acquisition), (b) calculations related to the negative covenants set forth in Article VI and (c) any calculation of Total Shareholders’ Equity, each such calculation shall be made excluding the effects of any impairment charges resulting from the adoption and ongoing application of Financial Accounting Standards Board Statement of Financial Accounting Standards Nos. 141 and 142 by the Borrower or its affiliates.

The Borrower shall deliver to the Administrative Agent and each Lender at the same time as the delivery of any annual or quarterly financial statements given in accordance with the provisions of Section 5.1, to the extent such information is not included in such financial statements, (a) a description in reasonable detail of any material change in the application of accounting principles employed in the preparation of such financial statements from those applied in the most recently preceding quarterly or annual financial statements as to which no objection shall have been made in accordance with the provisions above and (b) a reasonable estimate of the effect on the financial statements on account of such changes in application.

ARTICLE II THE LOANS; AMOUNT AND TERMS

Section 2.1 Revolving Loans.

(a) Revolving Commitment. During the Commitment Period, subject to the terms and conditions hereof, each Lender severally agrees to make revolving credit loans (“Revolving Loans”) to the Borrower from time to time for the purposes hereinafter set forth; provided, however, that (i) with regard to each Lender individually, the sum of such Lender’s share of outstanding Revolving Loans plus such Lender’s Revolving Commitment Percentage of Swingline Loans plus such Lender’s LOC Commitment Percentage of LOC Obligations shall not exceed such Lender’s Revolving Commitment Percentage of the aggregate Revolving Committed Amount, and (ii) with regard to the Lenders collectively, the sum of the aggregate amount of outstanding Revolving Loans plus Swingline Loans plus LOC Obligations shall not exceed the Revolving Committed Amount. For purposes hereof, the aggregate amount available hereunder shall be THREE HUNDRED MILLION DOL LARS ($300,000,000) (as such aggregate maximum amount may be reduced from time to time as provided in Section 2.5 or increased as provided in Section 2.1(f), the “Revolving Committed Amount”). Revolving Loans may consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the Borrower may request, and may be repaid and reborrowed in accordance with the provisions hereof. LIBOR Rate Loans shall be made by each Lender at its LIBOR Lending Office and Alternate Base Rate Loans at its Domestic Lending Office.

(b) Revolving Loan Borrowings.

(i) Notice of Borrowing. The Borrower shall request a Revolving Loan borrowing by written notice (or telephone notice promptly confirmed in writing which confirmation may be by fax) to the Administrative Agent not later than 12:00 Noon (Charlotte, North Carolina time) on the date of the requested borrowing in the case of Alternate Base Rate Loans, and on the third Business Day prior to the date of the requested borrowing in the case of LIBOR Rate Loans. Each such request for 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, (D) whether the borrowing shall be comprised of Alternate Base Rate Loans, LIBOR Rate Loans or a combination thereof, and if LIBOR Rate Loans are requested, the Interest Period(s) therefor. A form of Notice of Borrowing (a “Notice of Borrowing”) is attached as Schedule 2.1(b)(i). If the B orrower shall fail to specify in any such Notice of Borrowing (I) an applicable Interest Period in the case of a LIBOR Rate 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 an Alternate Base Rate Loan hereunder. The Administrative Agent shall give notice to each Lender promptly upon receipt of each Notice of Borrowing, the contents thereof and each such Lender’s share thereof.

(ii) Minimum Amounts. Each Revolving Loan borrowing that is a LIBOR Rate Loan shall be in a minimum aggregate amount of $3,000,000 and integral multiples of $1,000,000 in excess thereof (or the remaining amount of the Revolving Committed Amount, if less). Each Revolving Loan borrowing that is a Alternate Base Rate Loan shall be in a minimum aggregate amount of $1,000,000 and integral multiples of $250,000 in excess thereof (or the remaining amount of the Revolving Committed Amount, if less).

(iii) Advances. Each Lender will make its Revolving Commitment Percentage of each Revolving Loan borrowing available to the Administrative Agent for the account of the Borrower at the office of the Administrative Agent specified in Schedule 9.2, or at such other office as the Administrative Agent may designate in writing, by 1:00 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 Borrower by the Administrative Agent by the close of business on the date specified in the applicable Notice of Borrowing by crediting the account of the Borrower on the books of such office with the aggregate of the amounts made available to the Administrative Agent by the 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 Revolving Commitment Termination Date.

(d) Interest. Subject to the provisions of Section 2.8, Revolving Loans shall bear interest as follows:

(i) Alternate Base Rate Loans. During such periods as Revolving Loans shall be comprised of Alternate Base Rate Loans, each such Alternate Base Rate Loan shall bear interest at a per annum rate equal to the Alternate Base Rate; and

(ii) LIBOR Rate Loans. During such periods as Revolving Loans shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear interest at a per annum rate equal to the sum of the LIBOR Rate plus the Applicable Margin.

Interest on Revolving Loans shall be payable in arrears on each Interest Payment Date.

(e) Revolving Notes. Each Lender’s Revolving Commitment Percentage of the Revolving Loans shall be evidenced by a duly executed promissory note of the Borrower to such Lender in substantially the form of Schedule 2.1(e).

Section 2.2 Swingline Loan Subfacility.

(a) Swingline Commitment. During the Commitment Period, subject to the terms and conditions hereof, the Swingline Lender, in its individual capacity, agrees to make certain revolving credit loans to the Borrower (each a “Swingline Loan” and, collectively, the “Swingline Loans”) 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 amount of outstanding Revolving Loans plus Swingline Loans plus LOC Obligations shall not exceed the Revolving Committed Amount. Swingline Loans hereunder may be repaid and reborrowed in accordance with the provisions hereof.

(b) Swingline Loan Borrowings.

(i) Notice of Borrowing and Disbursement. The Swingline Lender will make Swingline Loans available to the Borrower on any Business Day upon request made by the Borrower not later than 12:00 Noon (Charlotte, North Carolina time) on such Business Day. A notice of request for Swingline Loan borrowing shall be made in the form of Schedule 2.1(b)(i) with appropriate modifications. Swingline Loan borrowings hereunder shall be made in minimum amounts of $100,000 and in integral amounts of $100,000 in excess thereof.

(ii) Repayment of Swingline Loans. Each Swingline Loan borrowing shall be due and payable on the Revolving Commitment Termination Date. The Swingline Lender may, at any time, in its sole discretion, by written notice to the Borrower and the Administrative Agent, demand repayment of its Swingline Loans by way of a Revolving Loan borrowing, in which case the Borrower shall be deemed to have requested a Revolving Loan borrowing comprised entirely of LIBOR Rate Loans (with Interest Periods selected by the Borrower) in the amount of such Swingline Loans; provided, however, that, in the following circumstances, any such demand shall also be deemed to have been given one Business Day prior to each of (A) the Revolving Commitment Termination Date, (B) the occurrence of any Event of Default described in Section 7.1(e), (iii) upon acceleration of the Credit Party Obligations hereunder, whether on account of an Event of Default described in Section 7.1(e) or any other Event of Default, and (i v) the exercise of remedies in accordance with the provisions of Section 7.2 hereof (each such Revolving Loan borrowing made on account of any such deemed request therefor as provided herein being hereinafter referred to as a “Mandatory Borrowing”). Each Lender hereby irrevocably agrees to make such Revolving Loans promptly upon any such request or deemed request on account of each Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the same such date notwithstanding (I) the amount of Mandatory Borrowing may not comply with the minimum amount for borrowings of Revolving Loans otherwise required hereunder, (II) whether any conditions specified in Section 4.2 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 Loans to be made by the time otherwise required in Section 2.1(b)(i), (V) the date of such Mandatory Borrowing, or (VI) any reduction in the R evolving Committed Amount or termination of the Revolving Commitments immediately prior to such Mandatory Borrowing or contemporaneously therewith. In the event that any Mandatory Borrowing 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), then each Lender hereby agrees that it shall forthwith purchase (as of the date the Mandatory 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 participations in the outstanding Swingline Loans as shall be necessary to cause each such Lender to share in such Swingline Loans ratably based upon its respective Revolving Commitment Percentage (determined before giving effect to any termination of the Commitments pursuant to Section 7.2), provided that (A) all interest payable on the Swinglin e Loans shall be for the account of the Swingline Lender until the date as of which the respective participation is purchased, and (B) at the time any purchase of participations pursuant to this sentence is actually made, the purchasing Lender shall be required to pay to the Swingline Lender interest on the principal amount of such participation purchased for each day from and including the day upon which the Mandatory Borrowing would otherwise have occurred to but excluding the date of payment for such participation, at the rate equal to, if paid within two (2) Business Days of the date of the Mandatory Borrowing, the Federal Funds Effective Rate, and thereafter at a rate equal to the Alternate Base Rate.

(c) Interest on Swingline Loans. Subject to the provisions of Section 2.8, Swingline Loans shall bear interest at a per annum rate equal to the LIBOR Market Index Rate plus the Applicable Margin for Revolving Loans that are LIBOR Rate Loans. Interest on Swingline Loans shall be payable in arrears on each Interest Payment Date.

(d) Swingline Note. The Swingline Loans shall be evidenced by a duly executed promissory note of the Borrower to the Swingline Lender in the original amount of the Swingline Committed Amount and substantially in the form of Schedule 2.2(d).

Section 2.3 Letter of Credit Subfacility.

(a) Issuance. Subject to the terms and conditions hereof and of the LOC Documents, if any, and any other terms and conditions which the Issuing Lender may reasonably require, during the Commitment Period the Issuing Lender shall issue, and the Lenders shall participate in, Letters of Credit for the account of the Borrower from time to time upon request in a form acceptable to the Issuing Lender; provided, however, that (i) the aggregate amount of LOC Obligations shall not at any time exceed FIFTEEN MILLION DOLLARS ($15,000,000) (the “LOC Committed Amount”), (ii) the sum of the aggregate amount of Revolving Loans plus Swingline Loans plus LOC Obligations shall not at any time exceed the Revolving Committed Amount, (iii) all Letters of Credit shall be denominated in U.S. Dollars and (iv) Letters of Credit shall be issued for lawful corporate purposes and may be issued as standby letters of credit, including in connection with workers’ compensa tion and other insurance programs. Except as otherwise expressly agreed upon by all the Lenders, no Letter of Credit shall have an original expiry date more than twelve (12) months from the date of issuance; provided, however, so long as no Default or Event of Default has occurred and is continuing and subject to the other terms and conditions to the issuance of Letters of Credit hereunder, the expiry dates of Letters of Credit may be extended annually or periodically from time to time on the request of the Borrower or by operation of the terms of the applicable Letter of Credit to a date not more than twelve (12) months from the date of extension; provided, further, that no Letter of Credit, as originally issued or as extended, shall have an expiry date extending beyond the Revolving Commitment Termination Date. Each Letter of Credit shall comply with the related LOC Documents. The issuance and expiry date of each Letter of Credit shall be a Business Day. Any Letters of Credi t issued hereunder shall be in a minimum original face amount of $50,000. Wachovia shall be the Issuing Lender on all Letters of Credit issued after the Closing Date.

(b) Notice and Reports. The request for the issuance of a Letter of Credit shall be submitted to the Issuing Lender at least five (5) Business Days prior to the requested date of issuance. The Issuing Lender will promptly upon request provide to the Administrative Agent for dissemination to the Lenders a detailed report specifying the Letters of Credit which are then issued and outstanding and any activity with respect thereto which may have occurred since the date of any prior report, and including therein, among other things, the account party, the beneficiary, the face amount, expiry date as well as any payments or expirations which may have occurred. The Issuing Lender will further provide to the Administrative Agent promptly upon request copies of the Letters of Credit. The Issuing Lender will provide to the Administrative Agent promptly upon request a summary report of the nature and extent of LOC Obligations then outstanding.

(c) Participations. Each Lender upon issuance of a Letter of Credit shall be deemed to have purchased without recourse a risk participation from the Issuing Lender in such Letter of Credit and the obligations arising thereunder and any collateral relating thereto, in each case in an amount equal to its LOC Commitment Percentage of the obligations under such Letter of Credit and shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to the Issuing Lender therefor and discharge when due, its LOC Commitment Percentage of the obligations arising under such Letter of Credit. Without limiting the scope and nature of each Lender’s participation in any Letter of Credit, to the extent that the Issuing Lender has not been reimbursed as required hereunder or under any LOC Document, each such Lender shall pay to the Issuing Lender its LOC Commitment Percentage of such unreimbursed drawing in same day funds on the day of notification by th e Issuing Lender of an unreimbursed drawing pursuant to the provisions of subsection (d) hereof. The obligation of each Lender to so reimburse the Issuing Lender shall be absolute and unconditional and shall not be affected by the occurrence of a Default, an Event of Default or any other occurrence or event. Any such reimbursement shall not relieve or otherwise impair the obligation of the Borrower to reimburse the Issuing Lender under any Letter of Credit, together with interest as hereinafter provided.

(d) Reimbursement. In the event of any drawing under any Letter of Credit, the Issuing Lender will promptly notify the Borrower and the Administrative Agent. The Borrower shall reimburse the Issuing Lender on the day of drawing under any Letter of Credit (either with the proceeds of a Swingline Loan or Revolving Loan obtained hereunder or otherwise) in same day funds as provided herein or in the LOC Documents. If the Borrower shall fail to reimburse the Issuing Lender as provided herein, the unreimbursed amount of such drawing shall bear interest at a per annum rate equal to the Alternate Base Rate plus two percent (2%). Unless the Borrower shall immediately notify the Issuing Lender and the Administrative Agent of its intent to otherwise reimburse the Issuing Lender, the Borrower shall be deemed to have requested a Swingline Loan, or if and to the extent Swingline Loans shall not be available, a Revolving Loan in the amount of the drawing as provided in subsection (e) hereof, the proceeds of w hich will be used to satisfy the reimbursement obligations. The Borrower’s reimbursement obligations hereunder shall be absolute and unconditional under all circumstances irrespective of any rights of set-off, counterclaim or defense to payment the Borrower may claim or have against the Issuing Lender, the Administrative Agent, the Lenders, the beneficiary of the Letter of Credit drawn upon or any other Person, including without limitation any defense based on any failure of the Borrower to receive consideration or the legality, validity, regularity or unenforceability of the Letter of Credit. The Issuing Lender will promptly notify the other Lenders of the amount of any unreimbursed drawing and each Lender shall promptly pay to the Administrative Agent for the account of the Issuing Lender in Dollars and in immediately available funds, the amount of such Lender’s LOC Commitment Percentage of such unreimbursed drawing. Such payment shall be made on the day such notice is received by such Lende r from the Issuing Lender if such notice is received at or before 2:00 P.M. (Charlotte, North Carolina time), otherwise such payment shall be made at or before 12:00 Noon (Charlotte, North Carolina time) on the Business Day next succeeding the day such notice is received. If such Lender does not pay such amount to the Issuing Lender in full upon such request, such Lender shall, on demand, pay to the Administrative Agent for the account of the Issuing Lender interest on the unpaid amount during the period from the date of such drawing until such Lender pays such amount to the Issuing Lender in full at a rate per annum equal to, if paid within two (2) Business Days of the date of drawing, the Federal Funds Effective Rate and thereafter at a rate equal to the Alternate Base Rate. Each Lender’s obligation to make such payment to the Issuing Lender, and the right of the Issuing Lender to receive the same, shall be absolute and unconditional, shall not be affected by any circumstance whatsoever and without regard to the termination of this Credit Agreement or the Commitments hereunder, the existence of a Default or Event of Default or the acceleration of the Credit Party Obligations hereunder and shall be made without any offset, abatement, withholding or reduction whatsoever.

(e) Repayment with Revolving Loans. On any day on which the Borrower shall have requested, or been deemed to have requested, (i) a Swingline Loan borrowing to reimburse a drawing under a Letter of Credit, the Swingline Lender shall make the Swingline Loan advance pursuant to the terms of the request or deemed request in accordance with the provisions for Swingline Loan advances hereunder, or (ii) a Revolving Loan to reimburse a drawing under a Letter of Credit, the Administrative Agent shall give notice to the Lenders that a Revolving Loan has been requested or deemed requested in connection with a drawing under a Letter of Credit, in which case a Revolving Loan borrowing comprised entirely of Alternate Base Rate Loans (each such borrowing, a “Mandatory Borrowing”) shall be immediately made (without giving effect to any termination of the Commitments pursuant to Section 7.2) pro rata based on each Lender’s respective Revolving Commitment Percentage (determine d before giving effect to any termination of the Commitments pursuant to Section 7.2) and in the case of both clauses (i) and (ii) the proceeds thereof shall be paid directly to the Issuing Lender for application to the respective LOC Obligations. Each Lender hereby irrevocably agrees to make such Revolving Loans immediately upon any such request or deemed request on account of each Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the same such date notwithstanding (i) the amount of Mandatory Borrowing may not comply with the minimum amount for borrowings of Revolving Loans otherwise required hereunder, (ii) whether any conditions specified in Section 4.2 are then satisfied, (iii) whether a Default or an Event of Default then exists, (iv) failure for any such request or deemed request for Revolving Loan to be made by the time otherwise required in Section 2.1(b), (v) the date of such Mandatory Borrowing, or (vi) any reduction in the Revolving Committed Am ount after any such Letter of Credit may have been drawn upon. In the event that any Mandatory Borrowing 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), then each such Lender hereby agrees that it shall forthwith fund (as of the date the Mandatory Borrowing would otherwise have occurred, but adjusted for any payments received from the Borrower on or after such date and prior to such purchase) its Participation Interests in the outstanding LOC Obligations; provided, further, that in the event any Lender shall fail to fund its Participation Interest on the day the Mandatory Borrowing would otherwise have occurred, then the amount of such Lender’s unfunded Participation Interest therein shall bear interest payable to the Issuing Lender upon demand, at the rate equal to, if paid within two (2) Business Days of such date, the Federal Funds Effective Rate, and thereafter at a rate equal to the Alternate Base Rate.

(f) Modification, Extension. The issuance of any supplement, modification, amendment, renewal, or extension to any Letter of Credit shall, for purposes hereof, be treated in all respects the same as the issuance of a new Letter of Credit hereunder.

(g) Uniform Customs and Practices. The Issuing Lender shall have the Letters of Credit be subject to The Uniform Customs and Practice for Documentary Credits, as published as of the date of issue by the International Chamber of Commerce (the “UCP”), in which case the UCP may be incorporated therein and deemed in all respects to be a part thereof.

Section 2.4 Fees.

(a) Commitment Fee. In consideration of the Revolving Commitment, the Borrower agrees to pay to the Administrative Agent for the ratable benefit of the Lenders a commitment fee (the “Commitment Fee”) in an amount equal to the Applicable Margin per annum on the average daily unused portion of the Revolving Committed Amount (with LOC Obligations constituting usage of the Revolving Committed Amount). The Commitment Fee shall be payable quarterly in arrears on the last day of each November, February, May and August.

(b) Utilization Fee. In consideration of the Revolving Commitment, the Borrower agrees to pay to the Administrative Agent for the ratable benefit of the Lenders a utilization fee (the “Utilization Fee”) in an amount equal to the Applicable Margin per annum on the sum of the average daily outstanding principal amount of Loans plus the average daily maximum amount available to be drawn under the Letters of Credit, such daily averages to be calculated using only those days on which the sum of the aggregate principal amount of outstanding Loans plus the average daily maximum amount available to be drawn under the Letters of Credit exceeded fifty percent (50%) of the Revolving Committed Amount. The Utilization Fee shall be payable quarterly in arrears on the last day of each November, February, May and August.

(c) Letter of Credit Fees. In consideration of the LOC Commitments, the Borrower agrees to pay to the Issuing Lender a fee (the “Letter of Credit Fee”) equal to the Applicable Margin per annum on the average daily maximum amount available to be drawn under each Letter of Credit from the date of issuance to the date of expiration. In addition to such Letter of Credit Fee, the Issuing Lender may charge, and retain for its own account without sharing by the other Lenders, an additional facing fee of one-eighth of one percent (1/8%) per annum on the average daily maximum amount available to be drawn under each such Letter of Credit issued by it. The Issuing Lender shall promptly pay over to the Administrative Agent for the ratable benefit of the Lenders (including the Issuing Lender) the Letter of Credit Fee. The foregoing fees shall be payable quarterly in arrears on the last day of each November, February, May and August.

(d) Issuing Lender Costs. In addition to the Letter of Credit Fees payable pursuant to subsection (b) hereof, the Borrower shall pay to the Issuing Lender for its own account without sharing by the other Lenders the reasonable and customary costs from time to time of the Issuing Lender with respect to the amendment, transfer, administration, cancellation and conversion of, and drawings under, such Letters of Credit (collectively, the “Issuing Lender Costs”).

(e) Administrative Fee. The Borrower agrees to pay to the Administrative Agent the annual administrative fee as described in the Fee Letter.

Section 2.5 Commitment Reductions.

(a) Voluntary Reductions. The Borrower shall have the right to terminate or permanently reduce the unused portion of the Revolving Committed Amount at any time or from time to time upon not less than five Business Days’ prior notice to the Administrative Agent (which shall notify the Lenders thereof as soon as practicable) of each such termination or reduction, which notice shall specify the effective date thereof and the amount of any such reduction which shall be in a minimum amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof and shall be irrevocable and effective upon receipt by the Administrative Agent, provided that no such reduction or termination shall be permitted if after giving effect thereto, and to any prepayments of the Revolving Loans made on the effective date thereof, the sum of the then outstanding aggregate principal amount of the Revolving Loans plus Swingline Loans plus LOC Obligations would exceed the Revolving Committed Amount.

(b) Revolving Commitment Termination Date. The Revolving Commitment, the LOC Commitment and the Swingline Commitment shall automatically terminate on the Revolving Commitment Termination Date.

Section 2.6 Prepayments.

(a) Optional Prepayments. The Borrower shall have the right to prepay Loans in whole or in part from time to time; provided, however, that each partial prepayment of Revolving Loans shall be in a minimum principal amount of $1,000,000 and integral multiples of $100,000 in excess thereof and each prepayment of Swingline Loans shall be in a minimum principal amount of $100,000 and integral multiples of $100,000 in excess thereof. The Borrower shall give three Business Days’ irrevocable notice in the case of LIBOR Rate Loans and one Business Day’s irrevocable notice in the case of Alternate Base Rate Loans, to the Administrative Agent (which shall notify the Lenders thereof as soon as practicable).

(b) Mandatory Prepayments. If at any time the sum of the aggregate principal amount of Loans plus aggregate amount of LOC Obligations exceeds the Revolving Committed Amount, the Borrower shall immediately make payment on the Loans (and then cash collateralize the outstanding LOC Obligations) in an amount sufficient to eliminate the deficiency.

(c) Application. Unless otherwise specified by the Borrower, prepayments made hereunder shall be applied first to Revolving Loans which are Alternate Base Rate Loans, then to Revolving Loans which are LIBOR Rate Loans in direct order of Interest Period maturities. All prepayments under Section 2.6(a) shall be subject to Section 2.16, but otherwise without premium or penalty. Interest on the principal amount prepaid shall be payable on the next occurring Interest Payment Date that would have occurred had such Loan not been prepaid or, at the request of the Administrative Agent, interest on the principal amount prepaid shall be payable on any date that a prepayment is made hereunder through the date of prepayment. Amounts prepaid on the Swingline Loan and the Revolving Loans may be reborrowed in accordance with the terms hereof.

Section 2.7 Minimum Principal Amount of Tranches.

All borrowings, payments and prepayments in respect of Revolving Loans shall be in such amounts and be made pursuant to such elections so that after giving effect thereto the aggregate principal amount of the Revolving Loans comprising any Tranche shall not be less than $3,000,000 or a whole multiple of $1,000,000 in excess thereof.

Section 2.8 Default Rate and Payment Dates.

Upon the occurrence, and during the continuance, of an Event of Default, at the Required Lender’s option, (i) the Borrower shall no longer have the option to request LIBOR Rate Loans or Swingline Loans, (ii) all amounts due and payable with respect to LIBOR Rate Loans shall bear interest at a rate per annum two percent (2%) in excess of the rate then applicable to such Loans until the end of the applicable Interest Period and thereafter at a rate equal to the Alternate Base Rate plus two percent (2%), (iii) all amounts due and payable with respect to Base Rate Loans shall bear interest at a rate per annum equal to the Alternate Base Rate plus two percent (2%) and (iv) all other amounts owing hereunder or under the other Credit Documents shall bear interest, payable on demand, at a per annum rate two percent (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 the Alternate Base Rate pl us two percent (2%)).

Section 2.9 Conversion Options.

(a) The Borrower may, in the case of Revolving Loans, elect from time to time to convert Alternate Base Rate Loans to LIBOR Rate Loans by giving the Administrative Agent at least three Business Days’ prior irrevocable written notice of such election. A form of Notice of Conversion/Extension is attached as Schedule 2.9. If the date upon which an Alternate Base Rate Loan is to be converted to a LIBOR Rate Loan is not a Business Day, then such conversion shall be made on the next succeeding Business Day and during the period from such last day of an Interest Period to such succeeding Business Day such Loan shall bear interest as if it were an Alternate Base Rate Loan. All or any part of outstanding Alternate Base Rate Loans may be converted as provided herein; provided that (i) no Loan may be converted into a LIBOR Rate Loan when any Default or Event of Default has occurred and is continuing and (ii) partial conversions shall be in an aggregate principal amount of $3,000,000 or a whole multiple of $1,000,000 in excess thereof.

(b) Any LIBOR Rate Loans may be continued as such upon the expiration of an Interest Period with respect thereto by compliance by the Borrower with the notice provisions contained in Section 2.9(a); provided, that no LIBOR Rate Loan may be continued as such when any Default or Event of Default has occurred and is continuing. If the Borrower shall fail to give timely notice of an election to continue a LIBOR Rate Loan, or the continuation of LIBOR Rate Loans is not permitted hereunder, such LIBOR Rate Loans shall be automatically converted to Alternate Base Rate Loans at the end of the applicable Interest Period with respect thereto.

Section 2.10 Computation of Interest and Fees; Interest Rate Limitation.

(a) Interest payable hereunder with respect to Alternate Base Rate Loans accruing interest at the Prime Rate shall be calculated on the basis of a year of 365 days (or 366 days, as applicable) for the actual days elapsed. All other fees, interest and all other amounts payable hereunder shall be calculated on the basis of a 360 day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Borrower and the Lenders of each determination of a LIBOR Rate on the Business Day of the determination thereof. Any change in the interest rate on a Loan resulting from a change in the Alternate Base Rate shall become effective as of the opening of business on the day on which such change in the Alternate Base Rate shall become effective. The Administrative Agent shall as soon as practicable notify the Borrower and the Lenders of the effective date and the amount of each such change.

(b) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Credit Agreement shall be conclusive and binding on the Borrower and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement showing the computations used by the Administrative Agent in determining any interest rate.

(c) Notwithstanding anything to the contrary contained in any of the Credit Documents, if any specified interest rate shall exceed the maximum rate permitted by applicable law as in effect from time to time, the Borrower shall pay interest at the highest permissible rate, which rate shall change as and when the highest permissible rate shall change. If the Borrower makes an interest payment under any of the Credit Documents that exceeds the maximum amount of interest permitted by applicable law, the excess of such payment above the maximum amount that lawfully may be paid shall be refunded to the Borrower or, at the Borrower’s option, credited toward the payment of principal due under such Credit Document (as directed by the Borrower); or, if the Borrower makes an interest payment that exceeds the maximum amount of interest permitted by applicable law and all principal thereunder shall have been previously or thereby paid in full, such payment shall be deemed to have been the result of mathematical error and the Administrative Agent shall refund to the Borrower the amount of such payment that is in excess of the amount that lawfully may be paid.

Section 2.11 Pro Rata Treatment and Payments.

Each borrowing of Revolving Loans and any reduction of the Revolving Commitments shall be made pro rata according to the respective Commitment Percentages of the Lenders. Each payment under this Credit Agreement or any Note shall be applied, first, to any fees then due and owing by the Borrower pursuant to Section 2.4, second, to interest then due and owing in respect of the Notes of the Borrower, third, to principal then due and owing hereunder and under the Notes of the Borrower and, fourth, to any other amounts then due and owing hereunder or under any other Credit Document. Each payment on account of any fees pursuant to Section 2.4 shall be made pro rata in accordance with the respective amounts due and owing (except as to the portion of the Letter of Credit Fee retained by the Issuing Lender, the Issuing Lender Fees and the annual administrative fee referenced in Section 2.4(d)). Each optional prepayment of principal of the Loans shall be app lied to the Loans as the Borrower may designate (to be applied pro rata among the Lenders); provided, that prepayments made pursuant to Section 2.14 shall be applied in accordance with such section. Each mandatory prepayment on account of principal of the Loans shall be applied in accordance with Section 2.6(b). All payments (including prepayments) to be made by the Borrower of principal, interest and fees shall be made without defense, set-off or counterclaim (except as provided in Section 2.17(b)) and shall be made to the Administrative Agent for the account of the Lenders at the Administrative Agent’s office specified on Schedule 9.2 in Dollars and in immediately available funds not later than 1:00 P.M. (Charlotte, North Carolina time) on the date when due. The Administrative Agent shall distribute such payments to the Lenders entitled thereto promptly upon receipt in like funds as received. If any payment hereunder (other than payments on the LIBOR Rate Loans) become s due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension. If any payment on a LIBOR Rate Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day.

Section 2.12 Non-Receipt of Funds by the Administrative Agent.

(a) Unless the Administrative Agent shall have been notified in writing by a Lender prior to the date a Loan is to be made by such Lender (which notice shall be effective upon receipt) that such Lender does not intend to make the proceeds of such Loan available to the Administrative Agent, the Administrative Agent may assume that such Lender has made such proceeds available to the Administrative Agent on such date, and the Administrative Agent may in reliance upon such assumption (but shall not be required to) make available to the Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent, the Administrative Agent shall be able to recover such corresponding amount from such Lender. If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent will promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Administrativ e Agent. The Administrative Agent shall also be entitled to recover from the Lender or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to the Borrower to the date such corresponding amount is recovered by the Administrative Agent at a per annum rate equal to (i) from the Borrower at the applicable rate for the applicable borrowing pursuant to the Notice of Borrowing and (ii) from a Lender at the Federal Effective Funds Rate.

(b) Unless the Administrative Agent shall have been notified in writing by the Borrower, prior to the date on which any payment is due from it hereunder (which notice shall be effective upon receipt) that the Borrower does not intend to make such payment, the Administrative Agent may assume that such Borrower has made such payment when due, and the Administrative Agent may in reliance upon such assumption (but shall not be required to) make available to each Lender on such payment date an amount equal to the portion of such assumed payment to which such Lender is entitled hereunder, and if the Borrower has not in fact made such payment to the Administrative Agent, such Lender shall, on demand, repay to the Administrative Agent the amount made available to such Lender. If such amount is repaid to the Administrative Agent on a date after the date such amount was made available to such Lender, such Lender shall pay to the Administrative Agent on demand interest on such amount in respect of each day from the date such amount was made available by the Administrative Agent to such Lender to the date such amount is recovered by the Administrative Agent at a per annum rate equal to the Federal Funds Effective Rate.

(c) A certificate of the Administrative Agent submitted to the Borrower or any Lender with respect to any amount owing under this Section 2.12 shall be conclusive in the absence of manifest error.

Section 2.13 Inability to Determine Interest Rate.

Notwithstanding any other provision of this Credit Agreement, if (a) at the time of the request for a LIBOR Rate Loan, the Administrative Agent shall reasonably determine (which determination shall be conclusive and binding absent manifest error) that, by reason of circumstances affecting the relevant market, reasonable and adequate means do not exist for ascertaining LIBOR for such Interest Period, or (b) the Required Lenders shall reasonably determine (which determination shall be conclusive and binding absent manifest error) that the LIBOR Rate does not adequately and fairly reflect the cost to such Lenders of funding LIBOR Rate Loans that the Borrower has requested be outstanding as a LIBOR Tranche during such Interest Period, the Administrative Agent shall forthwith give telephone notice of such determination, confirmed in writing, to the Borrower, and the Lenders at least two Business Days prior to the first day of such Interest Period. Unless the Borrower shall have notified the Administrative Agen t upon receipt of such telephone notice that it wishes to rescind or modify its request regarding such LIBOR Rate Loans, any Loans that were requested to be made as LIBOR Rate Loans shall be made as Alternate Base Rate Loans and any Loans that were requested to be converted into or continued as LIBOR Rate Loans shall be converted into Alternate Base Rate Loans. Until any such notice has been withdrawn by the Administrative Agent, no further Loans shall be made as, continued as, or converted into, LIBOR Rate Loans for the Interest Periods so affected.

Section 2.14 Illegality.

Notwithstanding any other provision of this Credit Agreement, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof by the relevant Governmental Authority to any Lender shall make it unlawful for such Lender or its LIBOR Lending Office to make or maintain LIBOR Rate Loans as contemplated by this Credit Agreement or to obtain in the interbank eurodollar market through its LIBOR Lending Office the funds with which to make such Loans, (a) such Lender shall promptly notify the Administrative Agent and the Borrower thereof, (b) the commitment of such Lender hereunder to make LIBOR Rate Loans or continue LIBOR Rate Loans as such shall forthwith be suspended until the Administrative Agent shall give notice that the condition or situation which gave rise to the suspension shall no longer exist, and (c) such Lender’s Loans then outstanding as LIBOR Rate Loans, if any, shall be converted on the last day of the Interest Period for such Loans or within such ea rlier period as required by law as Alternate Base Rate Loans. The Borrower hereby agrees promptly to pay any Lender, within 15 days after its demand, any additional amounts necessary to compensate such Lender for actual and direct costs (but not including anticipated profits) reasonably incurred by such Lender in making any repayment in accordance with this Section including, but not limited to, any interest or fees payable by such Lender to lenders of funds obtained by it in order to make or maintain its LIBOR Rate Loans hereunder. A certificate as to any additional amounts payable pursuant to this Section submitted by such Lender, through the Administrative Agent, to the Borrower shall be conclusive in the absence of manifest error. Each Lender agrees to use reasonable efforts (including reasonable efforts to change its LIBOR Lending Office) to avoid or to minimize any amounts which may otherwise be payable pursuant to this Section; provided, however, that such efforts shall not cause the imposition on such Lender of any additional costs or legal or regulatory burdens deemed by such Lender in its sole discretion to be material.

Section 2.15 Requirements of Law.

(a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof:

(i) shall subject such Lender to any tax of any kind whatsoever with respect to any Letter of Credit or any application relating thereto, any LIBOR Rate Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for changes in the rate of tax on the overall net income of such Lender);

(ii) 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 LIBOR Rate hereunder; or

(iii) shall impose on such Lender any other condition;

and the result of any of the foregoing is to increase the cost to such Lender of making or maintaining LIBOR Rate Loans or the Letters of Credit or to reduce any amount receivable hereunder or under any Note, then, in any such case, the Borrower shall promptly pay such Lender, within 15 days after its demand, any additional amounts necessary to compensate such Lender for such additional cost or reduced amount receivable which such Lender reasonably deems to be material as determined by such Lender with respect to its LIBOR Rate Loans or Letters of Credit. A certificate as to any additional amounts payable pursuant to this Section submitted by such Lender, through the Administrative Agent, to the Borrower shall be conclusive in the absence of manifest error. Each Lender agrees to use reasonable efforts (including reasonable efforts to change its Domestic Lending Office or LIBOR Lending Office, as the case may be) to avoid or to minimize any amounts which might otherwise be payable pursuant to this paragra ph of this Section; provided, however, that such efforts shall not cause the imposition on such Lender of any additional costs or legal or regulatory burdens deemed by such Lender to be material.

(b) If any Lender shall have reasonably determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any central bank or Governmental Authority made subsequent to the date hereof does or shall have the effect of reducing the rate of return on such Lender’s or such corporation’s capital as a consequence of its obligations hereunder to a level below that which such Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Lender’s or such corporation’s policies with respect to capital adequacy) by an amount reasonably deemed by such Lender to be material, then from time to time, within fifteen (15) days after demand by such Lender, the Borrower shall pay to such L ender such additional amount as shall be certified by such Lender as being required to compensate it for such reduction. Such a certificate as to any additional amounts payable under this Section submitted by a Lender (which certificate shall include a description of the basis for the computation), through the Administrative Agent, to the Borrower shall be conclusive absent manifest error.

(c) The agreements in this Section 2.15 shall survive the termination of this Credit Agreement and payment of the Notes and all other amounts payable hereunder.

Section 2.16 Indemnity.

The Borrower hereby agrees to indemnify each Lender and to hold such Lender harmless from any funding loss or expense which such Lender may sustain or incur as a consequence of (a) default by the Borrower in payment of the principal amount of or interest on any Loan by such Lender in accordance with the terms hereof, (b) default by the Borrower in accepting a borrowing after the Borrower has given a notice in accordance with the terms hereof, (c) default by the Borrower in making any prepayment after the Borrower has given a notice in accordance with the terms hereof, and/or (d) the making by the Borrower of a prepayment of a Loan, or the conversion thereof, on a day which is not the last day of the Interest Period with respect thereto, in each case including, but not limited to, any such loss or expense arising from interest or fees payable by such Lender to lenders of funds obtained by it in order to maintain its Loans hereunder. A certificate as to any additional amounts payable pursuant to this Sectio n submitted by any Lender, through the Administrative Agent, to the Borrower (which certificate must be delivered to the Administrative Agent within thirty days following such default, prepayment or conversion) shall be conclusive in the absence of manifest error. The agreements in this Section shall survive termination of this Credit Agreement and payment of the Notes and all other amounts payable hereunder.

Section 2.17 Taxes.

(a) All payments made by the Borrower hereunder or under any Note will be, except as provided in Section 2.17(b), made free and clear of, and without deduction or withholding for, any present or future taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any Governmental Authority or by any political subdivision or taxing authority thereof or therein with respect to such payments (but excluding any tax imposed on or measured by the net income or profits of a Lender pursuant to the laws of the jurisdiction in which it is organized or the jurisdiction in which the principal office or applicable lending office of such Lender is located or any subdivision thereof or therein) and all interest, penalties or similar liabilities with respect thereto (all such non-excluded taxes, levies, imposts, duties, fees, assessments or other charges being referred to collectively as “Taxes”). If any Taxes are so levied or imposed, the effected L ender will promptly provide notice to the Borrower and evidence of the amounts due. the Borrower agrees to pay the full amount of such Taxes, and such additional amounts as may be necessary so that every payment of all amounts due under this Credit Agreement or under any Note, after withholding or deduction for or on account of any Taxes, will not be less than the amount provided for herein or in such Note. The Borrower will furnish to the Administrative Agent as soon as practicable after the date the payment of any Taxes is due pursuant to applicable law certified copies (to the extent reasonably available and required by law) of tax receipts evidencing such payment by the Borrower. The Borrower agrees to indemnify and hold harmless each Lender, and reimburse such Lender upon its written request, for the amount of any Taxes so levied or imposed and paid by such Lender.

(b) Each Lender that is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower and the Administrative Agent on or prior to the Closing Date, or in the case of a Lender that is an assignee or transferee of an interest under this Credit Agreement pursuant to Section 9.6(d) (unless the respective Lender was already a Lender hereunder immediately prior to such assignment or transfer), on the date of such assignment or transfer to such Lender, (i) if the Lender is a “bank” within the meaning of Section 881(c)(3)(A) of the Code, two accurate and complete original signed copies of Internal Revenue Service Form W-8BEN or W-8ECI or W-8IMY (or successor forms) certifying such Lender’s entitlement to a complete exemption from United States withholding tax with respect to payments to be made under this Agreement and under any Note, or (ii) if the Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Cod e, either Internal Revenue Service Form W-8BEN or W-8ECI or W-8IMY as set forth in clause (i) above, or (x) a certificate substantially in the form of Schedule 2.17 (any such certificate, a “Tax Exempt Certificate”) and (y) two accurate and complete original signed copies of Internal Revenue Service Form W-8BEN (or successor form) certifying such Lender’s entitlement to an exemption from United States withholding tax with respect to payments of interest to be made under this Credit Agreement and under any Note. In addition, each Lender agrees that it will deliver upon the Borrower’s request updated versions of the foregoing, as applicable, whenever the previous certification has become obsolete or inaccurate in any material respect, together with such other forms as may be required in order to confirm or establish the entitlement of such Lender to a continued exemption from or reduction in United States withholding tax with respect to payments under this Credit Agreemen t and any Note. Notwithstanding anything to the contrary contained in Section 2.17(a), but subject to the immediately succeeding sentence, (x) each Borrower shall be entitled, to the extent it is required to do so by law, to deduct or withhold Taxes imposed by the United States (or any political subdivision or taxing authority thereof or therein) from interest, fees or other amounts payable hereunder for the account of any Lender which is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes to the extent that such Lender has not provided to the Borrower U.S. Internal Revenue Service Forms that establish a complete exemption from such deduction or withholding and (y) the Borrower shall not be obligated pursuant to Section 2.17(a) hereof to gross-up payments to be made to a Lender in respect of Taxes imposed by the United States if (I) such Lender has not provided to the Borrower the Internal Revenue Service Forms required to be provided to the Borrower pursuant to this Section 2.17(b) or (II) in the case of a payment, other than interest, to a Lender described in clause (ii) above, to the extent that such Forms do not establish a complete exemption from withholding of such Taxes. Notwithstanding anything to the contrary contained in the preceding sentence or elsewhere in this Section 2.17, the Borrower agrees to pay additional amounts and to indemnify each Lender in the manner set forth in Section 2.17(a) (without regard to the identity of the jurisdiction requiring the deduction or withholding) in respect of any amounts deducted or withheld by it as described in the immediately preceding sentence as a result of any changes after the Closing Date in any applicable law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof, relating to the deducting or withholding of Taxes.

(c) Each Lender agrees to use reasonable efforts (including reasonable efforts to change its Domestic Lending Office or LIBOR Lending Office, as the case may be) to avoid or to minimize any amounts which might otherwise be payable pursuant to this Section; provided, however, that such efforts shall not cause the imposition on such Lender of any additional costs or legal or regulatory burdens deemed by such Lender in its sole discretion to be material.

(d) If the Borrower pays any additional amount pursuant to this Section 2.17 with respect to a Lender, such Lender shall use reasonable efforts to obtain a refund of tax or credit against its tax liabilities on account of such payment; provided that such Lender shall have no obligation to use such reasonable efforts if either (i) it is in an excess foreign tax credit position or (ii) it believes in good faith, in its sole discretion, that claiming a refund or credit would cause adverse tax consequences to it. In the event that such Lender receives such a refund or credit, such Lender shall pay to the Borrower an amount that such Lender reasonably determines is equal to the net tax benefit obtained by such Lender as a result of such payment by the Borrower. In the event that no refund or credit is obtained with respect to the Borrower’s payments to such Lender pursuant to this Section 2.17, then such Lender shall upon request provide a certification that such Lender has not received a refund or credit for such payments. Nothing contained in this Section 2.17 shall require a Lender to disclose or detail the basis of its calculation of the amount of any tax benefit or any other amount or the basis of its determination referred to in the proviso to the first sentence of this Section 2.17 to the Borrower or any other party.

(e) The agreements in this Section 2.17 shall survive the termination of this Credit Agreement and the payment of the Notes and all other amounts payable hereunder.

Section 2.18 Indemnification; Nature of Issuing Lender’s Duties.

(a) In addition to its other obligations under Section 2.3, the Borrower hereby agrees to protect, indemnify, pay and save each Issuing Lender harmless from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable attorneys’ fees) that the Issuing Lender may incur or be subject to as a consequence, direct or indirect, of (i) the issuance of any Letter of Credit or (ii) the failure of the Issuing Lender to honor a drawing under a Letter of Credit as a result of any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or governmental authority (all such acts or omissions, herein called “Government Acts”).

(b) As between the Borrower and the Issuing Lender, the Borrower shall assume all risks of the acts, omissions or misuse of any Letter of Credit by the beneficiary thereof. The Issuing Lender shall not be responsible: (i) for the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of any Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any 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; (iii) for failure of the beneficiary of a Letter of Credit to comply fully with conditions required in order to draw upon a Letter of Credit; (iv) for errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) for errors in interpretation of technical terms; (vi) for any loss or delay in the transmission or otherwise of any document required in order to make a drawing under a Letter of Credit or of the proceeds thereof; and (vii) for any consequences arising from causes beyond the control of the Issuing Lender, including, without limitation, any Government Acts. None of the above shall affect, impair, or prevent the vesting of the Issuing Lender’s rights or powers hereunder.

(c) In furtherance and extension and not in limitation of the specific provisions hereinabove set forth, any action taken or omitted by the Issuing Lender, under or in connection with any Letter of Credit or the related certificates, if taken or omitted in good faith, shall not put such Issuing Lender under any resulting liability to the Borrower. It is the intention of the parties that this Credit Agreement shall be construed and applied to protect and indemnify the Issuing Lender against any and all risks involved in the issuance of the Letters of Credit, all of which risks are hereby assumed by the Borrower, including, without limitation, any and all risks of the acts or omissions, whether rightful or wrongful, of any Government Authority. The Issuing Lender shall not, in any way, be liable for any failure by the Issuing Lender or anyone else to pay any drawing under any Letter of Credit as a result of any Government Acts or any other cause beyond the control of the Issuing Lender.

(d) Nothing in this Section 2.18 is intended to limit the reimbursement obligation of the Borrower contained in Section 2.3(d) hereof. The obligations of the Borrower under this Section 2.18 shall survive the termination of this Credit Agreement. No act or omissions of any current or prior beneficiary of a Letter of Credit shall in any way affect or impair the rights of the Issuing Lender to enforce any right, power or benefit under this Credit Agreement.

(e) Notwithstanding anything to the contrary contained in this Section 2.18, the Borrower shall have no obligation to indemnify any Issuing Lender in respect of any liability incurred by such Issuing Lender arising out of the gross negligence or willful misconduct of the Issuing Lender (including action not taken by an Issuing Lender), as determined by a court of competent jurisdiction.

Section 2.19 Replacement of Lenders Invoking Yield Protection.

If any Replaced Lender shall become affected by any of the changes or events described in Section 2.14, 2.15 or 2.17 and shall petition the Borrower for any increased cost or amounts thereunder, then in such case, the Borrower may, upon at least five (5) Business Days’ notice to the Administrative Agent and such Replaced Lender, designate a Replacement Lender to which such Replaced Lender shall, subject to its receipt (unless a later date for the remittance thereof shall be agreed upon by the Borrower and the Replaced Lender) of all amounts owed to such Replaced Lender under Section 2.14, 2.15 or 2.17 assign all (but not less than all) of its rights, obligations, Loans and Commitment hereunder; provided, that all amounts owed to such Replaced Lender by the Borrower (except liabilities which by the terms hereof survive the payment in full of the Loans and termination of this Credit Agreement) shall be paid in full as of the date of such assignment. No Lender shall have any obligation to act as a Repl acement Lender in accordance with the terms above or to purchase a Commitment, and no Lender shall be responsible for arranging for a Replacement Lender to the extent the Borrower exercises its rights above. Upon any assignment by any Replaced Lender pursuant to this Section 2.19 becoming effective, the Replacement Lender shall thereupon be deemed to be a “Lender” for all purposes of this Credit Agreement and such Replaced Lender shall thereupon cease to be a “Lender” for all purposes of this Credit Agreement and shall have no further rights or obligations hereunder (other than pursuant to Sections 2.14, 2.15, 2.17 and 9.5 while such Replaced Lender was a Lender).

Notwithstanding any Replaced Lender’s failure or refusal to assign its rights, obligations, Loans and Commitment under this Section 2.19, the Replaced Lender shall cease to be a “Lender” for all purposes of this Credit Agreement and the Replacement Lender substituted therefor upon payment to the Replaced Lender by the Replacement Lender of all amounts set forth in this Section 2.19 without any further action of the Replaced Lender.

ARTICLE III REPRESENTATIONS AND WARRANTIES

To induce the Lenders to enter into this Credit Agreement and to make the Extensions of Credit herein provided for, each of the Credit Parties hereby represents and warrants to the Administrative Agent and to each Lender that:

Section 3.1 Financial Condition.

The balance sheets and the related statements of income and of cash flows of the Borrower and its Subsidiaries for fiscal year 2002 audited by Ernst & Young LLP are complete and correct in all material respects and present fairly the financial condition of the Borrower and its Subsidiaries on a consolidated basis as of the date of such financial statements. All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied on a Consistent Basis throughout the periods involved (except as disclosed therein).

Section 3.2 No Change.

Since November 30, 2002 (and after delivery of annual audited financial statements in accordance Section 5.1(a), from the date of the most recently delivered annual audited financial statements) there has been no development or event which has had or could reasonably be expected to have a Material Adverse Effect and the Credit Parties have incurred no material liabilities other than those incurred in the ordinary course of business which are not disclosed on Schedule 6.1(b).

Section 3.3 Corporate Existence; Compliance with Law.

Each of the Borrower and its Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has the requisite power and authority and the legal right to own and operate all its material property, to lease the material property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified to conduct business 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 except to the extent that the failure to so qualify or be in good standing could not, in the aggregate, reasonably be expected to have a Material Adverse Effect and (d) is in compliance with all Requirements of Law (including without limitation, Environmental Laws), except to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 3.4 Corporate Power; Authorization; Enforceable Obligations.

Each of the Credit Parties has the full power and authority and the legal right to make, deliver and perform the Credit Documents to which it is party and has taken all necessary limited liability company or corporate action to authorize the execution, delivery and performance by it of the Credit Documents to which it is party. No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the borrowings hereunder or with the execution, delivery or performance of any Credit Document by any Credit Party (other than those which have been obtained) or with the validity or enforceability of any Credit Document against the Credit Parties. Each Credit Document has been duly executed and delivered on behalf of the Credit Parties that are a party thereto. Each Credit Document constitutes a legal, valid and binding obligation of the Credit Parties that are a party thereto, enforceable against such Credit Parti es in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, 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).

Section 3.5 No Legal Bar; No Default.

The execution, delivery and performance of the Credit Documents, the borrowings thereunder and the use of the proceeds of the Loans will not violate any Requirement of Law or any Contractual Obligation of the Borrower or its Subsidiaries (except those as to which waivers or consents have been obtained), and will not result in, or require, the creation or imposition of any Lien on any of its or their respective properties or revenues pursuant to any Requirement of Law or Contractual Obligation other than the Liens arising under or contemplated in connection with the Credit Documents. Neither the Borrower nor any of its Subsidiaries is in default under or with respect to any of its Contractual Obligations in any respect which could reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing.

Section 3.6 No Material Litigation.

Except as set forth in Schedule 3.6, no litigation, investigation or proceeding (including without limitation, any environmental proceeding) of or before any arbitrator or Governmental Authority is pending or, to the best knowledge of the Credit Parties, threatened by or against the Borrower or any of its Subsidiaries or against any of its or their respective properties or revenues (a) with respect to the Credit Documents or any Loan or any of the transactions contemplated hereby, or (b) which, if adversely determined, could reasonably be expected to have a Material Adverse Effect.

Section 3.7 Investment Company Act.

None of the Credit Parties is an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.

Section 3.8 Margin Regulations.

No part of the proceeds of any Loan hereunder will be used directly or indirectly for any purpose which violates, or which would be inconsistent with, the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect. The Borrower and its Subsidiaries taken as a group do not own “margin stock” except as identified in the financial statements referred to in Section 3.1 and, following the application of the proceeds of each Loan, the aggregate value of all “margin stock” owned by the Borrower and its Subsidiaries taken as a group does not exceed 25% of the value of their assets.

Section 3.9 ERISA.

Except as set forth in Schedule 3.9, neither a Reportable Event nor an “accumulated funding deficiency” (within the meaning of Section 412 of the Code or Section 302 of ERISA) has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any Plan, and each Plan has complied in all material respects with the applicable provisions of ERISA and the Code, except to the extent that any such occurrence or failure to comply would not reasonably be expected to have a Material Adverse Effect. No termination of a Single Employer Plan has occurred resulting in any liability that has remained underfunded, and no Lien in favor of the PBGC or a Plan has arisen, during such five-year period which could reasonably be expected to have a Material Adverse Effect. The present value of all accrued benefits under each Single Employer Plan (based on those assumptions used to fund such Plans) did not, as of the last annual valuation date prior t o the date on which this representation is made or deemed made, exceed the value of the assets of such Plan allocable to such accrued benefits by an amount which, as determined in accordance with GAAP, could reasonably be expected to have a Material Adverse Effect. Neither the Borrower nor any Commonly Controlled Entity is currently subject to any liability for a complete or partial withdrawal from a Multiemployer Plan which could reasonably be expected to have a Material Adverse Effect.

Section 3.10 Purpose of Loans.

The proceeds of the Loans hereunder shall be used solely by the Borrower to (a) refinance certain existing Indebtedness of the Borrower (including the Existing Credit Facility) and to pay certain fees and expenses related thereto, and (b) provide for working capital and other general corporate purposes of the Credit Parties, including track development, Permitted Investments and Permitted Acquisitions. The Letters of Credit shall be used only for transactions entered into by the Borrower for general corporate purposes.

Section 3.11 Subsidiaries.

Set forth on Schedule 3.11 is a complete and accurate list of all Subsidiaries of the Borrower. Information on the attached Schedule includes state of incorporation, the number and percentage of shares of each class of Capital Stock or other equity interests outstanding, and the number and effect, if exercised, of all outstanding options, warrants, rights of conversion or purchase and similar rights.

Section 3.12 Ownership.

Each of the Borrower and its Subsidiaries is the owner of, and has good and marketable title to, all of its respective assets necessary to operate its business in the ordinary course, except as may be permitted pursuant Section 6.13 hereof, and none of such assets is subject to any Lien other than Permitted Liens.

Section 3.13 Indebtedness.

Except as otherwise permitted under Section 6.1, the Borrower and its Subsidiaries have no Indebtedness.

Section 3.14 Taxes.

Each of the Borrower and its Subsidiaries has filed, or caused to be filed, all material tax returns (federal, state, local and foreign) required to be filed and paid (a) all amounts of taxes shown thereon to be due (including interest and penalties) and (b) all other taxes, fees, assessments and other governmental charges (including mortgage recording taxes, documentary stamp taxes and intangibles taxes) owing by it, except for such taxes (i) which are not yet delinquent, (ii) that are being contested in good faith and by proper proceedings or (iii) which are not material, and against which adequate reserves are being maintained in accordance with GAAP. Neither the Borrower nor any of its Subsidiaries is aware as of the Closing Date of any proposed tax assessments against it or any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect. Except as set forth on Schedule 3.14, there are no outstanding agreements or waivers extending the statutory period of limitatio n applicable to any tax return required to be filed with respect to any of the Credit Parties.

Section 3.15 Investments.

All Investments of each of the Borrower and its Subsidiaries are Permitted Investments.

Section 3.16 No Burdensome Restrictions.

None of the Borrower or any of its Subsidiaries is a party to any agreement or instrument or subject to any other obligation or any charter or corporate restriction or any provision of any applicable law, rule or regulation which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

Section 3.17 Brokers’ Fees.

None of the Borrower or any of its Subsidiaries has any obligation to any Person in respect of any finder’s, broker’s, investment banking or other similar fee in connection with any of the transactions contemplated under the Credit Documents other than the closing and other fees payable pursuant to this Credit Agreement.

Section 3.18 Labor Matters.

There are no collective bargaining agreements or Multiemployer Plans covering the employees of the Borrower or any of its Subsidiaries as of the Closing Date, other than as set forth in Schedule 3.18 hereto, and none of the Borrower or any of its Subsidiaries (a) has suffered any strikes, walkouts, work stoppages or other material labor difficulty within the last five years, other than as set forth in Schedule 3.18 hereto or (b) has knowledge of any potential or pending strike, walkout or work stoppage.

Section 3.19 Accuracy and Completeness of Information.

All factual information heretofore, contemporaneously or hereafter furnished by or on behalf of the Borrower or any of its Subsidiaries to the Administrative Agent or any Lender for purposes of or in connection with this Credit Agreement or any other Credit Document, or any transaction contemplated hereby or thereby, is or will be, at the time it is provided, true and accurate in all material respects and not incomplete by omitting to state any material fact necessary to make such information not misleading. There is no fact now known to the Borrower or any of its Subsidiaries which has, or could reasonably be expected to have, a Material Adverse Effect which fact has not been set forth herein, in the financial statements of the Borrower and its Subsidiaries furnished to the Administrative Agent and/or the Lenders, or in any certificate, opinion or other written statement made or furnished by the Borrower to the Administrative Agent and/or the Lenders.

Section 3.20 Possession of Franchises and Licenses.

Each of the Borrower and its Subsidiaries possesses all material franchises, certificates, licenses, permits and other authorizations from Governmental Authorities, free from material restrictions, that are necessary in any material respect for the ownership, maintenance or operation of its properties and the conduct of its business as presently conducted, and each of the Borrower and its Subsidiaries is not in material violation of any thereof.

Section 3.21 Claims and Offsets.

There is no defense, setoff or counterclaim against payment of principal of or interest under the Notes or against any other amounts due or that may become due under the Credit Documents. To the extent permitted by applicable law, each of the Credit Parties hereby forever waives, releases and discharges all defenses, setoffs, counterclaims or claims of any nature (solely with respect to any amounts due or that may become due under the Credit Documents), if any, whether known or unknown, held by such Credit Party against any of the Lenders, any of their Affiliates, any of their officers, directors, shareholders, agents, attorneys and employees, and their respective successors, assigns, heirs and legal representatives.

Section 3.22 Intent and Effect of Transactions.

The transactions contemplated by this Credit Agreement and the other Credit Documents:

(a) Are not made or incurred with the intent to hinder, delay or defraud any Person to whom any of the Credit Parties has been, is now or may hereafter become indebted;

(b) Do not render any of the Credit Parties insolvent, nor are any of the Credit Parties insolvent at the time the transactions provided for herein and the other Credit Documents are entered into;

(c) Do not leave any of the Credit Parties with unreasonably small capital with which to engage in its business, or in any business or transaction in which it intends to engage; and

(d) Are not entered into with the intent to incur, or with the belief that any of the Credit Parties would incur, debts that would be beyond its ability to pay as such debts mature.

Section 3.23 Senior Debt Status.

The Credit Party Obligations constitute “senior indebtedness” for purposes of the Senior Note Indenture.

ARTICLE IV CONDITIONS PRECEDENT

Section 4.1 Conditions to Closing Date and Initial Revolving Loans.

This Credit Agreement shall become effective upon, and the obligation of each Lender to make the initial Revolving Loans on the Closing Date is subject to, the satisfaction of the following conditions precedent:

(a) Execution of Credit Agreement. The Administrative Agent shall have received (i) counterparts of this Credit Agreement, executed by a duly authorized officer of each party hereto and (ii) for the account of each Lender, Revolving Notes and for the account of the Swingline Lender, a Swingline Note, executed by a duly authorized officer of the Borrower.

(b) Authority Documents. The Administrative Agent shall have received the following:

(i) Articles of Incorporation. Copies of the articles of incorporation or other charter documents, as applicable, of each Credit Party certified to be true and complete as of a recent date by the appropriate governmental authority of the state of its incorporation.

(ii) Resolutions. Copies of resolutions of the board of directors of each Credit Party approving and adopting the Credit Documents, the transactions contemplated therein and authorizing execution and delivery thereof, certified by an officer of such Credit Party as of the Closing Date to be true and correct and in force and effect as of such date.

(iii) Bylaws. A copy of the bylaws of each Credit Party certified by an officer of such Credit Party as of the Closing Date to be true and correct and in force and effect as of such date.

(iv) Good Standing. Copies of (A) certificates of good standing, existence or its equivalent with respect to each Credit Party certified as of a recent date by the appropriate governmental authorities of the state of incorporation and each other state in which the failure to so qualify and be in good standing could reasonably be expected to have a Material Adverse Effect on the business or operations of the Borrower and its Subsidiaries in such state and (B) a certificate indicating payment of all corporate franchise taxes certified as of a recent date by the appropriate governmental taxing authorities.

(v) Incumbency. An incumbency certificate of each Credit Party certified by a secretary or assistant secretary to be true and correct as of the Closing Date.

(c) Legal Opinions of Counsel. The Administrative Agent shall have received an opinion of Glenn R. Padgett, Chief Counsel - Operations for the Credit Parties, dated the Closing Date and addressed to the Administrative Agent and the Lenders, in form and substance acceptable to the Administrative Agent.

(d) Fees and Expenses. The Administrative Agent shall have received all fees and expenses owed by the Borrower to the Administrative Agent and its legal counsel and the Lenders shall have received all fees owed by the Borrower to the Lenders in connection with the closing.

(e) Litigation. There shall not exist any pending litigation or investigation affecting or relating to the Borrower or any of its Subsidiaries or this Credit Agreement and the other Credit Documents that in the reasonable judgment of the Administrative Agent could reasonably be expected to have a Material Adverse Effect that has not been settled, dismissed, vacated, discharged or terminated prior to the Closing Date.

(f) Corporate Structure. The corporate capital and ownership structure of the Borrower and its Subsidiaries shall be as described in Schedule 3.11.

(g) Government Consent. The Administrative Agent shall have received evidence that all governmental, shareholder and material third party consents and approvals necessary in connection with the financings and other transactions contemplated hereby have been obtained and all applicable waiting periods have expired without any action being taken by any authority that could restrain, prevent or impose any material adverse conditions on such financings and other transactions or that could threaten any of the foregoing.

(h) Compliance with Laws. The financings and other transactions contemplated hereby shall be in material compliance with all material applicable laws and regulations (including all applicable securities and banking laws, rules and regulations).

(i) Bankruptcy. There shall be no bankruptcy or insolvency proceedings with respect to the Borrower or any of its Subsidiaries.

(j) Financial Statements. The Administrative Agent shall have received copies of the financial statements referred to in Section 3.1 hereof, each in form and substance reasonably satisfactory to it.

(k) Material Contracts. The Administrative Agent shall have received and reviewed all material contracts and agreements of the Borrower and its Subsidiaries as reported to the Securities Exchange Commission, the terms and conditions of which shall be satisfactory to the Administrative Agent in its reasonable discretion.

(l) No Material Adverse Change. There shall not have occurred any material adverse change in the business, properties, prospects, operations, condition (financial or otherwise) of the Borrower and its Subsidiaries taken as a whole.

(m) Repayment of Existing Indebtedness. All existing Indebtedness for borrowed money of the Borrower and its Subsidiaries (including the Existing Credit Facility, but excluding the existing Indebtedness listed on Schedule 6.1(b)) shall have been repaid in full and terminated and the Administrative Agent shall have received such evidence of such repayment and termination as the Administrative Agent may reasonably require.

(n) Additional Matters. All other documents and legal matters in connection with the transactions contemplated by this Credit Agreement shall be reasonably satisfactory in form and substance to the Administrative Agent and its counsel.

Section 4.2 Conditions to All Extensions of Credit.

The obligation of each Lender to make any Extension of Credit hereunder is subject to the satisfaction of the following conditions precedent on the date of making such Extension of Credit:

(a) Representations and Warranties. The representations and warranties made by the Credit Parties herein or which are contained in any certificate furnished at any time under or in connection herewith shall be true and correct in all material respects on and as of the date of such Extension of Credit as if made on and as of such date.

(b) No Default or Event of Default. No Event of Default, nor any Default that can be cured with the payment of money, shall have occurred and be continuing on such date or after giving effect to the Extension of Credit to be made on such date unless such Default or Event of Default shall have been waived in accordance with this Credit Agreement.

(c) Compliance with Commitments. Immediately after giving effect to the making of any such Extension of Credit (and the application of the proceeds thereof), (i) the sum of the aggregate principal amount of outstanding Revolving Loans plus Swingline Loans plus LOC Obligations shall not exceed the Revolving Committed Amount, (ii) the LOC Obligations shall not exceed the LOC Committed Amount and (iii) the Swingline Loans shall not exceed the Swingline Committed Amount.

(d) Additional Conditions to Revolving Loans. If such Loan is made pursuant to Section 2.1, all conditions set forth in such Section shall have been satisfied.

(e) Additional Conditions to Swingline Loan. If such Loan is made pursuant to Section 2.2, all conditions set forth in such Section shall have been satisfied.

(f) Additional Conditions to Letters of Credit. If such Extension of Credit is made pursuant to Section 2.3, all conditions set fort in such Section shall have been satisfied.

Each request for an Extension of Credit and each acceptance by the Borrower of any such Extension of Credit shall be deemed to constitute a representation and warranty by the Borrower as of the date of such Extension of Credit that the applicable conditions in paragraphs (a) through (f) of this Section have been satisfied.

ARTICLE V AFFIRMATIVE COVENANTS

The Credit Parties hereby covenant and agree that on the Closing Date, and thereafter for so long as this Credit Agreement is in effect and until the Commitments have terminated, no Note remains outstanding and unpaid and the Credit Party Obligations, together with interest, fees and all other amounts owing to the Administrative Agent or any Lender hereunder, are paid in full, the Credit Parties shall, and shall cause each of their Subsidiaries (other than in the case of Sections 5.1 or 5.2 hereof), to:

Section 5.1 Financial Statements.

Furnish to the Administrative Agent and each of the Lenders:

(a) Annual Financials. As soon as available, but in any event within ninety (90) days after the end of each fiscal year of the Borrower, the Borrower shall furnish a copy of the consolidated financial statements of the Borrower prepared in accordance with GAAP applied on a Consistent Basis, together with an unqualified letter of an independent certified public accounting firm selected by the Borrower and reasonably acceptable to the Required Lenders and such other information as may be reasonably requested by the Required Lenders. Such statements shall include a balance sheet, a statement of income and expenses, a statement of cash flow and such other and further reports and schedules as may reasonably be requested by the Required Lenders, including without limitation verification of the Borrower’s compliance with the financial covenants set forth in Section 5.8. Such statements shall be certified as to their correctness by a Responsible Officer of Borrower.

(b) Quarterly Financials. As soon as available, but in any event, within forty-five (45) days after the end of each fiscal quarter of the Borrower (other than the last fiscal quarter of each fiscal year), the Borrower shall furnish to each Lender a copy of the unaudited management-prepared quarterly consolidated financial statements of the Borrower, prepared in accordance with GAAP applied on a Consistent Basis. Such statements shall include a balance sheet, a statement of income and expenses, a statement of cash flow and such other and further reports and schedules as may reasonably be requested by the Required Lenders, and verification of the Borrower’s compliance with the financial covenants set forth in Section 5.8. Such statements shall also be certified as to their correctness by a Responsible Officer of the Borrower.

Section 5.2 Certificates; Other Information.

Furnish to the Administrative Agent and each of the Lenders:

(a) concurrently with the delivery of the financial statements referred to in Section 5.1(a) above, a certificate of the independent certified public accountants reporting on such financial statements stating that in making the examination necessary therefor no knowledge was obtained of any violation of the financial covenants contained in Section 5.8, except as specified in such certificate;

(b) concurrently with the delivery of the financial statements referred to in Sections 5.1(a) and 5.1(b) above, a certificate of a Responsible Officer, substantially in the form of Schedule 5.2(b), stating that, to the best of such Responsible Officer’s knowledge, each of the Credit Parties during such period observed or performed in all material respects all of its covenants and other agreements, and satisfied in all material respects every condition, contained in this Credit Agreement to be observed, performed or satisfied by it, that no financial statement accompanying such certificate contains any untrue statement or omits to state a material fact necessary to make the facts contained therein not misleading and that such Responsible Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate and such certificate shall include the calculations in reasonable detail required to indicate compliance with Section 5.8 as of the last day of such p eriod;

(c) within ten (10) days after the same are sent, filed or distributed, copies of (i) all reports (other than those otherwise provided pursuant to Section 5.1 and those which are of a promotional nature) and other financial information which the Borrower sends to all of its shareholders, (ii) copies of all financial statements and non-confidential reports which the Borrower may make to or file with the SEC or any successor or analogous Governmental Authority and (iii) all official press releases distributed by the investor relations department of the Borrower that may be of general interest to the investment community and other public announcements of financial results (such as earnings, etc.) made by the Borrower; provided, however, unless a Default or an Event of Default shall have occurred and be continuing, the Borrower shall not be required to furnish any tax return information to the Administrative Agent and the Lenders.

(d) within ninety (90) days after the end of each fiscal year of the Borrower, a certificate containing information regarding the amount of all Asset Dispositions and the amount of all Investments made pursuant to clauses (f) and (g) of the definition of Permitted Investments unless such information has previously been disclosed in the financial statements delivered pursuant to Section 5.1 or 5.2;

(e) promptly upon receipt thereof, a copy of any other audit report or “management letter” submitted by independent accountants to the Borrower or any of its Subsidiaries in connection with any annual, interim or special audit of the books of such Person which identifies a weakness in the internal control structure;

(f) after the occurrence and during the continuation of an Event of Default, access to the unaudited consolidating financial statements of the Borrower and its Subsidiaries at the offices of the Borrower;

(g) promptly, but in no event later than three (3) Business Days after any change in the Debt Rating, notice of the new Debt Rating; and

(h) promptly, such additional financial and other information as the Administrative Agent, on behalf of any Lender, may from time to time reasonably request.

Section 5.3 Payment of Obligations.

Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, in accordance with industry practice (subject, where applicable, to specified grace periods) all its material obligations of whatever nature (including, without limitation, taxes, assessments and governmental charges or levies) and any additional costs that are imposed as a result of any failure to so pay, discharge or otherwise satisfy such obligations, except when the amount or validity of such obligations and costs is currently being contested in good faith by appropriate proceedings and reserves, if applicable, in conformity with GAAP with respect thereto have been provided on the books of the Borrower or its Subsidiaries, as the case may be.

Section 5.4 Conduct of Business and Maintenance of Existence.

Continue to engage in business of the same general type as now conducted by it on the Closing Date and preserve, renew and keep in full force and effect its corporate, partnership or limited liability company existence and take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business; comply with all Contractual Obligations and Requirements of Law applicable to it except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 5.5 Maintenance of Property; Insurance.

(a) Keep all material property useful and necessary in its business in good working order and condition (ordinary wear and tear and obsolescence excepted);

(b) Maintain with financially sound and reputable insurance companies insurance on all its material property in at least such amounts and against at least such risks as are usually insured against in the same general area by companies engaged in the same or a similar business (including, without limitation, hazard and other relevant coverage); and furnish to the Administrative Agent, upon written request, full information as to the insurance carried; provided, however, that the Borrower and its Subsidiaries may maintain self insurance plans to the extent companies of similar size and in similar businesses do so.

Section 5.6 Inspection of Property; Books and Records; Discussions.

Keep proper books of records and account in which full, true and correct entries in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in relation to its businesses and activities; and except as limited by the Credit Agreement or any Confidentiality Agreement executed by any Lender, permit, during regular business hours and upon reasonable notice by the Administrative Agent or any Lender, the Administrative Agent or any Lender (and their respective representatives) to visit and inspect any of its properties and examine and make abstracts from any of its consolidated books and records (other than materials protected by the attorney-client privilege and materials which the Borrower may not disclose without violation of a confidentiality obligation binding upon it) at any reasonable time and as often as may reasonably be desired, and to discuss the business, operations, properties and financial and other condition of the Borrower and its Subsidiaries with officers and employees of the Borrower and its Subsidiaries and with its independent certified public accountants; provided that the Administrative Agent and the Lenders as a group shall be limited to one visit and inspection per calendar year; provided further, that during the existence of a Default or Event of Default, (a) the foregoing limitation on the number of visits and inspections shall not apply and any visit and inspection made during such period shall not be taken into account for purposes of such limitation and (b) any inspection of the books and records of the Borrower and its Subsidiaries (and any abstracts made thereof) shall not be limited to only “consolidated” books and records.

Section 5.7 Notices.

Give prompt notice in writing to the Administrative Agent (which shall promptly transmit such notice to each Lender) of:

(a) the occurrence of any Default or Event of Default;

(b) the occurrence of any default or event of default under any Contractual Obligation of the Borrower or any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect;

(c) any litigation, or any investigation or proceeding known to the Borrower or any of its Subsidiaries, affecting the Borrower or any of its Subsidiaries which could reasonably be expected to be adversely determined and, if adversely determined, could reasonably be expected to have a Material Adverse Effect;

(d) (i) the occurrence or expected occurrence of any Reportable Event with respect to any Plan, a failure to make any required contribution to a Plan, the creation of any Lien in favor of the PBGC (other than a Permitted Lien) or a Plan or any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or the taking of any other action by the PBGC, any Credit Party, any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the terminating, Reorganization or Insolvency of, any Plan; and

(e) any other development or event which could reasonably be expected to have a Material Adverse Effect.

Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action the Credit Parties propose to take with respect thereto. In the case of any notice of a Default or Event of Default, the Borrower shall specify that such notice is a Default or Event of Default notice on the face thereof.

Section 5.8 Financial Covenants.

Commencing on the day immediately following the Closing Date, the Borrower shall, and shall cause each of its Subsidiaries to, comply with the following financial covenants:

(a) Leverage Ratio. The Leverage Ratio, as of the last day of each fiscal quarter of the Borrower, shall be less than or equal to 3.0 to 1.0.

(b) Interest Coverage Ratio. The Interest Coverage Ratio, as of the last day of each fiscal quarter of the Borrower, shall be greater than or equal to 3.0 to 1.0.

Section 5.9 Additional Subsidiary Guarantors.

The Credit Parties will cause each of their Domestic Subsidiaries, whether newly formed, after acquired or otherwise existing (except as to certain Subsidiaries existing as of the date hereof which are expressly prohibited by a Contractual Obligation from guaranteeing the Credit Party Obligations and except for non-wholly owned Subsidiaries of the Borrower which are designated by the Borrower from time to time), to promptly become a Guarantor hereunder by way of execution of a Joinder Agreement.

Section 5.10 Compliance with Law.

The Borrower will, and will cause each of its Subsidiaries to, comply with all laws, rules, regulations and orders, and all applicable restrictions imposed by all Governmental Authorities Law (including without limitation, Environmental Laws), applicable to it and its Property if noncompliance with any such law, rule, regulation, order or restriction could reasonably be expected to have a Material Adverse Effect.

ARTICLE VI NEGATIVE COVENANTS

Each of the Credit Parties hereby covenants and agrees that on the Closing Date, and thereafter for so long as this Credit Agreement is in effect and until the Commitments have terminated, no Note remains outstanding and unpaid and the Credit Party Obligations, together with interest, fees and all other amounts owing to the Administrative Agent or any Lender hereunder, are paid in full, unless the Required Lenders shall otherwise consent in writing, such Credit Party will not, nor will it permit any of its Subsidiaries to, either directly or indirectly:

Section 6.1 Indebtedness.

Incur, create, assume or permit to exist any other indebtedness or liability on account of borrowed money, represented by any notes, bonds, debentures or similar obligations, or on account of the deferred purchase price of any property, or any other deposits, advance or progress payments under contracts, except:

(a) Indebtedness arising or existing under this Credit Agreement and the other Credit Documents;

(b) Indebtedness of the Borrower and its Subsidiaries existing as of the Closing Date (and set forth in Schedule 6.1(b) hereto) and renewals, refinancings and extensions thereof in a principal amount not in excess of that outstanding as of the date of such renewal, refinancing or extension;

(c) Indebtedness and obligations owing under Hedging Agreements relating to the Loans hereunder and other Hedging Agreements entered into in order to manage existing or anticipated interest rate, exchange rate or commodity price risks and not for speculative purposes;

(d) Indebtedness of the Borrower and its Subsidiaries incurred after the Closing Date consisting of Capital Leases or Indebtedness incurred to provide all or a portion of the purchase price or cost of construction of an asset; provided that (i) such Indebtedness when incurred shall not exceed the purchase price or cost of construction of such asset 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;

(e) Indebtedness evidenced by the Senior Notes; provided that (i) the aggregate principal amount of the Senior Notes shall not exceed $400,000,000 at any time (or such higher amount as agreed to by the Required Lenders), (ii) the Senior Notes shall rank pari passu with the Credit Party Obligations, (iii) the Senior Notes shall be guaranteed only by the Guarantors, (iv) the covenants set forth in the Senior Note Indenture and the Senior Notes shall not be more restrictive than the covenants set forth herein and (v) any Senior Note that is issued, refinanced, renewed or extended after the Closing Date shall have a maturity (and a weighted average life to maturity) that is at least 6 months after the Revolving Commitment Termination Date;

(f) Indebtedness of the Borrower the repayment of which is subordinated to the payment of the Indebtedness arising or existing under this Credit Agreement and the other Credit Documents provided the terms of such subordination and all other terms and provisions relating to such Indebtedness (including, without limitation, the terms relating to the interest rate, maturity, amortization and covenants of such Indebtedness) are reasonably satisfactory to the Required Lenders; and

(g) other unsecured Indebtedness of the Borrower; provided that such Indebtedness is not senior in right of payment to the payment of the Indebtedness arising or existing under this Credit Agreement and the other Credit Documents and such Indebtedness does not exceed twenty-five percent (25%) of the Total Shareholders’ Equity.

Section 6.2 Liens.

Contract, create, incur, assume or permit to exist any Lien with respect to any of their respective property or assets of any kind (whether real or personal, tangible or intangible), whether now owned or hereafter acquired, except for Permitted Liens.

Section 6.3 Nature of Business.

Alter the character of their business in any material respect from that conducted as of the Closing Date.

Section 6.4 Consolidation, Merger, Sale or Purchase of Assets, etc.

(a) Dissolve, liquidate or wind up their affairs or enter into any transaction of merger or consolidation; provided, however that (i) the Borrower may merge or consolidate with any Subsidiary so long as the Borrower shall be the continuing or surviving corporation, (ii) any Domestic Subsidiary of the Borrower may be merged with or into any other Domestic Subsidiary of the Borrower (iii) the Borrower or any Subsidiary of the Borrower may merge with any other Person in connection with a Permitted Acquisition if the Borrower or such Subsidiary shall be the continuing or surviving corporation.

(b) Make any Asset Dispositions (including, without limitation, any Sale-Leaseback Transaction) other than (i) Specified Sales, (ii) the sale or disposition of machinery, equipment and other assets no longer used or useful in the conduct of Borrower’s or any such Subsidiary’s business, (iii) Equity Issuances, (iv) Sale-Leaseback Transactions set forth on Schedule 6.4(b) hereto, (v) Asset Dispositions between or among Credit Parties or (vi) such other Asset Dispositions (excluding for purposes hereof, any sale or other disposition of Capital Stock of a Credit Party), provided that (A) the consideration for such assets disposed of represents the fair market value of such assets at the time of such Asset Disposition; and (B) the cumulative net book value of all Asset Dispositions by the Borrower and any of its Subsidiaries during any single fiscal year shall not exceed fifteen percent (15%) of the Total Shareholders’ Equity;

(c) Acquire all or substantially all of the assets or business of any Person except in connection with a Permitted Acquisition.

Section 6.5 Advances, Investments and Loans.

Lend money or extend credit or make advances to any Person, or purchase or acquire any stock, obligations or securities of, or any other interest in, or make any capital contribution to, or otherwise make an Investment in, any Person except for Permitted Investments; provided that immediately before and after giving effect to any Permitted Investment, no Default or Event of Default shall exist.

Section 6.6 Issuance of Subsidiary Equity Securities.

Issue, sell, transfer, pledge or otherwise dispose of any shares of Capital Stock or other equity or ownership interests (“Equity Interests”) in any Subsidiary, except (a) in connection with the sale of all of the Capital Stock of a Subsidiary pursuant to a transaction permitted by Section 6.4(b), (b) the issuance, sale or transfer of Equity Interests by a Subsidiary (the “Issuing Subsidiary”) to the Borrower or a Subsidiary of the Borrower that owns such Issuing Subsidiary and (c) as needed to qualify directors under applicable law.

Section 6.7 Transactions with Affiliates; Modification of Documentation..

(a) Except as permitted in clause (e) of the definition of Permitted Investments, enter into or permit to exist any transaction or series of transactions, whether or not in the ordinary course of business, with any officer, director, shareholder, Subsidiary or Affiliate other than (i) customary fees and expenses paid to directors, (ii) where such transactions are on terms and conditions substantially as favorable as would be obtainable in a comparable arm’s-length transaction with a Person other than an officer, director, shareholder, Subsidiary or Affiliate, (iii) the Homestead Keepwell Agreement and the Chicago Agreements and (iv) provided that no Default or Event of Default shall result therefrom, transactions involving payments to the France Family individually (or family-related entities controlled by France Family members) or to NASCAR in the ordinary course of business in accordance with past practices of the Credit Parties.

(b) Permit the Borrower or any Subsidiary to, if any Default or Event of Default has occurred and is continuing or would be directly or indirectly caused as a result thereof, after the issuance thereof, amend or modify (or permit the amendment or modification of) any of the terms of any Indebtedness if such amendment or modification would add or change any terms in a manner adverse to the issuer of such Indebtedness, or shorten the final maturity or average 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

Section 6.8 Fiscal Year; Accounting Method; Organizational Documents.

Unless required by applicable law or GAAP, change its fiscal year or method of accounting or amend, modify or change its articles of incorporation in any manner adverse to the Lenders (or corporate charter or other similar organizational document) or bylaws (or other similar document) without the prior written consent of the Required Lenders.

Section 6.9 Limitation on Restricted Actions.

Except as set forth on Schedule 6.9, create or permit to exist any restriction of any kind on the ability of any Subsidiary to (a) pay dividends or make any other distributions to the Borrower or any of its Subsidiaries, (b) pay Indebtedness owed to the Borrower or any of its Subsidiaries, (c) make loans or advances to the Borrower or any of its Subsidiaries or (d) transfer any of its properties or assets to the Borrower or any of its Subsidiaries.

Section 6.10 Extraordinary Dividends and Other Payments.

(a) Directly or indirectly purchase, redeem or otherwise retire any Capital Stock in advance of a regularly scheduled date for such retirement, or apply or set apart any of its assets therefor, other than repurchases, redemptions or retirements in connection with the Borrower’s long-term incentive compensation plans approved by the Borrower’s shareholders and on file with the SEC, (b) make any other extraordinary distribution (by reduction of capital or otherwise) in respect of any such Capital Stock (other than (i) transfers expressly permitted herein and (ii) ordinary dividends in an amount not to exceed (A) on an annual basis, an amount equal to ten percent (10%) of the Total Shareholders’ Equity and (B) on an aggregate basis, an amount equal to twenty-five percent (25%) of the Total Shareholders’ Equity), or agree to do any of the foregoing, (c) open market repurchases of Capital Stock of the Borrower in an amount not to exceed (i) on an annual basis, an amount equal to ten perc ent (10%) of the Total Shareholders’ Equity and (ii) on an aggregate basis, an amount equal to twenty-five percent (25%) of the Total Shareholders’ Equity or (d) make any loan or other payment (other than (i) salary and other payments expressly permitted herein, (ii) payments of Indebtedness permitted by Section 6.1, (iii) payments owing under the Homestead Keepwell Agreement and the Chicago Agreements and (iv) payments owing to any Affiliate).

Section 6.11 Major Motorsports Events.

Voluntarily change the scope and magnitude of major motorsports events conducted at facilities controlled by the Borrower or any of its Subsidiaries except to the extent that any such change could not reasonably be expected to have a Material Adverse Effect.

ARTICLE VII EVENTS OF DEFAULT

Section 7.1 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) The Borrower shall fail to pay any principal on any Note when due in accordance with the terms thereof or hereof; or the Borrower shall fail to reimburse the Issuing Lender for any LOC Obligations within two Business Days after such LOC Obligations become due in accordance with the terms hereof; or the Borrower shall fail to pay any interest on any Note or any fee or other amount payable hereunder when due in accordance with the terms thereof or hereof; or any Guarantor shall fail to pay on the Guaranty in respect of any of the foregoing or in respect of any other Guaranty Obligations hereunder; or

(b) Any representation or warranty made or deemed made herein or in any of the other Credit Documents or which is contained in any certificate, document or financial or other statement furnished at any time under or in connection with this Credit Agreement shall prove to have been incorrect, false or misleading in any material respect on or as of the date made or deemed made or reaffirmed; or

(c) (i) Any Credit Party shall fail to perform, comply with or observe any term, covenant or agreement applicable to it contained in Section 5.7(a), Section 5.8 or Article VI hereof; or (ii) any Credit Party shall fail to comply with any other covenant contained in this Credit Agreement or the other Credit Documents or any other agreement, document or instrument among any Credit Party, the Administrative Agent and the Lenders or executed by any Credit Party in favor of the Administrative Agent or the Lenders (other than as described in Sections 7.1(a) or 7.1(c)(i) above), and in the event such breach or failure to comply is capable of cure, is not cured within thirty (30) days of its occurrence; or

(d) The occurrence of an event of default under the Homestead Keepwell Agreement or any Chicago Agreement; or

(e) The Borrower or any of its Subsidiaries shall (i) default in any payment of principal of or interest on any Indebtedness in a principal amount outstanding of at least $5,000,000 in the aggregate for the Borrower and any of its Subsidiaries beyond the period of grace (not to exceed 30 days), if any, provided in the instrument or agreement under which such Indebtedness was created; or (ii) default in the observance or performance of any other agreement or condition relating to any Indebtedness in a principal amount outstanding of at least $5,000,000 in the aggregate for the Borrower and its Subsidiaries or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to become due prior to its stated maturity; or

(f) (i) The Borrower or any of its Subsidiaries shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or the Borrower or any Subsidiary shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against the Borrower or any Subsidiary any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointm ent or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against the Borrower or any Subsidiary any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) the Borrower or any Subsidiary shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii) or (iii) above; or (v) the Borrower or any Subsidiary shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or

(g) One or more judgments or decrees shall be entered against the Borrower or any of its Subsidiaries involving in the aggregate a liability (to the extent not paid when due or covered by insurance) of $5,000,000 or more and all such judgments or decrees shall not have been paid and satisfied, vacated, discharged, stayed or bonded pending appeal within 30 days from the entry thereof; or

(h) (i) Any Person shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan or any Lien in favor of the PBGC or a Plan (other than a Permitted Lien) shall arise on the assets of any Credit Party or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a Trustee is, in the reasonable opinion of the Required Lenders, likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) any Credit Party or any Commonly Controlled Entity shall, or in the reasonable opinion of the Required Lenders is likely to, incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, any Multiemployer Plan or (vi) any other similar event or condition shall occur or exist with respect to a Plan; and in each case in clauses (i) through (vi) above, such event or condition, together with all other such events or conditions, if any, could have a Material Adverse Effect; or

(i) (i) the France Family shall fail to own capital stock of the Borrower which represents a majority of the voting power of the Borrower or (ii) during any period of up to 24 consecutive months, commencing after the Closing Date, individuals who at the beginning of such 24 month period were directors of the Borrower (together with any new director whose election by the Borrower’s Board of Directors or whose nomination for election by the Borrower’s shareholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the directors of the Borrower then in office; or

(j) The Guaranty or any provision thereof shall cease to be in full force and effect or any Guarantor or any Person acting by or on behalf of any Guarantor shall deny or disaffirm any Guarantor’s obligations under the Guaranty; or

(k) Any other Credit Document shall fail to be in full force and effect or to give the Administrative Agent and/or the Lenders the rights, powers and privileges purported to be created thereby (except as such documents may be terminated or no longer in force and effect in accordance with the terms thereof, other than those indemnities and provisions which by their terms shall survive); or

(l) There shall occur and be continuing any Event of Default under and as defined in Senior Note Indenture or the Credit Party Obligations shall cease to be classified as “senior indebtedness” under the Senior Note Indenture.

Section 7.2 Acceleration; Remedies.

Upon the occurrence of an Event of Default, then, and in any such event, (a) if such event is an Event of Default specified in Section 7.1(f) above, automatically the Commitments shall immediately terminate and the Loans (with accrued interest thereon), and all other amounts under the Credit Documents (including without limitation the maximum amount of all contingent liabilities under Letters of Credit) shall immediately become due and payable, and (b) if such event is any other Event of Default, either or both of the following actions may be taken: (i) with the written consent of the Required Lenders, the Administrative Agent may, or upon the written request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower declare the Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate; and (ii) with the written consent of the Required Lenders, the Administrative Agent may, or upon the written request of the Required Lenders, the Administrative A gent shall, by notice of default to the Borrower, declare the Loans (with accrued interest thereon) and all other amounts owing under this Credit Agreement and the Notes to be due and payable forthwith and direct the Borrower to pay to the Administrative Agent cash collateral as security for the LOC Obligations for subsequent drawings under then outstanding Letters of Credit an amount equal to the maximum amount of which may be drawn under Letters of Credit then outstanding, whereupon the same shall immediately become due and payable.

ARTICLE VIII THE AGENT

Section 8.1 Appointment.

Each Lender hereby irrevocably designates and appoints Wachovia as the Administrative Agent of such Lender under this Credit Agreement, and each such Lender irrevocably authorizes Wachovia, as the Administrative Agent for such Lender, to take such action on its behalf under the provisions of this Credit Agreement and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of this Credit Agreement, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Credit Agreement, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Credit Agreement or otherwise exist against the Administrative Agent.

Section 8.2 Delegation of Duties.

The Administrative Agent may execute any of its duties under this Credit Agreement by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care. Without limiting the foregoing, the Administrative Agent may appoint one of its affiliates as its agent to perform the functions of the Administrative Agent hereunder relating to the advancing of funds to the Borrower and distribution of funds to the Lenders and to perform such other related functions of the Administrative Agent hereunder as are reasonably incidental to such functions.

Section 8.3 Exculpatory Provisions.

Neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates shall be (a) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Credit Agreement (except for its or such Person’s own gross negligence or willful misconduct) or (b) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by any of the Credit Parties or any officer thereof contained in this Credit Agreement 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 for the value, validity, effectiveness, genuineness, enforceability or sufficiency of any of the Credit Documents or for any failure of any of the Credit Parties to perform its obligations hereunder or thereunder. The Administrative Agent shall not be under any obligation to any L ender to ascertain or to inquire as to the observance or performance by the Credit Parties of any of the agreements contained in, or conditions of, this Credit Agreement, or to inspect the properties, books or records of the Credit Parties.

Section 8.4 Reliance by Administrative Agent.

The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any Note, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or conversation believed by it in good faith 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, without limitation, counsel to the Credit Parties), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless (a) a written notice of assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent and (b) the Administrative Agent shall have received the written agreement of such assignee to be bound hereby as fully and to the same extent as if such assignee were an original Lende r party hereto, in each case in form satisfactory to the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Credit Agreement unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which 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 any of the Credit Documents in accordance with a request of the Required Lenders or all of the Lenders, as may be required under this Credit Agreement, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Notes.

Section 8.5 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 hereunder unless the Administrative Agent has received notice from a Lender or a Credit Party referring to this Credit Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default”. In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give prompt notice thereof to the Lenders. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders; provided, however, that unless and until the Administrative Agent shall have received such directions, 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 in the best interests of the Lenders except to th e extent that this Credit Agreement expressly requires that such action be taken, or not taken, only with the consent or upon the authorization of the Required Lenders, or all of the Lenders, as the case may be.

Section 8.6 Non-Reliance on Administrative Agent and Other Lenders.

Each Lender expressly acknowledges that neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates has made any representation or warranty to it and that no act by the Administrative Agent hereinafter taken, including any review of the affairs of the Credit Parties, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Lender. Each Lender represents to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Credit Parties and made its own decision to make its Loans hereunder and enter into this Credit Agreement. Each Lender also represents that it will, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Credit Agreement, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Credit Parties. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of the Credit Parties which may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates.

Section 8.7 Indemnification.

The Lenders agree to indemnify the Administrative Agent in its capacity hereunder (to the extent not reimbursed by the Credit Parties and without limiting the obligation of the Credit Parties to do so), ratably according to their respective Commitment Percentages in effect on the date on which indemnification is sought under this Section, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Notes) be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of any Credit Document or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing; provided, however, that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements to the extent resulting from the Administrative Agent’s gross negligence or willful misconduct, as determined by a court of competent jurisdiction. The agreements in this Section 8.7 shall survive the termination of this Credit Agreement and payment of the Notes and all other amounts payable hereunder.

Section 8.8 Administrative Agent in Its Individual Capacity.

The Administrative Agent and its affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Credit Parties as though the Administrative Agent were not the Administrative Agent hereunder. With respect to its Loans made or renewed by it and any Note issued to it, the Administrative Agent shall have the same rights and powers under this Credit Agreement as any Lender and may exercise the same as though it were not the Administrative Agent, and the terms “Lender” and “Lenders” shall include the Administrative Agent in its individual capacity.

Section 8.9 Successor Administrative Agent.

The Administrative Agent may resign as Administrative Agent upon 30 days’ prior notice to the Borrower and the Lenders. If the Administrative Agent shall resign as Administrative Agent under this Credit Agreement and the Notes, then the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders, which successor agent shall be approved by the Borrower, whereupon such successor agent shall succeed to the rights, powers and duties of the Administrative Agent, and the term “Administrative Agent” shall mean such successor agent effective upon such appointment and approval, and the former Administrative Agent’s rights, powers and duties as Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Credit Agreement or any holders of the Notes. After any retiring Administrative Agent’s resignation as Administrative Agent, the provisions of this Section 8 .9 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.

Section 8.10 Nature of Duties.

Except as otherwise expressly stated herein, any agent or arranger listed on the cover page to this Credit Agreement (other than the Administrative Agent) shall have no obligations, responsibilities or duties under this Credit Agreement or under any other Credit Document other than obligations, responsibilities and duties applicable to all Lenders in their capacity as the Lenders; provided, however, that any such agent shall be entitled to the same rights, protections, exculpations, notices and indemnifications granted to the Administrative Agent under this Article VIII in their capacity as an agent hereunder.

ARTICLE IX MISCELLANEOUS

Section 9.1 Amendments and Waivers.

Neither this Credit Agreement, nor any of the Notes, nor any of the other Credit Documents, nor any terms hereof or thereof may be amended, supplemented, waived or modified except in accordance with the provisions of this Section nor may be released except as specifically provided herein or in accordance with the provisions of this Section 9.1. The Required Lenders may, or, with the written consent of the Required Lenders, the Administrative Agent may, from time to time, (a) enter into with the Credit Parties written amendments, supplements or modifications hereto and to the other Credit Documents for the purpose of adding any provisions to this Credit Agreement or the other Credit Documents or changing in any manner the rights of the Lenders or of the Credit Parties hereunder or thereunder or (b) waive, on such terms and conditions as the Required Lenders may specify in such instrument, any of the requirements of this Credit Agreement or the other Credit Documents or any Default or Event of Default and i ts consequences; provided, however, that no such waiver and no such amendment, waiver, supplement, modification or release shall:

(i) reduce the amount or extend the scheduled date of maturity of any Loan or Note or any installment thereon, or reduce the stated rate of any interest or fee payable hereunder (other than interest at the increased post-default rate) or extend the scheduled date of any payment thereof or increase the amount or extend the expiration date of any Lender’s Commitment, in each case without the written consent of each Lender directly affected thereby, or

(ii) amend, modify or waive any provision of this Section 9.1 or reduce the percentage specified in the definition of Required Lenders or release all or substantially all of the Guarantors from their obligations hereunder, without the written consent of all the Lenders, or

(iii) amend, modify or waive any provision of Article VIII without the written consent of the then Administrative Agent, or

(iv) amend, modify or waive any provision of the Credit Documents requiring consent, approval or request of the Required Lenders or all Lenders, without the written consent of the Required Lenders or all of the Lenders as the case may be and, provided, further, that no amendment, waiver or consent affecting the rights or duties of the Administrative Agent or the Issuing Lender under any Credit Document shall in any event be effective, unless in writing and signed by the Administrative Agent and/or the Issuing Lender, as applicable, in addition to the Lenders required hereinabove to take such action.

Any such waiver, any such amendment, supplement or modification and any such release shall apply equally to each of the Lenders and shall be binding upon the Credit Parties, the Lenders, the Administrative Agent and all future holders of the Notes. In the case of any waiver, the Credit Parties, the Lenders and the Administrative Agent shall be restored to their former position and rights hereunder and under the outstanding Loans and Notes and other Credit Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon.

Notwithstanding any of the foregoing to the contrary, the consent of the Credit Parties shall not be required for any amendment, modification or waiver of the provisions of Article VIII (other than the provisions of Section 8.9); provided, however, that the Administrative Agent will provide written notice to the Credit Parties of any such amendment, modification or waiver. In addition, the Credit Parties and the Lenders hereby authorize the Administrative Agent to modify this Credit Agreement by unilaterally amending or supplementing Schedule 2.1(a) from time to time in the manner requested by any Credit Party, the Administrative Agent or any Lender in order to reflect any assignments or transfers of the Loans as provided for hereunder; provided, however, that the Administrative Agent shall promptly deliver a copy of any such modification to the Credit Parties and each Lender.

Notwithstanding the fact that the consent of all the Lenders is required in certain circumstances as set forth above, (x) each Lender is entitled to vote as such Lender sees fit on any bankruptcy reorganization plan that affects the Loans, and each Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent provisions set forth herein and (y) the Required Lenders may consent to allow a Credit Party to use cash collateral in the context of a bankruptcy or insolvency proceeding.

Section 9.2 Notices.

Except as otherwise provided in Article II, all notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made (a) when delivered by hand, (b) when transmitted via telecopy (or other facsimile device) to the number set out herein, (c) the day following the day on which the same has been delivered prepaid (or pursuant to an invoice arrangement) to a reputable national overnight air courier service, or (d) the third Business Day following the day on which the same is sent by certified or registered mail, postage prepaid, in each case addressed to the respective parties hereto as set forth on Schedule 9.2, or to such other address as may be hereafter notified by the respective parties hereto and any future holders of the Notes.

Section 9.3 No Waiver; Cumulative Remedies.

No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Lender, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

Section 9.4 Survival of Representations and Warranties.

All representations and warranties made hereunder and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Credit Agreement and the Notes and the making of the Loans, provided that all such representations and warranties shall terminate on the date upon which the Commitments have been terminated and all amounts owing hereunder and under any Notes have been paid in full.

Section 9.5 Payment of Expenses and Taxes.

The Borrower agrees (a) to pay or reimburse the Administrative Agent for all its reasonable out-of-pocket costs and expenses incurred in connection with the development, preparation, negotiation, printing and execution of, and any amendment, supplement or modification to, this Credit Agreement and the other Credit Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, together with the reasonable fees and disbursements of counsel to the Administrative Agent, (b) to pay or reimburse each Lender and the Administrative Agent for all its costs and expenses incurred in connection with the enforcement or preservation of any rights under this Credit Agreement, the Notes and any such other documents, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent and to the Lenders (including reasonable allocated costs of in-house legal counsel), and (c) on demand, to pay, indemnify, and hold each Lender and the Administrative Agent harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other similar taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, the Credit Documents and any such other documents, and (d) to pay, indemnify, and hold each Lender and the Administrative Agent and their Affiliates harmless from and against, any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of the Credit Documents and any such other documents and t he use, or proposed use, of proceeds of the Loans (all of the foregoing, collectively, the “indemnified liabilities”); provided, however, that the Borrower shall not have any obligation hereunder to the Administrative Agent or any Lender with respect to indemnified liabilities arising from the gross negligence or willful misconduct of the Administrative Agent or such Lender, as the case may be, as determined by a court of competent jurisdiction. The agreements in this Section 9.5 shall survive repayment of the Loans, Notes and all other amounts payable hereunder.

Section 9.6 Successors and Assigns; Participations; Purchasing Lenders.

(a) This Credit Agreement shall be binding upon and inure to the benefit of the Credit Parties, the Lenders, the Administrative Agent, all future holders of the Notes and their respective successors and assigns, except that the Credit Parties may not assign or transfer any of its rights or obligations under this Credit Agreement or the other Credit Documents without the prior written consent of each Lender.

(b) Any Lender may, in accordance with applicable law, at any time sell to one or more banks or other entities (“Participants”) participating interests in any Loan owing to such Lender, any Note held by such Lender, any Commitment of such Lender, or any other interest of such Lender hereunder, in each case in minimum amounts of $5,000,000 (or, if such participation is to an Affiliate of such Lender, such lesser amount as agreed to by the Borrower). In the event of any such sale by a Lender of participating interests to a Participant, such Lender’s obligations under this Credit Agreement to the other parties to this Credit Agreement shall remain unchanged, such Lender shall remain solely responsible for the performance thereof, such Lender shall remain the holder of any such Note for all purposes under this Credit Agreement, and the Credit Parties and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Credit Agreement. No Lender shall transfer or grant any participation under which the Participant shall have rights to approve any amendment to or waiver of this Credit Agreement or any other Credit Document except to the extent such amendment or waiver would (i) extend the scheduled maturity of any Loan or Note or any installment thereon in which such Participant is participating, or reduce the stated rate or extend the time of payment of interest or fees thereon (except in connection with a waiver of interest at the increased post-default rate) or reduce the principal amount thereof, or increase the amount of the Participant’s participation over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default shall not constitute a change in the terms of such participation, and that an increase in any Commitment or Loan shall be permitted without consent of any participant if the Participant’s participation is not increased as a result thereof), (ii) release all or substantially all of the Guarantors from their obligations under the Guaranty or (iii) consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Credit Agreement. In the case of any such participation, the Participant shall not have any rights under this Credit Agreement or any of the other Credit Documents (the Participant’s rights against such Lender in respect of such participation to be those set forth in the agreement executed by such Lender in favor of the Participant relating thereto) and all amounts payable by the Borrower hereunder shall be determined as if such Lender had not sold such participation; provided that each Participant shall be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.5 with respect to its participation in the Commitments and the Loans outstanding from time to time; provided further, that no Participant shall be entitled to receive any greater amount pursuant to such Sections than the transferor Lender would have been entitled to receive in respect of the amount of the participation transferred by such transferor Lender to such Participant had no such transfer occurred.

(c) Any Lender may, in accordance with applicable law, at any time, sell or assign to any Affiliate of such Lender or with the consent of the Administrative Agent and, so long as no Event of Default or Default that can be cured with the payment of money has occurred and is continuing, the Borrower (which consent shall not be unreasonably withheld or delayed), to one or more other Lenders, banks or financial institutions (“Purchasing Lenders”), all or any part of its rights and obligations under this Credit Agreement and the Notes in minimum amounts of $5,000,000 with respect to its Revolving Commitment and its Revolving Loans (or, if less, the entire amount of such Lender’s obligations), pursuant to a Commitment Transfer Supplement, executed by such Purchasing Lender and such transferor Lender (and the Administrative Agent and, so long as no Event of Default or Default that can be cured with the payment of money has occurred and is continuing, the Borrower), and delivered to the A dministrative Agent for its acceptance and recording in the Register; provided, however, if the Borrower refuses to grant its consent to any such sale or assignment and fails to obtain a substitute purchaser reasonably satisfactory to the selling Lender and the Administrative Agent within thirty (30) days after such refusal, the Borrower shall be deemed to have granted its consent to such sale or assignment. Upon such execution, delivery, acceptance and recording, from and after the Transfer Effective Date specified in such Commitment Transfer Supplement, (x) the Purchasing Lender thereunder shall be a party hereto and, to the extent provided in such Commitment Transfer Supplement, have the rights and obligations of a Lender hereunder with a Commitment as set forth therein, and (y) the transferor Lender thereunder shall, to the extent provided in such Commitment Transfer Supplement, be released from its obligations under this Credit Agreement (and, in the case of a Commitment Transfer Suppleme nt covering all or the remaining portion of a transferor Lender’s rights and obligations under this Credit Agreement, such transferor Lender shall cease to be a party hereto). Such Commitment Transfer Supplement shall be deemed to amend this Credit Agreement to the extent, and only to the extent, necessary to reflect the addition of such Purchasing Lender and the resulting adjustment of Commitment Percentages arising from the purchase by such Purchasing Lender of all or a portion of the rights and obligations of such transferor Lender under this Credit Agreement and the Notes. On or prior to the Transfer Effective Date specified in such Commitment Transfer Supplement, the Borrower shall execute and deliver to the Administrative Agent in exchange for the Notes delivered to the Administrative Agent pursuant to such Commitment Transfer Supplement new Notes to the order of such Purchasing Lender in an amount equal to the Commitment assumed by it pursuant to such Commitment Transfer Supplement and, unless the transferor Lender has not retained a Commitment hereunder, new Notes to the order of the transferor Lender in an amount equal to the Commitment retained by it hereunder. Such new Notes shall be dated the Closing Date and shall otherwise be in the form of the Notes replaced thereby. The Notes surrendered by the transferor Lender shall be returned by the Administrative Agent to the Borrower marked “canceled”.

(d) The Administrative Agent shall maintain at its address referred to in Section 9.2 a copy of each Commitment Transfer Supplement delivered to it and a register (the “Register”) for the recordation of the names and addresses of the Lenders and the Commitment of, and principal amount of the Loans owing to, each Lender from time to time. The entries in the Register shall be conclusive, in the absence of manifest error, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register as the owner of the Loan recorded therein for all purposes of this Credit Agreement. The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice.

(e) Upon its receipt of a duly executed Commitment Transfer Supplement, together with payment to the Administrative Agent by the transferor Lender or the Purchasing Lender, as agreed between them, of a registration and processing fee of $3,000 for each Purchasing Lender listed in such Commitment Transfer Supplement and the Notes subject to such Commitment Transfer Supplement, the Administrative Agent shall (i) accept such Commitment Transfer Supplement, (ii) record the information contained therein in the Register and (iii) give prompt notice of such acceptance and recordation to the Lenders and the Borrower.

(f) The Credit Parties authorize each Lender to disclose to any Participant or Purchasing Lender (each, a “Transferee”) and any prospective Transferee any and all financial information in such Lender’s possession concerning the Credit Parties and their Affiliates which has been delivered to such Lender by or on behalf of the Borrower pursuant to this Credit Agreement or which has been delivered to such Lender by or on behalf of the Credit Parties in connection with such Lender’s credit evaluation of the Credit Parties and their Affiliates prior to becoming a party to this Credit Agreement, in each case subject to Section 9.15 and in each case subject to the prior consent of the Borrower, such consent not to be unreasonably withheld.

(g) At the time of each assignment pursuant to this Section 9.6 to a Person which is not already a Lender hereunder and which is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for Federal income tax purposes, the respective assignee Lender shall provide to the Borrower and the Administrative Agent the appropriate Internal Revenue Service Forms (and, if applicable, a Tax Exempt Certificate) described in Section 2.17.

(h) Nothing herein shall prohibit any Lender from pledging or assigning any of its rights under this Credit Agreement (including, without limitation, any right to payment of principal and interest under any Note) to any Federal Reserve Bank in accordance with applicable laws.

Section 9.7 Adjustments; Set-off.

(a) Each Lender agrees that if any Lender (a “benefited Lender”) shall at any time receive any payment of all or part of its Loans, or interest thereon, in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 7.1(f), or otherwise) in a greater proportion than any such payment to any other Lender, if any, in respect of such other Lender’s Loans, or interest thereon, such benefited Lender shall purchase for cash from the other Lenders a participating interest in such portion of each such other Lender’s Loan, as shall be necessary to cause such benefited Lender to share the excess payment ratably with each of the Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without intere st. The Borrower agrees that each Lender so purchasing a portion of another Lender’s Loans may exercise all rights of payment (including, without limitation, rights of set-off) with respect to such portion as fully as if such Lender were the direct holder of such portion.

(b) In addition to any rights and remedies of the Lenders provided by law (including, without limitation, other rights of set-off), each Lender shall have the right, without prior notice to the Credit Parties, any such notice being expressly waived by the Credit Parties to the extent permitted by applicable law, upon the occurrence of any Event of Default, to setoff and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender or any branch, agency or Affiliate thereof to or for the credit or the account of any Credit Party, or any part thereof in such amounts as such Lender may elect, against and on account of the obligations and liabilities of the such Credit Party to such Lender hereunder and claims of every nature and description of such Lender against such Credit Party, in any currency, whether arising hereunder, under the Notes or under any documents contemplated by or referred to herein or therein, as such Lender may elect, whether or not such Lender has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. The aforesaid right of set-off may be exercised by such Lender against such Credit Party or against any trustee in bankruptcy, debtor in possession, assignee for the benefit of creditors, receiver or execution, judgment or attachment creditor of such Credit Party, or against anyone else claiming through or against such Credit Party or any such trustee in bankruptcy, debtor in possession, assignee for the benefit of creditors, receiver, or execution, judgment or attachment creditor, notwithstanding the fact that such right of set-off shall not have been exercised by such Lender prior to the occurrence of any Event of Default. Each Lender agrees promptly to notify the applicable Credit Part y and the Administrative Agent after any such set-off and application made by such Lender; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application.

Section 9.8 Table of Contents and Section Headings.

The table of contents and the Section and subsection headings herein are intended for convenience only and shall be ignored in construing this Credit Agreement.

Section 9.9 Counterparts.

This Credit Agreement may be executed by one or more of the parties to this Credit Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Credit Agreement signed by all the parties shall be lodged with the Borrower and the Administrative Agent.

Section 9.10 Effectiveness.

This Credit Agreement shall become effective on the date on which all of the parties have signed a copy hereof (whether the same or different copies) and shall have delivered the same to the Administrative Agent pursuant to Section 9.2 or, in the case of the Lenders, shall have given to the Administrative Agent written, telecopied or telex notice (actually received) at such office that the same has been signed and mailed to it.

Section 9.11 Severability.

Any provision of this Credit 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.

Section 9.12 Integration.

This Credit Agreement and the Notes represent the agreement of the Credit Parties, the Administrative Agent and the Lenders with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent, the Credit Parties or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the Notes.

Section 9.13 Governing Law.

This Credit Agreement and the Notes and the rights and obligations of the parties under this Credit Agreement and the Notes shall be governed by, and construed and interpreted in accordance with, the law of the State of North Carolina.

Section 9.14 Consent to Jurisdiction and Service of Process.

All judicial proceedings brought against any Credit Party with respect to this Credit Agreement, any Note or any of the other Credit Documents may be brought in any state or federal court of competent jurisdiction in the State of North Carolina, and, by execution and delivery of this Credit Agreement, each of the Credit Parties accepts, for itself and in connection with its properties, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any final judgment rendered thereby in connection with this Credit Agreement from which no appeal has been taken or is available. Each of the Credit Parties irrevocably agrees that all service of process in any such proceedings in any such court may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to it at its address set forth in Section 9.2 or at such other address of which the Administrative Agent shall have been noti fied pursuant thereto, such service being hereby acknowledged by each of the Credit Parties to be effective and binding service in every respect. Each of the Credit Parties, the Administrative Agent and the Lenders irrevocably waives any objection, including, without limitation, any objection to the laying of venue or based on the grounds of forum non conveniens which it may now or hereafter have to the bringing of any such action or proceeding in any such jurisdiction. Nothing herein shall affect the right to serve process in any other manner permitted by law or shall limit the right of any Lender to bring proceedings against any Credit Party in the court of any other jurisdiction.

Section 9.15 Confidentiality.

The Administrative Agent and each Lender party to this Credit Agreement as of the date hereof have each executed a Confidentiality Agreement with the Borrower. Each Purchasing Lender agrees to execute a Confidentiality Agreement with the Borrower in the same form as the Confidentiality Agreement executed by its transferor Lender or in a modified form acceptable to the Borrower. The Administrative Agent and each of the Lenders agree it will use its best efforts not to disclose without the prior consent of the Borrower (other than to its employees, affiliates, auditors or counsel or to another Lender) any information with respect to the Borrower and its Subsidiaries which is furnished pursuant to this Credit Agreement, any other Credit Document or any documents contemplated by or referred to herein or therein and which is designated by the Borrower to the Lenders in writing as confidential or as to which it is otherwise reasonably clear such information is not public, except that any Lender may disclose an y such information (a) as has become generally available to the public other than by a breach of this Section 9.15, (b) as may be required or appropriate in any report, statement or testimony submitted to any municipal, state or federal regulatory body having or claiming to have jurisdiction over such Lender or to the Federal Reserve Board or the Federal Deposit Insurance Corporation or the OCC or the NAIC or similar organizations (whether in the United States or elsewhere) or their successors, (c) as may be required or appropriate in response to any summons or subpoena or any law, order, regulation or ruling applicable to such Lender, (d) to any prospective Participant or assignee in connection with any contemplated transfer pursuant to Section 9.6; provided that such prospective transferee shall have been made aware of this Section 9.15 and shall have agreed to be bound by its provisions as if it were a party to this Credit Agreement or (e) to Gold Sheets and other similar bank trade publicat ions; such information to consist of deal terms and other information regarding the credit facilities evidenced by this Credit Agreement customarily found in such publications.

Notwithstanding anything herein to the contrary, confidential "information" shall not include, and each party hereto (and each employee, representative or other agent of each such party) may disclose to any and all Persons, without limitation of any kind, 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 analysis) that are provided to such party relating to such tax treatment and tax structure; provided that (i) with respect to any document or similar item that in either case contains information concerning the tax treatment or tax structure of the transaction as well as other information, this paragraph shall only apply to such portions of the document or similar item that relate to the tax treatment or tax structure of the Loans and transactions contemplated hereby and (ii) nothing in this Section 9.15 shall be construed to require a party hereto that receives any tax opinion or other tax analysis to deliver or disclose such opinion or analysis to any other party hereto.

Section 9.16 Acknowledgments.

Each of the Credit Parties hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of each Credit Document;

(b) neither the Administrative Agent nor any Lender has any fiduciary relationship with or duty to such Credit Party arising out of or in connection with this Credit Agreement and the relationship between Administrative Agent and Lenders, on one hand, and such Credit Party, on the other hand, in connection herewith is solely that of debtor and creditor; and

Section 9.17 Waivers of Jury Trial; Waiver of Consequential Damages.

THE CREDIT PARTIES AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. Each of the parties to this Credit Agreement agrees not to assert any claim against any other party hereto or any of their respective directors, officers, employees, attorneys or agents, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to any of the transactions contemplated herein and in the other Credit Documents.

Section 9.18 Replacement of Lenders After Merger.

To the extent a Replaced Lender merges with a financial institution that is not an existing Lender, the Borrower may, upon at least five (5) Business Days’ notice to the Administrative Agent and such Lender, designate a Replacement Lender to which such Lender shall assign at par all or a portion of its rights, obligations, Loans and Commitments hereunder; provided, that all amounts owed to such Lender by the Borrower (except liabilities which by the terms hereof survive the payment in full of the Loans and termination of this Credit Agreement) shall be paid in full as of the date of such assignment to the extent of such assignment. To the extent an existing Lender merges with another existing Lender, the Borrower may, upon at least five (5) Business Days’ notice to the Administrative Agent and such surviving Lender, designate a Replacement Lender to which such surviving Lender shall assign at par a portion of its Commitments and outstanding Loans in an amount necessary to reduce the outstandin g Loans (if any) and Commitments of such surviving Lender to a level acceptable to the Borrower in light of the amount of outstanding Loans (if any) and Commitments of the two Lenders that merged, but no less than the highest amount of outstanding Loans (if any) and the highest Commitment of the two Lenders that merged. No Lender shall have any obligation to act as a Replacement Lender in accordance with the terms above or to purchase a Commitment or portion of a Commitment of any other Lender, and no Lender shall be responsible for arranging for a Replacement Lender to the extent the Borrower exercises its rights above. Upon any assignment by any Replaced Lender pursuant to this Section 9.18 becoming effective, the Replacement Lender shall thereupon be deemed to be a “Lender” for all purposes of this Credit Agreement and such Replaced Lender shall thereupon cease to be a “Lender” for all purposes of this Credit Agreement to the extent of such assignment.

Notwithstanding any Replaced Lender’s failure or refusal to assign its rights, obligations, Loans and Commitment under this Section 9.18, the Replaced Lender shall cease to be a “Lender” for all purposes of this Credit Agreement to the extent of such assignment and the Replacement Lender substituted therefor to the extent of such assignment upon payment to the Replaced Lender by the Replacement Lender of all amounts set forth in this Section 9.18 without any further action of the Replaced Lender.

ARTICLE X GUARANTY

Section 10.1 The Guaranty.

In order to induce the Lenders to enter into this Credit Agreement and to extend credit hereunder and in recognition of the direct benefits to be received by the Guarantors from the Extensions of Credit hereunder, each of the Guarantors hereby agrees with the Administrative Agent and the Lenders as follows: the Guarantor hereby unconditionally and irrevocably jointly and severally guarantees as primary obligor and not merely as surety the full and prompt payment when due, whether upon maturity, by acceleration or otherwise, of any and all indebtedness of the Borrower to the Administrative Agent and the Lenders. If any or all of the indebtedness of the Borrower to the Administrative Agent and the Lenders becomes due and payable hereunder, each Guarantor unconditionally promises to pay such indebtedness to the Administrative Agent and the Lenders, or order, on demand, together with any and all reasonable expenses which may be incurred by the Administrative Agent or the Lenders in collecting any of the indeb tedness. The word “indebtedness” is used in this Article X in its most comprehensive sense and includes any and all advances, debts, obligations and liabilities of the Borrower arising in connection with this Credit Agreement, in each case, heretofore, now, or hereafter made, incurred or created, whether voluntarily or involuntarily, absolute or contingent, liquidated or unliquidated, determined or undetermined, whether or not such indebtedness is from time to time reduced, or extinguished and thereafter increased or incurred, whether the Borrower may be liable individually or jointly with others, whether or not recovery upon such indebtedness may be or hereafter become barred by any statute of limitations, and whether or not such indebtedness may be or hereafter become otherwise unenforceable.

Notwithstanding any provision to the contrary contained herein or in any other of the Credit Documents, to the extent the obligations of a Guarantor 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 such Guarantor hereunder shall be limited to the maximum amount that is permissible under applicable law (whether federal or state and including, without limitation, the Bankruptcy Code).

Section 10.2 Bankruptcy.

Additionally, each of the Guarantors unconditionally and irrevocably guarantees jointly and severally the payment of any and all indebtedness of the Borrower to the Lenders whether or not due or payable by the Borrower upon the occurrence of any of the events specified in Section 7.1(e), and unconditionally promises to pay such indebtedness to the Administrative Agent for the account of the Lenders, or order, on demand, in lawful money of the United States. Each of the Guarantors further agrees that to the extent that the Borrower or a Guarantor shall make a payment or a transfer of an interest in any property to the Administrative Agent or any Lender, which payment or transfer or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, or otherwise is avoided, and/or required to be repaid to the Borrower or a Guarantor, the estate of the Borrower or a Guarantor, a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable c ause, then to the extent of such avoidance or repayment, the obligation or part thereof intended to be satisfied shall be revived and continued in full force and effect as if said payment had not been made.

Section 10.3 Nature of Liability.

The liability of each Guarantor hereunder is exclusive and independent of any security for or other guaranty of the indebtedness of the Borrower whether executed by any such Guarantor, any other guarantor or by any other party, and no Guarantor’s liability hereunder shall be affected or impaired by (a) any direction as to application of payment by the Borrower or by any other party, or (b) any other continuing or other guaranty, undertaking or maximum liability of a guarantor or of any other party as to the indebtedness of the Borrower, or (c) any payment on or in reduction of any such other guaranty or undertaking, or (d) any dissolution, termination or increase, decrease or change in personnel by the Borrower, or (e) any payment made to the Administrative Agent or the Lenders on the indebtedness which the Administrative Agent or such Lenders repay the Borrower pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and each of the Guaran tors waives any right to the deferral or modification of its obligations hereunder by reason of any such proceeding.

Section 10.4 Independent Obligation.

The obligations of each Guarantor hereunder are independent of the obligations of any other guarantor or the Borrower, and a separate action or actions may be brought and prosecuted against each Guarantor whether or not action is brought against any other guarantor or the Borrower and whether or not any other Guarantor or the Borrower is joined in any such action or actions.

Section 10.5 Authorization.

Each of the Guarantors authorizes the Administrative Agent and each Lender without notice or demand (except as shall be required by applicable statute and cannot be waived), and without affecting or impairing its liability hereunder, from time to time to (a) renew, compromise, extend, increase, accelerate or otherwise change the time for payment of, or otherwise change the terms of the indebtedness or any part thereof in accordance with this Credit Agreement, including any increase or decrease of the rate of interest thereon, (b) take and hold security from any guarantor or any other party for the payment of this Guaranty or the indebtedness and exchange, enforce waive and release any such security, (c) apply such security and direct the order or manner of sale thereof as the Administrative Agent and the Lenders in their discretion may determine and (d) release or substitute any one or more endorsers, guarantors, the Borrower or other obligors.

Section 10.6 Reliance.

It is not necessary for the Administrative Agent or the Lenders to inquire into the capacity or powers of the Borrower or the officers, directors, members, partners or agents acting or purporting to act on its behalf, and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder.

Section 10.7 Waiver.

(a) Each of the Guarantors waives any right (except as shall be required by applicable statute and cannot be waived) to require the Administrative Agent or any Lender to (i) proceed against the Borrower, any other guarantor or any other party, (ii) proceed against or exhaust any security held from the Borrower, any other guarantor or any other party, or (iii) pursue any other remedy in the Administrative Agent’s or any Lender’s power whatsoever. Each of the Guarantors waives any defense based on or arising out of any defense of the Borrower, any other guarantor or any other party other than payment in full of the indebtedness, including without limitation any defense based on or arising out of the disability of the Borrower, any other guarantor or any other party, or the unenforceability of the indebtedness or any part thereof from any cause, or the cessation from any cause of the liability of the Borrower other than payment in full of the indebtedness. Without limiting the generality of the provisions of this Article X, each of the Guarantors hereby specifically waives the benefits of N.C. Gen. Stat. § 26-7 through 26-9, inclusive. The Administrative Agent or any of the Lenders may, at their election, foreclose on any security held by the Administrative Agent or a Lender by one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable (to the extent such sale is permitted by applicable law), or exercise any other right or remedy the Administrative Agent and any Lender may have against the Borrower or any other party, or any security, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the indebtedness has been paid. Each of the Guarantors waives any defense arising out of any such election by the Administrative Agent and each of the Lenders, even though such election operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of the Guarantors against the Borrower or any other party or any security.

(b) Each of the Guarantors waives all presentments, demands for performance, protests and notices, including without limitation notices of nonperformance, notice of protest, notices of dishonor, notices of acceptance of this Guaranty, and notices of the existence, creation or incurring of new or additional indebtedness. Each Guarantor assumes all responsibility for being and keeping itself informed of the Borrower’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the indebtedness and the nature, scope and extent of the risks which such Guarantor assumes and incurs hereunder, and agrees that neither the Administrative Agent nor any Lender shall have any duty to advise such Guarantor of information known to it regarding such circumstances or risks.

(c) Each of the Guarantors hereby agrees it will not exercise any rights of subrogation which it may at any time otherwise have as a result of this Guaranty (whether contractual, under Section 509 of the U.S. Bankruptcy Code, or otherwise) to the claims of the Lenders against the Borrower or any other guarantor of the indebtedness of the Borrower owing to the Lenders (collectively, the “Other Parties”) and all contractual, statutory or common law rights of reimbursement, contribution or indemnity from any Other Party which it may at any time otherwise have as a result of this Guaranty until such time as the Loans hereunder shall have been paid and the Commitments have been terminated. Each of the Guarantors hereby further agrees not to exercise any right to enforce any other remedy which the Administrative Agent and the Lenders now have or may hereafter have against any Other Party, any endorser or any other guarantor of all or any part of the indebtedness of the Borrower and any benef it of, and any right to participate in, any security or collateral given to or for the benefit of the Lenders to secure payment of the indebtedness of the Borrower until such time as the Loans hereunder shall have been paid and the Commitments have been terminated.

Section 10.8 Limitation on Enforcement.

The Lenders agree that this Guaranty may be enforced only by the action of the Administrative Agent acting upon the instructions of the Required Lenders and that no Lender shall have any right individually to seek to enforce or to enforce this Guaranty, it being understood and agreed that such rights and remedies may be exercised by the Administrative Agent for the benefit of the Lenders under the terms of this Credit Agreement. The Lenders further agree that this Guaranty may not be enforced against any director, officer, employee or stockholder of the Guarantors.

Section 10.9 Confirmation of Payment.

The Administrative Agent and the Lenders will, upon request after payment of the indebtedness and obligations which are the subject of this Guaranty and termination of the Commitments relating thereto, confirm to the Borrower, the Guarantors or any other Person that such indebtedness and obligations have been paid and the Commitments relating thereto terminated, subject to the provisions of Section 10.2.

FLORIDA	O-2384	59-0709342
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

1801 WEST INTERNATIONAL SPEEDWAY BOULEVARD, DAYTONA BEACH, FLORIDA	32114
(Address of principal executive offices)	(Zip code)

INTERNATIONAL SPEEDWAY CORPORATION
Condensed Consolidated Balance Sheets
			November 30, 2002		August 31, 2003
					(Unaudited)
			(In Thousands)
ASSETS
Current Assets:
	Cash and cash equivalents		$	109,263	$	217,823
	Short-term investments			200		200
	Receivables, less allowance of $1,500			30,557		42,292
	Inventories			4,799		6,533
	Prepaid expenses and other current assets			3,784		13,759

Total Current Assets				148,603		280,607

Property and Equipment, net of accumulated depreciation of $192,433
	and $224,355, respectively			859,096		865,812
Other Assets:
	Equity investments			31,152		33,306
	Goodwill			92,542		92,542
	Other			24,578		20,264

				148,272		146,112

Total Assets			$	1,155,971	$	1,292,531

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
	Accounts payable		$	17,506	$	16,135
	Deferred income			98,315		130,208
	Current portion of long-term debt			5,775		6,775
	Income taxes payable			3,939		12,926
	Other current liabilities			10,968		16,524

Total Current Liabilities				136,503		182,568

Long-Term Debt				309,606		302,115
Deferred Income Taxes				74,943		100,901
Long-Term Deferred Income				11,709		12,175
Other Long-Term Liabilities				885		587
Commitments and Contingencies				-		-
Shareholders’ Equity:
	Class A Common Stock, $.01 par value, 80,000,000 shares authorized;
		25,319,221 and 28,144,258 issued and outstanding at November 30,
		2002 and August 31, 2003, respectively		253		281
	Class B Common Stock, $.01 par value, 40,000,000 shares authorized;
		27,867,456 and 25,073,917 issued and outstanding at November 30,
		2002 and August 31, 2003, respectively		279		251
	Additional paid-in capital			693,463		694,733
	Retained (deficit) earnings			(67,641)		2,964
	Accumulated other comprehensive loss			(874)		(574)

				625,480		697,655
	Less: unearned compensation-restricted stock			3,155		3,470

Total Shareholders’ Equity				622,325		694,185

Total Liabilities and Shareholders’ Equity			$	1,155,971	$	1,292,531

		__/s/ James C. France________________
		James C. France
		Chief Executive Officer

		__/s/ Susan G. Schandel_______________
		Susan G. Schandel
		Chief Financial Officer

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

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS

PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

PART II - OTHER INFORMATION

ITEM 1. Legal Proceedings

ITEM 6. Exhibits and Reports on Form 8-K

ARTICLE I DEFINITIONS

Section 1.1 Defined Terms.

Section 1.2 Other Definitional Provisions.

Section 1.3 Accounting Terms.

ARTICLE II THE LOANS; AMOUNT AND TERMS

Section 2.1 Revolving Loans.

Section 2.2 Swingline Loan Subfacility.

Section 2.3 Letter of Credit Subfacility.

Section 2.4 Fees.

Section 2.5 Commitment Reductions.

Section 2.6 Prepayments.

Section 2.7 Minimum Principal Amount of Tranches.

Section 2.8 Default Rate and Payment Dates.

Section 2.9 Conversion Options.

Section 2.10 Computation of Interest and Fees; Interest Rate Limitation.

Section 2.11 Pro Rata Treatment and Payments.

Section 2.12 Non-Receipt of Funds by the Administrative Agent.

Section 2.13 Inability to Determine Interest Rate.

Section 2.14 Illegality.

Section 2.15 Requirements of Law.

Section 2.16 Indemnity.

Section 2.17 Taxes.

Section 2.18 Indemnification; Nature of Issuing Lender’s Duties.

Section 2.19 Replacement of Lenders Invoking Yield Protection.

ARTICLE III REPRESENTATIONS AND WARRANTIES

Section 3.1 Financial Condition.

Section 3.2 No Change.

Section 3.3 Corporate Existence; Compliance with Law.

Section 3.4 Corporate Power; Authorization; Enforceable Obligations.

Section 3.5 No Legal Bar; No Default.

Section 3.6 No Material Litigation.

Section 3.7 Investment Company Act.

Section 3.8 Margin Regulations.

Section 3.9 ERISA.

Section 3.10 Purpose of Loans.

Section 3.11 Subsidiaries.

Section 3.12 Ownership.

Section 3.13 Indebtedness.

Section 3.14 Taxes.

Section 3.15 Investments.

Section 3.16 No Burdensome Restrictions.

Section 3.17 Brokers’ Fees.

Section 3.18 Labor Matters.

Section 3.19 Accuracy and Completeness of Information.

Section 3.20 Possession of Franchises and Licenses.

Section 3.21 Claims and Offsets.

Section 3.22 Intent and Effect of Transactions.

Section 3.23 Senior Debt Status.

ARTICLE IV CONDITIONS PRECEDENT

Section 4.1 Conditions to Closing Date and Initial Revolving Loans.

Section 4.2 Conditions to All Extensions of Credit.

ARTICLE V AFFIRMATIVE COVENANTS

Section 5.1 Financial Statements.

Section 5.2 Certificates; Other Information.

Section 5.3 Payment of Obligations.

Section 5.4 Conduct of Business and Maintenance of Existence.

Section 5.5 Maintenance of Property; Insurance.

Section 5.6 Inspection of Property; Books and Records; Discussions.

Section 5.7 Notices.

Section 5.8 Financial Covenants.

Section 5.9 Additional Subsidiary Guarantors.

Section 5.10 Compliance with Law.

ARTICLE VI NEGATIVE COVENANTS

Section 6.1 Indebtedness.

Section 6.2 Liens.

Section 6.3 Nature of Business.

Section 6.4 Consolidation, Merger, Sale or Purchase of Assets, etc.

Section 6.5 Advances, Investments and Loans.

Section 6.6 Issuance of Subsidiary Equity Securities.

Section 6.7 Transactions with Affiliates; Modification of Documentation..

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

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS