Document:

Exhibit 10.11

 

AMENDED AND
RESTATED

 

OPERATING
AGREEMENT

 

OF

 

ELVIS PRESLEY ENTERPRISES, LLC,

 

a Delaware Limited Liability Company

 

 

This AMENDED
AND RESTATED OPERATING AGREEMENT (this “Agreement”), dated as of February 7,
2005, of ELVIS PRESLEY ENTERPRISES, LLC (the “Company”) is entered into by the
Initial Members (as defined below).

 

WHEREAS, on
December 10, 2004, a Certificate of Formation for PT, LLC, a limited liability
company organized under the laws of the State of Delaware, was filed with the
Secretary of State of the State of Delaware and on January 20, 2005, an
amendment to the Certificate of Formation was filed, changing the name of PT,
LLC to Elvis Presley Enterprises, LLC.

 

WHEREAS, prior
to the Closing (as defined in the Contribution Agreement) the Promenade Trust
(as defined below) set forth the operating agreement for the Company as its
sole member and contributed the Assets (as defined below) to the Company
pursuant to the Bill of Sale (as defined below).

 

WHEREAS, the
Promenade Trust is contributing 100% of its Class A Interest (as defined
below), to Parent pursuant to the Exchange Agreement (as defined below)
concurrently with the execution of this Agreement.

 

WHEREAS, the
parties desire to adopt and approve this Amended and Restated Operating
Agreement for the Company, to admit EPE Holding Corporation as a Class A Member
(as defined below), and to set forth the agreement of the parties with respect
to the rights, preferences and privileges of the Members of the Company.

 

NOW THEREFORE,
the persons executing this Agreement as Members, intending to be legally bound
hereby, agree as follows:

 

ARTICLE I.           DEFINITIONS

 

1.1           For
purposes of this Agreement, unless the context clearly indicates otherwise, the
following terms shall have the following meanings:

 

“Act”
means the Delaware Limited Liability Company Act (Del. Code tit. 6,
§§ 18-101 – 18-1109), as amended from time to time.

 

 

“Additional
Amount” shall have the meaning set forth in Section 7.1 hereof.

 

“Additional
Vegas Amount” shall have the meaning set forth in Section 7.2(d) of the
Charter.

 

“Additional
Member” means a Member other than an Initial Member or a Substitute Member
who has acquired a Membership Interest.

 

“Adjusted
Base Amount” shall initially mean the Initial Base Amount.  The Adjusted Base Amount shall be adjusted
(upwards or downwards) from time to time by the Manager acting reasonably and
in good faith to estimate 15% of future Operating Cash Flow if the Manager
reasonably and in good faith believes there will be a significant continuing
change in Operating Cash Flow, due to (among other things) material new long
term licenses or similar contracts or the termination or expiration of any such
contracts; provided, that the Adjusted Base Amount shall not be reduced
below the Initial Base Amount.

 

“Affiliate”
means with respect to any Person, (1) any other Person who, directly or
indirectly, owns or controls, is under common ownership or control with, or is
owned or controlled by, such specified Person, (2) any other Person who is a
director, officer or partner or is, directly or indirectly, the beneficial
owner of ten percent or more of any class of equity securities, of the
specified Person or a Person described in clause (1) above, (3) any other
Person of whom the specified Person is a director, officer or partner or is,
directly or indirectly, the beneficial owner of ten percent or more of any
class of equity securities, (4) any other Person in whom the specified Person
has a substantial beneficial interest or as to whom the specified Person serves
as trustee or in a similar capacity, or (5) any relative (including any partner
with whom such Person resides on a permanent basis) of the specified Person or
any of the foregoing Persons described in clauses (1), (2), (3) or (4) above,
any relative of such spouse, any spouse of any such relative or any other
Person who, directly or indirectly, is under common ownership or control with,
or is owned or controlled by such spouse or relative, including a trust for the
benefit of one or more of the foregoing persons, or any corporation, limited
liability partnership, or other entity controlled by one or more of the
foregoing.  Notwithstanding the
foregoing, the Class B Member shall not be deemed to be an Affiliate of
the Company or any of its Affiliates by reason of ownership of the Class B
Interest, the Series B Preferred Shares, or any of its rights or obligations
hereunder or thereunder.

 

“Amount
Owed” with respect to any Fiscal Year means the greater of (i) 15% of the
Operating Cash Flow for such Fiscal Year and (ii) the Minimum Distribution for
such Fiscal Year.

 

“Amount
Paid” with respect to any Fiscal Year means the aggregate amount of all:

 

(i)            Class B Monthly
Distributions paid by the Company during such Fiscal Year, other than any Additional
Amounts paid pursuant to Section 7.1 hereof,

 

(ii)           reductions to the Class
B Monthly Distributions payable during such Fiscal Year pursuant to the first
sentence of Section 3.2(b)(ii),

 

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(iii)          monthly Vegas
Distributions paid by Vegas during such Fiscal Year, other than any Additional
Vegas Amounts paid pursuant to Section 7.2(d) of the Charter,

 

(iv)          reductions to the
monthly Vegas Distributions payable during such Fiscal Year pursuant to Section
7.2(a)(ii) of the Charter,

 

(v)           amounts paid by the
Class A Members directly to the Class B Member with respect to Class B Monthly
Distributions payable during such Fiscal Year pursuant to Section 3.2(b), and

 

(vi)          amounts paid by the
holders of the Series A Preferred Shares directly to the holders of the Series
B Preferred Shares with respect to monthly Vegas Distributions payable during
such Fiscal Year pursuant to Section 3.1(a) of the Shareholders Agreement.

 

“Annual
Audit Report” means the audited balance sheet and the related statement of
income, changes in members’ equity and cash flows for the Company for each
Fiscal Year, audited by Deloitte & Touche or such other nationally
recognized auditing firm designated by Manager, and prepared in accordance with
GAAP, consistently applied, together with a calculation of the Operating Cash
Flow for such Fiscal Year certified by the chief financial officer of the
Manager.

 

“Assets”
shall have the meaning ascribed to such term in the Bill of Sale.

 

“Beneficiary”
means the beneficiary or beneficiaries of the Promenade Trust.

 

“Bill of
Sale” means that certain Bill of Sale and Instrument of Assignment and
Assumption, dated as of the date hereof, by and between the Company and the
Promenade Trust.

 

“Business
Day” means any day except a Saturday, Sunday or other day on which the
commercial banks in city of New York, New York or Memphis, Tennessee are
authorized by law to close.

 

“Capital
Account” means a capital account in accordance with Section 6.1 and in
accordance with the rules of Section 1.704-1(b)(2)(iv) of the
Regulations promulgated under the Code.

 

“Capital
Account Distributions,” with respect to any Fiscal Year, means the sum of
(a) the amounts reflected in clauses (i) and (v) of the definition of the Amount
Paid and (b) the Year End Class B Distribution, in each case, for such Fiscal
Year.

 

“Capital
Contribution” means any contribution to the capital of the Company in cash
or Property by a Member whenever made.

 

“Certificate
of Formation” means the Certificate of Formation of the Company as properly
adopted and amended from time to time by the Members and filed with the
Secretary of State.

 

3

 

“Change of
Control” means (a) any merger or consolidation of Parent with or into any
person, (b) any sale of voting equity of Parent to any person or group of
affiliated persons, or (c) any sale by Parent of all or substantially all of
its assets, on a consolidated basis, in one transaction or a series of related
transactions to any person or group of affiliated persons, in each case if,
immediately after giving effect to such transaction(s), any person (together
with such person’s affiliates, the “Acquiror”) (other than a shareholder of
parent immediately before such transaction) is or becomes the beneficial owner,
directly or indirectly, of more than 50% of the aggregate voting equity of the
surviving entity, Parent or the transferee, as the case may be.

 

“Charter”
means the Amended and Restated Charter of Elvis Presley Enterprises, Inc., as
in effect from time to time.

 

“Class A
Interest” means an ownership interest in the Company that entitles the
holder to receive the distributions and allocations, and the rights and powers
of a Class A Interest as set forth in this Agreement.

 

“Class A
Member” means a holder of a Class A Interest.

 

“Class A
Year End Distribution” means for any Fiscal Year an amount equal to the
Operating Cash Flow for such Fiscal Year less the sum of (i) the Class B
Monthly Distributions for all months during such Fiscal Year, (ii) the Class B
Year End Distributions for such Fiscal Year, (iii) all Vegas Distributions
relating to such Fiscal Year (or any period thereof), (iv) all deemed
distributions to the Class A Members relating to such Fiscal Year, and (v) all
dividends and distributions from Vegas to the Class A Members relating to such
Fiscal Year (or any period thereof).

 

“Class B
Distribution” shall mean the Class B Monthly Distributions and the Class B
Year End Distribution.

 

“Class B
Distribution Payment Date” shall mean, (i) with respect to the Class B
Monthly Distribution, the first Business Day of the applicable month, and (ii)
with respect to the Class B Year End Distribution, the date that is ninety (90)
days following the end of the applicable Fiscal Year.

 

“Class B
Interest” means an ownership interest in the Company that entitles the
holder to receive the distributions (including the Class B Distributions)
and allocations, and the rights and powers of a Class B Interest as set forth
in this Agreement.

 

“Class B
Member” means a holder of a Class B Interest.  If there exists upon the date of
determination more than one Class B Member, (a) all references to any
action to be taken by or an action that requires the approval, acceptance or
consent of the Class B Member means an action that has been approved by,
or the approval, acceptance or consent of, a majority-in-interest of the
Class B Interests and (b) all allocations and distributions to be made to
the Class B Member on such date will be made on a pro rata basis.

 

“Class B
Monthly Distribution” means, for each month of each Fiscal Year, an amount
that, when added to the Vegas Distribution with respect to such month, equals
1/12 multiplied by the Adjusted Base Amount, subject to adjustment as provided
in Section 3.2(b)(ii).

 

4

 

“Class B
Monthly Minimum Distribution” means 1/12 multiplied by the Minimum
Distribution.

 

“Class B
Year End Distribution” means, with respect to any Fiscal Year, an amount
that, when added to the year end Vegas Distribution with respect to such Fiscal
Year, equals the greater of (a) zero, or (b) the Amount Owed less the Amount
Paid, in each case with respect to such Fiscal Year, subject to adjustment
pursuant to Section 3.2(b).

 

“Code”
means the Internal Revenue Code of 1986, as amended from time to time and any
successor statute.

 

“Company”
means Elvis Presley Enterprises, LLC, a Delaware limited liability company.

 

“Company
Property” means any Property owned by the Company.

 

“Consolidated
Net Income” means for any period the net income or loss of the Company and
Vegas for such period, determined on a combined basis in accordance with GAAP; provided,
that there shall be excluded therefrom (to the extent otherwise included in the
calculation thereof), all non-cash gains and losses (including write-ups and
write downs in the value of assets required in accordance with GAAP).

 

“control”
means the possession, directly or indirectly, of the power to direct the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.

 

“Cost of
Funds” at any time means the weighted average cost of borrowed funds under bona fide financing arrangements of Parent
with unaffiliated parties at such time.

 

“CPI”
means the Consumer Price Index published by the Bureau of Labor Statistics of
the United States Department of Labor, All Items for Urban Wage Earners and
Clerical Workers (1982-84 = 100), or if such index is not available, a
comparable index mutually agreed to by the Class B Member and the Manager which
is published by a governmental institution or a nationally recognized publisher
of statistical information.

 

“CPI
Increase” means, for any Fiscal Year, the amount obtained by multiplying
(a) the Replaced Expenses during such Fiscal Year, by (b) the percentage
increase between the CPI for the month of December 2004 and the average CPI for
the twelve months of such Fiscal Year. The CPI Increase for each Fiscal Year
shall be effective as of the first day of such Fiscal Year.

 

“Depreciation”
means, for each Fiscal Year, an amount equal to the depreciation, amortization,
or other cost recovery deduction allowable with respect to an asset for such
Fiscal Year; provided, that:

 

(i)            if
the Gross Asset Value of an asset differs from its adjusted basis for Federal
income tax purposes at the beginning of such Fiscal Year, Depreciation with
respect to such asset shall be an amount that bears the same ratio to such
beginning Gross Asset Value as the Federal income tax depreciation,
amortization, or other cost recovery deduction with respect to such asset for
such Fiscal Year bears to such beginning adjusted tax basis; and

 

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(ii)           if
the adjusted basis for Federal income tax purposes of an asset at the beginning
of such Fiscal Year is zero, Depreciation shall be determined with reference to
such beginning Gross Asset Value using any reasonable method selected in good
faith by the Manager.

 

“Excess
Allocations” means for any period all allocations of overhead and other
charges and expenses to the Company, Vegas and their respective subsidiaries
from Parent or any of its other Affiliates during such period except to the
extent such allocations (i) replace operating expenses incurred directly by the
Company and Vegas prior to the Closing Date (“Replaced Expenses”) and (ii) do
not exceed the amount of such Replaced Expenses plus the CPI Increase for such
Fiscal Year.

 

“Excess
Overhead” means for any period Operating Expenses for such period to the
extent such Operating Expenses exceed 125% of the Operating Expenses for the
corresponding period during the immediately preceding fiscal year.

 

“Excess
Payment Balance” on any date means the greater of (a) zero and (b) the sum
of the Negative Balances for each Fiscal Year ending on or prior to such date
in which the Amount Paid exceeded the Amount Owed, if any, less the aggregate
of the Reduction Amounts on or prior to such date.

 

“Excess Net
Profit Allocations” means, with respect to any Fiscal Year, the excess, if
any, of (a) the aggregate Net Profits allocated to the Class B Member for all
prior years over (b) the aggregate Capital Account Distributions made to the
Class B Member for all such prior years.

 

“Exchange
Agreement” means the Contribution and Exchange Agreement, dated as of
December 15, 2004, by and among the Promenade Trust, Parent and RFX Acquisition
LLC.

 

“Expenses” means reasonable out-of-pocket expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, or being or preparing to be a witness or
other participant in a Proceeding.

 

“Fair
Market Value” means, with respect to any asset or property, a price that
could be negotiated in an arm’s length, free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction.

 

“Fiscal
Year” means, for accounting and tax purposes, the year beginning January 1
and ending December 31 of each year, except for the short taxable years in the
years of the Company’s formation and termination and as otherwise required by
the Code.

 

“GAAP”
means accounting principles generally accepted in the United States set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, statements and
pronouncements of the Financial Accounting Standards Board, and any applicable
rules and regulations of the Securities and Exchange Commission, in each case,
that are in effect from time to time, applied on a consistent basis.

 

“Gross
Asset Value” means with respect to any asset, the asset’s adjusted basis
for Federal income tax purposes, except as follows:

 

6

 

(1)           The
initial Gross Asset Value of any asset contributed by a Member to the Company
shall be the gross fair market value of such asset. The initial Gross Asset
Values of the Assets contributed to the Company by the Promenade Trust pursuant
to Section 5.1 hereof shall be as set forth in Exhibit A.

 

(2)           The
Gross Asset Values of all Company Property shall be adjusted to equal their
respective gross fair market values as determined reasonably and in good faith
by the Manager as of each of the following times: (a) the acquisition of an
additional Membership Interest by any new or existing Member in exchange for
more than a de minimus
contribution of Property; (b) the distribution by the Company to a Member of more
than a de minimus amount of
Property as consideration for a Membership Interest; (c) the liquidation of the
Company (within the meaning of Regulations section 1.704-1(b)(2)(ii)(g)); and
(d) at such other times as the Manager shall reasonably and in good faith
determine is necessary or advisable to comply with Regulation sections
1.704-1(b) and 1.704-2; provided, that adjustments pursuant to clauses
(a) and (b) above shall be made only if the Manager reasonably and in good
faith determines that such adjustments are necessary or appropriate to reflect
the relative economic interests of the Members of the Company.

 

(3)           The
Gross Asset Value of any Company Property distributed to any Member shall be
adjusted to equal the gross fair market value of such asset on the date of
distribution.

 

(4)           The
Gross Asset Value of Company Property shall be increased (or decreased) to
reflect any adjustments to the adjusted bases of such assets pursuant to
section 734(b) of the Code; but only to the extent that such adjustments are
taken into account in determining Capital Accounts pursuant to Regulation
section 1.704-1(b)(2)(iv)(m); provided, that Gross Asset Values shall
not be adjusted pursuant to this definition if the Manager reasonably and in
good faith determines that an adjustment pursuant to subparagraph (2) of this
definition is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this subparagraph (4).

 

If the Gross
Asset Value of an asset has been determined or adjusted pursuant to
subparagraph (1), (2) or (4) of this definition, then such Gross Asset Value
shall thereafter be adjusted by the Depreciation taken into account with
respect to such asset for purposes of computing Net Profits and Net Losses.

 

“Improper Activity” means any of the activities, products,
services, organizations or causes set forth on Exhibit B hereto.

 

“Indebtedness”
means,

 

(a)           all
liabilities, contingent or otherwise, of such Person, to the extent such
liabilities would appear as a liability upon the consolidated balance sheet of
such Person in accordance with GAAP, (1) in respect of borrowed money (whether
or not the recourse of the lender is to the whole of the assets of such Person
or only to a portion thereof), (2) evidenced by bonds, notes, debentures or
similar instruments, (3) representing the balance deferred and unpaid of the
purchase price of any property or services, except those incurred in the
ordinary course of its business that would constitute ordinarily a trade payable
to trade creditors;

 

7

 

(b)           all
liabilities and obligations, contingent or otherwise, of such Person
(1) evidenced by bankers’ acceptances or similar instruments issued or
accepted by banks, (2) relating to any capitalized lease obligation, or
(3) evidenced by a letter of credit or a reimbursement obligation of such
Person with respect to any letter of credit; and

 

(c)           all
liabilities and obligations of others of the kind described in the preceding
clause (a) or (b) that such Person has guaranteed or provided credit support or
that is otherwise its legal liability or that are secured by any assets or
property of such Person.

 

“Indemnitee”
means any Person entitled to indemnification pursuant to Sections 11.1 or 11.2.

 

“Independent
Financial Advisor” means a nationally recognized accounting, appraisal or
investment banking firm that:

 

(a)           does
not, and whose directors, officers and employees or Affiliates do not, have a
direct or indirect interest (financial or otherwise) in the Company, Vegas, the
Manager, any Member, any Vegas Holder, or any Affiliate of any of them; and

 

(b)           in
the reasonable, good faith judgment of the Manager, is otherwise independent
and qualified to perform the task for which it is to be engaged.

 

“Initial
Base Amount” for the period from the date hereof until December 31, 2005
shall mean $1,375,000 and for each Fiscal Year beginning on or after January 1,
2006 shall mean $1,500,000, in each case subject to adjustment pursuant to
Section 9.2(d).

 

“Initial
Members” means those Members identified on Exhibit A hereto.

 

“Interest”
means, for any period, the aggregate amount of interest in respect of any
Indebtedness, including non-cash interest and the amortization of original
issue discount and all commissions, discounts and other fees and charges.

 

“Losses”
means liabilities, losses, damages, out-of-pocket costs or Expenses.

 

“Manager”
means the manager appointed pursuant to Section 4.1 of this Agreement, who
shall initially be the Class A Member, or any successor Manager appointed
pursuant to Section 4.1(b).

 

“Member”
means an Initial Member, Additional Member or a Substitute Member.

 

“Membership
Interest” means a Class A Interest, a Class B Interest or any
other equity interest in the Company.

 

“Minimum
Distribution” for the period from the date hereof until December 31, 2005
means the greater of (i) 80% of the Adjusted Base Amount for the such period,
and (ii) $1,100,000 and for each Fiscal Year beginning on or after January 1,
2006 means the greater of (i) 80% of the Adjusted Base Amount for the
respective year, and (ii) $1,200,000.

 

8

 

“Negative
Balance” means for any Fiscal Year, (a) if the Amount Paid exceeded the
Amount Owed for such Fiscal Year, the amount of such excess and (b) if the
Amount Paid does not exceed the Amount Owed, zero.

 

“Net
Profits” or “Net Losses” means, for any fiscal period of the
Company, an amount equal to the Company’s net taxable income or loss for such
period as determined for Federal income tax purposes (including separately
stated items) in accordance with the accounting method and rules used by the
Company and in accordance with sections 703 and 704 of the Code, with the
following adjustments:

 

(1)           Any
income of the Company that is exempt from Federal income tax and not otherwise
taken into account in computing Net Profits and Net Losses under this Agreement
shall be added to such taxable income or loss;

 

(2)           Any
expenditure of the Company described or deemed described in
section 705(a)(2)(B) of the Code and not otherwise taken into account in
computing Net Profits and Net Losses under this Agreement shall be subtracted
from such taxable income or loss;

 

(3)           In
the event the Gross Asset Value of any Company Property is adjusted pursuant to
clause (2) or (3) of the definition of Gross Asset Value, the amount of such
adjustment shall be taken into account as gain or loss (as applicable) from the
disposition of such asset for purposes of computing Net Profits and Net Losses
under this Agreement;

 

(4)           Gain
or loss resulting from any disposition of any Company asset with respect to
which gain or loss is recognized for Federal income tax purposes shall be
computed with reference to the Gross Asset Value of the asset disposed of,
notwithstanding that the adjusted income tax basis of such asset differs from
its Gross Asset Value; and

 

(5)           In
lieu of the depreciation, amortization and other cost recovery deductions taken
into account in computing taxable income or loss, there shall be taken into
account Depreciation for such Fiscal Year or quarterly period.

 

“New
Securities” means any Membership Interests, whether now authorized or not,
and rights, options or warrants to purchase Membership Interests and securities
of any type whatsoever that are, or may become, convertible into Membership
Interests.

 

“Operating
Cash Flow”  means for any fiscal
period an amount equal to

 

(a)           Consolidated
Net Income for such period, plus

 

(b)           to
the extent such amounts reduced Consolidated Net Income during such period, (i)
depreciation and amortization expense, (ii) Excess Allocations, and (iii)
Excess Overhead, plus

 

(c)           the
sum of (i) the net decrease, if any, in accounts receivable of the Company and
Vegas during such period, and (ii) the net increase, if any, in deferred
revenue of the Company and Vegas during such period, in each case determined on
a combined basis in accordance with GAAP, less

 

9

 

(d)           the
sum of (i) the net increase, if any, in accounts receivable of the Company and
Vegas during such period, (ii) the net decrease, if any, in deferred revenue of
the Company and Vegas during such period, and (iii) to the extent such amounts
have not otherwise reduced Operating Cash Flow during such period, all cash
capital expenditures made by the Company and Vegas during such period, in each
case determined on a combined basis in accordance with GAAP.

 

“Operating
Expenses” means for any period operating expenses of the Company and Vegas
during such period, determined on a combined basis in accordance with GAAP.

 

“Parent”
means Sports Entertainment Enterprises, Inc.

 

“Permitted
Rate” means as of any date of determination, a rate per annum equal to: (a)
the rate on Indebtedness under a bona fide
financing arrangement with an unaffiliated third party incurred by Parent or
any Affiliate of Parent (as applicable) the proceeds of which are directly used
to provide the Indebtedness to the Company pursuant to Section 5.3 hereof or to
Vegas pursuant to Section 2.4 of the Shareholders Agreement; (b) if Parent or
such Affiliate does not use the proceeds of Indebtedness to directly provide
Indebtedness to the Company or Vegas, the Cost of Funds; or (c) if no such bona fide financing arrangements exist,
then a rate that is mutually agreed upon by the parties.  In the case of clauses (a) or (b) above, the
Company shall provide to the Class B Member a written statement, certified by
the Chief Financial Officer of Parent, describing in reasonable detail how such
rate was determined.

 

“Permitted
Transferee” means a Person who acquires a Membership Interest in a Transfer
by a Member in accordance with the terms set forth in Article IX hereof.

 

“Person”
means any natural person or corporation (both non-profit and other
corporations), partnership (both limited and general), joint venture, limited
liability company, trust, estate, unincorporated association or other entity.

 

“Preemptive
Share” means 15%.

 

“Proceeding”
means any action, suit or proceeding, the result of which may be that a court,
arbitrator or governmental agency may enter a judgment, order, decree or other
determination which, if not appealed and reversed, would be binding upon the
Company, a Member or other Person subject to the jurisdiction of such court,
arbitrator or governmental agency.

 

“Promenade
Trust” means the Promenade Trust, a grantor trust created under the laws of
Tennessee, pursuant to the Second Restated and Amended Trust Agreement, dated
December 15, 2004, by and among Barry Siegel and Gary Hovey, as Co-Trustees,
and Beneficiary.

 

“Property”
means any assets, real or personal, tangible or intangible.

 

“Reduction
Amount”  means:

 

(a)           with
respect to any Class B Distribution or Vegas Distribution (i) the amount such
Class B Distribution or Vegas Distribution would have been but for the

 

10

 

operation of Section 3.2(b)(ii) hereof or Section 7.2(a)(ii) of the
Charter less (ii) the amount of such distribution after giving effect to such
section, and

 

(b)           all
amounts paid to reduce the Excess Payment Balance hereunder or under the
Charter or the Shareholders Agreement (including pursuant to Sections 9.2(c)
and 11.4(b) hereof, Section 7.3(a) of the Charter or Section 4.1(c) of the
Shareholders Agreement).

 

“Regulations”
means, except where the context indicates otherwise, the permanent, proposed or
temporary rules and regulations of the U.S. Department of the Treasury
promulgated under the Code, as such rules and regulations may be lawfully
changed from time to time.

 

“relative”
means spouses, former spouses, parents, grandparents, great-grandparents,
children, grandchildren, great-grandchildren, siblings, first uncles, first
aunts and first cousins (in each case, whether natural or adoptive).

 

“Representative”
means an officer, director, manager, partner, member, employee, representative
or other agent.

 

“Secretary
of State” means the Secretary of State of the State of Delaware.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules an
regulations promulgated by the Securities and Exchange Commission thereunder.

 

“Series A
Preferred Shares” means the Series A Preferred Shares of Vegas, par value
$1.00 per share.

 

“Series B
Preferred Shares” means the Series B Preferred Shares of Vegas, par value
$1.00 per share.

 

“Shareholders
Agreement” means the Shareholders Agreement, dated as of the date hereof,
by and among Vegas and the Vegas Holders.

 

“Side
Letter” means the letter agreement, dated as of the date hereof, by and
among the EPE Holding Corporation, the Promenade Trust, Parent and RFX
Acquisition, LLC.

 

“Substitute
Member” means a transferee of Membership Interest who has been approved and
admitted as a Member in accordance with Article IX.

 

“Tag-Along
Notice” means the notice delivered by the Transferring Members pursuant to
Section 9.2.

 

“Tag-Along
Option Period” means the 30-day period commencing on the date the Tag-Along
Notice is deemed delivered to the Class B Member pursuant to Section 9.2.

 

“Tax
Matters Partner” means the tax matters partner of the Company pursuant to
section 6231(a)(7) of the Code, designated pursuant to Section 8.3, and
any successor Tax Matters Partner.

 

11

 

“Taxing
Jurisdiction” means any Federal, state, local or foreign government that
collects tax or any similar assessments, interest or penalties, however
designated, on any Member’s share of the income or gain attributable to the
Company.

 

“Third
Party” means an arms-length third party that is not a Member, a Vegas
Holder or an Affiliate of any Member or any Vegas Holder.

 

“Transactions”
means the transactions contemplated by this Agreement, the Exchange Agreement,
the Bill of Sale and any other agreements or transactions contemplated thereby.

 

“Transfer”
means to directly or indirectly sell, assign, transfer, exchange, mortgage,
pledge, grant, hypothecate, gift, bequeath or otherwise transfer (including
transfer by reorganization, merger, sale of substantially all of the assets or
by operation of law).  Notwithstanding
the foregoing, FOR THE AVOIDANCE OF DOUBT, a PLEDGE, a sale or transfer of
shares of Parent shall not be deemed to be an indirect Transfer of Membership
Interests.

 

“Transferring
Members” means, collectively, Parent and any Affiliate of Parent.

 

“Vegas”
means Elvis Presley Enterprises, Inc., a Tennessee corporation.

 

“Vegas
Common Shares” means the common shares of Vegas, par value $1.00 per share.

 

“Vegas
Distribution” means any monthly or year end dividend or distribution
declared and paid on the Series B Preferred Shares.

 

“Vegas
Holder” means any holder of Series A Preferred Shares, Series B Preferred
Shares or Vegas Common Shares.

 

1.2           Directly or
Indirectly.  Any
provision of this Agreement which refers to an action which may be taken by any
Person, or which a Person is prohibited from taking, shall include any such
action taken directly or indirectly by or on behalf of such Person, including
by or on behalf of any Affiliate, partner or agent of such Person.

 

1.3           Including
Without Limitation. 
Any provision of this Agreement which refers to the words “include,” “includes,”
or “including” shall be deemed to be followed by the words “without limitation”.

 

1.4           Captions.  All captions in this Agreement are inserted
for reference only and are not to be considered in the construction or
interpretation of any provision hereof.

 

1.5           Interpretation.  In the event that any claim is made by any
Person relating to any conflict, omission or ambiguity in this Agreement, no
presumption or burden of proof or persuasion shall be implied by virtue of the
fact that this Agreement was prepared by or at the request of a particular
Person or its counsel.

 

1.6           References to
this Agreement. 
References to numbered or letter articles, sections, and subsections
refer to articles, sections and subsections, respectively, of this Agreement
unless

 

12

 

expressly stated otherwise.  All references to this Agreement include,
whether or not expressly referenced, the exhibits and appendices attached
hereto.

 

ARTICLE II.         FORMATION

 

2.1           Name.  The name of the limited liability company is
Elvis Presley Enterprises, LLC.  Subject
to Section 4.3 hereof, the business of the Company may be conducted under any
other name deemed necessary or desirable reasonably and in good faith by the
Manager, but in any case, only to the extent permitted by applicable law.

 

2.2           Formation.  The Promenade Trust formed the Company as a
limited liability company by filing the Certificate of Formation with the Secretary
of State pursuant to the provisions of the Act. 
Except as otherwise provided herein, the rights, duties and liabilities
of the Members and the Manager shall be as provided in the Act for members and
managers.

 

2.3           Term.  The term of the Company commenced upon the
filing of the Certificate of Formation, and shall continue until the Company is
dissolved and its affairs wound up in accordance with the Act and this
Agreement.

 

2.4           Purpose.  The business and purposes of the Company
shall be to engage in any lawful act or activity for which a limited liability
company may be organized under the Act; provided, that the Company
may not engage in an Improper Activity.

 

2.5           Registered
Office; Registered Agent. 
The address of the initial registered office of the Company in the State
of Delaware is c/o Paracorp Incorporated, 3500 South DuPont Highway, Dover,
County of Kent, Delaware.  The name and
address of the initial registered agent of the Company for service of process
on the Company in the State of Delaware is Paracorp Incorporated, 3500 South
DuPont Highway, Dover, County of Kent, Delaware.  The Manager may change the registered agent
or office through appropriate filings with the Secretary of State.  In the event the registered agent ceases to
act as such for any reason or the registered office shall change, the Manager
shall promptly designate a replacement registered agent or file a notice of
change of address as the case may be.

 

2.6           Principal Place
of Business.  The
principal place of business of the Company shall be 3734 Elvis Presley
Boulevard, Memphis, Tennessee 38116, or such other place or places as the
Manager may reasonably and in good faith determine from time to time.

 

2.7           Members.  The name and the mailing address of each
Member is as set forth on Exhibit A hereto.  Each Member may change its address upon
notice thereof to the other Members.

 

2.8           Authorized
Persons.  The Manager
shall have the right to designate as an “authorized person,” within the meaning
of the Act, those individuals authorized to execute, deliver and file any
amendments to, and/or restatements of, the Certificate of Formation of the
Company and such other instruments, documents and certificates which may from
time to time be required by the laws of the United States of America, the State
of Delaware, or any other state or country, or any political subdivision
thereof, in which the Company shall determine to do business, to effectuate,
implement and continue the valid and subsisting existence or 

 

13

 

qualification to do business of the Company,
or in connection with any tax returns, filings or related matters.

 

ARTICLE III.        MEMBERSHIP INTERESTS

 

3.1           Members.  The Members of the Company shall consist of
the Initial Members and such additional persons as shall be admitted to the
Company as Members in accordance with Section 3.2(c) and Article IX
hereof.  Exhibit A shall be amended
from time to time to reflect the admission of any Member or the removal,
expulsion, retirement or death of any Member, the receipt by the Company of
notice of any change of name or address of a Member and any additional Capital
Contributions.

 

3.2           Series of
Membership Interest. 
The Company shall have two classes of Membership Interests, Class A
Interests and Class B Interests.

 

(a)           Distribution
Preference.  The Company shall not
make any distributions to any other Members unless and until (i) the Company
has paid all required Class B Distributions to the Class B Member and
(ii) Vegas has paid all required Vegas Distributions to the holders of the
Series B Preferred Shares.

 

(b)           Class B
Distribution.

 

(i)            The Company shall pay
each Class B Distribution to the Class B Member in cash on or before
the applicable Class B Distribution Payment Date.  If the Company shall fail to pay the
Class B Distribution on or before any Class B Distribution Payment
Date (because there is insufficient cash legally available therefore or
otherwise), the Class A Members shall pay directly to the Class B Member
an amount equal to all unpaid Class B Distributions in full as soon thereafter
as possible, and before any distributions are paid to other Members.

 

(ii)           If the Amount Paid is
greater than the Amount Owed for any Fiscal Year, the Class B Year End
Distribution for such Fiscal Year shall be zero, and the monthly Vegas
Distribution and/or the Class B Monthly Distribution shall thereafter be
reduced until the Excess Payment Balance is zero; provided, that in no
event shall the sum of (A) the monthly Vegas Distribution and (B) the Class B
Monthly Distribution for any month be reduced below the Class B Monthly Minimum
Distribution for such month.  If (1) the
Amount Paid is less than the Amount Owed for any Fiscal Year but there is a
positive Excess Payment Balance at the time the Class B Year End Distribution
with respect to such Fiscal Year is to be made and (2) such Amount Owed exceeds
140% of the Initial Base Amount, the year end Vegas Distribution and/or Class B
Year End Distribution shall be reduced until the sum of (A) the Amount Paid
plus (B) the year end Vegas Distribution with respect to such Fiscal Year plus
(C) the Class B Year End Distribution equals 140% of the Initial Base Amount.

 

(iii)          Subject to the
limitations set forth in Article VIII of the Exchange Agreement and clause (iv)
below, the Class B Distribution otherwise payable

 

14

 

hereunder may
be reduced pursuant to and in accordance with the terms of Section 8.7(c) of
the Exchange Agreement.

 

(iv)          Notwithstanding any other
provision of this Agreement, the Charter, or the Exchange Agreement, the
aggregate amount of the reductions of Class B Monthly Distributions and Vegas
Distributions pursuant to this Agreement, the Charter and the Exchange
Agreement, for any given month, shall not cause the aggregate amount of the
Class B Monthly Distribution and the monthly Vegas Distribution to be less than
50% of 1/12 of the Initial Base Amount.

 

(c)           Admission
of Additional Members.  Except as set
forth in Article IX hereof, no Person shall be admitted as a Member without the
prior written approval of the Class B Member and the Manager.  An Additional Member shall be deemed admitted
as a Member upon the execution by such Additional Member of this
Agreement.  Upon admission, such Additional
Member shall be bound by all provisions of this Agreement and shall have all
the rights and powers and be subject to all the restrictions and liabilities
pursuant to this Agreement.

 

3.3           No Withdrawals
or Resignations.  No
Member has the right to withdraw, resign or retire from the Company, except as
permitted by law.

 

3.4           Liability of
Members.  The debts,
obligations and liabilities of the Company, whether arising in contract, tort
or otherwise, shall be solely the debts, obligations and liabilities of the
Company, and no Member shall be obligated personally for any such debt,
obligation or liability of the Company solely by reason of being a Member,
except as otherwise required by law. The failure of the Company to observe any
formalities or requirements relating to the exercise of its powers or
management of its business or affairs under this Agreement or the Act shall not
be grounds for imposing personal liability on the Members for liabilities of
the Company.

 

3.5           Meetings of
Members.  The Company shall
hold an annual meeting of the Members within 90 days after the end of each
Fiscal Year.  No other regular meetings
of the Members are required to be held. 
All meetings shall be noticed, held and conducted pursuant to section
18-302 of the Act.  Except as otherwise
specifically provided for herein, in any instance under this Agreement that
requires the consent of the Members, such consent may be obtained in any manner
permitted by the Act.

 

(a)           Power
to Call Meetings.  Upon written
demand of any Member, meetings shall be called for any purpose; provided,
that unless the Company is in material default hereunder, the Class B Member
shall not be entitled to call more than two (2) meetings in any given calendar
year.

 

(b)           Notice
of Meeting.  Written notice of a
meeting of Members shall be sent or otherwise given to each Member not less
than five nor more than 60 days before the date of the meeting.  The notice shall specify the place, date and
hour of the meeting.  The Member
requesting such meeting shall promptly cause notice to be given to the

 

15

 

Members that a meeting will be held at the time requested by the Member
requesting the meeting, not less than five nor more than 60 days after the
receipt of the request.

 

(c)           Manner
of Giving Notice.  Notice of any
meeting of Members shall be given in accordance with the provisions of, and
shall be addressed to each of the Members at the address of each Member as set
forth in, Section 15.2 below.

 

(d)           Quorum.  The presence in person or by proxy of the
Class B Member and the holders of a majority-in-interest of the
Class A Interests shall constitute a quorum at a meeting of Members.

 

(e)           Waiver
of Notice or Consent.  The actions
taken at any meeting, however called and noticed, and wherever held, have the
same validity as if taken at a meeting duly held after regular call and notice,
if, either before or after the meeting, each of the Members entitled to vote
who was not present in person or by proxy signs a written waiver of notice or
consents to the holding of the meeting and approves the minutes of the
meeting.  All such waivers, consents or
approvals shall be filed with the Company records or made a part of the minutes
of the meeting.  Attendance of a Member
at a meeting shall constitute a waiver of notice of that meeting, except when
the Member objects at the beginning of the meeting to the transaction of any
business because the meeting is not lawfully called or convened.

 

(f)            Telephonic
Participation by Member at Meetings. 
Members may participate in any Members’ meeting through the use of any
means of conference telephones or similar communications equipment as long as
all Members participating can hear one another. 
A Member so participating is deemed to be present in person at the
meeting.

 

(g)           Place
of Meetings.  Meetings of the Members
shall be held at the principal office of Parent, unless the Members shall agree
upon some other appropriate and convenient location for that purpose from time
to time.

 

3.6           Preemptive
Rights.  The
Class B Member shall have a preemptive right to subscribe for or purchase
all or any part of its Preemptive Share of any New Securities that the Company
may, from time to time, propose to issue or sell.  This preemptive right shall be subject to the
following provisions:

 

(a)           Notice
Procedures.  If the Company proposes
to undertake an issuance of New Securities, it shall give the Class B
Member written notice of its intention, describing the type of New Securities,
the price and the general terms upon which the Company proposes to issue the
same.  The Class B Member shall have
30 days from the date of receipt of such notice to notify the Company of its
election to purchase up to its Preemptive Share of such New Securities for the
price, at the time and upon the general terms specified in the notice, by
giving written notice to the Company and stating therein the quantity of New
Securities to be purchased; provided, that the Class B Member shall have
at least 30 days following delivery of its notice of election to consummate the
purchase of such New Securities.

 

16

 

(b)           Completion
of Transaction.  If the Class B
Member fails to notify the Company of its intent to exercise the preemptive
right within said 30-day period or to consummate such purchase as required, the
Company shall have 90 days thereafter to consummate the sale of the New
Securities, at a price and upon general terms no more favorable to the
purchasers thereof than specified in the Company’s notice.  If the Company has not sold such New
Securities within said 90-day period, the Company shall not thereafter issue or
sell any New Securities, without first offering such securities to the
Class B Member in the manner provided above.

 

ARTICLE IV.        MANAGEMENT

 

4.1           Appointment of
Manager.

 

(a)           Except
as otherwise set forth in this Agreement,

 

(i)            the management of the
Company shall be vested in, and the Members hereby appoint EPE Holding
Corporation as Manager of the Company and EPE Holding Corporation hereby
accepts such appointment and agrees to be bound by the provisions of this
Agreement; and

 

(ii)           the Manager shall have
the exclusive duty, right, power and authority to manage the assets, business
and affairs of the Company with all rights and powers and the full authority
necessary, desirable or convenient to administer and operate the same for
Company purposes, including to, directly or indirectly, take or omit whatever
action for Company purposes that the Manager may, in the Manager’s sole
discretion, deem necessary or desirable to carry out the Company’s purposes,
and to make all decisions and do all things necessary or desirable in
connection therewith; and

 

(iii)          the Members, in their
capacity as members, shall have no part in the management of the Company and
shall have no authority to, or right to, act on behalf of or bind the Company
in connection with any matter, nor have any voting rights, except as set forth
in this Agreement.

 

(b)           The
Manager may resign at any time upon written notice to the Members, provided,
that prior to the effectiveness of any such resignation, the Manager shall
provide for the substitution of a new Manager that is acceptable to the
Class B Member.

 

(c)           The
Manager shall, and shall cause its Representatives to:

 

(i)            conduct the affairs of
the Company in the best interests of the Company and the mutual best interests
of the Members, including the safe keeping and use of all Company funds and
assets and the use thereof for the benefit of the Company in accordance with
the terms of this Agreement; and

 

(ii)           act, at all times with
integrity and in good faith and utilize all reasonable efforts in all
activities relating to the conduct of the business of the Company and in
resolving conflicts of interest arising in connection therewith.

 

17

 

(d)           In
addition to any other duties hereunder or under applicable law, (i) the Manager
and its directors shall have the same fiduciary duties to the Class B Member as
they would have to the minority holders of common stock of a Delaware
corporation and (ii) the Class A Member shall have a duty of good faith and
fair dealing to the Class B Member.

 

(e)           The
Manager shall devote such time and effort to the business and operations of the
Company as shall be reasonably necessary to promote fully the interests of the
Company and the mutual best interests of the Members.

 

4.2           Compensation.  Neither the Parent, nor any of its
Affiliates, nor any of their respective directors, officers or employees, other
than employees of the Company, shall receive any compensation for service to
the Company.  Notwithstanding the
foregoing, but subject to the other provisions of this Agreement (including
Section 4.3(f)), the Manager may engage Affiliates to provide services
typically provided by third party providers to the Company (excluding services
that would typically be considered corporate overhead) and such Affiliates may
receive reasonable and customary compensation therefore.

 

4.3           Major Decisions.  Notwithstanding anything to the contrary
contained herein, the Company will not and will not permit any of its
subsidiaries to, directly or indirectly take any of the following actions
without the prior written approval of the Class B Member:

 

(a)           create,
issue, subdivide, reclassify, or change any class or series of Membership
Interests, or any securities convertible into or exchangeable for a Membership
Interest other than Class A Interests, or admit Additional Members other than
Class A Members;

 

(b)           incur
Indebtedness:

 

(i)            the proceeds of which
are directly or indirectly used (A) for any purpose other than in the Business
or (B) to redeem or repurchase any Membership Interests or any securities
convertible into or exchangeable for a Membership Interest,

 

(ii)           owed to Parent or any
Affiliate of Parent, that bears Interest in excess of the Permitted Rate on the
date such Indebtedness is incurred,

 

(iii)          that restricts payment
of the Class B Distribution other than during the continuance of a payment
default or any other default that would allow the lender to accelerate such
Indebtedness under the terms of a bona fide
credit agreement with a Third Party, or

 

(iv)          if such Indebtedness is
to the Class A Member or an Affiliate of the Class A Member and will be outstanding
for 18 months or longer, unless the Class B Member is given a preemptive right
with respect to such Indebtedness pursuant to procedures identical to those set
forth in Section 3.6; provided, that the Class B Member shall have 5
days after receipt of notice from the Class A Member or such Affiliate to
notify the Class A Member or such Affiliate of its

 

18

 

intention to
exercise its preemptive right and the Class B Member shall have 5 days from the
delivery of its notice of election to consummate the transaction;

 

(c)           redeem
or repurchase any Membership Interests, or any securities convertible into or
exchangeable for a Membership Interest, except on a proportionate basis, such
that after consummation of the redemption or repurchase:

 

(i)            the distributions and
allocations of Net Profits or Net Losses in respect of the Class B Interest
would be the same as the distributions and allocations of Net Profits or Net
Losses in respect of the Class B Interest immediately prior to such redemption
or repurchase;

 

(ii)           the percentage interest
of the Class B Member in respect of all classes of Membership Interests is the
same as the percentage interest of the Class B Member immediately prior to such
redemption or repurchase; and

 

(iii)          the Company will not be
impaired from making the Class B Distributions.

 

(d)           {intentionally
left blank}

 

(e)           consummate
any merger, consolidation or reorganization of the Company, or Transfer all or
substantially all of the assets of the Company, in each case, unless the Class
B Member is provided a right of first refusal with respect to any such
transaction exercisable in accordance with procedures substantially identical
to the procedures set forth in Section 9.1(a)-(d), provided that the
grant of any permitted pledge or mortgage of any assets of the Company to
secure Indebtedness of the Company to a person (or, for the avoidance of doubt,
the pledge of the Class A Interest) shall not constitute a merger,
consolidation, reorganization or transfer for purposes of this Section 4.3(e)
if the holder of such pledge or mortgage agrees to comply with the terms hereof
and provided  further, that

 

(i)            such right of first
refusal shall not be required with respect to (A) transactions with Affiliates
of the Company, (B) merger, consolidation or reorganization transactions in
which Parent and its Affiliates continue to hold at least a majority of the
outstanding Class A Interests, and (C) transfers of substantially all of the
assets of the Company to an Acquiror pursuant to a Change of Control of Parent,
and

 

(ii)           if the Class B Member
(x) by reason of clause (i) does not have or (y) has, but does not exercise,
such right, the surviving entity or transferee adopts this Agreement or another
agreement containing only the terms of this Agreement.

 

(f)            enter
into any transaction with or for the benefit of (x) any Member, Manager,
officer or employee of the Company or any of its subsidiaries, or (y) any
Affiliate of the Company or any of its subsidiaries, or of any of their
members, managers, 

 

19

 

shareholders, directors, officers or employees (the persons identified
in clauses (x) and (y), the “Related Parties”), unless:

 

(i)            such transaction is
entered into in good faith on terms that are no less favorable to the Company
or the relevant subsidiary than those that could reasonably have been obtained
in a comparable transaction at such time on an arm’s-length basis from a Person
that is not a Related Party;

 

(ii)           prior to the
consummation thereof, the Manager delivers to the Class B Member a resolution
adopted in good faith by a majority of the independent members of the board of
directors of Parent (including a majority of the disinterested members thereof)
stating that such members have determined in good faith that such transaction
complies with the requirements of clause (i) above; and

 

(iii)          if such transaction (or
a series of related transactions) involves an aggregate Fair Market Value of
more than $2 million during any 18 month period, the Manager, prior to the
consummation thereof, obtains and delivers to the Class B Member, at the
Company’s sole expense, a favorable opinion as to the fairness of the financial
terms of such transaction to the Company or the relevant subsidiary, as the
case may be, from an Independent Financial Advisor;

 

(g)           engage
in any business other than the business of the Company on the date hereof, or
any business incidental thereto or reasonable extension thereof;

 

(h)           approve
any amendment or change of the Certificate of Formation or other governance
documents of the Company that would reduce or otherwise affect in a manner
adverse to the Class B Member the allocations, rights, powers or obligations of
the Class B Member;

 

(i)            other
than any action that is consistent with the past practice of the Business,
directly or indirectly, or permit its subsidiaries or, in the case of clauses
(ii) and (iii) below, any Person under the control of the Company, and the
respective directors, officers, employees, agents and representatives of each
of the foregoing, acting in such capacity, to:

 

(i)            undertake any Improper
Activity,

 

(ii)           take any action
(including, by granting any third party any right or license) that could
reasonably be expected to associate the Company or its subsidiaries, the
business of the Company or Elvis Presley or any indicia associated with Elvis
Presley (including the name (including assumed or professional names), image
and likeness and other identifiable attributes) with any Improper Activities,
or

 

(iii)          taking any action that
is offensive, immoral, derogatory or in poor taste that would tarnish the
reputation or public image of Elvis Presley, the Trust

 

20

 

or the
Beneficiary, or the Company (including the name (including assumed or
professional names), image and likeness and other identifiable attributes); or

 

(j)            enter
into any agreement, arrangement or understanding to do any of the foregoing.

 

ARTICLE V.         CAPITAL
CONTRIBUTIONS

 

5.1           Capital
Contributions.

 

(a)           The
Promenade Trust contributed the Assets to the Company pursuant to the terms of
the Bill of Sale in exchange for 100% of the Class B Interests and 100% of
the Class A Interests.  In
accordance with the terms of the Exchange Agreement, as of the date hereof, the
Promenade Trust transferred to Parent 100% of the Class A Interest.

 

(b)           Except
as otherwise provided in this Agreement, no interest shall accrue on any
Capital Contribution and no Member shall have the right to withdraw or be
repaid any Capital Contribution.

 

5.2           Additional
Contributions.  Except
as set forth in Section 7.6, the Members shall have no obligation to make any
additional Capital Contributions to the Company.

 

5.3           Financing Growth.  Subject to Section 4.3, the Manager shall
have the right to finance efforts to grow the business of the Company by
loaning capital directly to the Company and/or arranging bona fide third-party financing; provided,
that the Interest on any such Indebtedness owed to Parent or any Affiliate of
Parent shall not exceed the Permitted Rate.

 

ARTICLE VI.        CAPITAL ACCOUNTS

 

6.1           Capital Accounts.  The Company shall maintain a Capital Account
for each Member.

 

(a)           Initial
Capital Accounts.

 

(i)            Immediately after
Transferring the Class A Interest to Parent the Capital Account balance of the
Class A Member and the Class B Member are as set forth as Exhibit A.

 

(ii)           Each Additional Member’s
Capital Account shall have an initial balance equal to the amount of cash and
the Gross Asset Value of all Property constituting such Member’s initial
Capital Contributions, which initial balance shall be set forth on Exhibit A
(which schedule shall be updated by the Manager from time to time to reflect
additional Capital Contribution by the Members, if any, and the Capital
Contributions of Additional Members or Substitute Members, if any).

 

(b)           Adjustments
to Capital Accounts.  Each Member’s
Capital Account shall thereafter be increased by the sum of:

 

21

 

(i)            the amount of cash and
cash equivalents and the fair value of any Property contributed by such Member
to the capital of the Company (net of liabilities secured by such contributed
Property that the Company is considered to assume or take subject to under
section 752 of the Code) plus

 

(ii)           any Net Profits
allocated to such Member pursuant to Section 6.5 hereof.

 

Each Member’s Capital Account shall be
reduced by the sum of:

 

(i)            the amount of cash and
cash equivalents and the fair value of any Property distributed by the Company
to such Member (net of liabilities secured by such distributed Property that
such Member is considered to assume or take subject to under section 752 of the
Code) plus

 

(ii)           any Net Losses
allocated to such Member pursuant to Section 6.5 hereof.

 

(c)           All
matters concerning the computation of Capital Accounts, the allocation of Net
Profit and Net Loss, the allocation of items of the Company income, gain, loss,
deduction and expense for tax purposes and the adoption of any accounting
procedures not expressly provided for by the terms of this Agreement shall be
determined by the Manager and the Class B Member.  Notwithstanding anything herein to the
contrary, no Indebtedness incurred by Parent or any of its Affiliates, directly
or indirectly in connection with the Transactions, shall be allocated to the
Company.  In the event of any
disagreement between the Class B Member and the Manager with respect to the
foregoing, the Class B Member and the Manager shall use reasonable good faith efforts
to resolve such dispute.  If, at the end
of a 10-day period (or such longer period as they may mutually agree), they are
unable to resolve such disagreement, then an Independent Financial Advisor that
is mutually selected by the Class B Member and the Manager shall resolve any
remaining disagreements.

 

6.2           Transferee
Capital Accounts.  In
the event of a Transfer of a Membership Interest in accordance with the terms
of this Agreement, the Capital Account of the transferring Member shall become
the Capital Account of the transferee to the extent it relates to the
transferred Membership Interest in accordance with section 1.704-1(b)(2)(iv) of
the Regulations.

 

6.3           Maintenance of
Capital Accounts.  The
manner in which Capital Accounts are to be maintained pursuant to this
Article VI is intended to comply with the requirements of section 704(b)
of the Code and the Regulations promulgated thereunder. If, in the reasonable,
good faith opinion of the Company’s accountants, the manner in which Capital
Accounts are to be maintained pursuant to the preceding provisions of this
Article VI are required to be modified to comply with section 704(b) of
the Code and the Regulations thereunder, then notwithstanding anything to the
contrary contained in the preceding provisions of this Article VI, the
method in which Capital Accounts are to be maintained shall be so modified to
the minimum extent necessary to comply with the Code and the Regulations; provided,
that any change in the manner

 

22

 

of maintaining Capital Accounts shall not
materially alter the economic agreement between or among the Members.

 

6.4           Capital Account
Deficit.  Except as
provided in Section 7.6(b), no Member shall be required to make any additional
Capital Contribution to restore a deficit balance in such Member’s Capital
Account upon dissolution of the Company pursuant to Article XI or
otherwise.

 

6.5           Allocations.  Except as provided in Sections 6.6 and 6.7,
Net Profit or Net Losses of the Company shall be allocated as follows:

 

(i)            First, if during any
Fiscal Year, there is Excess Overhead or Excess Allocations, to the extent such
Excess Overhead or Excess Allocations are reflected in items included in
computing Net Profits and Net Loss, such items shall be specially allocated to
the Class A Members on a pro rata
basis;

 

(ii)           After giving effect to
the adjustments in clause (i), if any, Net Profits and Net Losses shall be
allocated 85% to the Class A Members, on a pro
rata basis, and 15% to the Class B Member; provided, however,
that if during any Fiscal Year the Capital Account Distributions made to the
Class B Member for such Fiscal Year exceeds the Class B Member’s share of the
Net Profits, the Class B Member shall be allocated an additional amount of Net
Profits for such Fiscal Year (and if necessary, items of income or gain) equal
to the excess, if any, of (x) the amount by which the Capital Account
Distributions exceed the Class B Member’s share of Net Profits over (y) Excess
Net Profit Allocations, and the Class A Members shall be allocated the
remaining Net Profits, if any (or if necessary, items of expense or loss), on a
pro rata basis; provided,
further, that, to the extent the Class B Members were allocated an increased
share of Net Profits (or items of income or gain) pursuant to this Section
6.5(ii), the Class B Member’s share of Net Profits in subsequent years shall be
decreased to the extent the Class B Member’s share of Net Profits for such year
exceeds the amount of Capital Account Distributions for such year.

 

(iii)          To the extent permitted
under Section 704(c) of the Code, the Class A Members, on a pro rata basis, shall be specially
allocated, for tax purposes, all items of depreciation and amortization
(including amortization of goodwill and intangibles) attributable to any
increase in the adjusted tax bases of the assets contributed to the Company
pursuant to the Bill of Sale in connection with the Transactions (it being
understood that Depreciation shall not be specially allocated in the computation
of Net Profit and Net Loss).

 

(iv)          Notwithstanding the
foregoing provisions of this Section 6.5, in connection with a distribution in
dissolution under Section 11.4, Net Profit (and if necessary items of income or
gain) shall be specially allocated to the Class A Member to the extent of any
amount to be distributed to the Class A Members pursuant Section 11.4(b).

 

23

 

6.6           Regulatory
Allocations. 
Notwithstanding anything to the contrary herein, any special allocations
required to be made pursuant to the Regulations promulgated under
section 704 of the Code, including those related to minimum gain
chargebacks and qualified income offsets, which qualified income offset rules
of section 1.704-1(b)(2)(ii)(d) of the Regulations are hereby incorporated by
reference, shall be made prior to the allocations set forth in Section 6.5 and
in the order of priority set forth in the Regulations.  It is the intent of the Members that, to the
maximum extent possible, all regulatory allocations will be offset either by
other regulatory allocations or special allocations of other items of Company
income, gain, loss or deduction such that, after all such regulatory
allocations are made, each Member’s Capital Account balance is, to the maximum
extent possible, equal to the Capital Account balance that such Member would
have had if the regulatory allocations were not contained in this Agreement,
and all allocations were made pursuant to Section 6.5 hereof.

 

6.7           Section 704(c)
of the Code.  The
Company shall cause depreciation and/or cost recovery deductions and gain or
loss with respect to each item of property to be allocated among the Members
for income tax purposes in accordance with the principles of Section 704(c) of
the Code and Regulations promulgated thereunder using the “traditional” method
as defined in Regulation 1.704-3(b). 
Allocations pursuant to this Section 6.7 are solely for purposes of
Federal and state income taxes and shall not affect, or in any way be taken
into account in computing, any Member’s capital account or share of profits,
losses, other items, or distribution pursuant to any provisions of this
Agreement.

 

ARTICLE VII.      DISTRIBUTIONS

 

7.1           Except
as provided in this Article VII, Article IX and Article XI, the Members shall
not (a) be entitled to interest on their Capital Contributions to the
Company or (b) have the right to distributions or the return of any
Capital Contribution.  After payment of
the Class B Distribution and the distribution described in Section 7.2(b)
and any distribution required by Section 9.1(c)(iv), the Manager shall make no
distribution to the Members prior to the dissolution of the Company.  Notwithstanding any other provision hereof,
if a Class B Distribution is not made to the Class B Member on a Class B
Distribution Date, in addition to all other remedies hereunder or at law, the
Class B Member shall be allocated additional Net Profits (and if necessary,
items of income or gain) in an amount (the “Additional Amount”) equal to
(x) the product of (1) such unpaid Class B Distributions times (2) the Cost of
Funds times (3) the number of days such Class B Distribution remains unpaid,
divided by (y) 360.  The Company shall
distribute to the Class B Member the Additional Amount in cash immediately upon
request of the Class B Member concurrently with the distribution of such
overdue Class B Distributions and, notwithstanding anything herein to the
contrary, the payment of such Additional Amount shall not be included in the
calculation of Amount Paid.

 

7.2           Except
as provided in Section 11.4:

 

(a)           a
Class B Distribution shall be made on each Class B Distribution Payment Date to
the Class B Member.

 

(b)           immediately
following the distribution of the later of the Class B Year End Distribution
and the year end Vegas Distribution with respect to each Fiscal Year, a Class A

 

24

 

Year End Distribution with respect to such Fiscal Year shall be made to
the Class A Members on a pro rata
basis.

 

7.3           Form of
Distribution.  Except
in connection with the dissolution of the Company pursuant to Article XI, all
distributions shall be in cash.  A
Member, regardless of the nature of the Member’s Capital Contribution, has no
right to demand and receive any distribution from the Company in any form other
than cash.

 

7.4           Company Tax
Liability.  If the
Company incurs a withholding tax or other tax liability or obligation with
respect to the share of the Company’s income allocable or distributed to any
Member, then the Manager, without limitation of any other rights of the
Company, shall cause the amount of such liability or obligation to be offset
against any amounts distributable to such Member either currently or in the
future.  Any amount offset pursuant to
the preceding sentence shall be treated, for purposes of Section 7.2, as
having been distributed to the affected Member. 
If the amount of such taxes is greater than any such then distributable
amounts, then such Member and any successor to such Member’s Membership
Interest shall indemnify and hold harmless the Company and the Manager against,
and shall reimburse the Company within ten days after the demand of the
Manager, the amount of such excess.

 

7.5           Restriction on
Distributions.

 

(a)           No
distribution shall be made if, after giving effect to the distribution:

 

(i)            the Company would not
be able to pay its debts as they become due in the usual course of business; or

 

(ii)           the Company’s total
assets would be less than the sum of its total liabilities plus, unless this
Agreement provides otherwise, the amount that would be needed, if the Company
were to be dissolved at the time of the distribution, to satisfy the
preferential rights of other Members, if any, upon dissolution that are
superior to the rights of the Member receiving the distribution.

 

(b)           The
Members may base a determination that a distribution is not prohibited on
financial statements prepared on the basis of accounting practices and
principles on any of the following:

 

(i)            a fair valuation; or

 

(ii)           any other method that
is reasonable in the circumstances.

 

7.6           Return of
Distributions.

 

(a)           Except
for: (i) those distributions made in violation of the Act or this Agreement; or
(ii) as required pursuant to 7.6(b) below, no Member shall be obligated to return
any distribution to the Company or pay the amount of any distribution for the
account of the Company or to any creditor of the Company.  The amount of any distribution returned to
the Company by a Member or paid by a Member for the account

 

25

 

of the Company or to a creditor of the Company shall be added to the
account or accounts from which it was subtracted when it was distributed to the
Member.

 

(b)           (i)            If
at any time, the Company does not have sufficient cash legally available to pay
a Class B Distribution, not later than four Business Days prior to the
applicable Class B Distribution Payment Date, the Class A Members shall return
any distributions previously made to such Members on a pro rata basis in an aggregate amount
equal to such shortfall.  If, after all
such distributions are returned, the Company does not have sufficient cash
legally available to pay the Class B Distribution, the Class A Members shall each
make a Capital Contribution of their proportionate share of any shortfall not
later than four Business Days prior to the applicable Class B Distribution
Payment Date and shall cause the Company to make the Class B Distribution to
the extent required; and

 

(ii)           If
the Class B Member disputes the calculation of the Class B Year End
Distribution pursuant to Section 7.7 and it is determined that the Class B Year
End Distribution should be increased, the Class A Members, pro rata, within 5 days following such
determination, shall pay directly to the Class B Member such portion of the
Class A Year End Distribution as is equal to the increase in the Class B Year
End Distribution.

 

7.7           Class B
Statement.

 

(a)           Within
90 days following the end of each Fiscal Year, the Manager shall provide the
Class B Member with a copy of the Annual Audit Report, together with the
calculation of the Class B Year End Distribution and the year end Vegas
Distribution for such Fiscal Year.  If
the Class B Member disagrees with the calculation of the Class B Year End
Distribution or the year end Vegas Distribution, it shall, within 30 days after
its receipt of the Annual Audit Report, notify the Manager of such disagreement
in writing, setting forth the particulars of such disagreement; provided,
that failure to provide a notice of disagreement shall not waive any rights
that the Class B Member may have under this Agreement or otherwise.

 

(b)           If
any such notice of disagreement is provided, the Class B Member and the Manager
shall use reasonable good faith efforts to resolve such dispute.  If, at the end of a 10-day period (or such
longer period as they may mutually agree), they are unable to resolve such
disagreement, then an Independent Financial Advisor mutually selected by (i)
the Class B Member, on one hand, and (ii) the Manager and Vegas, on the other
hand, shall resolve any remaining disagreements regarding the Class B Year End
Distribution or the year end Vegas Distribution.  The Independent Financial Advisor shall
determine as promptly as practicable, only with respect to the disagreements
submitted, whether and to what extent (if any) the Class B Year End
Distribution and/or the year end Vegas Distribution requires adjustment.  The Independent Financial Advisor shall
promptly deliver to the Class B Member, the Manager and Vegas its determination
in writing, which determination shall be made subject to the definitions and
principles set forth in this Agreement. 
The determination of the Independent Financial Advisor shall be final,
binding and conclusive for purposes of this Agreement.  Notwithstanding anything to the contrary
herein, an amount equal to the Class B Year End Distribution as set forth on
the 

 

26

 

Annual Audit Report shall be paid to the Class B Member on the
applicable Class B Distribution Payment Date and, if it is subsequently
determined that an additional payment is due, such additional payment shall be
made within 10 days following the Independent Financial Advisor’s
determination.  The fees and expenses of
the Independent Financial Advisor shall be paid by the Company, unless the
Independent Financial Advisor determines that the aggregate amount of the
additional payment due to the Class B Member in respect of the Class B Year End
Distribution and the year end Vegas Distribution is not more than the lower of
(i) $50,000 or (ii) 5% of the payment that was actually paid to the Class B
Member, in which case, the Class B Member shall pay the fees and expenses of
the Independent Financial Advisor.

 

ARTICLE VIII.     TAXES

 

8.1           Elections.  The Manager shall make any elections for the
Company allowed under the Code or the tax laws of any state or other
jurisdiction having taxing jurisdiction over the Company that are in the
overall best interests of the Members, subject to the prior written approval of
the Class B Member with respect to any material tax elections (including,
without limitation, an election to be treated as a corporation for federal income
tax purposes).

 

8.2           Taxes of Taxing
Jurisdictions.  Subject
to the prior written approval of the Class B Member in respect of any such
Fiscal Year to which such tax return relates, the Manager shall, where
permitted by the rules of any Taxing Jurisdiction, file a composite, combined,
or aggregate tax return reflecting the income of the Company and pay the tax,
interest and penalties of all of the Members on such income to the Taxing
Jurisdiction, in which case the Company shall inform the Members of the amount
of such tax interest and penalties so paid.

 

8.3           Tax Matters
Partner.  Initially,
the Manager shall be designated the tax matters partner of the Company pursuant
to section 6231(a)(7) of the Code.  If
the Manager is no longer a Member or resigns as the tax matters partner, the
successor Manager shall designate one Member, which can be such new Manager, as
the successor Tax Matters Partner.  Any
Member designated as Tax Matters Partner shall take such action as may be
necessary to cause each other Member to become a “notice partner” within the
meaning of section 6223 of the Code. Any Member who is designated Tax Matters
Partner may not take any action contemplated by sections 6224 through 6234 of
the Code without the consent of the other Members.  The Tax Matters Partner shall keep the
Members apprised of any tax proceedings affecting the Company.  In addition, the Tax Matters Partner shall
provide a copy of the Company Tax Return 30 days prior to the filing of such return
to the other Members. Subject to Sections 8.1 and 8.2, the Tax Matters Partner
shall have discretion regarding the elections or the filing of tax returns; provided,
that in preparing the tax returns of the Company, the Tax Matters Partner will
make those tax elections (or refrain from making those elections), and will
only take reporting positions, which are in the overall best interests of the
Members.  In determining the overall best
interests of the Members, the Tax Matters Partner will assume that all Members
are subject to tax at the highest combined marginal Federal, state and local
income tax rates applicable to an individual residing in the locality of the
Member or the Beneficiary with the highest effective tax rate.  The Tax Matters Partner shall comply with all
provisions of the Agreement with respect to taxes in the performance of its
duties as Tax Matters Partner.  The Tax
Matters Partner will not be liable to any other Member for any act or omission
associated with its role as Tax Matters Partner except

 

27

 

to the extent that any action it takes or
fails to take is in violation of this Agreement or constitutes gross
negligence, fraud or a willful violation of law.  Any reasonable cost or expense incurred by
the Tax Matters Partner in connection with its duties, including the
preparation for or pursuance of administrative or judicial proceedings and the
preparation of income tax returns, shall be paid by the Company.

 

ARTICLE IX.        ASSIGNMENTS AND TRANSFERS OF INTERESTS.

 

9.1           Right
of First Refusal.  Other than
Transfers (i) to its Affiliates or (ii) of all of the Class A Interests then
held by a Parent or any Affiliate of Parent to an Acquiror pursuant to a Change
of Control of Parent, each time the Class A Member proposes to Transfer all or
any part of the Class A Interest, such Member shall first offer such Class A
Interest to the Class B Member in accordance with the following provisions, provided
that the grant of any permitted pledge or mortgage of any assets of the Company
to secure Indebtedness of the Company to a person or of the Class A Interest
shall not constitute a Transfer or assignment for purposes of this Section 9.1
if the holder of such pledge or mortgage agrees to comply with the terms
hereof:

 

(a)           Notice
of Proposed Transfer.  Such Class A
Member shall deliver a written notice (“Option Notice”) to the Class B Member
stating (i) such Member’s bona
fide intention to Transfer such
Membership Interest; (ii) the Membership Interest to be Transferred;
(iii) the purchase price and terms of payment for which the Member
proposes to Transfer such Membership Interest; (iv) the nature of the
proposed Transfer; and (iv) the name and address of the proposed
transferee.  The Member shall use
commercially reasonable efforts to cause the Option Notice to be signed by the
proposed transferee, if any, confirming the accuracy of the information
contained therein.

 

(b)           Members’
Option.  The Class B Member shall
have the right, but not the obligation, to elect to purchase such Class A Interest
upon the same price and terms, including payment of any deposit and forfeit
thereof, designated in the Option Notice.  If the Option Notice provides for the payment
of non-cash consideration, the Class B Member may elect to pay the
consideration in cash equal to the good faith estimate of the present fair
market value of the non-cash consideration offered.  Within 10 Business Days after receipt of
the Option Notice, the Class B Member shall notify the Managers in writing of its
election to purchase the Membership Interest proposed to be so
transferred.  The failure to submit a
notice within the applicable period shall constitute an election not to
purchase any of the Membership Interest which may be so Transferred.

 

(c)           Closing.  If the Class B Member elects to purchase the
Membership Interest designated in the Option Notice, then the closing of such
purchase shall occur within the time period and subject to the conditions set
forth in the Option Notice.  The Transferring
Member, the Company and/or the other Members shall execute such documents and
instruments and make such deliveries as may be reasonably required to
consummate such purchase.

 

(d)           Failure
to Exercise Options.  If the Class B
Member elects not to purchase all of the Membership Interest designated in the
Option Notice, then the transferring Member may Transfer the portion of the
Membership Interest described in the Option 

 

28

 

Notice not so purchased, to the proposed transferee but only if such
Transfer (i) is completed within 90 days after the expiration of the
Class B Members’ right to purchase such Membership Interest; (ii) is made
on terms no less favorable to the transferring Member than as designated in the
Option Notice; and (iii) complies with Sections 9.2, 9.3, 9.4 and
9.5.  If such Membership Interest is not
so Transferred, the transferring Member must give notice in accordance with
this Section prior to any other or subsequent Transfer of such Membership
Interest.  If the Class B Member
exercises its option under this Section 9.1 and defaults in its obligation to
purchase all of the Membership Interest designated in the Option Notice, the
rights pursuant to this Section 9.1 shall terminate.

 

9.2           Tag-Along Rights.

 

(a)           In
addition to the other requirements hereunder, if a Transferring Member desires
to transfer Membership Interests to a Third Party, the Transferring Members
shall deliver a Tag-Along Notice to the other Members (a “Non-Transferring
Member”) indicating the amount and type (as applicable) of its Membership
Interests proposed to be Transferred and the terms (including the form and
amount of consideration to be paid) and conditions of such proposed Transfer, provided
that the grant of any permitted pledge or mortgage of any assets of the Company
to secure Indebtedness of the Company to a person or of the Class A Interest
shall not constitute a Transfer or assignment for purposes of this Section
9.2(a) if the holder of such pledge or mortgage agrees to comply with the terms
hereof.  The Non-Transferring Member
shall have the right to elect to participate in the proposed Transfer, by
delivering written notice of such election to the Transferring Members within
the Tag-Along Option Period.  The
Non-Transferring Member shall be entitled, but is not required, to sell to the
prospective Third Party an amount of its Membership Interest up to the product
of (i) the amount of the Non-Transferring Member’s Membership Interest and (ii)
the percentage determined by dividing (A) the amount of the Transferring
Members’ Membership Interest proposed to be Transferred divided by (B) the
aggregate amount of the Transferring Members’ Membership Interest, on
substantially the same terms and conditions as the Transferring Members,
provided, that where the Non-Transferring Member is a Class B Member, such
Class B Member shall: (x) not be required to make any representations or
warranties other than with respect to its ownership of the Class B Membership
Interest; and (y) agree to its pro rata share of any required indemnification
obligations solely with respect to such representations and warranties required
to be given pursuant to clause (x) above.

 

(b)           The
Transferring Members shall not sell any Membership Interests to a Third Party
unless and until, simultaneously with such sale, the Third Party purchases such
Membership Interests from the Non-Transferring Member in accordance with the
terms of this Section 9.2.

 

(c)           Subject
to Section 9.1 and the other requirements hereunder, so long as the Transferring
Members comply with the conditions set forth in this Article IX, the
Transferring Members may Transfer such Membership Interests to the Third Party
set forth in the Tag-Along Notice, provided that:

 

29

 

(i)            such Transfer is
completed within 60 days after the expiration of the Tag-Along Option Period,

 

(ii)           such Transfer is made
for the same consideration and on substantially the same terms and conditions
as set forth in the Tag-Along Notice,

 

(iii)          if any Class B Interests
are being transferred, such Membership Interests shall automatically and
without any action of the parties hereto or the transferee, become Class A
Interests, without any of the rights specifically associated with Class B
Interests,

 

(iv)          the requirements hereof
relating to consents and the requirements in Sections 9.3 and 9.5 are met,

 

(v)           if the Membership
Interests are not Transferred to the proposed Third Party within such 60-day
period, the Transferring Members must give notice in accordance with this
Section 9.2 prior to any other or subsequent Transfer of such Membership
Interests; and

 

(vi)          the proceeds to be
received by a transferring Member are applied to any amounts due and owing the
Company or the other Members hereunder (including in the case of a Class B
Member as a Capital Contribution in the amount of, and to reduce, any Excess
Payment Balance) concurrently with the Transferring Member’s receipt of the
proceeds from the Transfer permitted hereunder; it being understood that if
there remains outstanding any Excess Payment Balance after the application of
the proceeds to be received by a Transferring Member in respect of Class B
Interests, such outstanding Excess Payment Balance shall apply in full to the
remaining Class B Interests and Series B Preferred Shares.

 

(d)           Immediately
following the transfer of a Class B Interest pursuant to this Section 9.2,
except as provided below, all distribution and allocation calculations relating
to (x) the Class B Member’s continuing Class B Interest (including all
definitions and minimums relating thereto) under this Agreement and (y) the
remaining Series B Preferred Shares held by the Class B Member (including all
definitions and minimums relating thereto) under the Shareholders Agreement and
the Charter, shall be reduced in the aggregate proportionately on a going
forward basis based on the percentage of the Class B Member’s interest
transferred and the percentage of Series B Preferred Shares transferred.  The Company shall by written notice to the
Class B Member delivered concurrently with the Tag-Along Notice elect to either
(i) have an “interim closing of the books” on the date of transfer with respect
to all Class A Interests and Class B Interests and the Series A Preferred
Shares and the Series B Preferred Shares then transferred or (ii) not have an
interim closing of the books with respect to any Class A Interests or Class B
Interests and Series A Preferred Shares and the Series B Preferred Shares then
transferred (i.e., if there is an interim closing of the books with respect to
any interest transferred, there will be an interim closing of the books with
respect to all interests transferred). 
If the Company elects to have an interim closing of the books, then the
date

 

30

 

of transfer shall be treated as the end of a Fiscal Year for purposes
of calculating the Class B Year End Distribution and the year end Vegas
Distribution, which amount shall be payable concurrently with the
transfer.  Otherwise, the determination
of the Amount Owed for the year of the transfer shall be the weighted average
of the Class B Member’s percentage of Operating Cash Flow for such year. The
weighted average shall be the sum of the percentage share of Operating Cash Flow
for each day of the Fiscal Year divided by the number of days in the Fiscal
Year.  For example if the Class B Member’s
interest in Operating Cash Flow was 15% for 125 days and 13% for 240 days, the
formula would be 15x125 (1875) plus 13x240 (3120) divided by 365, which results
in a percentage of Operating Cash Flow equal to 13.68%.  The Class B Member’s interest in Net Profit
for the year of the transfer shall be determined in the same manner.

 

9.3           Requirements of
Transfer.  In addition
to the other requirements hereunder, no Transfer of a Membership Interest in
the Company shall be effective unless and until:

 

(a)           the
Company and the non-transferring Members have received written notice
(including the name and address of the proposed transferee and the date of such
Transfer) of such Transfer;

 

(b)           the
Company has received an opinion of counsel reasonably satisfactory to the
Manager that such transfer is subject to an effective registration under, or
exempt from the registration requirements of, the applicable state and Federal
securities laws; provided, that no opinion shall be required with
respect to any transfer by a Class B Member to the Beneficiary, the Beneficiary’s
descendants, immediate family members or any trust or other entity formed for
tax or estate planning purposes for the benefit of any of the foregoing;

 

(c)           the
Company has received from the transferee the information and agreements that
the Manager may reasonably require, including but not limited to any taxpayer
identification number and any agreement that may be required by any Taxing
Jurisdiction; and

 

(d)           the
proposed transferee agrees in writing for the benefit of the Class B Member, in
form and substance reasonably satisfactory to the Class B Member, to comply
with the obligations of the transferor set forth in this Agreement.

 

9.4           Substitute
Members.  A Permitted
Transferee who has complied with this Article IX above shall become a
Substitute Member and shall be entitled to the allocations, distributions and
all other rights attributable to the interest in the Company transferred to
such Transferee upon execution of a counterpart of this Agreement or such other
instrument evidencing, to the satisfaction of the Manager, such substitute
Member’s intent to become a Member.  Upon
admission, such Substitute Member shall be bound by all provisions of this
Agreement and shall have all the rights and powers and be subject to all the
restrictions and liabilities under this Agreement.

 

9.5           No
Transfer.  Notwithstanding anything
to the contrary in this Agreement:

 

31

 

(a)           No
Member shall Transfer any Membership Interest in the Company unless, concurrent
with the Transfer of such Membership Interest, such Member Transfers to the
transferee of its Membership Interest a number of (i) Vegas Common Shares and
(ii) Preferred Shares (as defined in the Charter) such that the percentage of
such Member’s Membership Interest Tranferred equals the percentage of such
Member’s Vegas Common Shares and the percentage of such Member’s Preferred
Shares Transferred.  For illustrative
purposes, if a Member Transfers 1/3 of its Membership Interest, it must also
Transfer 1/3 of its Vegas Common Shares and 1/3 of its Preferred Shares to the
same transferee.

 

(b)           No
Class A Member may Transfer any Membership Interest in the Company except as
permitted by this Article IX.  No Class B
Member may Transfer any Membership Interest except (i) in connection with a
Transfer by a Class A Member under this Article IX with respect to which the
Class B Member is exercising its Tag-Along rights hereunder or (ii) pursuant to
Article X.

 

ARTICLE X.         OPTIONAL
PURCHASE EVENT

 

10.1         Put Option. 
Subject to Section 9.5(a), from and after January 1, 2008, the Class B
Member may, by delivery of a written notice to the Company (the “Put Notice”),
cause the Class A Members (the “Remaining Members”) to purchase all or part of
the Class B Member’s Membership Interest (the “Put Interest”) as provided in
this Section; provided, that the Class B Member shall not be entitled to
deliver a Put Notice more than twice in any Fiscal Year.  The Company and Parent hereby jointly
guarantee the performance of the Class A Members of this Article X.

 

10.2         Purchase Price.

 

(a)           The purchase price for the Put Interest shall
be the fair market value thereof as determined by an independent appraiser
jointly selected by (i) the Class B Member, on one hand, and (ii) the Manager
and Vegas, on the other hand.  If the
Class B Member, the Manager and Vegas are unable to agree on an appraiser
within 10 days after delivery of the Put Notice, the Class B Member shall
select an independent appraiser and the Manager and Vegas shall collectively
select an independent appraiser, each within 5 days after expiration of
the 10-day period.  The 2 appraisers
so selected shall each independently appraise the Put Interest and, as long as
the difference in the 2 appraisals does not exceed 1% of the lower of the
2 appraisals, the fair market value shall be conclusively deemed to equal
the average of the 2 appraisals. 
The determination of such appraisers shall be binding on the
parties.  If either party fails to select
an independent appraiser within the time required by this Section, the fair
market value of the Put Interest shall be conclusively deemed to equal the
appraisal of the independent appraiser timely selected by the other.

 

(b)           If the difference between the 2 appraisals
exceeds 1 percent of the lower of the 2 appraisals, the
2 appraisers selected shall select a third appraiser (the “Independent
Appraiser”) who shall also independently appraise the Put Interest and choose
between the other two appraisals.  The
determination of such appraiser shall be

 

32

 

binding on the parties. The cost
of the Independent Appraiser shall be borne by the party whose appraisal has
not been chosen.

 

(c)           In determining the fair market value, the
appraisers shall consider all opinions and relevant evidence submitted to them
by the parties, or otherwise obtained by them (including future plans and
opportunities of the Company and Vegas), and shall set forth their
determination in writing, together with their opinions and the considerations
on which the opinions are based, with a signed counterpart to be delivered to each
party, within 30 days after commencing the appraisal.  In determining such fair market value:
(i) the appraisers shall take into account the amount of the Excess Payment
Balance, if any, and (ii) no
discount shall be taken for non-marketability, minority ownership or other
similar factors.  The Company will
promptly provide all information requested by either party to assist in
determining fair market value.

 

(d)           The proceeds to be received by the Class B
Member in connection with the sale of its Put Interest shall be applied to any
amounts due and owing by the Class B Member to the Company or Vegas or the
other Members hereunder only to the extent such amounts were not taken into
account in determining the fair market value of the Put Interest.

 

10.3         Closing.  The
purchase price for the Put Interest shall be paid by the Remaining Members in
cash, at a closing (“Closing”) for the sale of a Put Interest, to be held at
10:00 a.m. at the location specified in the Put Notice no later than
60 days after the determination of the purchase price, except that if the
Closing date falls on a Saturday, Sunday, or legal holiday, then the Closing
shall be held on the next succeeding Business Day.  At the Closing, the Class B Member shall
deliver to the Remaining Members an instrument of transfer (containing
warranties of title and no encumbrances) conveying the Put Interest.  The Class B Member, the Company and the
Remaining Members shall do all things and execute and deliver all papers as may
be reasonably necessary to consummate fully such sale and purchase in
accordance with the terms and provisions of this Agreement.

 

10.4         Allocation
of Class B Year End Distribution.  In
any year in which a Put Option is exercised, the determination of the Class B
Year End Distribution and the year end Vegas Distribution shall be made with
respect to each Class B Member based on their varying interests during the
year, reducing any amounts to which such Member is entitled, in the aggregate
proportionately for such year and on a going forward basis based on the
percentage of such Class B Member’s Interest and Series B Preferred Shares as
to which the Put Option has been exercised. 
For example, if a Class B Member holds 100% of the Class B Interests and
Series B Preferred Shares originally outstanding for 125 days and 25% of such
Class B Interests and Series B Preferred Shares for 240 days, the formula would
be 100x125 (12500) plus 25x240 (6000) divided by 365, which results in a
weighted percentage equal to 50.68% and accordingly, such Class B Member would
be entitled to receive 50.68% of the Class B Year End Distribution and year end
Vegas Distribution.

 

33

 

ARTICLE XI.        DISSOLUTION AND WINDING UP

 

11.1         Term.  Subject to the occurrence of an event of
dissolution pursuant to Section 11.2, the Company shall have perpetual
existence.

 

11.2         Dissolution.  The Company shall dissolve, and its affairs
shall be wound up upon the first to occur of the following:

 

(a)           the
written consent of the Class B Member and the Manager, or

 

(b)           the
entry of a decree of judicial dissolution under section 18-802 of the Act.

 

11.3         Effect of
Dissolution.  Upon
dissolution, the Company shall cease carrying on its business except insofar as
may be necessary to complete the winding up of the affairs of the Company, but
its separate existence shall continue until the Certificate of Dissolution has
been issued by the Secretary of State. 
Upon dissolution, the Company shall no longer be required to make
distributions hereunder except as provided by Section 11.4 below.

 

11.4         Distribution of
Assets on Dissolution. 
Upon the winding up of the Company, the Company Property shall be
distributed as follows:

 

(a)           to
third-party creditors, to the extent permitted by law, in satisfaction of
liabilities the Company;

 

(b)           pro rata, to the Class A Members until any
Excess Payment Balance has been discharged; and

 

(c)           to
all Members in accordance with their positive Capital Account balances as such
Capital Accounts would be adjusted taking into account all allocations under
Article VI and Capital Account adjustments for the Company’s Fiscal Year
in which the dissolution occurs, on a pro forma basis as if all of the assets
of the Company had been sold for Fair Market Value immediately prior to such
winding up.

 

11.5         Payment of
Dissolution Proceeds. 
Dissolution proceeds shall be paid by the end of the Company’s Fiscal
Year or, if later, within 90 days after the date of dissolution.  Distributions of dissolution proceeds shall
be paid in cash or, in the case of distributions to Class A Members,
Property or partly in both, as determined reasonably and in good faith by the
Manager.  Notwithstanding the foregoing,
the Class B Members may elect to receive distributions of property, including
certain specific items of property.  The
valuation of such property used in distributions must be agreed upon by all the
Class B Member and the Manager.  If they
are not able to agree, then an Independent Financial Advisor mutually selected
by the Class B Member and the Manager shall determine the value in a manner
consistent with that set forth in Section 7.7.

 

11.6         Winding Up.  The winding up of the Company shall be
completed when all debts, liabilities and obligations of the Company have been
paid and discharged or reasonably adequate provision therefore has been made
and all of the remaining Company Property has been

 

34

 

distributed to the Members. Upon the
completion of winding up of the Company, a certificate of dissolution shall be
delivered to the Secretary of State for filing. The certificate of dissolution
shall set forth the information required by the Act.

 

ARTICLE XII.      INDEMNIFICATION

 

12.1         Indemnification
of Members.  The
Company shall indemnify any Member (other than the Manager) from and against
any and all Losses, actually and reasonably incurred by such Person in
connection with such Proceeding who was or is a party or is threatened to be
made a party to, a threatened, pending or completed Proceeding by reason of the
fact that he or she is or was a Member or Representative of the Company, to the
fullest extent permitted by applicable law unless (i) such Losses were incurred
as a direct result of such Member’s breach of this Agreement or such Member’s gross
negligence, bad faith or willful misconduct or (ii) such Losses relate to any
transaction from which such person derived an improper personal benefit.

 

12.2         Indemnification
of Manager.

 

(a)           The
Company shall indemnify any Manager who was or is a party or is threatened to
be made a party to, or otherwise becomes involved in, any threatened, pending
or completed Proceeding (other than a Proceeding by or in the right of the
Company) by reason of the fact that such Manager is or was an agent of the
Company against all Losses actually and reasonably incurred by or levied
against such Manager in connection with such Proceeding, unless it is
determined by a court of competent jurisdiction that such Manager did not act
in good faith, in a manner he or she reasonably believed to be in or not
opposed to the best interests of the Company, and in a manner not in violation
of this Agreement or the Act, and with respect to any criminal Proceeding, in a
manner where the Manager had no reasonable cause to believe his or her conduct
was unlawful.

 

(b)           The
Company shall indemnify any Manager who was or is a party or is threatened to
be made a party to, or otherwise becomes involved in, any threatened, pending
or completed Proceeding by or in the right of the Company to procure a judgment
in its favor by reason of the fact that such Manager is or was an agent of the
Company only against Expenses actually and reasonably incurred by such Manager
in connection with such Proceeding, unless it is determined by a court of
competent jurisdiction that such Manager did not act in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the Company. 
Notwithstanding any other provision hereof, no indemnification shall be
made with respect to any claim, issue or matter as to which such Manager shall
have been adjudged to be in violation of this Agreement or the Act or otherwise
liable to the Company unless and only to the extent that the court in which
such Proceeding was brought or other court of competent jurisdiction shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such Manager is fairly and
reasonably entitled to indemnification for such Expenses which such court shall
deem proper.

 

35

 

(c)           Any
indemnification under Sections 11.2(a) or 11.2(b) (unless ordered by a court as
referred to in such Section) shall be made by the Company only as authorized in
the specific case upon a determination that indemnification of the Manager is
proper in the circumstances because such Manager has met the applicable
standard of conduct set forth in Sections 11.2(a) or 11.2(b).

 

(d)           Indemnification
Procedures. If any Indemnitee receives notice of any claim,
assertion or other commencement of any Proceeding or becomes aware of any
matter with respect to which the Company is obligated to provide
indemnification pursuant to Sections 11.1 or 11.2, the Indemnitee shall
promptly give the Company written notice thereof.  Failure to give such notice shall not affect
a party’s right to be indemnified hereunder; provided, that the Company’s
liability hereunder shall be limited to that which would have existed had
prompt notice been given, and the Indemnitee shall be solely responsible for,
and shall indemnify the Company from, such increased liability, if any, as
shall have been occasioned by its failure to provide the Company with prompt
notice.  The Company may defend at the
Company’s own expense and by the Company’s own counsel, any such matter
involving the asserted liability of the Indemnitee.  In such event, the Indemnitee, the Company
and the Company’s counsel shall cooperate in the compromise of, or defense
against, any such asserted liability. 
The Indemnitee may participate in the defense of such asserted liability
at its own expense.  The Company shall
have the right to compromise any Proceeding; provided, that it shall not
effect a settlement of any Proceeding without the prior written consent of the
Indemnitee (which consent shall not be unreasonably withheld) and shall include
an unconditional release of the Indemnitee for any claim, action, assertion or
Proceeding.  If the Company is defending
any Proceeding, the Indemnitee shall make available to the Company any books,
records or other documents within its control that are reasonably necessary or
appropriate for such defense.

 

12.3         No
payments pursuant to this Agreement shall be made by the Company:

 

(a)           to
indemnify or advance funds to any Person with respect to a Proceeding initiated
or brought voluntarily by such Person and not by way of defense, except with
respect to a Proceeding brought to establish or enforce a right to indemnification
under this Agreement or otherwise than as required by applicable law; or

 

(b)           if
a court of competent jurisdiction finally determines that any indemnification
or advance of Expenses hereunder is unlawful.

 

12.4         Notwithstanding
the foregoing, any indemnification pursuant to this Agreement shall be offset
against any insurance proceeds received by the Indemnitee.  The Manager shall purchase and maintain at no
cost to the Company adequate insurance coverage on behalf of any Person a
Representative of the Manager against any liability asserted against such
Person and incurred by such Person in any such capacity, or arising out such
Person’s status as an agent, whether or not the Company would have the power to
indemnify such Person against such liability under the provisions of this
Article XII or the Act.

 

36

 

ARTICLE XIII.     INFORMATION, ACCOUNTS AND PUBLICITY

 

13.1         Books and
Records.  The books and
records of the Company shall be kept, and the financial position and the
results of its operations recorded, in accordance with GAAP.  The books and records of the Company shall
reflect all the Company’s transactions and shall be appropriate and adequate
for the business conducted by the Company.

 

13.2         Delivery to
Members and Inspection. 
Upon the written request stating the reason of such request of any
Member for purposes reasonably related to the interest of that Person as a
Member, the Manager shall promptly deliver to the requesting Member, at the
expense of the Company, a copy of the following:

 

(a)           a
current list of the full name and last known business or residence address of
each Member, former Member and other holder of a Membership Interest, set forth
in alphabetical order, together with the Capital Contributions and Capital
Account of each Member;

 

(b)           copies
of the Company’s federal, foreign, state, and local income tax or information
returns and reports, if any, for each Fiscal Year;

 

(c)           copies
of the financial statements of the Company, if any, for the six (6) most recent
Fiscal Years;

 

(d)           a
copy of the Certificate of Formation and all amendments thereto, this Agreement
and all amendments thereto, together with executed copies of any written powers
of attorney pursuant to which this Agreement and the Certificate and all
amendments thereto have been executed;

 

(e)           true
and full information regarding the amount of cash and a description and
statement of the agreed value of any other property or services contributed by
each Member and which each Member has agreed to contribute in the future, and
the date on which each became a Member; and

 

(f)            any
other information regarding the affairs of the Company as is reasonable,
including true and full information regarding the business and financial
condition of the Company.

 

Each Member
has the right, upon reasonable request for the purposes reasonably related to
the interest of the Person as a Member, to (i) inspect and copy during normal
business hours any of the Company records maintained by the Company pursuant to
Section 13.1; and (ii) obtain from the Manager, promptly after their
becoming available, a copy of the Company’s federal, state, and local income
tax or information returns for each Fiscal Year.

 

13.3         Additional
Records.  The Manager
shall deliver, at the expense of the Company, the following to the Class B
Member:

 

(a)           Copies
of the Annual Audit Report within 90 days following the end of each Fiscal
Year;

 

37

 

(b)           Copies
of the unaudited financial statements of the Company within 45 days following
the end of each calendar quarter;

 

(c)           Annual
budgets covering at least a period of one Fiscal Year no later than 60 days
after the beginning of such period accompanied by a certificate signed by the
Manager certifying that (i) such projections have been prepared on the
basis of sound financial planning and practice, consistent with past budgets
and financial statements and (ii) the Manager has no reason to question
the reasonableness of any material assumptions on which such projections were
prepared;

 

(d)           A
copy of the monthly financial reports to the extent such reports are prepared
by the Company in the ordinary course of business, in each case certified by
the chief accounting officer of the Company or, if none, the Manager, within 30
days after the end of each calendar month, including unaudited financial
statements on a monthly basis and material updates and changes (if any) to the
budget or business plan;

 

(e)           Immediate
notification of any material litigation or governmental order;

 

(f)            any
other information regarding the affairs of the Company as is reasonably
requested.

 

13.4         Annual
Statements.

 

(a)           The
Tax Matters Member shall cause to be prepared at least annually, at Company
expense, information necessary for the preparation of the Members’ federal and
state income tax returns.  The Tax
Matters Member shall send or cause to be sent to each Member within 90 days
after the end of each Fiscal Year:

 

(i)            such information as is
necessary to complete federal and state income tax or information returns,
including (A) those information returns required by the Code and the laws of
any state and (B) information concerning the Company’s income, gain, loss,
deduction or credit when relevant to reporting a Member’s share of such items
for Federal, state or local tax purposes, and

 

(ii)           a copy of the Company’s
federal, state, and local income tax or information returns for that year.

 

(b)           The
Manager shall cause to be filed any filings in any state in which the Company
is qualified to do business.

 

13.5         Filings.  The Manager, at Company expense, shall cause
the income tax returns for the Company to be prepared and timely filed with the
appropriate authorities.  The Manager, at
Company expense, shall also cause to be prepared and timely filed, with
appropriate federal and state regulatory and administrative bodies, amendments
to, or restatements of, the Certificate and all reports required to be filed by
the Company with those entities under the Act or other then current applicable
laws, rules, and regulations.

 

38

 

13.6         Bank Accounts.  The Manager shall maintain the funds of the
Company and its subsidiaries in one or more separate bank accounts in the name
of the Company or its subsidiaries, and shall not, other than with its subsidiaries,
permit the funds of the Company to be commingled in any fashion with the funds
of any other Person.

 

ARTICLE XIV.     ACKNOWLEDGMENTS AND REPRESENTATIONS BY MEMBERS

 

14.1         Representations
and Warranties.  Each
Member represents, warrants and agrees that:

 

(a)           such
Member is acquiring the Membership Interests for investment for its own account
and not with a view to, or for, resale, in connection with any distribution or
public offering thereof within the meaning of the Securities Act, and it is not
a party to any agreement to transfer the Membership Interests;

 

(b)           the
Membership Interests will not be registered under the Securities Act or
qualified under applicable state securities laws on the grounds that the
issuance of the Interests to such Member is exempt from registration under such
laws;

 

(c)           the
Membership Interests must be held indefinitely by such Member unless the
Membership Interests are subsequently registered under applicable federal and
state securities laws or an exemption from such registration is available;

 

(d)           such
Member is an “accredited investor” as defined in Rule 501(a) of the Securities
Act;

 

(e)           such
Member is familiar with the Company’s business, properties, prospects and
financial condition; and

 

(f)            such
Member has not been presented with any form of general solicitation or
advertising.

 

ARTICLE XV.      MISCELLANEOUS

 

15.1         Amendments;
Waivers.  This
Agreement may be amended or modified from time to time only by a written
instrument executed by (a) the Class B Member and (b) the holders of a
majority-in-interest of the Class A Interests.  Any waiver, or claimed waiver, sought to be
enforced against a Member shall not be effective unless contained in a signed
writing made by such Member.

 

15.2         Notices.

 

(a)           Any
notice to any Member shall be at the address of such Member set forth in Exhibit
A hereto or such other mailing address of which such Member shall advise
the Company in writing. Any notice to the Company shall be at the principal
place of business of the Company as set forth in Section 2.6, or such other
address as

 

39

 

determined reasonably and in good faith by the Manager, upon due notice
to each Member in accordance with this Section 15.2.

 

(b)           Any
notice hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered, sent by overnight courier or sent by United
States mail, or by facsimile transmission, and will be deemed received, unless
earlier received, (i) if sent by certified or registered mail, return receipt
requested, when actually received, (ii) if sent by overnight courier, when
actually received, (iii) if sent by facsimile transmission (which transmission
is confirmed), on the date confirmed, and (iv) if delivered by hand, on the date
of receipt.

 

15.3         Agreement
Binding Upon Successors and Assigns.  This Agreement shall be binding and inure to
the benefit of the Members hereto and to their respective successors, but the
rights and obligations of the Members hereunder shall not be assignable,
transferable or delegable except as expressly provided herein, and any
attempted assignment, transfer or delegation thereof which is not made in
accordance with such express provisions shall be void.

 

15.4         Severability.  If any provision of this Agreement or the
application of any such provision to any Person or circumstance shall be held
invalid, the remainder of this Agreement or the application of such provision
to Persons or circumstances other than those to which it is held invalid shall
not be affected thereby.

 

15.5         Not for Benefit
of Creditors.  The
provisions of this Agreement are intended only for the regulation of relations
among Members and between Members and former or prospective Members and the
Company.  This Agreement is not intended
for the benefit of non-Member creditors and no rights are granted to non-Member
creditors under this Agreement.

 

15.6         Not a
Partnership.  The
Members have formed the Company under the Act and expressly do not intend
hereby to form a partnership under either the Delaware Uniform Partnership Act
nor the Delaware Uniform Limited Partnership Act.  Except for applicable tax purposes, the Members do not intend to be
partners one to another, or partners as to any third party. To the extent any
Member, by word or action, represents to another Person that any other Member
is a partner or that the Company is a partnership, the Member making such
wrongful representation shall be liable to any other Member who incurs personal
liability by reason of such wrongful representation.

 

15.7         Costs and
Expenses.  Except as
otherwise provided herein and unless otherwise agreed to in writing by the
Class B Member and the Manager, each Member shall bear the costs and
expenses incurred by its Representatives in connection with the performance of
their duties pursuant to this Agreement.

 

15.8         Arbitration.  Except as otherwise provided in this
Agreement, any controversy between the parties arising out of this Agreement
shall be submitted to a mutually-agreed upon JAMS arbitrator pursuant to the
American Arbitration Association’s Expedited Procedures for arbitration in Los
Angeles, California.  The costs of the
arbitration, including any administration fee, the arbitrator’s fee, and costs
for the use of facilities during the hearings, shall be borne equally by the
parties to the arbitration.  Attorneys’
fees may be awarded to the prevailing or

 

40

 

most prevailing party at the discretion of
the arbitrator.  The arbitrator shall not
have any power to alter, amend, modify or change any of the terms of this
Agreement nor to grant any remedy which is either prohibited by the terms of
this Agreement, or not available in a court of law. The arbitrator shall issue
a written reasoned award and decision that shall be consistent with and
supported by the facts and the law within 90 days from the date the arbitration
proceedings are initiated.  Judgment on
the award of the arbitrator may be entered in any court having jurisdiction
thereof.

 

15.9         Certificates;
Legend.  A Membership
Interest may (but need not) be represented by a certificate of membership.  Subject to applicable law, the form and
content of the certificate of membership shall be determined by the
Manager.  Any such certificates issued
following the closing shall be governed by Article 8 of the UCC and shall be
deemed “securities” within the meaning of Article 8 of the UCC and “certificated
securities” within the meaning of Section 8-102(A)(4) of the UCC.  Any and all certificates of membership
currently held or subsequently acquired representing Membership Interests
subject to the provisions hereof will bear the following legend on each of
their respective reverse sides:

 

“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED NOR QUALIFIED UNDER ANY
STATE SECURITIES LAWS.  SUCH SECURITIES
MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, ASSIGNED, OR OTHERWISE
TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER
APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF
COUNSEL SATISFACTORY TO ELVIS PRESLEY ENTERPRISES, LLC (THE “COMPANY”), SUCH
QUALIFICATION AND REGISTRATION IS NOT REQUIRED. 
ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE SET FORTH
IN THE AMENDED AND RESTATED OPERATING AGREEMENT OF THE COMPANY.”

 

15.10       Counterparts.  This Agreement may be executed in any number
of counterparts and by different parties to this Agreement in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same Agreement.

 

15.11       Remedies
Cumulative.  The remedies
under this Agreement are cumulative and shall not exclude any other remedies to
which any Person may be lawfully entitled.

 

15.12       Governing Law.  This Agreement shall be governed by, and
construed under, the laws of the State of Delaware, without regard to any
conflicts or laws or choice of laws principles that would require the
application of the laws of any jurisdiction other than the State of Delaware,
all rights and remedies being governed by said laws.  The Members intend the provisions of the Act
to be controlling as to any matters not set forth in this Agreement.

 

15.13       Acknowledgement.  The Members hereby expressly acknowledge that
payments to be made to the Class B Member in respect of the Class B
Interest pursuant to Articles VII or X may be made directly to any Person
designated in writing by the Class B Member.

 

41

 

[the next page is the signature page]

 

42

 

IN WITNESS
WHEREOF, the undersigned, intending to be legally bound hereby, have duly
executed this Agreement as of the day first above written.

 

	
   

  	
  Class A Member:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EPE HOLDING CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas P. Benson

  	
   

  
	
   

  	
   

  	
  Name: Thomas P. Benson

  	
   

  
	
   

  	
   

  	
  Title: Executive Vice President, Chief
  Financial Officer and Treasurer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Parent, solely with respect to the last
  sentence of

  Section 10.1:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SPORTS ENTERTAINMENT ENTERPRISES,

  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas P. Benson

  	
   

  
	
   

  	
   

  	
  Name: Thomas P. Benson

  	
   

  
	
   

  	
   

  	
  Title: Executive Vice President, Chief
  Financial Officer and Treasurer

  	
   

  

 

43

 

	
   

  	
  Class B Member:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PROMENADE TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Barry J. Siegel

  	
   

  
	
   

  	
   

  	
  Name: Barry J. Siegel

  	
   

  
	
   

  	
   

  	
  Title: 
  Trustee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary Hovey

  	
   

  
	
   

  	
   

  	
  Name: Gary Hovey

  	
   

  
	
   

  	
   

  	
  Title: 
  Trustee

  	
   

  
							

 

44Exhibit
10.12

 

$39,000,000

 

BRIDGE LOAN
CREDIT AGREEMENT

 

among

 

SPORTS
ENTERTAINMENT ENTERPRISES, INC.,

 

a Colorado
corporation,

 

EPE HOLDING
CORPORATION,

 

a Delaware
corporation,

 

as Borrower,

 

The Several
Lenders

 

from Time to
Time Parties Hereto,

 

and

 

BEAR STEARNS
CORPORATE LENDING INC.,

 

as
Administrative Agent

 

 

Dated as of
February 7, 2005

 

 

 

BEAR, STEARNS & CO. INC., as Sole Lead
Arranger

 

 

TABLE OF CONTENTS

 

	
  SECTION 1. DEFINITIONS

  	
   

  
	
   

  	
   

  
	
  1.1.

  	
  Defined Terms

  	
   

  
	
  1.2.

  	
  Other Definitional Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2. AMOUNT AND TERMS OF BRIDGE
  COMMITMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  2.1.

  	
  Bridge Commitments

  	
   

  
	
  2.2.

  	
  Procedure for Bridge Loan Borrowing

  	
   

  
	
  2.3.

  	
  Repayment of Bridge Loans

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3. GENERAL PROVISIONS APPLICABLE TO
  LOANS

  	
   

  
	
   

  	
   

  	
   

  
	
  3.1.

  	
  Optional Prepayments

  	
   

  
	
  3.2.

  	
  Mandatory Prepayments

  	
   

  
	
  3.3.

  	
  Conversion and Continuation Options

  	
   

  
	
  3.4.

  	
  Limitations on Eurodollar Tranches

  	
   

  
	
  3.5.

  	
  Interest Rates and Payment Dates

  	
   

  
	
  3.6.

  	
  Computation of Interest and Fees

  	
   

  
	
  3.7.

  	
  Inability to Determine Interest Rate

  	
   

  
	
  3.8.

  	
  Pro Rata Treatment and Payments

  	
   

  
	
  3.9.

  	
  Requirements of Law

  	
   

  
	
  3.10.

  	
  Taxes

  	
   

  
	
  3.11.

  	
  Indemnity

  	
   

  
	
  3.12.

  	
  Change of Lending Office

  	
   

  
	
  3.13.

  	
  Replacement of Lenders

  	
   

  
	
  3.14.

  	
  Evidence of Debt

  	
   

  
	
  3.15.

  	
  Illegality

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4. REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1.

  	
  Financial Condition

  	
   

  
	
  4.2.

  	
  No
  Change

  	
   

  
	
  4.3.

  	
  Corporate Existence; Compliance with Law

  	
   

  
	
  4.4.

  	
  Power; Authorization; Enforceable
  Obligations

  	
   

  
	
  4.5.

  	
  No
  Legal Bar

  	
   

  
	
  4.6.

  	
  Litigation

  	
   

  
	
  4.7.

  	
  No
  Default

  	
   

  
	
  4.8.

  	
  Ownership of Property; Liens

  	
   

  
	
  4.9.

  	
  Intellectual Property.

  	
   

  
	
  4.10.

  	
  Taxes

  	
   

  
	
  4.11.

  	
  Federal Regulations

  	
   

  

 

 

	
  4.12.

  	
  Labor Matters

  	
   

  
	
  4.13.

  	
  ERISA

  	
   

  
	
  4.14.

  	
  Investment Company Act; Other Regulations

  	
   

  
	
  4.15.

  	
  Subsidiaries

  	
   

  
	
  4.16.

  	
  Use of Proceeds

  	
   

  
	
  4.17.

  	
  Environmental Matters

  	
   

  
	
  4.18.

  	
  Accuracy of Information, etc.

  	
   

  
	
  4.19.

  	
  Security Documents

  	
   

  
	
  4.20.

  	
  Solvency

  	
   

  
	
  4.21.

  	
  Senior Indebtedness

  	
   

  
	
  4.22.

  	
  Certain Documents

  	
   

  
	
  4.23.

  	
  Foreign Assets Control Regulations and
  Anti-Money Laundering

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5. CONDITIONS PRECEDENT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6. AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  6.1.

  	
  Financial Statements

  	
   

  
	
  6.2.

  	
  Certificates; Other Information

  	
   

  
	
  6.3.

  	
  Payment of Obligations

  	
   

  
	
  6.4.

  	
  Maintenance of Existence; Compliance

  	
   

  
	
  6.5.

  	
  Maintenance of Property; Insurance

  	
   

  
	
  6.6.

  	
  Inspection of Property; Books and Records;
  Discussions

  	
   

  
	
  6.7.

  	
  Notices

  	
   

  
	
  6.8.

  	
  Intellectual Property.

  	
   

  
	
  6.9.

  	
  Environmental Laws

  	
   

  
	
  6.10.

  	
  Additional Collateral, etc.

  	
   

  
	
  6.11.

  	
  Use of Proceeds

  	
   

  
	
  6.12.

  	
  Further Assurances

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7. NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  7.1.

  	
  Financial Condition Covenants

  	
   

  
	
  7.2.

  	
  Indebtedness

  	
   

  
	
  7.3.

  	
  Liens

  	
   

  
	
  7.4.

  	
  Fundamental Changes

  	
   

  
	
  7.5.

  	
  Disposition of Property

  	
   

  
	
  7.6.

  	
  Restricted Payments

  	
   

  
	
  7.7.

  	
  Capital Expenditures

  	
   

  
	
  7.8.

  	
  Investments

  	
   

  
	
  7.9.

  	
  Optional Payments and Modifications of
  Indebtedness

  	
   

  
	
  7.10.

  	
  Transactions with Affiliates

  	
   

  
	
  7.11.

  	
  Sales and Leasebacks

  	
   

  
	
  7.12.

  	
  Hedge Agreements

  	
   

  
	
  7.13.

  	
  Changes in Fiscal Periods

  	
   

  
	
  7.14.

  	
  Negative Pledge Clauses

  	
   

  
	
  7.15.

  	
  Clauses Restricting Subsidiary Distributions

  	
   

  

 

 

	
  7.16.

  	
  Lines of Business

  	
   

  
	
  7.17.

  	
  Certain Amendments

  	
   

  
	
  7.18.

  	
  Accounting Changes

  	
   

  
	
  7.19.

  	
  Intellectual Property.

  	
   

  
	
  7.20.

  	
  Hazardous Substances

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8. EVENTS OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9. THE AGENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  9.1.

  	
  Appointment

  	
   

  
	
  9.2.

  	
  Delegation of Duties

  	
   

  
	
  9.3.

  	
  Exculpatory Provisions

  	
   

  
	
  9.4.

  	
  Reliance by Agents

  	
   

  
	
  9.5.

  	
  Notice of Default

  	
   

  
	
  9.6.

  	
  Non-Reliance on Agents and Other Lenders

  	
   

  
	
  9.7.

  	
  Indemnification

  	
   

  
	
  9.8.

  	
  Agent in Its Individual Capacity

  	
   

  
	
  9.9.

  	
  Successor Administrative Agent

  	
   

  
	
  9.10.

  	
  Agents Generally

  	
   

  
	
  9.11.

  	
  The Lead Arranger

  	
   

  
	
  9.12.

  	
  Withholding Tax

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10. MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  10.1.

  	
  Amendments and Waivers

  	
   

  
	
  10.2.

  	
  Notices

  	
   

  
	
  10.3.

  	
  No Waiver; Cumulative Remedies

  	
   

  
	
  10.4.

  	
  Survival of Representations and Warranties

  	
   

  
	
  10.5.

  	
  Payment of Expenses and Taxes

  	
   

  
	
  10.6.

  	
  Successors and Assigns; Participations and
  Assignments

  	
   

  
	
  10.7.

  	
  Adjustments; Set-off

  	
   

  
	
  10.8.

  	
  Counterparts

  	
   

  
	
  10.9.

  	
  Severability

  	
   

  
	
  10.10.

  	
  Integration

  	
   

  
	
  10.11.

  	
  GOVERNING LAW

  	
   

  
	
  10.12.

  	
  Submission To Jurisdiction; Waivers

  	
   

  
	
  10.13.

  	
  Acknowledgments

  	
   

  
	
  10.14.

  	
  Releases of Liens

  	
   

  
	
  10.15.

  	
  Confidentiality

  	
   

  
	
  10.16.

  	
  WAIVERS OF JURY TRIAL

  	
   

  
	
  10.17.

  	
  Delivery of Addenda

  	
   

  
	
  10.18.

  	
  USA PATRIOT Act

  	
   

  

 

 

	
  SCHEDULES:

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1(a)

  	
  Permitted Indebtedness

  	
   

  
	
  1.1(b)

  	
  Permitted Liens

  	
   

  
	
  4.4

  	
  Consents, Authorizations, Filings and Notices

  	
   

  
	
  4.15

  	
  Subsidiaries

  	
   

  
	
  4.19

  	
  UCC Filing Jurisdictions

  	
   

  
	
  5(i)

  	
  Environmental Reports

  	
   

  
	
  7.10

  	
  Affiliate Transactions

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  
	
   

  	
   

  	
   

  
	
  A

  	
  Form of Guarantee and Collateral Agreement

  	
   

  
	
  B

  	
  Form of Compliance Certificate

  	
   

  
	
  C

  	
  Form of Closing Certificate

  	
   

  
	
  D

  	
  Form of Assignment and Assumption

  	
   

  
	
  E-1

  	
  Form of Legal Opinion of Paul, Hastings, Janofsky and Walker LLP

  	
   

  
	
  E-2

  	
  Form of Legal Opinion of Greenberg Traurig

  	
   

  
	
  F

  	
  Form of Exemption Certificate

  	
   

  
	
  G

  	
  Form of Bridge Note

  	
   

  
	
  H

  	
  Form of Addendum

  	
   

  
	
  I

  	
  Form of Solvency Certificate

  	
   

  
	
  J

  	
  Subordination Provisions

  	
   

  

 

 

BRIDGE LOAN CREDIT AGREEMENT, dated as of
February 7, 2005, among SPORTS ENTERTAINMENT ENTERPRISES, INC., a Colorado
corporation (“Holdings”), EPE HOLDING CORPORATION, a Delaware
corporation and a direct wholly owned subsidiary of Holdings (the “Borrower”),
the several banks and other financial institutions or entities from time to
time parties to this Agreement as lenders (the “Lenders”), BEAR, STEARNS
& CO. INC., as sole lead arranger (in such capacity, the “Lead Arranger”),
and BEAR STEARNS CORPORATE LENDING INC., as administrative agent (in such
capacity, the “Administrative Agent”).

 

RECITALS

 

WHEREAS, on the Closing Date (as defined
below) RFX Acquisition LLC, a Delaware limited liability company (“RFX”),
intends, through its acquisition of a controlling interest in Holdings, to
acquire (the “Acquisition”) eighty-five percent (85%) of the common
stock (on a fully diluted basis) and 100% of the Series A Preferred Stock of
Elvis Presley Enterprises, Inc., a Tennessee corporation (“EPE”), in
each case, issued and outstanding as of the date hereof, and one hundred
percent (100%) of the outstanding Class A membership interests, representing
approximately eighty-five percent (85%) of the economic and voting interests,
in Elvis Presley Enterprises, LLC, a newly formed Delaware limited liability
company (“LLC” and, together with EPE, the “Operating Companies”);

 

WHEREAS, the Acquisition will be effected
pursuant to the Contribution and Exchange Agreement, dated as of December 15, 2004, among The Promenade
Trust, a grantor trust created under the laws of Tennessee (the “Seller”),
Holdings and RFX (as the same may be amended from time to time in accordance
with the terms hereof, the “Acquisition Agreement”); and

 

WHEREAS, upon consummation of the
Acquisition, all of the equity interests in the Operating Companies acquired by
Holdings will be contributed to the Borrower, and all existing indebtedness of
RFX (consisting primarily of a $5,000,000 secured loan from Bear Stearns
Corporate Lending Inc. to RFX (the “Deposit Loan”)) and the Operating
Companies and their respective subsidiaries will be repaid or defeased
(together with the Deposit Loan, the “Existing Indebtedness”).

 

NOW, THEREFORE, in consideration of the
foregoing premises and to induce the Administrative Agent and the Lenders to
enter into this Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrower hereunder, the parties hereto hereby agree
as follows:

 

SECTION 1. 
DEFINITIONS

 

1.1.          Defined
Terms.  As
used in this Agreement, the terms listed in this Section 1.1 shall have the
respective meanings set forth in this Section 1.1.

 

“Acquired Indebtedness”:  Indebtedness of any Person substantially all
of the Capital Stock or other ownership interests of which is, or in respect of
any business unit of any 

 

1

 

Person,
acquired after the Closing Date by Holdings or one of its Subsidiaries in
connection with a Permitted Acquisition, but only to the extent such
Indebtedness was outstanding prior to giving effect to such Permitted
Acquisition and was not incurred in contemplation of or for purposes of
consummating such Permitted Acquisition.

 

“Acquisition”:  as defined in the recitals to this Agreement.

 

“Acquisition Agreement”:  as defined in the recitals to this Agreement.

 

“Acquisition Documentation”:  collectively, the Acquisition Agreement and
all schedules, exhibits and annexes thereto and all side letters and agreements
affecting the terms thereof or entered into in connection therewith, including
the Boxcar Assignment.

 

“Addendum”:  an instrument, substantially in the form of
Exhibit H, by which a Lender becomes a party to this Agreement as of the
Closing Date.

 

“Administrative Agent”:  as defined in the preamble to this Agreement.

 

“Affiliate”:  as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person.  For purposes
of this definition, “control” of a Person means the power, directly or
indirectly, either to (a) vote 5.0% or more of the securities having ordinary
voting power for the election of directors (or persons performing similar
functions) of such Person or (b) direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.

 

“Agents”:  the collective reference to the Lead Arranger
and the Administrative Agent.

 

“Aggregate Exposure”:  with respect to any Lender at any time, an
amount equal to (a) until the Closing Date, the aggregate amount of such
Lender’s Bridge Commitments at such time and (b) thereafter, the aggregate
then unpaid principal amount of such Lender’s Bridge Loans.

 

“Aggregate Exposure Percentage”:  with respect to any Lender at any time, the
ratio (expressed as a percentage) of such Lender’s Aggregate Exposure at such
time to the Aggregate Exposure of all Lenders at such time.

 

“Agreement”:  this Credit Agreement, as amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.

 

“Applicable Margin”:  for each Type of Loan, the rate per annum set
forth under the relevant column heading below:

 

	
   

  	
   

  	
  Eurodollar Loans

  	
   

  	
  Base Rate Loans

  	
   

  
	
  At all times on and after the Closing Date
  to, but not including, the second scheduled Interest Payment Date

  	
   

  	
  4.00

  	
  %

  	
  3.00

  	
  %

  
	
  At all times on and after the second
  scheduled Interest Payment Date, to but not including, the third scheduled
  Interest Payment Date

  	
   

  	
  5.00

  	
  %

  	
  4.00

  	
  %

  
	
  At all times on and after the third
  scheduled Interest Payment Date

  	
   

  	
  6.00

  	
  %

  	
  5.00

  	
  %

  

 

2

 

 

“Approved Fund”:  (a) a CLO and (b) with respect to any Lender
that is a fund which invests in commercial loans, any other fund that invests
in commercial loans and is managed or advised by the same investment advisor as
such Lender or by an Affiliate of such investment advisor.

 

“Asset Sale”:  any Disposition of Property or series of
related Dispositions of Property (excluding any such Disposition permitted by
clause (a), (b) or (c) of Section 7.5) that yields gross proceeds to any Group
Member (valued at the initial principal amount thereof in the case of non-cash
proceeds consisting of notes or other debt securities and valued at fair market
value in the case of other non-cash proceeds) in excess of $500,000.

 

“Assignee”:  as defined in Section 10.6(b).

 

“Assignment and Assumption”:  an Assignment and Assumption, substantially
in the form of Exhibit D.

 

“Base Rate”:  for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) 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 0.50%.  For
purposes hereof:  “Prime Rate”
shall mean the rate of interest per annum publicly announced from time to time
by the Reference Lender as its prime rate in effect at its principal office in
New York City (the Prime Rate not being intended to be the lowest rate of
interest charged by the Reference Lender in connection with extensions of
credit to debtors).  Any change in the
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective as of the opening of business on the effective day of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.

 

“Base Rate Loans”:  Loans the rate of interest applicable to
which is based upon the Base Rate.

 

“Benefited Lender”:  as defined in Section 10.7(a).

 

3

 

“Board”:  the Board of Governors of the Federal Reserve
System of the United States (or any successor).

 

“Borrower”:  as defined in the preamble to this Agreement.

 

“Boxcar Assignment”:  a written instrument effecting the transfer
of all outstanding shares of Boxcar Enterprises, Inc., a Tennessee corporation,
to EPE.

 

“Bridge Commitment”:  as to any Lender, the obligation of such
Lender, if any, to make a Bridge Loan to the Borrower hereunder in a principal
amount not to exceed the amount set forth under the heading “Bridge Commitment”
under such Lender’s name on such Lender’s Addendum.  The original aggregate amount of the Bridge
Commitments is $39,000,000.

 

“Bridge Lenders”:  each Lender that has a Bridge Commitment or
that holds a Bridge Loan.

 

“Bridge Loans”:  as defined in Section 2.1.

 

“Business”:  as defined in Section 4.17(b).

 

“Business Day”:  a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by
law to close, provided, that with respect to notices and determinations
in connection with, and payments of principal and interest on, Eurodollar
Loans, such day is also a day for trading by and between banks in Dollar
deposits in the interbank eurodollar market.

 

“Capital Expenditures”:  for any period, with respect to any Person,
the aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.

 

“Capital Lease Obligations”:  as to any Person, the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination
thereof, which obligations are required to be classified and accounted for as
capital leases on a balance sheet of such Person under GAAP and, for purposes
of this Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with GAAP.

 

“Capital Stock”:  any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants, rights or options to purchase any of the
foregoing.

 

“Cash Equivalents”:  (a) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one 

 

4

 

year from the
date of acquisition; (b) certificates of deposit, time deposits,
eurodollar time deposits or overnight bank deposits having maturities of six
months or less from the date of acquisition issued by any Lender or by any
commercial bank organized under the laws of the United States or any state
thereof or the District of Columbia having combined capital and surplus of not less
than $500,000,000; (c) commercial paper of an issuer rated at least A-1 by
Standard & Poor’s Ratings Services (“S&P”) or P-1 by Moody’s
Investors Service, Inc. (“Moody’s”), or carrying an equivalent rating by
a nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within six months from the date of acquisition; (d) repurchase obligations of
any Lender or of any commercial bank satisfying the requirements of clause (b)
of this definition, having a term of not more than 30 days, with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least
A by S&P or A by Moody’s; (f) securities with maturities of six months or
less from the date of acquisition backed by standby letters of credit issued by
any Lender or any commercial bank satisfying the requirements of clause (b) of
this definition; or (g) shares of money market mutual or similar funds which
invest exclusively in assets satisfying the requirements of any of clauses (a)
through (f) of this definition or money market funds that (i) comply with the
criteria set forth in Securities and Exchange Commission Rule 2a-7 under the
Investment Company Act of 1940, as amended, (ii) are rated AAA by S&P and
Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000.

 

“Change of Control”: the occurrence of
any of the following: (a) Robert F.X. Sillerman shall (i) cease to own
beneficially at least 40% of the outstanding voting interests in Holdings on a
fully diluted basis or (ii) transfer more than 5% of the economic interest in
Holdings that are held by Robert F.X. Sillerman as of the Closing Date;
(b) the board of directors of Holdings shall cease to consist of a
majority of Continuing Directors; (c) Holdings shall cease to own and control,
of record and beneficially, directly, 100% of each class of outstanding Capital
Stock of the Borrower free and clear of all Liens (except Liens created by the
Guarantee and Collateral Agreement); (d) the Borrower shall cease to own and
control, of record and beneficially, directly, at least the percentage of the
ownership interests of the Operating Companies as are owned by the Borrower as
of the Closing Date free and clear of all Liens (except Liens created by the
Guarantee and Collateral Agreement); or (e) either Operating Company shall
cease to own and control, of record and beneficially, directly, the percentage
of each class of outstanding Capital Stock and other ownership interests of its
Subsidiaries as is owned by it as of the Closing Date free and clear of all
Liens (other than pursuant to a merger permitted by Section 7.4).

 

“CLO”: any entity (whether a
corporation, partnership, trust or otherwise) that is engaged in making,
purchasing, holding or otherwise investing in bank loans and similar extensions
of credit in the ordinary course of its business and is administered or managed
by a Lender or an affiliate of such Lender.

 

5

 

“Closing Date”:  the date on which the conditions precedent
set forth in Section 5 shall have been satisfied, which date is February 7,
2005.

 

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

 

“Collateral”:  all property of the Loan Parties, now owned
or hereafter acquired, upon which a Lien is purported to be created by any
Security Document.

 

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

 

“Compliance Certificate”:  a certificate duly executed by a Responsible
Officer substantially in the form of Exhibit B.

 

“Conduit Lender”:  any special purpose entity organized and
administered by any Lender for the purpose of making Loans otherwise required
to be made by such Lender and designated by such Lender in a written
instrument, subject to the consent of the Administrative Agent and the Borrower
(which consent shall not be unreasonably withheld); provided, that the
designation by any Lender of a Conduit Lender shall not relieve the designating
Lender of any of its obligations to fund a Loan under this Agreement if, for
any reason, its Conduit Lender fails to fund any such Loan, and the designating
Lender (and not the Conduit Lender) shall have the sole right and
responsibility to deliver all consents and waivers required or requested under
this Agreement with respect to its Conduit Lender, and provided, further,
that no Conduit Lender shall (a) be entitled to receive any greater amount
pursuant to Section 3.9, 3.10, 3.11 or 10.5 than the designating Lender would
have been entitled to receive in respect of the extensions of credit made by
such Conduit Lender or (b) be deemed to have any Bridge Commitment.

 

“Consolidated EBITDA”:  for any period, Consolidated Net Income for
such period plus, without duplication and to the extent reflected as a
charge in the statement of such Consolidated Net Income for such period, (and
provided that to the extent that all or any portion of the income of any
Subsidiary or other Person is excluded from Consolidated Net Income pursuant to
the definition thereof for such period or portion thereof, any amounts set
forth in the following clauses (a) through (g) that are attributable to such
Subsidiary or other Person shall not be included for purposes of such clauses
for such period or portion thereof) the sum of (a) income tax expense, (b)
interest expense, amortization or write-off of debt discount and debt issuance
costs and commissions, discounts and other fees and charges associated with
Indebtedness (including the Loans), (c) depreciation and amortization expense,
(d) amortization of intangibles (including, but not limited to, goodwill) and organizational
costs, (e) any extraordinary charges or losses determined in accordance with
GAAP, (f) non-cash compensation expenses arising from the issuance of stock,
options to purchase stock and stock appreciation rights to the management of
the Borrower, and (g) any other noncash charges, noncash expenses or noncash
losses of the Borrower or any of its Subsidiaries for such period (excluding
any such charge, expense or loss incurred in the ordinary course of business
that constitutes an accrual of or a reserve for cash charges for any future
period), provided, however, 

 

6

 

that cash
payments made in such period or in any future period in respect of such noncash
charges, expenses or losses (excluding any such charge, expense or loss
incurred in the ordinary course of business that constitutes an accrual of or a
reserve for cash charges for any future period) shall be subtracted from
Consolidated Net Income in calculating Consolidated EBITDA in the period when
such payments are made, and minus, to the extent included in the
statement of such Consolidated Net Income for such period, the sum of (a)
interest income, (b) any extraordinary income or gains determined in accordance
with GAAP and (c) any other non-cash income (excluding any items that represent
the reversal of any accrual of, or cash reserve for, anticipated cash charges
in any prior period that are described in the parenthetical to clause (g)
above), all as determined on a consolidated basis.

 

In addition to and without limitation of the
foregoing, (x) with respect to any Asset Sale or other Disposition or any
Permitted Acquisition as to which the fair market value of the assets that are
the subject of such Asset Sale, Disposition or Permitted Acquisition is equal
to or greater than $1,000,000, for purposes of this definition, “Consolidated
EBITDA” shall be calculated after giving effect to such Asset Sale, Disposition
or Permitted Acquisition, on a pro forma basis for the four quarter period to
which such calculation relates (including, without limitation, any Permitted
Acquisition giving rise to the need to make such calculation as a result of
such Person or one of its Subsidiaries (including any Person who becomes a
Subsidiary as a result of any such Permitted Acquisition) assuming or otherwise
becoming liable for any Acquired Indebtedness in accordance with the terms of
this Agreement and also including any Consolidated EBITDA attributable to the
assets which are the subject of such Asset Sale, Disposition or Permitted
Acquisition), in each case, occurring during such four quarter period or at any
time subsequent to the last day of such four quarter period and on or prior to
the date of such Asset Sale, Disposition or Permitted Acquisition, as if such Asset
Sale, Disposition or Permitted Acquisition (including the assumption of or
liability for any such Acquired Indebtedness) had occurred on the first day of
such four quarter period, (y) “Consolidated EBITDA” shall be calculated on a
pro forma basis after giving effect to the reduction in compensation expense
resulting from replacing the previous arrangements with Priscilla Presley with
that certain Consulting Agreement, dated as of February 7, 2005, among the
Borrower, Priscilla Presley and EPE and (z) “Consolidated EBITDA” shall be
calculated on a pro forma basis after giving effect to the exclusion of all
costs and expenses incurred in connection with effecting the transactions
contemplated by the Contribution Agreement.

 

For purposes of this definition, whenever pro
forma effect is to be given to any Asset Sale, Disposition or Permitted
Acquisition and the amount of income or earnings relating thereto, the pro
forma calculations shall be determined in good faith by a responsible financial
or accounting officer of the Borrower and shall comply with the requirements of
Rule 11-02 of Regulation S-X promulgated by the Securities and Exchange
Commission, except that such pro forma calculations may include operating
expense reductions for the applicable period resulting from any Permitted
Acquisition which is being given pro forma effect that have been realized or
for which the steps necessary for realization have been taken or are reasonably
expected to be taken within six months following such Permitted Acquisition,
including, but not limited to, the execution or termination of any contracts,
the termination of any personnel or the closing (or approval by the Board of
Directors of such Person of any closing) of any facility, as applicable, 

 

7

 

provided that,
in either case, such adjustments are reasonably satisfactory to the
Administrative Agent and are set forth in an certificate signed by the Person’s
chief financial officer which states (i) the amount of such adjustment or
adjustments, (ii) that such adjustment or adjustments are based on the
reasonable good faith beliefs of the officer executing such certificate at the
time of such execution and (iii) that any related incurrence of Indebtedness is
permitted pursuant to this Agreement.

 

“Consolidated Leverage Ratio”:  as of the last day of any period, the ratio
of (a) Consolidated Total Debt (exclusive of Indebtedness under the $3.5
million note payable by EPE to Priscilla Presley) on such day to (b)
Consolidated EBITDA for such period.

 

“Consolidated Net Income”:  for any period, the consolidated net income
(or loss) of the Borrower and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded
therefrom (a) the income (or deficit) of any Person accrued prior to the date
it becomes a Subsidiary of the Borrower or is merged into or consolidated with
the Borrower or any of its Subsidiaries, (b) the income (or deficit) of any
Person (other than a Subsidiary of the Borrower) in which the Borrower or any
of its Subsidiaries has an ownership interest, except to the extent that any
such income is actually received by the Borrower or such Subsidiary in the form
of dividends or similar distributions, (c) that percentage of the income (or
deficit) of any Subsidiary of the Borrower equal to the percentage of Capital
Stock of such Subsidiary not owned, directly or indirectly, by the Borrower,
and (d) the undistributed earnings of any Subsidiary of the Borrower to the extent
that the declaration or payment of dividends or similar distributions by such
Subsidiary is not at the time permitted by the terms of any Contractual
Obligation (other than any Loan Document) or Requirement of Law applicable to
such Subsidiary.

 

“Consolidated Net Worth”:  at any date, all amounts that would, in
conformity with GAAP, be included on a consolidated balance sheet of the
Borrower and its Subsidiaries as (i) stockholders’ or members’ equity at such
date or (ii)outstanding Indebtedness or payables of the Borrower or any of its
Subsidiaries to Holdings permitted hereunder.

 

“Consolidated Total Debt”:  at any date, the aggregate principal amount
of all Indebtedness of the Borrower and its Subsidiaries at such date,
determined on a consolidated basis in accordance with GAAP.

 

“Continuing Directors”:  as of any date of determination, each member
of the board of directors of Holdings who is or was a member thereof on the
Closing Date, after giving effect to the Acquisition and the other transactions
contemplated hereby, and each other member of the board of directors of
Holdings elected to the board of directors of Holdings with the approval of at
least 66 2/3% of the then Continuing Directors.

 

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

 

8

 

“Default”:  any event or condition the occurrence of
which is, or with the giving of notice or lapse of time or both would be, an
Event of Default under Section 8.

 

“Deposit Loan”:  as defined in the recitals to this Agreement.

 

“Disposition”:  with respect to any Property, any sale, lease,
license, sale and leaseback, assignment, conveyance, transfer or other
disposition thereof.  The terms “Dispose”
and “Disposed of” shall have correlative meanings.

 

“Disqualified Capital Stock”:  that portion of any Capital Stock which, by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable at the option of the holder thereof) or upon the
happening of any event, (a) matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise on or prior to the date that is three
months later than the final Interest Payment Date, (b) is redeemable at the
sole option of the holder thereof on or prior to the date that is three months
later than the final Interest Payment Date or (c) contains any repurchase
obligation which may come into effect on or prior to the date that is three
months later than the final Interest Payment Date.

 

“Dollars” and “$”:  dollars in lawful currency of the United
States.

 

“Domestic Subsidiary”:  any Subsidiary of the Borrower organized
under the laws of any jurisdiction within the United States.

 

“Engagement Letter”:  the engagement letter entered into by the
Lead Arranger, RFX and Robert F.X. Sillerman on December 10, 2004.

 

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

 

“Environmental Permits”:  any and all permits, licenses, approvals,
registrations, notifications, exemptions and other authorizations required
under any Environmental Law.

 

“EPE”: 
as defined in the recitals to this Agreement.

 

“EPE Charter”:  the Amended and Restated Charter of EPE,
dated as of February 7, 2005.

 

“EPE Shareholders Agreement”:  the Shareholders Agreement, dated as of
February 7, 2005, by and among EPE, the Borrower and the Seller.

 

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

 

9

 

“Eurocurrency Reserve Requirements”:  for any day as applied to a Eurodollar Loan,
the aggregate (without duplication) of the maximum rates (expressed as a
decimal fraction) of reserve requirements in effect on such day (including
basic, supplemental, marginal and emergency reserves under any regulations of
the Board or other Governmental Authority having jurisdiction with respect
thereto) dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as “Eurocurrency Liabilities” in Regulation D of the
Board) maintained by a member bank of the Federal Reserve System.

 

“Eurodollar Base Rate”:  with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on the
basis of the rate for deposits in Dollars for a period equal to such Interest
Period commencing on the first day of such Interest Period appearing on Page
3750 of the Telerate screen as of 11:00 a.m., London time, two Business Days
prior to the beginning of such Interest Period. 
In the event that such rate does not appear on Page 3750 of the Telerate
screen (or otherwise on such screen), the “Eurodollar Base Rate” shall
be determined by reference to such other comparable publicly available service
for displaying eurodollar rates as may be selected by the Administrative Agent
or, in the absence of such availability, by reference to the rate at which the
Administrative Agent is offered Dollar deposits at or about 11:00 a.m., New
York City time, two Business Days prior to the beginning of such Interest Period
in the interbank eurodollar market where its eurodollar and foreign currency
and exchange operations are then being conducted for delivery on the first day
of such Interest Period for the number of days comprised therein.

 

“Eurodollar Loans”:  Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.

 

“Eurodollar Rate”:  with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for such
day in accordance with the following formula (rounded upward to the nearest
1/100th of 1%):

 

	
  Eurodollar
  Base Rate

  
	
  1.00 -
  Eurocurrency Reserve Requirements

  

 

“Eurodollar Tranche”:  the collective reference to Eurodollar Loans
for which the then current Interest Periods with respect to all of which begin
on the same date and end on the same later date (whether or not such Loans
shall originally have been made on the same day).

 

“Event of Default”:  any of the events specified in Section 8, provided
that any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.

 

“Existing Indebtedness”:  as defined in the recitals to this Agreement.

 

“Facility”:  the Bridge Commitments and the Bridge Loans
made in respect thereof.

 

“Federal Funds Effective Rate”:  for any day, the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by 

 

10

 

federal funds
brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day
that is a Business Day, the average of the quotations for the day of such
transactions received by the Reference Lender from three federal funds brokers
of recognized standing selected by it.

 

“Foreign Subsidiary”:  any Subsidiary of the Borrower that is not a
Domestic Subsidiary.

 

“Funding Office”:  the office of the Administrative Agent
specified in Section 10.2 or such other office as may be specified from time to
time by the Administrative Agent as its funding office by written notice to the
Borrower and the Lenders.

 

“GAAP”:  generally accepted accounting principles in
the United States as in effect from time to time except that for purposes of
Section 7.1, GAAP shall be determined on the basis of such principles in effect
on the date hereof and consistent with those used in the preparation of the
most recent audited financial statements referred to in Section 4.1(b).  In the event that any Accounting Change (as
defined below) shall occur and such change results in a change in the method of
calculation of financial covenants, standards or terms in this Agreement, then
the Borrower and the Administrative Agent agree to enter into negotiations in
order to amend such provisions of this Agreement so as to equitably reflect
such Accounting Changes with the desired result that the criteria for
evaluating the Borrower’s financial condition shall be the same after such
Accounting Changes as if such Accounting Changes had not been made.  Until such time as such an amendment shall
have been executed and delivered by the Borrower, the Administrative Agent and
the Required Lenders, all financial covenants, standards and terms in this
Agreement shall continue to be calculated or construed as if such Accounting
Changes had not occurred.  “Accounting
Changes” refers to changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants or, if applicable, the SEC.

 

“Governmental Authority”:  any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).

 

“Group Members”:  the collective reference to Holdings, the
Borrower and their respective Subsidiaries.

 

“Guarantee and Collateral Agreement”:  the Guarantee and Collateral Agreement to be
executed and delivered by Holdings and the Borrower, substantially in the form
of Exhibit A.

 

“Guarantee Obligation”:  as to any Person (the “guaranteeing person”),
any obligation of (a) the guaranteeing person or (b) another Person (including
any bank under any letter of credit) to induce the creation of which the guaranteeing
person has issued a 

 

11

 

reimbursement,
counterindemnity or similar obligation, in either case guaranteeing or in
effect guaranteeing any Indebtedness, leases, dividends or other obligations
(the “primary obligations”) of any other third Person (the “primary
obligor”) in any manner, whether directly or indirectly, including any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the
purchase or payment of any such primary obligation or (2) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment
of such primary obligation or (iv) otherwise to assure or hold harmless the
owner of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business.  The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person’s maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.

 

“Guarantor”:  Holdings, in its capacity as Guarantor under
the Guaranty and Collateral Agreement and any other Person required to become a
Guarantor hereunder or under the Guarantee and Collateral Agreement.

 

“Hazardous Substances” shall mean any
material substance or waste presently listed, defined, designated or classified
as hazardous, toxic or radioactive under, or otherwise regulated pursuant to,
any applicable Environmental Law or by any Governmental Authority including
petroleum and any derivatives or by-products thereof, asbestos, presumed
asbestos-containing material or asbestos-containing material, urea formaldehyde
and polychlorinated biphenyls and including any material, substance or waste
which is defined as a “hazardous waste,” “hazardous material,” “hazardous substance,”
“extremely hazardous waste,” “restricted hazardous waste,” “contaminant,”
“contaminant,” “toxic waste” or “toxic substance” under any provision of
Environmental Law.

 

“Hedge Agreements”:  any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial
or pricing indices or measures of economic, financial or pricing risk or value
or any similar transaction or any combination of these transactions; provided
that no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrower or any of its Subsidiaries shall be a Hedge
Agreement.

 

“Holdings”:  as defined in the preamble to this Agreement.

 

12

 

“HSR Act”:  the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.

 

“Indebtedness”:  of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services (other than current trade payables incurred in the ordinary course of
such Person’s business), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) all Capital Lease
Obligations of such Person, (f) all obligations of such Person, contingent or
otherwise, as an account party or applicant under or in respect of acceptances,
letters of credit, surety bonds or similar arrangements, (g) all obligations of
such Person, contingent or otherwise, to purchase, redeem, retire or otherwise
acquire for value any Capital Stock of such Person, (h) all Guarantee
Obligations of such Person in respect of obligations of others of the kind
referred to in clauses (a) through (g) above, (i) all obligations of the kind
referred to in clauses (a) through (h) above secured by (or for which the
holder of such obligation has an existing right, contingent or otherwise, to be
secured by) any Lien on property (including accounts and contract rights) owned
by such Person, whether or not such Person has assumed or become liable for the
payment of such obligation, (j) all Disqualified Capital Stock issued by such
Person and (k) for the purposes of Sections 7.2 and 8(e) only, all obligations
of such Person in respect of Hedge Agreements. 
The Indebtedness of any Person shall include the Indebtedness of any
other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such Person’s
ownership interest in or other relationship with such entity, except to the
extent the terms of such Indebtedness expressly provide that such Person is not
liable therefor.

 

“Indemnified Liabilities”:  as defined in Section 10.5.

 

“Indemnitee”:  as defined in Section 10.5.

 

“Insolvency”:  with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.

 

“Insolvent”:  pertaining to a condition of Insolvency.

 

“Intellectual Property”:  as defined in the Guarantee and Collateral
Agreement.

 

“Interest Payment Date”:  (a) May 9, 2005, August 8, 2005, November 7,
2005 and February 6, 2006 and (b) as to any optional or mandatory prepayment of
the Loans, the date of such optional or mandatory prepayment.

 

“Interest Period”:  as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two or three months thereafter,
as selected by the Borrower in its notice of 

 

13

 

borrowing or
notice of conversion, as the case may be, given with respect thereto; and (b)
thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Eurodollar Loan and ending one, two or three
months thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent no later than 11:00 a.m., New York City time, on the date
that is three Business Days prior to the last day of the then current Interest
Period with respect thereto; provided that, all of the foregoing
provisions relating to Interest Periods are subject to the following:

 

(i)            if any Interest Period 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 extension 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)           the Borrower may not select an Interest
Period that would extend beyond the date final payment is due on the Bridge
Loans;

 

(iii)          any Interest Period 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 a calendar month; and

 

(iv)          the Borrower shall select Interest Periods so
as not to require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.

 

“Investments”:  as defined in Section 7.8.

 

“Investor Equity Investment”:  (i) not less than $43.7 million in
convertible preferred equity, common stock and warrants to purchase common
stock issued by Holdings to The Huff Alternative Fund, L.P. and/or certain of
its Affiliates on the terms and conditions set forth in that certain Stock
Purchase Agreement, dated as of the date hereof, by and between Holdings and
the investors signatory thereto, relating to the sale of 2,172,400 shares of
Series A Convertible Redeemable Preferred Stock, no par value, of Holdings and
the sale of 3,706,052 shares of Common Stock of Holdings to such investors and
(ii) the Investor Warrants.

 

“Investor Warrants”:  means, collectively, the warrants to purchase
an aggregate of 5,581,981 shares of common stock of Holdings pursuant to those
certain warrant agreements, dated as of the date hereof, between Holdings and
The Huff Alternative Fund, L.P. and/or certain of its Affiliates.

 

“Lead Arranger”:  as defined in the recitals to this Agreement.

 

“Lenders”:  as defined in the preamble hereto; provided,
that unless the context otherwise requires, each reference herein to the
Lenders shall be deemed to include any Conduit Lender.

 

14

 

“Lien”:  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 any
conditional sale or other title retention agreement and any capital lease
having substantially the same economic effect as any of the foregoing).

 

“LLC”: 
as defined in the recitals to this Agreement.

 

“LLC Operating Agreement”:  the Amended and Restated Operating Agreement
of LLC, dated as of February 7, 2005, among the Borrower and the Seller.

 

“Loan”:  any loan made by any Lender pursuant to this
Agreement.

 

“Loan Documents”:  this Agreement, the Security Documents and
the Notes.

 

“Loan Parties”:  each Group Member that is a party to a Loan
Document, but in no event shall include EPE or LLC unless and to the extent
that 100% of the outstanding Capital Stock of either or both of them is owned
by the Borrower or Holdings.

 

“Material Adverse Effect”:  a material adverse effect on (a) the
business, assets, property, condition (financial or otherwise), results of
operations or prospects of Holdings, the Borrower, the Operating Companies and
their respective Subsidiaries, taken as a whole, excluding, however, any effect
attributable to (i) changes in conditions generally affecting the industries in
which Holdings operates and (ii) changes in law after the Closing Date or (b) the
validity or enforceability of this Agreement or any of the other Loan Documents
or the rights or remedies of the Agents or the Lenders hereunder or thereunder
or the validity, perfection or priority of the Administrative Agent’s Liens on
the Collateral.

 

“Material Environmental Amount”:  an amount payable by the Borrower and/or its
Subsidiaries in excess of $750,000 (after taking into account any amounts paid
to the Borrower or any Subsidiary of the Borrower in respect thereof pursuant
to indemnity claims made by the Borrower and/or its Subsidiaries) for any
violation of or liability under any Environmental Law, including, without
limitation, all remedial costs, compliance costs, compensatory damages,
punitive damages, fines, penalties or any combination thereof.

 

“Mortgages”:  each of the mortgages and deeds of trust made
by any Loan Party in favor of, or for the benefit of, the Administrative Agent
for the benefit of the Lenders, in form and substance reasonably satisfactory
to the Administrative Agent (with such changes thereto as shall be advisable
under the law of the jurisdiction in which such mortgage or deed of trust is to
be recorded).

 

“Multiemployer Plan”:  a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.

 

“Net Cash Proceeds”:  (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal
pursuant to a note or installment 

 

15

 

receivable or
purchase price adjustment receivable or by the Disposition of any non-cash
consideration received in connection therewith or otherwise, but only as and
when received) of such Asset Sale or Recovery Event, net of reasonable and
customary attorneys’ fees, accountants’ fees, investment banking fees, amounts
required to be applied to the repayment of Indebtedness secured by a Lien
expressly permitted hereunder on any asset that is the subject of such Asset Sale
or Recovery Event (other than any Lien pursuant to a Security Document) and
other reasonable and customary fees and expenses actually incurred in
connection therewith and net of taxes paid or reasonably estimated to be
payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements) and (b) in connection
with any issuance or sale of Capital Stock or any incurrence of Indebtedness or
the making of any capital or similar contribution, the cash proceeds received
from such issuance or incurrence, net of reasonable and customary attorneys’
fees, investment banking fees, accountants’ fees, underwriting discounts and
commissions and other reasonable and customary fees and expenses actually
incurred in connection therewith.

 

“Non-Excluded Taxes”:  as defined in Section 3.10(a).

 

“Non-U.S. Lender”:  as defined in Section 3.10(d).

 

“Notes”:  the collective reference to any promissory
note evidencing Loans.

 

“Obligations”:  the unpaid principal of and interest on
(including interest accruing after the maturity of the Loans and interest
accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) the Loans and all other obligations and liabilities of the
Borrower to any Agent or to any Lender, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, this Agreement, any other Loan
Document or any other document made, delivered or given in connection herewith
or therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including all fees, charges
and disbursements of counsel to any Agent or to any Lender that are required to
be paid by the Borrower pursuant hereto) or otherwise.

 

“Operating Companies”:  as defined in the recitals to this Agreement.

 

“Other Taxes”:  any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.

 

“Participant”:  as defined in Section 10.6(c).

 

“Patriot Act”: as defined in Section
10.19.

 

16

 

“PBGC”:  the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA (or any successor).

 

“Permitted Acquisition”:  one or more acquisitions by any Group Member
of a business unit (with any associated assets) or all of the outstanding capital
stock or other ownership interests (other than margin stock) of any other
Person, provided that (a) any such acquisition shall be financed solely
with the issuance of common or preferred stock (other than Disqualified Capital
Stock) of Holdings (in the case of preferred stock, on terms reasonably
satisfactory to the Administrative Agent) and no cash or Cash Equivalents shall
be received in connection therewith or used to consummate such acquisition, (b)
in the case of an asset acquisition, the applicable assets to be acquired are
used, or, in the case of a stock acquisition, the applicable Person to be
acquired is predominantly engaged, in media, entertainment or content related
businesses, (c) in the case of an acquisition by the Borrower or any of its
Subsidiaries, the Borrower shall be in compliance with the financial covenants
set forth in Section 7.1 on a pro forma basis after giving effect to such
acquisition (and a Responsible Officer of the Borrower shall have certified to
such compliance), (d) in connection with any such acquisition involving a
merger, Holdings, a wholly owned Subsidiary of Holdings or one of the Operating
Companies shall be the surviving entity (provided that (x) if such merger
involves the Borrower, the Borrower shall be the surviving entity and (y) if
such merger involves any Subsidiary of the Borrower, the Borrower, an Operating
Company, or a wholly owned Subsidiary of the Borrower shall be the surviving
entity), (e) immediately prior, and after giving effect, to such acquisition,
no Default or Event of Default shall have occurred and be continuing and (f) in
the case of the acquisition of the Capital Stock or other ownership interests
of another Person by the Borrower, the Borrower shall pledge such Capital Stock
or other ownership interest and, to the extent that such Person is then 100%
owned by the Borrower, cause such Person to become a guarantor, in each case,
in accordance with the Guarantee and Collateral Agreement.

 

“Permitted Indebtedness”: the
following types of Indebtedness:

 

(1)           Indebtedness of any
Loan Party pursuant to any Loan Document;

 

(2)           Indebtedness of the
Borrower to any Subsidiary (provided that such Indebtedness is
subordinated to the payment of the Obligations in accordance with the
Subordination Provisions) and Indebtedness of any Subsidiary of the Borrower to
the Borrower (provided that such Indebtedness is subordinated to the
payment of the Obligations in accordance with the Subordination Provisions and
the notes issued in respect thereof have been pledged to the Administrative
Agent);

 

(3)           Indebtedness
outstanding on the date hereof and listed on Schedule 1.1(a), provided that
such Indebtedness representing the Meadow Oaks mortgage shall have been and
shall at all times remain defeased in accordance with the terms thereof;

 

(4)           Indebtedness in respect
of bankers’ acceptances and bid, performance and surety or appeal bonds,
workers’ compensation claims and payment obligations in connection with
self-insurance or similar obligations, in each case in the ordinary course 

 

17

 

of business,
including guarantees or obligations of the Borrower with respect to letters of
credit, issued in the ordinary course of business, supporting such obligations;

 

(5)           Indebtedness arising
from the honoring by a bank or other financial institution of a check, draft or
similar instrument inadvertently drawn against insufficient funds, so long as
such Indebtedness is extinguished within five Business Days of incurrence;

 

(6)           Hedge Agreements
permitted under Section 7.12;

 

(7)           Indebtedness
represented by guarantees by the Borrower or Holdings of Indebtedness otherwise
permitted to be incurred under this Agreement;

 

(8)           Indebtedness consisting
of guarantees, indemnities or obligations in respect of purchase price
adjustments in connection with the acquisition or disposition of assets or the
Capital Stock of Subsidiaries permitted by this Agreement;

 

(9)           Indebtedness incurred
under commercial letters of credit issued for the account of a Group Member in
the ordinary course of business (and not for the purpose of, directly or
indirectly, incurring Indebtedness or providing credit support or a similar
arrangement in respect of Indebtedness), provided that any drawing under any
such letter of credit is reimbursed in full within seven days;

 

(10)         Indebtedness of Holdings
comprising “earn-out” obligations payable in connection with any Permitted
Acquisition made by Holdings in an aggregate amount not to exceed 5.0% of the
aggregate consideration paid by Holdings in connection with such Permitted
Acquisition;

 

(11)         Acquired Indebtedness in
an aggregate amount not to exceed $1,000,000;

 

(12)         Indebtedness, the
proceeds of which are used to acquire assets in the ordinary course of business
of Holdings or any of its Subsidiaries; provided that the aggregate
principal amount of such Indebtedness outstanding at any time shall not exceed
the lesser of (x) the purchase price or other cost of all property or equipment
so acquired plus the amount of reasonable fees and expenses incurred in
connection therewith and (y) $100,000;

 

(13)         Indebtedness consisting
of intercompany loans between EPE and LLC; and

 

(14)         Indebtedness of the
Borrower to Holdings in an amount not to exceed the aggregate amount of
advances made by Holdings to the Borrower following the Closing Date, provided
that such advances are evidenced by an intercompany note containing the
Subordination Provisions and pledged as collateral to the Administrative Agent.

 

18

 

“Permitted Liens”:  the following types of Liens:

 

(1)           Liens for taxes,
assessments or governmental charges or claims either (a) not delinquent or
(b) that are being contested in good faith by appropriate proceedings,
provided that adequate reserves with respect thereto are maintained on the
books of Holdings, the Borrower or the other applicable Group Member, as the
case may be, in conformity with GAAP;

 

(2)           common law or statutory
Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen,
repairmen. maritime and other Liens imposed by law incurred in the ordinary
course of business that are not overdue for a period of more than 30 days or
that are being contested in good faith by appropriate proceedings;

 

(3)           pledges or deposits in
connection with workers’ compensation, unemployment insurance and other social
security legislation;

 

(4)           deposits to secure the
performance of bids, trade contracts (other than for borrowed money), leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;

 

(5)           easements,
rights-of-way, zoning and other restrictions, minor defects, imperfections or
irregularities in title and other similar encumbrances incurred in the ordinary
course of business that, in the aggregate, are not substantial in amount and
that do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of any Group Member;

 

(6)           Liens created pursuant
to the Security Documents;

 

(7)           any interest or title
of a lessor under any lease entered into by the Borrower or any other
Subsidiary in the ordinary course of its business and covering only the assets
so leased;

 

(8)           Liens existing as of
the date hereof and set forth on Schedule 1.1(b);

 

(9)           judgment Liens (other
than with respect to judgments of a size sufficient to cause an Event of
Default under this Agreement) so long as such Lien is adequately bonded and any
appropriate legal proceedings which may have been duly initiated for the review
of such judgment shall not have been finally terminated or the period within
which such proceedings may be initiated shall not have expired;

 

(10)         purchase money Liens
securing Indebtedness permitted under clause (12) of the definition of “Permitted
Indebtedness”; provided that (a) such Liens shall be limited to the
property or equipment of the Borrower or its applicable Subsidiary actually
acquired with the proceeds of such Indebtedness and (b) such Liens shall be
created within 120 days of the date on which such property or equipment is
acquired;

 

19

 

(11)         Liens securing
reimbursement obligations with respect to commercial letters of credit which
encumber documents and other property relating to such letters of credit and
products and proceeds thereof;

 

(12)         leases, subleases,
licenses and sublicenses granted by the Operating Companies and their
Subsidiaries to others that do not materially interfere with the ordinary
course of business of Holdings or any of its Subsidiaries;

 

(13)         bankers’ Liens, rights of
setoff and similar Liens with respect to cash and Cash Equivalents on deposit
in one or more bank accounts in the ordinary course of business;

 

(14)         Liens in favor of customs
and revenue authorities arising as a matter of law to secure payments of custom
duties in connection with the importation of goods; and

 

(15)         Liens not otherwise
permitted by this Section on the assets of the Borrower and its Subsidiaries so
long as neither (i) the aggregate outstanding principal amount of the
obligations secured thereby nor (ii) the aggregate fair market value
(determined as of the date such Lien is incurred) of the assets subject thereto
exceeds (as to the Borrower and all Subsidiaries) $100,000 at any one time.

 

“Person”:  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”:  at a particular time, any employee benefit
plan that is covered by 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.

 

“Pledged Equity Interests”: as defined
in the Guarantee and Collateral Agreement.

 

“Pledged Notes”: as defined in the
Guarantee and Collateral Agreement.

 

“Pro Forma Balance Sheet”:  as defined in Section 4.1(a).

 

“Projections”:  as defined in Section 5(f).

 

“Properties”:  as defined in Section 4.17(a).

 

“Property”:  any right or interest in or to property of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.

 

“Realty”: with respect to a Person all
realty and interest in realty now or hereafter acquired or leased by such
Person.

 

20

 

“Recovery Event”:  any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding
relating to any asset of any Group Member other than such settlement or payment
in respect of any Group Member’s property interest in the real property known
as the Graceland Mansion; provided that any such recovery event or
series of related recovery events having a value not in excess of $100,000
shall not be deemed to be a “Recovery Event” for purposes of Section 3.2(b).

 

“Reference Lender”:  Bear Stearns Corporate Lending Inc.

 

“Register”:  as defined in Section 10.6(b)(iv).

 

“Regulation U”:  Regulation U of the Board as in effect from
time to time.

 

“Reinvestment Deferred Amount”:  with respect to any Reinvestment Event, the
aggregate Net Cash Proceeds received by the applicable Group Member in
connection therewith that are not applied to prepay the Bridge Loans pursuant
to Section 4.2(b) as a result of the delivery of a Reinvestment Notice.

 

“Reinvestment Event”:  any Recovery Event in respect of which the
applicable Group Member and the other applicable parties have elected pursuant
to the terms of any material contract or agreement to use the Net Cash Proceeds
from such Recovery Event to repair or replace the assets which were the subject
of such Recovery Event and as to which the Borrower has delivered a
Reinvestment Notice.

 

“Reinvestment Notice”:  a written notice executed by a Responsible
Officer certifying that no Event of Default has occurred and is continuing and
that the applicable Group Member and the other applicable parties have elected
pursuant to the terms of any material contract or agreement to use all or a
specified portion of the Net Cash Proceeds of a Recovery Event to repair or
replace the assets which were the subject of such Recovery Event.

 

“Reinvestment Prepayment Amount”:  with respect to any Reinvestment Event, the
Reinvestment Deferred Amount relating thereto less any amount expended prior to
the relevant Reinvestment Prepayment Date to repair or replace the assets which
were the subject of the relevant Recovery Event.

 

“Reinvestment Prepayment Date”:  with respect to any Reinvestment Event, the
earlier of (a) the date occurring six months after such Reinvestment Event and
(b) the date on which the Borrower shall have determined not to, or shall have
otherwise ceased to, repair or replace the assets which were the subject of the
relevant Recovery Event with all or any portion of the relevant Reinvestment
Deferred Amount.

 

“Reorganization”:  with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.

 

“Reportable Event”:  any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of
PBGC Reg. § 4043.

 

21

 

“Required Lenders”:  at any time, the holders of more than 50% of
(a) until the funding of the Bridge Loans, the Bridge Commitments then in
effect and (b) thereafter, the aggregate unpaid principal amount of the Bridge
Loans then outstanding.

 

“Requirement of Law”:  as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person
or any of its property is subject.

 

“Responsible Officer”:  the chief executive officer, president or
chief financial officer of the Borrower, but in any event, with respect to
financial matters, the chief financial officer of the Borrower.

 

“Restricted Payments”:  as defined in Section 7.6.

 

“RFX”: 
as defined in the recitals to this Agreement.

 

“RFX Warrants”:  means, collectively, the warrants to purchase
an aggregate of 20,486,815 shares of common stock of Holdings issued to RFX
pursuant to those certain warrant agreements, dated as of the date hereof,
between Holdings and RFX.

 

“SEC”: 
the Securities and Exchange Commission, any successor thereto and any
analogous Governmental Authority.

 

“Security Documents”:  the collective reference to the Guarantee and
Collateral Agreement, the Mortgages (if any) and all other security documents
hereafter delivered to the Administrative Agent granting a Lien on any property
of any Person to secure the obligations and liabilities of any Loan Party under
any Loan Document.

 

“Seller”:  as defined in the recitals to this Agreement.

 

“Seller Preferred Equity”:  approximately $21.9 million in convertible
preferred equity issued by Holdings to Lisa Marie Presley on the terms and
conditions set forth in the Certificate of Designation in respect thereof,
dated February 7, 2005.

 

“Single Employer Plan”:  any Plan that is covered by Title IV of
ERISA, but that is not a Multiemployer Plan.

 

“Solvent”:  with respect to any Person, as of any date of
determination, (a) the amount of the “present fair saleable value” of the
assets of such Person will, as of such date, exceed the amount of all “liabilities
of such Person, contingent or otherwise”, as of such date, as such quoted terms
are determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair saleable
value of the assets of such Person will, as of such date, be greater than the
amount that will be required to pay the liability of such Person on its debts
as such debts become absolute and matured, (c) such Person will not have, as of
such date, an unreasonably small amount of capital with which to conduct its 

 

22

 

business, and
(d) such Person will be able to pay its debts as they mature.  For purposes of this definition, (i) “debt”
means liability on a “claim”, and (ii) “claim” means any (x) right to payment,
whether or not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or not
such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured or unmatured, disputed, undisputed, secured or unsecured.

 

“Sponsor Equity”:  not less than $3.0 million in equity
contributions by RFX.

 

“Subordination Provisions”:  the subordination provisions attached hereto
as Exhibit J.

 

“Subsidiary”:  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 Agreement shall refer to a
Subsidiary or Subsidiaries of the Borrower.

 

“Transferee”:  any Assignee or Participant.

 

“Trust”:  the Promenade Trust, a grantor trust created
under the laws of Tennessee, pursuant to the Second Restated and Amended Trust
Agreement, dated December 15, 2004, by and among Barry Siegel and Gary Hovey,
as Co-Trustees, and Beneficiary.

 

“Type”:  as to any Loan, its nature as a Base Rate
Loan or a Eurodollar Loan.

 

“United States”:  the United States of America.

 

“Warrants”:  collectively, the Investor Warrants and the
RFX Warrants.

 

“Wholly Owned Subsidiary”:  as to any Person, any other Person all of the
Capital Stock of which (other than directors’ qualifying shares required by
law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.

 

1.2.          Other
Definitional Provisions. 
(a)  Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.

 

(b)  As used herein and in the other Loan
Documents, and any certificate or other document made or delivered pursuant
hereto or thereto, (i) accounting terms relating to any Group Member not
defined in Section 1.1 and accounting terms partly defined in Section 1.1, to
the extent not defined, shall have the respective meanings given to them under
GAAP, (ii) the 

 

23

 

words “include”, “includes” and
“including” shall be deemed to be followed by the phrase “without limitation”,
(iii) the word “incur” shall be construed to mean incur, create, issue, assume,
become liable in respect of or suffer to exist (and the words “incurred” and “incurrence”
shall have correlative meanings), (iv) the words “asset” and “property” shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, Capital Stock,
securities, revenues, accounts, leasehold interests and contract rights, and
(v) references to agreements or other Contractual Obligations shall, unless
otherwise specified, be deemed to refer to such agreements or Contractual
Obligations as amended, supplemented, restated or otherwise modified from time
to time (subject to any applicable restrictions hereunder).

 

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

 

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

 

(e)  The expressions, “payment in full,” “paid in
full” and any other similar terms or phrases when used herein with respect to
the Obligations shall mean the payment in full in cash, in immediately
available funds, of all the Obligations.

 

SECTION 2. 
AMOUNT AND TERMS OF BRIDGE COMMITMENTS

 

2.1.          Bridge
Commitments.  Subject to the
terms and conditions hereof, each Bridge Lender severally agrees to make a
bridge loan (a “Bridge Loan”) to the Borrower on the Closing Date in an
amount not to exceed the amount of the Bridge Commitment of such Lender.  The Bridge Loans from time to time may be
Eurodollar Loans or Base Rate Loans, as determined by the Borrower and notified
to the Administrative Agent in accordance with Sections 2.2 and 3.3.

 

2.2.          Procedure
for Bridge Loan Borrowing. 
The Borrower shall give the Administrative Agent irrevocable notice
(which notice must be received by the Administrative Agent prior to 10:00 a.m.,
New York City time, one Business Day prior to the anticipated Closing Date)
requesting that the Bridge Lenders make the Bridge Loans on the Closing Date
and specifying the amount to be borrowed. 
Upon receipt of such notice the Administrative Agent shall promptly
notify each Bridge Lender thereof.  Not
later than 12:00 Noon, New York City time, on the Closing Date each Bridge
Lender shall make available to the Administrative Agent at the Funding Office
an amount in immediately available funds equal to the Bridge Loan or Bridge
Loans to be made by such Lender.  The
Administrative Agent shall credit the account of the Borrower on the books of
such office of the Administrative Agent with the aggregate of the amounts made
available to the Administrative Agent by the Bridge Lenders in immediately
available funds.

 

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2.3.          Repayment
of Bridge Loans.  The
outstanding principal amount of the Bridge Loans (inclusive of any interest
capitalized pursuant to Section 3.5(e)) shall mature and be payable in full on
February 6, 2006.  The final repayment of
the Bridge Loans, whether at maturity, prepayment or upon an acceleration
thereof, shall be accompanied by a premium equal to 1.0% of the principal
amount of Bridge Loans (exclusive of any interest capitalized pursuant to Section
3.5(e)) outstanding as of the date of such repayment.

 

SECTION 3. 
GENERAL PROVISIONS APPLICABLE TO LOANS

 

3.1.          Optional
Prepayments.  (a) The
Borrower may at any time and from time to time prepay the Loans, in whole or in
part, upon irrevocable notice delivered to the Administrative Agent no later
than 11:00 a.m., New York City time, three Business Days prior thereto in the
case of Eurodollar Loans and no later than 11:00 a.m., New York City time, on
the date of prepayment in the case of Base Rate Loans, which notice shall
specify the date and amount of prepayment and whether the prepayment is of
Eurodollar Loans or Base Rate Loans; provided, that if a Eurodollar Loan is
prepaid on any day other than the last day of the Interest Period applicable
thereto, the Borrower shall also pay any amounts owing pursuant to Section
3.11.  Upon receipt of any such notice
the Administrative Agent shall promptly notify each relevant Lender thereof.  If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified
therein, together with accrued interest to such date on the amount
prepaid.  Partial prepayments of Bridge
Loans shall be in an aggregate principal amount of $1,000,000 or a whole
multiple thereof.

 

(b)  Each and every optional prepayment in respect
of the Bridge Loans under this Section 3.1 shall be accompanied by a prepayment
premium equal to 1.0% of the principal amount of such prepayment (exclusive,
to the extent applicable, of any interest capitalized pursuant to Section
3.5(e)) as provided in Section
2.3 and shall not require the payment of any other premium or penalty.

 

3.2.          Mandatory
Prepayments.  (a)  If any Capital Stock (other than the Warrants
or any Capital Stock issued in respect of the exercise of any Warrants) or
Indebtedness (other than Permitted Indebtedness) shall be issued or incurred by
any Group Member or any Group Member shall otherwise receive any other capital
or similar contribution , an amount equal to 100% of the Net Cash Proceeds
thereof, if any, shall be applied on the date of such issuance or incurrence
toward the prepayment of the Bridge Loans as set forth in Section 3.2(d), other
than the Net Cash Proceeds of any exercise of the RFX Warrants by RFX or any of
its members to the extent such amounts are contributed to EPE, LLC or Seller in
accordance with Section 8(o).

 

(b)  If on any date any Group Member shall receive
Net Cash Proceeds from any Asset Sale or Recovery Event then, unless, in the
case of a Recovery Event, a Reinvestment Notice shall be delivered in respect
thereof, such Net Cash Proceeds shall be applied on such date toward the
prepayment of the Bridge Loans as set forth in Section 3.2(d); provided,
that, notwithstanding the foregoing, on each Reinvestment Prepayment Date, an
amount equal to the Reinvestment Prepayment Amount with respect to the relevant
Reinvestment Event shall be applied toward the prepayment of the Bridge Loans
as set forth in Section 3.2(d).

 

25

 

(c)  Upon the occurrence of a Change of Control,
the Borrower shall prepay the entire principal amount of the Bridge Loans then
outstanding (inclusive of any interest capitalized pursuant to Section
3.5(e)).

 

(d)  Amounts to be applied in connection with
prepayments made pursuant to this Section 3.2 shall be applied to the
prepayment of the Bridge Loans, first, to Base Rate Loans and, second,
to Eurodollar Loans.  Each prepayment of
the Bridge Loans under this Section 3.2 shall be accompanied by accrued
interest to the date of such prepayment on the amount prepaid.

 

(e)  Each and every mandatory prepayment in
respect of the Bridge Loans under this Section 3.2 shall be accompanied by a
prepayment premium equal to 1.0% of the principal amount of such prepayment (exclusive,
to the extent applicable, of any interest capitalized pursuant to Section
3.5(e)).

 

3.3.          Conversion
and Continuation Options. 
(a)  The Borrower may elect from
time to time to convert Eurodollar Loans to Base Rate Loans by giving the
Administrative Agent prior irrevocable notice of such election no later than
11:00 a.m., New York City time, on the Business Day preceding the proposed
conversion date, provided that any such conversion of Eurodollar Loans may only
be made on the last day of an Interest Period with respect thereto.  The Borrower may elect from time to time to
convert Base Rate Loans to Eurodollar Loans by giving the Administrative Agent
prior irrevocable notice of such election no later than 11:00 a.m., New York
City time, on the Business Day preceding the proposed conversion date (which
notice shall specify the length of the initial Interest Period therefor),
provided that no Base Rate Loan may be converted into a Eurodollar Loan when
any Event of Default has occurred and is continuing and the Administrative
Agent or the Required Lenders have determined in its or their sole discretion
not to permit such conversions. If the Borrower requests a conversion to
Eurodollar Loans in any such notice, but fails to specify an Interest Period,
it will be deemed to have specified an Interest Period of one month.  Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof.

 

(b)  Any Eurodollar Loan may be continued as such
upon the expiration of the then current Interest Period with respect thereto by
the Borrower giving irrevocable notice to the Administrative Agent, in
accordance with the applicable provisions of the term “Interest Period” set
forth in Section 1.1, of the length of the next Interest Period to be
applicable to such Loans, provided that no Eurodollar Loan may be
continued as such when any Event of Default has occurred and is continuing and
the Administrative Agent has or the Required Lenders have determined in its or
their sole discretion not to permit such continuations, and provided, further,
that if the Borrower shall fail to give any required notice as described above
in this paragraph or if such continuation is not permitted pursuant to the
preceding proviso such Loans shall be automatically converted to Base Rate
Loans on the last day of such then expiring Interest Period. So long as no
Event of Default has occurred and is continuing, if the Borrower requests a
continuation of Eurodollar Loans in any such notice, but fails to specify an Interest
Period, it will be deemed to have specified an Interest Period of one
month.  Upon receipt of any such notice
the Administrative Agent shall promptly notify each relevant Lender thereof.

 

26

 

3.4.          Limitations
on Eurodollar Tranches. 
Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions and continuations of Eurodollar Loans hereunder and all
selections of Interest Periods hereunder shall be in such amounts and be made
pursuant to such elections so that, (a) after giving effect thereto, the
aggregate principal amount of the Eurodollar Loans comprising each Eurodollar
Tranche shall be equal to $5,000,000 or a whole multiple of $1,000,000 in
excess thereof and (b) no more than five Eurodollar Tranches shall be
outstanding at any one time.

 

3.5.          Interest
Rates and Payment Dates.

 

(a)  Each Eurodollar Loan shall bear interest on
the outstanding principal amount thereof (inclusive of any interest capitalized
pursuant to Section 3.5(e)) for each day during each Interest Period with
respect thereto at a rate per annum equal to the Eurodollar Rate determined for
such day plus the Applicable Margin.

 

(b)  Each Base Rate Loan shall bear interest on
the outstanding principal amount thereof (inclusive of any interest
capitalized pursuant to Section 3.5(e)) at a rate per annum equal to the Base Rate plus the Applicable Margin.

 

(c) (i) If all or any
portion of the principal amount of any Loan (inclusive of any interest
capitalized pursuant to Section 3.5(e)) shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount (inclusive of any
interest capitalized pursuant to Section 3.5(e)) shall bear interest at a rate per annum equal to the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
Section plus 2%, and (ii) if all or a portion of any interest payable on
any Loan (inclusive of any interest payable on any interest capitalized
pursuant to Section 3.5(e)) or other
amount payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum equal to the rate then applicable to Base Rate
Loans plus 2%, with respect to clauses (i) and (ii) above, from the date
of such non-payment until such amount is paid in full (after as well as before
judgment). In addition, during the continuance of a Default or Event of
Default, all Obligations (whether or not overdue) shall bear interest at the
rates(s) specified in the preceding sentence.

 

(d)  Interest shall be payable in arrears on each
Interest Payment Date, provided that interest accruing pursuant to
paragraph (b) of this Section 3.5 shall be payable from time to time on demand.

 

(e)  Notwithstanding the foregoing, at such times
as no Default or Event of Default shall have occurred and be continuing, at the
election of the Borrower by written notice to the Administrative Agent not less
than three Business Days prior to the applicable Interest Payment Date, any
interest payable in excess of (i) the Eurodollar Rate plus 4.00%, in the case
of Eurodollar Loans, or (ii) the Base Rate plus 3.00%, in case of Base Rate
Loans, shall be capitalized and added to the principal amount of the Loan to
which such interest relates.  Any such
amount so capitalized shall bear interest as provided in Section 3.5 and shall
be payable as provided in Section 2.3 and Section 3.2.

 

27

 

3.6.          Computation
of Interest and Fees.

 

(a)  Interest and fees payable pursuant hereto
shall be calculated on the basis of a 360-day year for the actual days elapsed,
except that, with respect to Base Rate Loans the rate of interest on which is
calculated on the basis of the Prime Rate, the interest thereon shall be
calculated on the basis of a 365- (or 366-, as the case may be) day year for
the actual days elapsed.  The
Administrative Agent shall as soon as practicable notify the Borrower and the
relevant Lenders of each determination of a Eurodollar Rate.  Any change in the interest rate on a Loan
resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective.  The
Administrative Agent shall as soon as practicable notify the Borrower and the
relevant Lenders of the effective date and the amount of each such change in
interest rate.  Interest shall accrue on
each Loan for each day on which it is made or outstanding, except the day on
which it is repaid unless it is repaid on the same day that it was made.

 

(b)  Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this 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 quotations used by the Administrative Agent in determining any
interest rate pursuant to Section 3.5(a).

 

3.7.          Inability
to Determine Interest Rate. 
If prior to the first day of any Interest Period:

 

(a)  the Administrative Agent shall have
determined (which determination shall be conclusive and binding upon the
Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period, or

 

(b)  the Administrative Agent shall have received
notice from the Required Lenders that the Eurodollar Rate determined or to be
determined for such Interest Period will not adequately and fairly reflect the
cost to such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period,

 

the
Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter.  If such notice is given (x) any Eurodollar
Loans requested to be made on the first day of such Interest Period shall be
made as Base Rate Loans, (y) any Loans that were to have been converted on
the first day of such Interest Period to Eurodollar Loans shall be continued as
Base Rate Loans and (z) any outstanding Eurodollar Loans shall be converted, on
the last day of the then-current Interest Period, to Base Rate Loans.  Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans shall be made or continued as
such, nor shall the Borrower have the right to convert Loans to Eurodollar
Loans.

 

28

 

3.8.          Pro
Rata Treatment and Payments.

 

(a)  Each borrowing by the Borrower from the
Lenders shall be made pro rata according to the respective Aggregate Exposure
Percentages of the relevant Lenders.

 

(b)  Each payment (including each prepayment) by
the Borrower on account of principal of and interest on the Bridge Loans shall
be made pro  rata according to the respective outstanding
principal amounts of the Bridge Loans then held by the Bridge Lenders.  Amounts prepaid on account of the Bridge
Loans may not be reborrowed.

 

(c)  All payments (including prepayments) to be
made by the Borrower hereunder, whether on account of principal, interest, fees
or otherwise, shall be made without setoff or counterclaim and shall be made
prior to 12:00 Noon, New York City time, on the due date thereof to the
Administrative Agent, for the account of the Lenders, at the Funding Office, in
Dollars and in immediately available funds. 
The Administrative Agent shall distribute such payments to the Lenders
promptly upon receipt in like funds as received.  If any payment hereunder (other than payments
on the Eurodollar Loans) becomes due and payable on a day other than a Business
Day, such payment shall be extended to the next succeeding Business Day.  If any payment on a Eurodollar 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.  In the case of any extension of any
payment of principal pursuant to the preceding two sentences, interest thereon
shall be payable at the then applicable rate during such extension.

 

(d)  Unless the Administrative Agent shall have
been notified in writing by any Lender prior to a borrowing that such Lender
will not make the amount that would constitute its share of such borrowing
available to the Administrative Agent, the Administrative Agent may assume that
such Lender is making such amount available to the Administrative Agent, and
the Administrative Agent may, in reliance upon such assumption, make available
to the Borrower a corresponding amount. 
If such amount is not made available to the Administrative Agent by the
required time on the date therefor, such Lender shall pay to the Administrative
Agent, on demand, such amount with interest thereon at a rate equal to the
greater of (i) the Federal Funds Effective Rate and (ii) a rate determined by
the Administrative Agent in accordance with banking industry rules on interbank
compensation for the period until such Lender makes such amount immediately
available to the Administrative Agent.  A
certificate of the Administrative Agent submitted to any Lender with respect to
any amounts owing under this paragraph shall be conclusive in the absence of
manifest error.

 

(e)  Unless the Administrative Agent shall have
been notified in writing by the Borrower prior to the date of any payment due
to be made by the Borrower hereunder that the Borrower will not make such
payment to the Administrative Agent, the Administrative Agent may assume that
the Borrower is making such payment, and the Administrative Agent may, but
shall not be required to, in reliance upon such assumption, make available to
the Lenders their respective pro  rata shares of a corresponding
amount.  If such payment is not made to
the Administrative Agent by the Borrower within three Business Days after such
due date, the Administrative Agent shall be entitled to recover, on demand,
from each Lender to which any amount which was made available pursuant to the
preceding sentence, such amount with interest 

 

29

 

thereon at the rate per annum equal to the daily average Federal Funds
Effective Rate.  Nothing herein shall be
deemed to limit the rights of the Administrative Agent or any Lender against
the Borrower.

 

3.9.          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 any Lender to any tax of any
kind whatsoever with respect to this Agreement or any Eurodollar Loan made by
it, or change the basis of taxation of payments to such Lender in respect
thereof (except for Non-Excluded Taxes covered by Section 3.10 (including
Non-Excluded Taxes not subject to indemnification under Section 3.10) and
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 that is not otherwise included in the determination of
the Eurodollar 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, by an amount
that such Lender deems to be material, of making, converting into, continuing
or maintaining Eurodollar Loans, or to reduce any amount receivable hereunder
in respect thereof, then, in any such case, the Borrower shall promptly pay
such Lender, upon its demand, any additional amounts necessary to compensate
such Lender for such increased cost or reduced amount receivable.  If any Lender becomes entitled to claim any
additional amounts pursuant to this paragraph, it shall promptly notify the
Borrower (with a copy to the Administrative Agent) of the event by reason of
which it has become so entitled.

 

(b)  If any Lender shall have 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 Person controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender’s or such Person’s capital as a consequence
of its obligations hereunder to a level below that which such Lender or such
Person could have achieved but for such adoption, change or compliance (taking
into consideration such Lender’s or such Person’s policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time, after submission by such Lender to the Borrower (with a copy to
the Administrative Agent) of a written request therefor, the Borrower shall pay
to such Lender such additional amount or amounts as will compensate such Lender
or such corporation for such reduction.

 

30

 

(c)  A certificate as to any additional amounts
payable pursuant to this Section 3.9 submitted by any Lender to the Borrower
(with a copy to the Administrative Agent) shall be conclusive in the absence of
manifest error.  Notwithstanding anything
to the contrary in this Section 3.9, the Borrower shall not be required to
compensate a Lender pursuant to this Section 3.9 for any amounts incurred more
than six months prior to the date that such Lender notifies the Borrower of
such Lender’s intention to claim compensation therefor; provided that,
if the circumstances giving rise to such claim have a retroactive effect, then
such six-month period shall be extended to include the period of such
retroactive effect.  The obligations of
the Borrower pursuant to this Section 3.9 shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.

 

3.10.        Taxes.

 

(a)  All payments made under this Agreement shall
be made free and clear of, and without deduction or withholding for or on account
of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority,
excluding net income taxes and franchise taxes (imposed in lieu of net income
taxes) imposed on any Agent, Lender or Participant as a result of a present or
former connection between such Agent, Lender or Participant and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from such Agent, Lender or Participant having
executed, delivered or performed its obligations or received a payment under,
or enforced, this Agreement or any other Loan Document).  If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded
Taxes”) or Other Taxes are required to be withheld from any amounts payable
to any Agent, Lender or Participant hereunder, the amounts so payable to such
Agent or such Lender shall be increased to the extent necessary to yield to
such Agent, Lender or Participant (after payment of all Non-Excluded Taxes and
Other Taxes) interest or any such other amounts payable hereunder at the rates
or in the amounts specified in this Agreement, provided, however, that the
Borrower shall not be required to increase any such amounts payable to any
Lender or Participant with respect to any Non-Excluded Taxes (i) that are attributable
to such Lender’s or Participant’s failure to comply with the requirements of
paragraph (d) or (e) of this Section 3.10 or (ii) that are United States
withholding taxes imposed on amounts payable to such Lender or Participant at
the time such Lender or Participant becomes a party to this Agreement, except
to the extent that such withholding is newly imposed or increased as a result
of a change in law effective after the date of this Agreement.

 

(b)  In addition, the Borrower shall pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable law.

 

(c)  Whenever any Non-Excluded Taxes or Other
Taxes are payable by the Borrower, as promptly as possible thereafter the
Borrower shall send to the Administrative Agent for its own account or for the
account of the relevant Agent or Lender, as the case may be, a certified copy
of an original official receipt received by the Borrower showing payment
thereof.  If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts
or other

 

31

 

required documentary evidence, the Borrower shall indemnify the Agents
and the Lenders for any incremental taxes, interest or penalties that may
become payable by any Agent or any Lender as a result of any such failure.

 

(d)  Each Lender (or Transferee) that is not a “U.S.
Person” as defined in Section 7701(a)(30) of the Code (a “Non-U.S. Lender”)
shall deliver to the Borrower and the Administrative Agent (or, in the case of
a Participant, to the Lender from which the related participation shall have
been purchased) two copies of either U.S. Internal Revenue Service Form W-8IMY
and/or Form W-8BEN (claiming benefits of an applicable tax treaty) or Form
W-8ECI, as applicable (or successor form) or, in the case of a Non-U.S. Lender
claiming exemption from U.S. federal withholding tax under Section 871(h) or
881(c) of the Code with respect to payments of “portfolio interest”, a
statement substantially in the form of Exhibit F and a Form W-8BEN, or any
subsequent versions thereof or successors thereto, properly completed and duly
executed by such Non-U.S. Lender claiming complete exemption from, or a reduced
rate of, U.S. federal withholding tax on all payments by the Borrower under
this Agreement and the other Loan Documents. 
Such forms shall be delivered by each Non-U.S. Lender on or before the
date it becomes a party to this Agreement (or, in the case of any Participant,
on or before the date such Participant purchases the related
participation).  In addition, each
Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Non-U.S. Lender.  Each Non-U.S. Lender shall promptly notify
the Borrower in writing at any time it determines that it is no longer in a
position to provide any previously delivered certificate to the Borrower (or
any other form of certification adopted by the U.S. taxing authorities for such
purpose).  Notwithstanding any other
provision of this paragraph, a Non-U.S. Lender shall not be required to deliver
any form pursuant to this paragraph that such Non-U.S. Lender is not legally
able to deliver.  Each Lender that is not
a Non-U.S. Lender shall furnish an accurate and complete U.S. Internal Revenue
Service Form W-9 (or successor form) establishing that such Lender is not
subject to U.S. backup withholding, and to the extent it may lawfully do so at
such times, provide a new Form W-9 (or successor form) upon the expiration or
obsolescence of any previously delivered form.

 

(e)  A Lender that is entitled to an exemption
from or reduction of non-U.S. withholding tax under the law of the jurisdiction
in which the Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased), at the time or times prescribed by applicable law and as reasonably
requested in writing by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Lender
is legally entitled to complete, execute and deliver such documentation and in
such Lender’s judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.

 

(f)  If any Agent,
Lender or Participant determines, in its sole discretion, that it has received a refund of any
Non-Excluded Taxes or Other Taxes as to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section 3.10, it shall pay over such refund to the Borrower
(but only to the extent 

 

32

 

of indemnity payments made, or additional amounts
paid, by the Borrower under this Section 3.10 with respect to the Non-Excluded
Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of such Agent or such Lender and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund); provided, that the Borrower, upon the request of such Agent,
Lender or Participant, agrees to repay the amount paid over to the Borrower (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) to such Agent or such Lender in the event such Agent or such Lender
is required to repay such refund to such Governmental Authority.  This paragraph shall not be construed to
require any Agent or any Lender to make available its tax returns (or any other
information relating to its taxes which it deems confidential) to the Borrower
or any other Person.  Each Lender or Participant, as applicable,
shall indemnify the Borrower for any losses resulting from any false,
inaccurate or untrue statements provided pursuant to paragraphs (d) or (e) of
this Section 3.10.

 

(g)  The agreements in this Section 3.10 shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.

 

(h)  For purposes of this Section 3.10, in the
case of any Lender that is a treated as a partnership for U.S. federal income
tax purposes, any Non-Excluded Taxes or Other Taxes required to be deducted and
withheld by such Lender with respect to payments made by the Borrower under any
Loan Document shall be treated as Non-Excluded Taxes or Other Taxes required to
be deducted by the Borrower, but only to the extent such Non-Excluded Taxes or
Other Taxes would have been required to be deducted and withheld by the Lender
if the Lender were treated as a corporation for U.S. federal income tax
purposes making such payments under the Loan Documents on behalf of the
Borrower.

 

3.11.        Indemnity.  Holdings and the Borrower jointly and
severally agree to indemnify each Lender and each Agent and to hold each Lender
and each Agent harmless from any loss or expense (but excluding any loss of
anticipated profits) that such Lender or such Agent may sustain or incur as a
consequence of (a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (b)
default by the Borrower in making any prepayment of or conversion from
Eurodollar Loans after the Borrower has given a notice thereof in accordance
with the provisions of this Agreement or (c) the making of a prepayment of
Eurodollar Loans on a day that is not the last day of an Interest Period with
respect thereto.  Such indemnification
may include an amount equal to the excess, if any, of (i) the amount of
interest that would have accrued on the amount so prepaid, or not so borrowed,
converted or continued, for the period from the date of such prepayment or of
such failure to borrow, convert or continue to the last day of such Interest
Period (or, in the case of a failure to borrow, convert or continue, the
Interest Period that would have commenced on the date of such failure) in each
case at the applicable rate of interest for such Loans provided for herein
(excluding, however, the Applicable Margin included therein, if any) over (ii)
the amount of interest (as reasonably determined by such Lender) that would
have accrued to such Lender on such amount by placing such amount on deposit
for a comparable period with leading banks in the interbank eurodollar
market.  A certificate as to any amounts
payable pursuant to this Section submitted to the Borrower by any Lender shall
be conclusive in the absence of manifest error. 

 

33

 

This
covenant shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.

 

3.12.        Change
of Lending Office.  Each
Lender agrees that, upon the occurrence of any event giving rise to the
operation of Section 3.9, 3.10(a) or 3.15 with respect to such Lender, it will,
if requested by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for any Loans
affected by such event with the object of avoiding the consequences of such
event; provided, that such designation is made on terms that, in the sole
judgment of such Lender, cause such Lender and its lending office(s) to suffer
no economic, legal or regulatory disadvantage, and provided, further, that
nothing in this Section shall affect or postpone any of the obligations of the
Borrower or the rights of any Lender pursuant to Section 3.9, 3.10(a) or 3.15.

 

3.13.        Replacement
of Lenders.  The Borrower may replace,
with a replacement financial institution reasonably satisfactory to the
Administrative Agent, any Lender that (a) requests payment of any amounts
payable under Section 3.9, 3.10(a) or 3.15 or (b) defaults in its obligation to
make Loans hereunder, but, in each case, only if (i) such replacement does not
conflict with any Requirement of Law, (ii) no Event of Default shall have
occurred and be continuing at the time of such replacement, (iii) prior to any
such replacement, such Lender shall have taken no action under Section 3.12 so
as to eliminate the continued need for payment of amounts owing pursuant to
Section 3.9 or 3.10(a), (iv) the replacement financial institution shall
purchase, at par, all Loans and other amounts owing to such replaced Lender on
or prior to the date of replacement, (v) the Borrower shall be liable to such
replaced Lender under Section 3.11 if any Eurodollar Loan owing to such
replaced Lender shall be purchased other than on the last day of the Interest
Period relating thereto, (vi) the replacement financial institution, if not
already a Lender, shall be reasonably satisfactory to the Administrative Agent,
(vii) the replaced Lender shall be obligated to make such replacement in
accordance with the provisions of Section 10.6 (provided that the Borrower
shall be obligated to pay the registration and processing fee referred to
therein), (viii) until such time as such replacement shall be consummated, the
Borrower shall pay all additional amounts (if any) required pursuant to Section
3.9, 3.10(a) or 3.15, as the case may be, and (ix) any such replacement shall
not be deemed to be a waiver of any rights that the Borrower, the
Administrative Agent or any other Lender shall have against the replaced
Lender.

 

3.14.        Evidence
of Debt.

 

(a)  Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing Indebtedness of the
Borrower to such Lender resulting from each Loan of such Lender from time to
time, including the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement.

 

(b)  The Administrative Agent, on behalf of the
Borrower, shall maintain the Register pursuant to Section 10.6(b), and a
subaccount therein for each Lender, in which shall be recorded (i) the amount of each Loan made hereunder and
any Note evidencing such Loan, the Type of such Loan and each Interest Period
applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable from the
Borrower to each Lender 

 

34

 

hereunder and (iii) both the
amount of any sum received by the Administrative Agent hereunder from the
Borrower and each Lender’s share thereof.

 

(c)  The entries made in the Register and the accounts
of each Lender maintained pursuant to Section 3.14(a) shall, to the extent
permitted by applicable law, be prima  facie evidence of the
existence and amounts of the obligations of the Borrower therein recorded; provided,
however, that the failure of any Lender or the Administrative Agent to
maintain the Register or any such account, or any error therein, shall not in
any manner affect the obligation of the Borrower to repay (with applicable
interest) the Loans made to the Borrower by such Lender in accordance with the
terms of this Agreement.

 

(d)  The Borrower agrees that, upon the request to
the Administrative Agent by any Lender, the Borrower will execute and deliver
to such Lender a promissory note of the Borrower evidencing any Bridge Loans of
such Lender, substantially in the form of Exhibit G, with appropriate
insertions as to date and principal amount.

 

3.15.        Illegality.  Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the interpretation
or application thereof shall make it unlawful for any Lender to make or
maintain Eurodollar Loans as contemplated by this Agreement, (a) the commitment
of such Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as
such and convert Base Rate Loans to Eurodollar Loans shall forthwith be
canceled and (b) such Lender’s Loans then outstanding as Eurodollar Loans, if
any, shall be converted automatically to Base Rate Loans on the respective last
days of the then current Interest Periods with respect to such Loans or within
such earlier period as required by law. 
If any such conversion of a Eurodollar Loan occurs on a day which is not
the last day of the then current Interest Period with respect thereto, the
Borrower shall pay to such Lender such amounts, if any, as may be required
pursuant to Section 3.11.

 

SECTION 4. 
REPRESENTATIONS AND WARRANTIES

 

To induce the Agents and the Lenders to enter
into this Agreement and to make the Loans, Holdings and the Borrower hereby
jointly and severally represent and warrant to each Agent and each Lender that:

 

4.1.          Financial
Condition.

 

(a)  The unaudited pro forma consolidated balance
sheet of Holdings and its consolidated Subsidiaries as at September 30, 2004
(including the notes thereto) (the “Pro Forma Balance Sheet”), copies of
which have heretofore been furnished to each Lender, has been prepared giving
effect (as if such events had occurred on such date) to (i) the consummation of
the Acquisition, (ii) the Loans to be made on the Closing Date and the use of
proceeds thereof and (iii) the payment of fees and expenses in connection with
the foregoing.  The Pro Forma Balance
Sheet has been prepared based on the best information available to the Borrower
as of the date of delivery thereof, and presents fairly on a pro forma basis
the estimated financial position of the Borrower and its consolidated
Subsidiaries as at September 30, 2004, assuming that the events specified in
the preceding sentence had actually occurred at such date.

 

35

 

(b)  The audited consolidated balance sheets of
the Operating Companies and their respective Subsidiaries as at December 31,
2001, December 31, 2002, December 31, 2003 and September 30, 2004, and the
related combined statements of changes in net assets and cash flows for the
ninth month period ended September 30, 2004 and the years ended December 31,
2001, December 31, 2002 and December 31, 2003, reported on by and accompanied
by an unqualified report from Deloitte & Touche, present fairly the
consolidated financial condition of the Operating Companies and their
respective Subsidiaries as at such dates, and the consolidated results of their
respective operations and their respective consolidated cash flows for the
respective months and years then ended. 
All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by the aforementioned firm
of accountants and disclosed in their reports thereon).  No Group Member has any material Guarantee
Obligations, contingent liabilities and liabilities for taxes, or any long-term
leases or unusual forward or long-term commitments, including any interest rate
or foreign currency swap or exchange transaction or other obligation in respect
of derivatives, that are not reflected in the most recent financial statements
referred to in this paragraph.  During
the period from December 31, 2003 to and including the date hereof there
has been no Disposition by any Group Member of any material part of its
business or property (other than pursuant to the Acquisition Documentation).

 

4.2.          No
Change.  Since September 30,
2004, there has been no development or event that has had or could reasonably
be expected to have a Material Adverse Effect.

 

4.3.          Corporate
Existence; Compliance with Law. 
Each Group Member (a) is duly organized or formed, validly existing and
in good standing under the laws of the jurisdiction of its organization, (b)
has the power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation or other organization 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 where the failure to be so
qualified could not reasonably be expected to cause a Material Adverse Effect,
and (d) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

4.4.          Power;
Authorization; Enforceable Obligations.  Each Group Member has the power and
authority, and the legal right, to make, deliver and perform each Loan Document
to which it is a party and the Acquisition Documentation to which it is a party
and, in the case of the Borrower, to obtain extensions of credit
hereunder.  Each Group Member has taken
all necessary organizational action to authorize the execution, delivery and
performance of the Loan Documents to which it is a party and the Acquisition
Documentation to which it is a party and, in the case of the Borrower, to
authorize the extensions of credit on the terms and conditions of this
Agreement.  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 Acquisition
(or the other transactions contemplated thereby) and the extensions of credit
hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the Loan Documents or of the
Acquisition Documentation, except (i) consents, authorizations, 

 

36

 

filings
and notices described in Schedule 4.4, which consents, authorizations, filings
and notices have been obtained or made and are in full force and effect and
(ii) the filings referred to in Section 4.19. 
Each Loan Document and the Acquisition Documentation has been duly
executed and delivered on behalf of each Group Member party thereto.  This Agreement constitutes, and each other
Loan Document upon execution will constitute, a legal, valid and binding
obligation of each Loan Party party thereto, enforceable against each such Loan
Party 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).

 

4.5.          No
Legal Bar.  The execution,
delivery and performance of this Agreement and the other Loan Documents, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or any Contractual Obligation of any Group Member and will
not result in, or require, the creation or imposition of any Lien on any of
their respective properties or revenues pursuant to any Requirement of Law or
any such Contractual Obligation (other than the Liens created by the Security
Documents).  No Requirement of Law or
Contractual Obligation applicable to the Borrower or any of its Subsidiaries
could reasonably be expected to have a Material Adverse Effect.

 

4.6.          Litigation.  No litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or, to the
knowledge of Holdings or the Borrower, threatened by or against any Group
Member or against any of their respective properties or revenues (a) with
respect to any of the Loan Documents or the Acquisition Documentation or any of
the transactions contemplated hereby or thereby, or (b) that could reasonably
be expected to have a Material Adverse Effect.

 

4.7.          No
Default.  No Group Member is
in default under or with respect to any of its Contractual Obligations in any
respect that could reasonably be expected to have a Material Adverse
Effect.  No Default or Event of Default
has occurred and is continuing.

 

4.8.          Ownership
of Property; Liens.  Each
Group Member has title in fee simple to, or a valid leasehold interest in, all
its real property, and good title to, or a valid leasehold interest in, all its
other property, and none of such property is subject to any Lien except as
permitted by Section 7.3.  None of the
Pledged Equity Interests is subject to any Lien except for Liens permitted by
Section 7.3.

 

4.9.          Intellectual
Property.

 

(a)  Each Group Member owns, or is licensed to
use, all Intellectual Property material to the conduct of its business as
currently conducted.

 

(b)  All Intellectual Property material to the
conduct of its business as currently conducted and owned by each Group Member
is valid, subsisting, unexpired and enforceable, has not been abandoned and
does not infringe the intellectual property rights of any other Person.

 

37

 

(c)  The rights of each Group Member in or to the
Intellectual Property owned by such Group Member do not infringe upon,
misappropriate, or otherwise violate the rights of any third party, and no
claim has been asserted that the use of such Intellectual Property does or may
infringe upon, misappropriate or otherwise violate the rights of any third
party, in either case, which infringement, misappropriation or violation could
reasonably be expected to have a Material Adverse Effect.  To the knowledge of any Group Member, there
is currently no infringement, misappropriation or unauthorized use of any item
of Intellectual Property owned by any Group Member that, either individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect.

 

(d)  No action or proceeding is pending, or, to
the knowledge of any Group Member, threatened, on the date hereof (1) seeking to limit, cancel or question the
validity of any Intellectual Property material to the conduct of its business as
currently conducted or a Group Member’s ownership interest therein, or (2) which, if adversely determined, would have a
Material Adverse Effect.

 

(e)  No holding, decision or judgment has been
rendered by any Governmental Authority which would limit, cancel or question
the validity of, or rights in, any Group Member’s Intellectual Property in any
respect that could reasonably be expected to have a Material Adverse
Effect.  No Group Member is aware of any
uses of any item of Intellectual Property owned by such Group Member that could
reasonably be expected to lead to such item becoming invalid or unenforceable
including, without limitation, unauthorized uses by third parties, which uses,
either individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

 

(f)  Each Group Member has made all filings and
recordations necessary to adequately protect its ownership interest in its
United States Intellectual Property and material non-United States Intellectual
Property owned by such Group Member including, without limitation, recordation
of its interests in the Trademarks owned by such Group Member with the United
States Patent and Trademark Office and in corresponding national and
international patent offices, and recordation of any of its interests in the
Copyrights owned by such Group Member with the United States Copyright Office
and in international copyright offices.

 

(g)  Each Group Member has performed all acts,
including any transfers or assignments, necessary to ensure that all rights of
publicity to use the name and likeness of Elvis Presley will, after
consummation of the transactions referenced in the recitals hereto, be owned
and controlled by Borrower.

 

4.10.        Taxes. 
Each Group Member has filed or caused to be filed all Federal, state and
other material tax returns that are required to be filed and has paid all taxes
shown to be due and payable on said returns or on any assessments made against
it or any of its property and all other material taxes, fees or other charges
imposed on it or any of its property by any Governmental Authority (other than
any the amount or validity of which are currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity
with GAAP have been provided on the books of Holdings, the Borrower or their
Subsidiaries, as the case may be); no material tax Lien has been filed, and, to
the knowledge of 

 

38

 

Holdings
and the Borrower, no material claim is being asserted, with respect to any such
tax, fee or other charge other than those permitted pursuant to Section
7.3.  No Loan Party and no Subsidiary
thereof intends to treat the Loan, the Acquisition, or any other transaction
contemplated hereby as being a “reportable transaction” (within the meaning of
Treasury Regulation section 1.6011-4).

 

4.11.        Federal
Regulations.  No part of the
proceeds of any Loans, and no other extensions of credit hereunder, will be
used for “buying” or “carrying” any “margin stock” within the respective
meanings of each of the quoted terms under Regulation U as now and from time to
time hereafter in effect or for any purpose that violates the provisions of the
Regulations of the Board.  If requested
by any Lender or the Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form G-3 or FR Form U-1, as applicable,
referred to in Regulation U.

 

4.12.        Labor
Matters.  Except as, in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect:  (a) there are no strikes or
other labor disputes against any Group Member pending or, to the knowledge of
Holdings or the Borrower, threatened; (b) hours worked by and payment made to
employees of each Group Member have not been in violation of the Fair Labor
Standards Act or any other applicable Requirement of Law dealing with such
matters; and (c) all payments due from any Group Member on account of employee
health and welfare insurance have been paid or accrued as a liability on the
books of the relevant Group Member.

 

4.13.        ERISA.  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 intended to be qualified under Section 401 of the Code has
received a favorable determination letter from the Internal Revenue Service
regarding such qualified status and has not, since receipt of the most recent
favorable determination letter, been amended or operated in a way which could
reasonably be expected to adversely affect such qualified status.  No termination of a Single Employer Plan has
occurred, and no Lien in favor of the PBGC or a Plan has arisen, during such
five-year period.  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 to 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 a material amount.  Neither the Borrower
nor any Commonly Controlled Entity has had a complete or partial withdrawal
from any Multiemployer Plan that has resulted or could reasonably be expected
to result in a liability under ERISA that would reasonably be expected to cause
a Material Adverse Effect, and neither the Borrower nor any Commonly Controlled
Entity would become subject to any material liability under ERISA if the
Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding
the date on which this representation is made or deemed made.  No such Multiemployer Plan is in
Reorganization or Insolvent.  Neither the
Borrower nor any of its Subsidiaries has any liability with respect to any 

 

39

 

employee
benefit plan that is not subject to the laws of the United States or a
political subdivision thereof that could reasonably be expected to result in a
Material Adverse Effect.

 

4.14.        Investment
Company Act; Other Regulations. 
No Loan Party is an “investment company”, or a company “controlled” by
an “investment company”, within the meaning of the Investment Company Act of
1940, as amended.  No Loan Party is
subject to regulation under any Requirement of Law (other than Regulation X of
the Board) that limits its ability to incur Indebtedness.

 

4.15.        Subsidiaries.  Except as disclosed to the Administrative
Agent by the Borrower in writing from time to time after the Closing Date, (a)
Schedule 4.15 sets forth the name and jurisdiction of organization or formation
of each Subsidiary of Holdings and the Borrower and, as to each such
Subsidiary, the percentage of each class of Capital Stock owned by any Loan
Party and (b) there are no outstanding subscriptions, options, warrants, calls,
rights or other agreements or commitments (other than stock options granted to
employees or directors and directors’ qualifying shares) of any nature relating
to any Capital Stock of the Borrower or any Subsidiary, except as created by
the Loan Documents.

 

4.16.        Use
of Proceeds.  The proceeds of
the Bridge Loans shall be used to finance a portion of the Acquisition, to pay
related fees and expenses, to refinance a portion of the Existing Indebtedness
(including the Deposit Loan) and for general corporate purposes.

 

4.17.        Environmental
Matters.  Except as,
individually, could not reasonably be expected to cause Holdings, the Borrower
or any of its Subsidiaries to incur liability in excess of a Material
Environmental Amount, or, in the aggregate, could not reasonably be expected to
have a Material Adverse Effect:

 

(a)  to the knowledge of Holdings and the
Borrower, the facilities and properties owned, leased or operated by Holding or
the Borrower (the “Properties”) do not contain, and to the knowledge of
Holdings or the Borrower, have not previously contained, any Hazardous
Substances in amounts or concentrations or under circumstances that constitute
or constituted a violation of, or could give rise to liability under, any
Environmental Law;

 

(b)  to the knowledge of Holdings and the
Borrower, no Group Member has received any notice, actual or threatened, of
violation, alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the business operated by any Group Member
(the “Business”);

 

(c)  to the knowledge of Holdings and the
Borrower, no judicial proceeding or governmental or administrative action is
pending or, to the knowledge of Holdings and the Borrower, threatened, under
any Environmental Law to which any Group Member is or will be named as a party
with respect to the Properties or the Business, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business;

 

40

 

(d)  to the knowledge of Holdings and the Borrower, there has been no
release or threat of release of Hazardous Substance at or from the Properties
or otherwise in connection with the Business, in violation of or in amounts or
in a manner that could give rise to liability under Environmental Laws;

 

(e) (i) to the knowledge of Holdings and the
Borrower, there is not now, nor has there been previously, located on
any of the Properties any: (A) underground storage tanks, as defined under any
Environmental Law, or (B) areas or vessels used or intended for the treatment,
storage or disposal of Hazardous Substances; and (ii) to the knowledge of Holdings and the Borrower, no Group Member
has transported, or arranged for the transport, storage, treatment or disposal,
by contract, agreement or otherwise, of any Hazardous Substances at, on, under
or to any of the Properties or any location including any location used for the
treatment, storage or disposal of Hazardous Substances, other than de minimis
quantities used in connection with the Business in accordance with all
Environmental Laws; and

 

(f)  to the knowledge of Holdings and the
Borrower, each Group Member is in compliance with all Environmental Permits
with respect to the Business and the Properties and all operations at the
Properties are in compliance with all applicable Environmental Laws, and there
is no contamination in violation of, or that is reasonably likely to give rise
to liability under, any Environmental Law at, under or about the Properties or
violation of any Environmental Law with respect to the Properties or the
Business.

 

4.18.        Accuracy
of Information, etc.  No
statement or information, other than the Projections and pro forma financial
information, contained in this Agreement, any other Loan Document or any other
document, certificate or statement furnished by or on behalf of any Loan Party
for use in connection with the transactions contemplated by this Agreement or
the other Loan Documents, contained as of the date such statement, information,
document or certificate was so furnished any untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
contained herein or therein taken as a whole not misleading.  The projections and pro forma financial
information contained in the materials referenced above are based upon good
faith estimates and assumptions believed by management of Holdings and the
Borrower to be reasonable at the time made, it being recognized by the Lenders
that such financial information as it relates to future events is not to be
viewed as fact and that actual results during the period or periods covered by
such financial information may differ from the projected results set forth
therein by a material amount.  As of the
date hereof, the representations and warranties contained in the Acquisition
Documentation are true and correct in all material respects.  There is no fact known to any Loan Party that
could reasonably be expected to have a Material Adverse Effect that has not
been expressly disclosed herein, in the other Loan Documents or in the other
documents, certificates and statements furnished to the Administrative Agent
and the Lenders for use in connection with the transactions contemplated hereby
and by the other Loan Documents.

 

4.19.        Security
Documents.  The Guarantee and
Collateral Agreement is effective to create in favor of the Administrative
Agent, for the benefit of the Secured Parties, a legal, valid and enforceable
security interest in the Collateral described therein and proceeds and products
thereof.  In the case of the Pledged
Equity Interests described in the Guarantee and 

 

41

 

Collateral Agreement, when certificates representing
such Pledged Equity Interests and related transfer powers are delivered to the
Administrative Agent, and in the case of the other Collateral described in the
Guarantee and Collateral Agreement, when financing statements and other filings
specified on Schedule 4.19 in appropriate form are filed in the offices
specified on Schedule 4.19 to the extent that a security interests therein can
be perfected by the filing of a financing statement, the Guarantee and
Collateral Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Collateral and the proceeds thereof, as security for the Obligations (as
defined in the Guarantee and Collateral Agreement), in each case prior and
superior in right to any other Person (except, in the case of Collateral other
than Pledged Equity Interests, Liens permitted by Section 7.3).

 

4.20.        Solvency.  Each Group Member is, and after giving effect
to the Acquisition and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent.

 

4.21.        Senior
Indebtedness.  The Obligations
constitute senior indebtedness of the Borrower and the Guarantor.

 

4.22.        Certain
Documents.  The Borrower has
delivered to the Administrative Agent a complete and correct copy of the
Acquisition Agreement and the related Acquisition Documentation, including any
amendments, supplements or modifications with respect thereto.

 

4.23.        Foreign
Assets Control Regulations and Anti-Money Laundering.  (a) Neither the making of Loans under this
Agreement nor the use of the proceeds thereof shall cause the Borrower or any
Subsidiary of the Borrower to violate any material provision of the U.S. Bank
Secrecy Act, as amended, and any applicable regulations thereunder or any of
the sanctions programs administered by the U.S. Department of the Treasury’s
Office of Foreign Assets Control (“OFAC”) of the United States Department of
Treasury, any regulations promulgated thereunder by OFAC or under any
affiliated or successor governmental or quasi-governmental office, bureau or
agency and any enabling legislation or executive order relating thereto.  Without limiting the foregoing, neither the
Borrower nor any Subsidiary of the Borrower (i) is a person whose property or
interests in property are blocked or subject to blocking pursuant to Section 1
of Executive Order 13224 of September 23, 200l Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) knowingly engages in any
dealings or transactions prohibited by such Section 2 of such executive order,
or is otherwise knowingly associated with any such person in any manner
violative of Section 2, or (iii) is a person on the list of Specially
Designated Nationals and Blocked Persons or subject to the limitations or
prohibitions under any other OFAC regulation or executive order.

 

(b)           The Borrower and its Subsidiaries are in
compliance, in all material respects, with the Uniting and Strengthening of
America by Providing the Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001.  No part of the
proceeds of the Loans hereunder will knowingly be used, directly or indirectly,
for any payments to any governmental official or employee, political party,
official of a political party, candidate for political office, or anyone else
acting in an official capacity, in order to obtain, retain or direct business
or obtain 

 

42

 

any improper advantage, in violation of the United States Foreign
Corrupt Practices Act of 1977, as amended.

 

SECTION 5. 
CONDITIONS PRECEDENT

 

The agreement of each Lender to make the initial extension of credit
requested to be made by it is subject to the satisfaction, prior to or concurrently
with the making of such extension of credit on the Closing Date (but in any
event no later than February 28, 2005), of the following conditions precedent:

 

(a)  Credit Agreement; Guarantee and Collateral
Agreement.  The Administrative Agent
shall have received (i) this Agreement executed and delivered by each
Agent, Holdings and the Borrower and, in the case of the Lenders, an Addendum,
(ii) the Guarantee and Collateral Agreement, executed and delivered the
Guarantor and the Borrower and (iii) an Acknowledgment and Consent in the form
attached to the Guarantee and Collateral Agreement, executed and delivered by
each Issuer (as defined therein), if any, that is not a Loan Party.

 

(b)  Acquisition, etc.  The following transactions shall have been
consummated, in each case on terms and conditions reasonably satisfactory to
the Administrative Agent:

 

(i)            the Acquisition shall have been consummated
in accordance with the terms of the Acquisition Documentation (and no provision
thereof shall have been amended, waived or otherwise modified in a manner
adverse to RFX, Holdings, the Borrower or the Lenders without the prior consent
of the Administrative Agent);

 

(ii)           Holdings shall have received at least $43.7
million from the proceeds of the Investor Equity Investment and at least $3.0
million from the proceeds of the Sponsor Equity;

 

(iii)          Holdings shall have issued approximately
$21.9 million in the form of Seller Preferred Equity;

 

(iv)          at least $5.0 million in proceeds from the
exercise of the RFX Warrants shall have been received by Holdings and at least
$1.0 million of such proceeds shall have been contributed by Holdings to the
Borrower;

 

(v)           the
Administrative Agent shall have received satisfactory evidence that the fees
and expenses to be incurred in connection with the Acquisition and the
financing thereof shall have been paid and shall not exceed $7.7 million (which
amount may include the reimbursement and payment of certain third-party costs
and expenses of FXM, Inc. prior to the Closing Date in an amount not to exceed
$1.5 million and the reimbursement to FXM, Inc. of corporate overhead expenses
incurred prior to the Closing Date in an amount not to exceed $1.2 million); and

 

(vi)          (i) the Administrative Agent shall have
received satisfactory evidence that all Existing Indebtedness shall have been
terminated and all amounts thereunder shall have been paid in full (or, with
respect to the approximately $4.26 

 

43

 

million mortgage in respect
of the Meadow Oaks Apartment complex, defeased in accordance with the terms
thereof) and (ii) satisfactory arrangements shall have been made for the
termination of all Liens granted in connection therewith.

 

(c)  [Reserved].

 

(d)  Financial Covenants.  The Administrative Agent shall have received
a certificate of a Responsible Officer certifying that, after giving effect to
the Acquisition (including
the payment of all fees and expenses incurred in connection therewith),
(i) the pro forma Consolidated EBITDA of the Borrower for the four fiscal
quarter period ended September 30, 2004 is equal to or greater than $9.50
million, (ii) the pro forma Consolidated Leverage Ratio of the Borrower for the
four fiscal quarter period ended September 30, 2004 is less than 4.0 to 1.0 and
(iii) cash and Cash Equivalents of the
Borrower and the Operating Companies is equal to or greater than $500,000.

 

(e)  Pro Forma Balance Sheet; Financial
Statements.  The Lenders shall have
received (i) the Pro Forma Balance Sheet and (ii) audited consolidated
financial statements of the Operating Companies and their respective
Subsidiaries for the 2001, 2002 and 2003 fiscal years and for the nine month
period ended September 30, 2004.

 

(f)  Business Plan and Projections.  The Administrative Agent shall have received
and shall be satisfied with a business plan and financial projections (the “Projections”)
for each fiscal quarter in 2005.

 

(g)  Approvals.  All governmental and third party approvals
(including HSR Act approval and other consents) necessary, or in the reasonable
discretion of the Administrative Agent, advisable in connection with the
Acquisition, the continuing operations of the Group Members and the
transactions contemplated hereby shall have been obtained and be in full force
and effect (including shareholder approvals), and all applicable waiting
periods shall have expired without any action being taken or threatened by any
competent authority that would restrain, prevent or otherwise impose adverse
conditions on the Acquisition or the financing contemplated hereby.

 

(h)  Lien Searches.  The Administrative Agent shall have received
the results of a recent lien search in each of the jurisdictions designated by
the Administrative Agent, and such search shall reveal no liens on any of the
assets of the Loan Parties except for liens permitted by Section 7.3 or
discharged on or prior to the Closing Date pursuant to documentation
satisfactory to the Administrative Agent.

 

(i)  Environmental Reports.  The Administrative Agent shall have received
copies of the environmental reports listed on Schedule 5(i).

 

(j)  Fees. 
The Lenders and the Agents shall have received all fees required to be
paid, and all expenses for which invoices have been presented (including the
reasonable fees and expenses of legal counsel and excluding corporate overhead
and other non out-of-pocket expenses), on or before the Closing Date.  All such amounts will be paid with proceeds
of Loans 

 

44

 

made on the Closing Date and will be reflected in the funding
instructions given by the Borrower to the Administrative Agent on or before the
Closing Date.

 

(k)  Closing Certificate.  The Administrative Agent shall have received
a certificate of each Loan Party, dated the Closing Date, substantially in the
form of Exhibit C, with appropriate insertions and attachments including,
without limitation, the formation documents and a good standing certificate of
each Group Member certified by the relevant authority of the jurisdiction of
organization of such Group Member.

 

(l)  Legal Opinions.  The Administrative Agent shall have received
the following executed legal opinions:

 

(i)            the legal opinion of Paul, Hastings, Janofsky
and Walker LLP, counsel to the Borrower and its Subsidiaries, substantially in
the form of Exhibit E-1;

 

(ii)           each legal opinion delivered in connection
with the Acquisition Agreement, accompanied by a reliance letter in favor of
the Lenders (including, without limitation, the legal opinion of Glankler
Brown, PLLC with regard to certain intellectual property matters);

 

(iii)          the legal opinions (and reliance letters, if
applicable) of Proskauer Rose and Greenberg Traurig in respect of the
Acquisition; and

 

(iv)          the legal opinion of local counsel in
Colorado, substantially in the form of Exhibit E-2.

 

Each such legal opinion
shall cover such other matters incident to the transactions contemplated by
this Agreement, and otherwise be in such form and of such substance, as the
Administrative Agent may reasonably require.

 

(m)  Pledged Equity Interests; Transfer Powers;
Pledged Notes.  The Administrative
Agent shall have received (i) the certificates representing the shares of
Capital Stock pledged pursuant to the Guarantee and Collateral Agreement,
together with an undated transfer power for each such certificate executed in
blank by a duly authorized officer of the pledgor thereof and (ii) each
promissory note (if any) pledged to the Administrative Agent pursuant to the
Guarantee and Collateral Agreement endorsed (without recourse) in blank (or
accompanied by an executed transfer form in blank) by the pledgor thereof.

 

(n)  Filings, Registrations and Recordings.  Each document (including any Uniform
Commercial Code financing statement) required by the Security Documents or
under law or reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the Administrative Agent,
for the benefit of the Lenders, a perfected Lien on the Collateral described
therein, prior and superior in right to any other Person (other than with
respect to Liens expressly permitted by Section 7.3), shall be in proper form
for filing, registration or recordation.

 

45

 

(o)  Solvency Certificate.  The Administrative Agent shall have received
and shall be reasonably satisfied with a solvency certificate of the chief
financial officer of Holdings substantially in the form of Exhibit I, which
shall document the solvency of the Borrower and its Subsidiaries (on a consolidated
basis) and each Operating Company and its respective Subsidiaries (on a
consolidated basis), in each case, after giving effect to the Acquisition and
other transactions contemplated hereby.

 

(p)  No Default; Representations; Officer’s
Certificate.  No Default or Event of
Default shall have occurred and be continuing on such date or after giving
effect to the extensions of credit requested to be made on such date.  Each of the representations and warranties
made by any Loan Party in or pursuant to the Loan Documents shall be true and
correct in all material respects on and as of such date as if made on and as of
such date.  The Administrative Agent
shall have received a certificate executed on behalf of the Borrower by the
chief executive officer of the Borrower certifying (i) as to the accuracy of
the representations and warranties of the Borrower in the Acquisition
Documentation and the Loan Documents and (ii) that since September 30,
2004 no event has occurred, that alone or in connection with other events,
could reasonably be expected to have a Material Adverse Effect.

 

(q)  Insurance.  The Administrative Agent shall be satisfied
with the insurance program to be maintained by the Borrower and its
Subsidiaries after giving effect to the Acquisition and shall have received
insurance certificates reasonably satisfactory to the Administrative Agent.

 

(r)  Miscellaneous.  The Administrative Agent shall have received
such other documents, agreements, certificates and information as it shall
reasonably request.

 

SECTION 6. 
AFFIRMATIVE COVENANTS

 

Holdings and the Borrower hereby jointly and
severally agree that, so long as the Bridge Commitments remain in effect or any
Loan or other amount is owing to any Lender or Agent hereunder, each of
Holdings and the Borrower shall and shall cause each other Group Member to:

 

6.1.          Financial Statements.  Furnish to the Administrative Agent and each
Lender:

 

(a)  as soon as available, but in any event within
90 days after the end of the 2004 fiscal year of the Operating Companies,
a copy of the audited consolidated balance sheet of the Operating Companies and
their respective consolidated Subsidiaries as at the end of such year and the
related audited consolidated statements of income and of cash flows for such
year, setting forth in each case in comparative form the figures for the
previous year, together with calculations demonstrating that the Borrower is
compliance with the financial covenants set forth in Section 7.1, reported on
without a “going concern” or like qualification or exception, or qualification
arising out of the scope of the audit, by Deloitte & Touche or other
independent certified public accountants of nationally recognized standing;

 

46

 

(b)  as soon as available, but in any event not
later than 45 days after the end of each of the first three quarterly periods
of each fiscal year of the Borrower, the unaudited consolidated balance sheet
of the Borrower and its consolidated Subsidiaries as at the end of such quarter
and the related unaudited consolidated statements of income and of cash flows
for such quarter and the portion of the fiscal year through the end of such
quarter, setting forth in each case in comparative form the figures for the
previous year, together with calculations demonstrating that the Borrower is
compliance with the financial covenants set forth in Section 7.1, certified by
a Responsible Officer as being fairly stated in all material respects (subject
to normal year-end audit adjustments); and

 

(c)  as soon as available, but in any event not
later than 45 days after the end of each month occurring during each fiscal
year of the Borrower (other than the third, sixth, ninth and twelfth such
month), the unaudited consolidated balance sheets of the Borrower and its
Subsidiaries as at the end of such month and the related unaudited consolidated
statements of income and of cash flows for such month and the portion of the
fiscal year through the end of such month, setting forth in each case in comparative
form the figures for the previous year, certified by a Responsible Officer as
being fairly stated in all material respects (subject to normal year-end audit
adjustments).

 

All such
financial statements shall be complete and correct in all material respects and
shall be prepared in reasonable detail and in accordance with GAAP applied
consistently throughout the periods reflected therein and with prior periods
(except as approved by such accountants or officer, as the case may be, and
disclosed therein and except for regular year-end adjustments).

 

6.2.          Certificates;
Other Information.  Furnish to
the Administrative Agent and each Lender:

 

(a)  concurrently with the delivery of the
financial statements referred to in Section 6.1(a), 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 Default or Event of Default with respect to the financial covenants set
forth in Section 7.1, except as specified in such certificate;

 

(b)  concurrently with the delivery of any
financial statements pursuant to Section 6.1, (i) a certificate of a
Responsible Officer stating that, to the best of such Responsible Officer’s
knowledge, each Loan Party during such period has observed or performed all of
its covenants and other agreements contained in this Agreement and the other
Loan Documents to which it is a party to be observed, performed or satisfied by
it, and that such Responsible Officer has obtained no knowledge of any Default
or Event of Default except as specified in such certificate, (ii) a certificate
of a Responsible Officer of the Borrower setting forth the amount and type of
each payment made during such period pursuant to Sections 7.6(b), (c) and (e),
and (iii) in the case of quarterly or annual financial statements, (x) a
Compliance Certificate containing all information and calculations necessary
for determining compliance by each Group Member with the provisions of this
Agreement referred to therein as of the last day of the fiscal quarter or
fiscal year of the Borrower, as the case may be, and (y) to the extent not
previously disclosed to the Administrative Agent, a description of any change
in the jurisdiction of organization of any 

 

47

 

Loan Party and a listing of any Intellectual Property acquired by any
Loan Party since the date of the most recent list delivered pursuant to this
clause (y) (or, in the case of the first such list so delivered, since the
Closing Date);

 

(c)  if the Borrower is not then a reporting
company under the Securities Exchange Act of 1934, as amended, within 45 days
after the end of each fiscal quarter of the Borrower, a narrative discussion
and analysis of the financial condition and results of operations of the
Borrower and its Subsidiaries for such fiscal quarter and for the period from
the beginning of the then current fiscal year to the end of such fiscal
quarter, as compared to the portion of the Projections covering such periods
and to the comparable periods of the previous year;

 

(d)  no later than 10 Business Days prior to the
effectiveness thereof, copies of substantially final drafts of any proposed
amendment, supplement, waiver or other modification with respect to the
Acquisition Documentation;

 

(e)  within five days after the same are sent,
copies of all financial statements and reports that Holdings or the Borrower
sends to the holders of any class of its debt securities or public equity securities
and, within five days after the same are filed, copies of all financial
statements and reports that Holdings or the Borrower may make to, or file with,
the SEC;

 

(f)  as soon as possible and in any event within 5
days of obtaining knowledge thereof:  notice of any development, event, or condition
that, individually or in the aggregate with other developments, events or
conditions that could reasonably be expected to result in the payment by
Holdings, the Borrower or any of its Subsidiaries of a Material Environmental
Amount; and

 

(g)  promptly, such additional financial and other
information as the Administrative Agent or any Lender may from time to time
reasonably request.

 

6.3.          Payment
of Obligations.  Pay,
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all its material obligations of whatever
nature, except where the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and reserves in conformity with
GAAP with respect thereto have been provided on the books of the relevant Group
Member.

 

6.4.          Maintenance
of Existence; Compliance. 
(a)(i)  Preserve, renew and keep
in full force and effect its organizational existence and (ii) take all
reasonable action to maintain all rights, privileges and franchises necessary
or desirable in the normal conduct of its business, except, in each case, as
otherwise permitted by Section 7.4 and except, in the case of clause (ii)
above, to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect; and (b) comply with all Contractual Obligations
and Requirements of Law except to the extent that failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.

 

6.5.          Maintenance
of Property; Insurance. 
(a)  Keep all property useful and
used in the ordinary course of its business in good working order and
condition, ordinary wear 

 

48

 

and tear excepted, or replace or substitute such
property as necessary, except where the failure to keep such property in good
working order or replace such property could not reasonably be expected to have
a Material Adverse Effect and (b) maintain with financially sound and reputable
insurance companies insurance on all property useful and used in the ordinary
course of its business in at least such amounts and against at least such risks
(but including in any event public liability, product liability and business
interruption) as are insured against as of the date hereof or as are otherwise
required to be maintained under any material contract or agreement or other
requirement applicable to the Borrower, in each case, except where the failure
to maintain such insurance could not reasonably be expected to have a Material
Adverse Effect.

 

6.6.          Inspection
of Property; Books and Records; Discussions.  (a) 
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 business and activities and
(b) permit representatives of any Lender, during normal business hours, from
time to time upon three Business Days’ prior notice (unless an Event of Default
shall have occurred and be continuing, in which case, no such notice shall be
required), to visit and inspect any of its properties and examine and make
abstracts from any of its books and records 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 Group Members with officers
and employees of the Group Members and with their independent certified public
accountants; provided that all such visits shall be arranged through the
Administrative Agent, which shall use reasonable efforts to coordinate such
visits so as to minimize the total number thereof, and any officer of any of
the Group Members, if it so chooses, may be present at such visit (except to
the extent that such visit involves discussions with such Group Member’s
independent accountants or auditors and the Administrative Agent has requested
that such officer or officers not be present). 
Physical access to any of the properties of any Group Member shall be
governed by the rules, policies and procedures of such property relating to
visits thereto by the public.

 

6.7.          Notices.  Promptly give notice to the Administrative
Agent and each Lender of:

 

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

 

(b)  any (i) default or event of default under any
Contractual Obligation of any Group Member or (ii) litigation, investigation or
proceeding that may exist at any time between any Group Member and any
Governmental Authority, that in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a Material
Adverse Effect;

 

(c)  any litigation or proceeding affecting any
Group Member (i) in which the amount involved is $500,000 or more and not
covered by insurance, (ii) in which injunctive or similar relief is sought or
(iii) which relates to any Loan Document;

 

(d)  the following events, as soon as possible and
in any event within 30 days after the Borrower knows or has reason to know thereof:  (i) the occurrence of any Reportable Event
with respect to any Plan, a failure to make any required contribution to a
Plan, the creation of any 

 

49

 

Lien in favor of the PBGC 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 or
the Borrower or any Commonly Controlled Entity or any Multiemployer Plan with
respect to the withdrawal from, or the termination, Reorganization or
Insolvency of, any Plan; and

 

(e)  any development or event that has had or
could reasonably be expected to have a Material Adverse Effect.

 

Each notice
pursuant to this Section 6.7 shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action Holdings, the Borrower or the relevant Group Member
proposes to take with respect thereto.

 

6.8.          Intellectual
Property.

 

(a)  [Reserved].

 

(b)  Consistent with past practices (i) continue
to use each material Trademark in a manner that maintains such Trademark in
full force free from any claim of abandonment for non-use, and (ii) use such
Trademark with the appropriate notice of registration and all other notices and
legends required by applicable Requirements of Law.

 

(c)  Notify the Administrative Agent and the
Lenders immediately if it knows, or has reason to know, that any application or
registration relating to any material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse
determination or development (including, without limitation, the institution
of, or any such determination or development in, any proceeding in the United
States Patent and Trademark Office, the United States Copyright Office or any
court or tribunal in any country) regarding such Group Member’s ownership of,
or the validity of, any Intellectual Property or such Group Member’s right to
register the same or to own and maintain the same, unless such forfeiture,
abandonment or dedication or such adverse determination or development could
not reasonably be expected to cause a Material Adverse Effect or constitute an
Event of Default.

 

(d)  Whenever a Loan Party, either by itself or
through any agent, employee, licensee or designee, shall file an application
for the registration of any Intellectual Property with the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, such Loan
Party shall report such filing to the Administrative Agent within five Business
Days after the last day of the fiscal quarter in which such filing occurs.  Upon request of the Administrative Agent,
such Loan Party shall execute and deliver, and have recorded, any and all
agreements, instruments, documents, and papers as the Administrative Agent may
request to evidence the Agents’ and the Lenders’ security interest in any Copyright,
Patent or Trademark and the goodwill and general intangibles of such Loan Party
relating thereto or represented thereby.

 

(e)  Take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States
Patent and Trademark Office, the United States Copyright 

 

50

 

Office or any similar office or agency in any
other country or group of countries or any political subdivision of any of the
foregoing, to maintain and pursue each application (and to obtain the relevant
registration) and to maintain each registration of the material Intellectual
Property, including, without limitation, filing of applications for renewal,
affidavits of use and affidavits of incontestability.

 

(f)  In the event that any material Intellectual
Property of a Group Member is infringed, misappropriated or diluted by a third
party, such Group Member shall (i) take such actions as such Group Member shall
reasonably deem appropriate under the circumstances to protect such
Intellectual Property and (ii) if such Intellectual Property is of material
economic value, promptly notify the Administrative Agent after it learns
thereof and sue for infringement, misappropriation or dilution, to seek
injunctive relief where appropriate and to recover any and all damages for such
infringement, misappropriation or dilution.

 

6.9.          Environmental
Laws.

 

(a)  Comply in all material respects with, and use
commercially reasonable efforts to cause all tenants and subtenants, if any, to
comply in all material respects with, all applicable Environmental Laws and
Environmental Permits, and obtain and comply in all material respects with and
maintain, and ensure that all tenants and subtenants obtain and comply in all
material respects with and maintain, any and all material Environmental
Permits.

 

(b)  Conduct and complete all investigations,
studies, sampling and testing, and all remedial, removal and other actions
required under Environmental Laws and promptly comply in all material respects
with all lawful orders and directives of all Governmental Authorities regarding
Environmental Laws.

 

6.10.        Additional
Collateral, etc.   (a)  With respect to any property acquired after
the Closing Date by the Borrower or any wholly owned Subsidiary thereof (other
than any property described in paragraph (b) below) as to which the
Administrative Agent, for the benefit of the Secured Parties, does not have a
perfected Lien, promptly (i) execute and deliver to the Administrative Agent
such amendments to the Guarantee and Collateral Agreement or such other
documents as the Administrative Agent deems necessary or advisable to grant to
the Administrative Agent, for the benefit of the Lenders, a security interest
in such property and (ii) take all actions necessary or advisable to grant to
the Administrative Agent, for the benefit of the Secured Parties, a perfected
first priority security interest in such property (subject to Liens on assets
other than Capital Stock permitted under Section 7.3), including the filing of
Uniform Commercial Code financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Administrative Agent and the delivery of certificates and transfer
powers in respect of any newly formed or acquired Subsidiary.

 

(b)  With respect to any fee interest in any real
property having a value (together with improvements thereof) of at least
$500,000 acquired after the Closing Date by any Loan Party, promptly (i)
execute and deliver a first priority Mortgage, in favor of the Administrative
Agent, for the benefit of the Secured Parties, covering such real property,
(ii) if requested by the 

 

51

 

Administrative Agent, provide
the Secured Parties with (x) title and extended coverage insurance covering
such real property in an amount at least equal to the purchase price of such
real property (or such other amount as shall be reasonably specified by the
Administrative Agent) as well as a current ALTA survey thereof, together with a
surveyor’s certificate and (y) any consents or estoppels reasonably deemed
necessary or advisable by the Administrative Agent in connection with such
Mortgage, each of the foregoing in form and substance reasonably satisfactory
to the Administrative Agent and (iii) if requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions relating to the matters
described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.

 

(c)  With respect to any new domestic wholly owned
first tier Subsidiary created or acquired after the Closing Date by the
Borrower (which, for the purposes of this paragraph (c), shall include any
existing Subsidiary that becomes a wholly owned first tier Subsidiary),
promptly (i) execute and deliver to the Administrative Agent such amendments to
the Guarantee and Collateral Agreement as the Administrative Agent reasonably
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary that is owned by the Borrower, (ii)
deliver to the Administrative Agent the certificates representing such Capital
Stock, together with undated stock powers, in blank, executed and delivered by
a duly authorized officer of the Borrower, (iii) cause such new Subsidiary
(A) to become a party to the Guarantee and Collateral Agreement, (B) to
take such actions necessary or advisable to grant to the Administrative Agent
for the benefit of the Lenders a perfected first priority security interest in
the Collateral described in the Guarantee and Collateral Agreement with respect
to such new Subsidiary, including the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by the Guarantee
and Collateral Agreement or by law or as may be reasonably requested by the
Administrative Agent and (C) to deliver to the Administrative Agent a
certificate of such Subsidiary, substantially in the form of Exhibit C, with
appropriate insertions and attachments, and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.

 

6.11.        Use
of Proceeds.  Use
the proceeds of the Loans only for the purposes specified in Section 4.16.

 

6.12.        Further
Assurances.  From
time to time execute and deliver, or cause to be executed and delivered, such
additional instruments, certificates or documents, and take all such actions,
as the Administrative Agent may reasonably request for the purposes of
implementing or effectuating the provisions of this Agreement and the other
Loan Documents, or of more fully perfecting or renewing the rights of the
Administrative Agent and the Lenders with respect to the Collateral (or with
respect to any additions thereto or replacements or proceeds thereof or with
respect to any other property or assets hereafter acquired by the borrower or
any Subsidiary which may be deemed to be part of the Collateral) pursuant
hereto or thereto.  Upon the exercise by
the Administrative Agent or any Lender of any power, right, privilege or remedy
pursuant to this Agreement or the other Loan Documents which requires any
consent, approval, recording 

 

52

 

qualification
or authorization of any Governmental Authority, each of Holdings and the
Borrower will execute and deliver, or will cause the execution and delivery of,
all applications, certifications, instruments and other documents and papers
that the Administrative Agent or such Lenders may be required to obtain from
Holdings, the Borrower or any of their respective Subsidiaries for such
governmental consent, approval, recording, qualification or authorization.

 

SECTION 7.  NEGATIVE
COVENANTS

 

Holdings and the Borrower hereby jointly and
severally agree that, so long as the Bridge Commitments remain in effect or any
Loan or other amount is owing to any Lender or Agent hereunder, each of
Holdings and the Borrower shall not, and shall not permit any Group Member to,
directly or indirectly:

 

7.1.          Financial Condition Covenants.

 

(a)           Consolidated Leverage Ratio.  Permit the Consolidated Leverage Ratio of the
Borrower for any period of four consecutive fiscal quarters ended December 31,
2004 or for any period of four consecutive fiscal quarters ending with any
fiscal quarter during 2005 to exceed 4.00 to 1.00.

 

(b)           Minimum Consolidated EBITDA.  Permit the Consolidated EBITDA of the
Borrower for any period of four consecutive fiscal quarters ended December 31,
2004 or for any period of four consecutive fiscal quarters ending with any
fiscal quarter during 2005 to be less than $9,500,000.

 

(c)           Minimum Consolidated Net Worth.  Permit Consolidated Net Worth at any time to
be less than $65,000,000.

 

(d)           Minimum Liquidity. 
Permit cash and Cash Equivalents of the Borrower, the Operating
Companies and their respective consolidated Subsidiaries in the aggregate at
any time to be less than $500,000.

 

7.2.          Indebtedness.  Create, issue,
incur, assume, become liable in respect of or suffer to exist any Indebtedness,
except for Permitted Indebtedness.

 

7.3.          Liens.  Create, incur, assume or suffer to exist any Lien upon any of its property, whether now owned
or hereafter acquired, except for Permitted Liens.

 

7.4.          Fundamental
Changes.  Enter
into any merger, consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or Dispose of, all
or substantially all of its property or business, except that:

 

(a)  any Subsidiary of the Borrower may be merged
or consolidated with or into the Borrower or any Subsidiary of the Borrower (provided
that, with respect to any such merger or consolidation involving the Borrower,
the Borrower shall be the continuing or surviving corporation);

 

53

 

(b)  Holdings may be merged or consolidated with
or into any Subsidiary of Holdings (other than the Borrower) for the purpose of
changing the jurisdiction of domicile of Holdings provided that the surviving
entity shall be required to assume all of the obligations of Holdings under
this Agreement and the other Loan Documents to which Holdings is a party in a
manner reasonably satisfactory to the Administrative Agent;

 

(c)  any Subsidiary of
the Borrower may Dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrower and any Subsidiary of any Operating
Company may Dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to the Borrower or an Operating Subsidiary; and

 

(d)  in connection with a
Permitted Acquisition, any Person that is the subject of such Permitted
Acquisition may be merged or consolidated with or into the Borrower or any
Subsidiary of the Borrower (provided that the Borrower or the applicable
Subsidiary of the Borrower shall be the continuing or surviving corporation).

 

7.5.          Disposition
of Property. 
Dispose of any of its property, whether now owned or hereafter acquired,
or, in the case of the Borrower or any of its Subsidiaries, issue or sell any
shares of the Borrower’s or such Subsidiary’s Capital Stock to any Person,
except:

 

(a)  the Disposition of
obsolete or worn out property in the ordinary course of business;

 

(b)  the sale of
inventory or licensing of Intellectual Property in the ordinary course of
business;

 

(c)  Dispositions permitted by Section 7.4(b);

 

(d)  the sale or issuance
of any Subsidiary’s Capital Stock to the Borrower; and

 

(e)  the sale or
Disposition of immaterial assets with an aggregate fair market value not to
exceed $150,000.

 

7.6.          Restricted
Payments.  Declare
or pay any dividend (other than dividends payable solely in common stock of the
Person making such dividend) on, or make any payment on account of, or set
apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any Capital Stock
of any Group Member, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of Holdings, the Borrower or any Subsidiary
(collectively, “Restricted Payments”), except that:

 

(a) (i) any
Subsidiary may make Restricted Payments to the Borrower, to any Wholly Owned
Subsidiary of the Borrower or to any of the Operating Companies and
(ii) any Operating Company may make Restricted Payments to the Borrower
and the other holders of its Capital Stock in respect of their proportionate
ownership of such Operating Company;

 

54

 

(b)  so long as no Default under Section 8(a) and
no Event of Default shall have occurred and be continuing or would result
therefrom (including the requirement that the Borrower and the Operating
Companies maintain cash and Cash Equivalents of at least $500,000), the
Borrower may pay dividends to Holdings to permit Holdings to pay any required
dividend in respect of the Seller Preferred Equity;

 

(c)  so long as no Default under Section 8(a) and
no Event of Default shall have occurred and be continuing or would result
therefrom (including the requirement that the Borrower and the Operating
Companies maintain cash and Cash Equivalents of at least $500,000), the
Borrower may pay dividends to Holdings to reimburse Holdings for (i)
out-of-pocket expenses incurred in connection with compliance by Holdings and
the Borrower with the Sarbanes-Oxley Act of 2002 and corporate overhead
expenses and management services in the ordinary course of business in an
aggregate amount not to exceed $1.75 million during any fiscal quarter after
the Closing Date, provided that to the extent such reimbursement is less than
$1.75 million in any fiscal quarter, the Borrower may carry forward such
difference to any subsequent fiscal quarter (it being understood that any
future payments made in excess of $1.75 million in any subsequent fiscal
quarter shall reduce the amount of the amount so carried forward) and (ii) any
taxes that are due and payable by Holdings and the Borrower as part of a
consolidated or combined group in an amount not to exceed the lesser of (x) the
relevant amount of any taxes (including any penalties and interest) that the
Borrower would owe if the Borrower were filing a separate tax return (or a
separate consolidated or combined return with its Subsidiaries that are members
of the consolidated or combined group) at the rate applicable to Holdings as
part of a consolidated or combined group with the Borrower, taking into account
any carryovers or carrybacks of tax attributes (such as operating losses) of
the Borrower and such Subsidiaries from other taxable years and (y) the net
amount of the relevant tax that Holdings actually owes to the appropriate
taxing authority; provided that any such payment in respect of taxes
received by Holdings shall be paid over to the appropriate taxing authority
within 60 days of Holdings’ receipt of such payments or shall be refunded to
the Borrower;

 

(d) (i) the
LLC (and, to the extent required, the Borrower) may pay dividends to the Trust
pursuant to the LLC Operating Agreement as in effect on the date hereof, and
(ii) EPE (and, to the extent required, the Borrower) may pay dividends to the
Trust in accordance with the terms of the EPE Shareholders Agreement, in each
case, as in effect on the date hereof; and

 

(e)  Holdings may pay amounts to FXM, Inc. in an aggregate
amount not to exceed $2.7 million (inclusive of any amounts paid to FXM, Inc.
pursuant to clause (v) of Section 5(b) on the Closing Date), of which up to
$1.2 million (inclusive of any amounts paid to FXM, Inc. pursuant to clause (v)
of Section 5(b) on the Closing Date) may be used to reimburse FXM, Inc.
for certain third-party costs incurred prior to the Closing Date and up to $1.5
million (inclusive of any amounts paid
to FXM, Inc. pursuant to clause (v) of Section 5(b) on the Closing Date) may
be used to reimburse FXM, Inc. for certain corporate overhead expenses incurred
prior to the Closing Date; provided, however, that, in each case,
such payments shall have been made within forty-five (45) days of the Closing
Date.

 

7.7.          Capital
Expenditures.  Make
or commit to make any Capital Expenditure, except (a) Capital Expenditures of
the Borrower and its Subsidiaries in the ordinary course of 

 

55

 

business not exceeding
$1,000,000, (b) Capital Expenditures made with the proceeds of any Reinvestment
Deferred Amount and (c) Capital Expenditures consisting of Permitted
Acquisitions.

 

7.8.          Investments.  Make any advance, loan, extension of credit
(by way of guaranty or otherwise) or capital contribution to, or purchase any
Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting a business unit of, or make any other investment in, any
Person (all of the foregoing, “Investments”), except:

 

(a)  extensions of trade
credit in the ordinary course of business;

 

(b)  Investments in cash and Cash Equivalents;

 

(c)  loans and advances to employees, directors
and officers of any Group Member in the ordinary course of business (including
for travel, entertainment and relocation expenses) in an aggregate amount for
all Group Members not to exceed $100,000 at any one time outstanding;

 

(d)  the Acquisition;

 

(e)  Investments in assets useful in the business
of the Borrower and its Subsidiaries made by the Borrower or any of its
Subsidiaries with the proceeds of any Reinvestment Deferred Amount;

 

(f)  intercompany Investments by any Group Member
in the Borrower (provided that such Investments that consist of
intercompany Indebtedness shall be subordinated to the Obligations in
accordance with the Subordination Provisions and the notes issued in respect
thereof have been pledged to the Administrative Agent, unless, in the case of
the requirement to pledge such notes, such notes run in favor of a Subsidiary
that is not a Guarantor) and Investments by the Borrower in any of its
Subsidiaries consisting of intercompany Indebtedness (provided that the
notes evidencing such intercompany Indebtedness shall have been pledged to the
Administrative Agent);

 

(g)  Investments under Hedge Agreements
entered into in the ordinary course of a Group Member’s business and not for
speculative purposes and otherwise in compliance with this Agreement;

 

(h)  Investments in securities of trade
creditors, licensors, licensees or customers received pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of such
trade creditors or customers or in good faith settlement of delinquent
obligations of such trade creditors or customers;

 

(i)  Investments represented by guarantees
that are otherwise permitted under this Agreement;

 

(j)  Permitted Acquisitions; and

 

(k)  Investments consisting of intercompany loans
between EPE and LLC.

 

56

 

7.9.          Optional Payments and Modifications
of Indebtedness.  (a)  Make or offer to make any optional or
voluntary payment, prepayment, repurchase or redemption of or otherwise
optionally or voluntarily defease or segregate funds with respect to any
Indebtedness (other than prepayments of the Bridge Loans in accordance with the
terms of this Agreement), (b) amend, modify, waive or otherwise change, or
consent or agree to any amendment, modification, waiver or other change to, any
of the terms of any Indebtedness other than the Bridge Loans (other than any
such amendment, modification, waiver or other change that (i) would extend the
maturity or reduce the amount of any payment of principal thereof or reduce the
rate or extend any date for payment of interest thereon and (ii) does not involve
the payment of a consent fee), or (c) amend, modify, waive or otherwise change,
or consent or agree to any amendment, modification, waiver or other change to,
any of the terms of the Seller Preferred Equity or the Investor Equity
Investment (other than any such amendment, modification, waiver or other change
that (i) would extend the scheduled redemption date or reduce the amount of any
scheduled redemption payment or reduce the rate or extend any date for payment
of dividends thereon and (ii) does not involve the payment of a consent fee).

 

7.10.        Transactions with Affiliates.  Enter into any transaction, including any
purchase, sale, lease or exchange of property, the rendering of any service or
the payment of any management, advisory or similar fees, with any Affiliate
(other than Holdings or the Borrower) unless such transaction is (a) set forth
on Schedule 7.10, (b) otherwise permitted under this Agreement or (c) upon fair
and reasonable terms no less favorable to the relevant Group Member, than it would
obtain in a comparable arm’s length transaction with a Person that is not an
Affiliate.

 

7.11.        Sales and Leasebacks.  Enter into any arrangement with any Person
providing for the leasing by any Group Member of real or personal property that
has been or is to be sold or transferred by such Group Member to such Person or
to any other Person to whom funds have been or are to be advanced by such
Person on the security of such property or rental obligations of such Group
Member.

 

7.12.        Hedge Agreements.  Enter into any Hedge Agreement, except (a)
Hedge Agreements entered into to hedge or mitigate risks to which the Borrower
or any Subsidiary has actual exposure (other than those in respect of Capital
Stock) and (b) Hedge Agreements entered into in order to effectively cap,
collar or exchange interest rates (from fixed to floating rates, from one
floating rate to another floating rate or otherwise) with respect to any
interest-bearing liability or investment of the Borrower or any Subsidiary.

 

7.13.        Changes in Fiscal Periods.  Permit the fiscal year of the Borrower to end
on a day other than December 31 or change the Borrower’s method of determining
fiscal quarters.

 

7.14.        Negative
Pledge Clauses. 
Enter into or suffer to exist or become effective any agreement that
prohibits or limits the ability of any Group Member to create, incur, assume or
suffer to exist any Lien upon any of its property or revenues, whether now
owned or hereafter acquired, other than this Agreement and the other Loan
Documents.

 

57

 

7.15.        Clauses Restricting Subsidiary
Distributions. 
Enter into or suffer to exist or become effective any consensual
encumbrance or restriction on the ability of any Subsidiary of the Borrower to
(a) make Restricted Payments in respect of any Capital Stock of such Subsidiary
held by, or pay any Indebtedness owed to, the Borrower or any other Subsidiary
of the Borrower, (b) make loans or advances to, or other Investments in, the
Borrower or any other Subsidiary of the Borrower or (c) transfer any of its
assets to the Borrower or any other Subsidiary of the Borrower, except for such
encumbrances or restrictions existing under or by reason of (i) any
restrictions existing under the Loan Documents, (ii) applicable law or any
rule, regulation or order, (iii) customary non-assignment provisions or
restrictions on cash or other deposits contained in any contract or any lease
governing a leasehold interest of any Group Member, (iv) restrictions on the
transfer of assets subject to any Lien permitted under this Agreement imposed
by the holder of such Lien, (v) restrictions imposed by any agreement to sell
assets or Capital Stock permitted under this Agreement to any Person pending
the closing of such sale (vi) customary provisions in joint venture agreements
and other similar agreements entered into by Holdings or one of its
Subsidiaries (other than the Borrower or any of its Subsidiaries), in each
case, relating solely to the respective joint venture or similar entity or the
equity interests therein and entered into in the ordinary course of business,
(vii) purchase money obligations (including any capitalized lease obligations)
relating to property acquired in the ordinary course of business, or (viii)
restrictions imposed under the LLC Operating Agreement, the EPE Charter and the
EPE Shareholders Agreement, in each case, as in effect on the date hereof.

 

7.16.        Lines
of Business.  Enter
into any business, either directly or through any Subsidiary, except for those
businesses in which the Borrower and its Subsidiaries are engaged on the date
of this Agreement (after giving effect to the Acquisition) or that are
reasonably related thereto.

 

7.17.        Certain
Amendments.  Amend,
supplement or otherwise modify (pursuant to a waiver or otherwise) the terms
and conditions of (a) the indemnities and licenses furnished to the Borrower or
any of its Subsidiaries pursuant to the Acquisition Documentation such that
after giving effect thereto such indemnities or licenses shall be materially less
favorable to the interests of the Group Members or the Lenders with respect
thereto, (b) any Group Member’s organizational documents or (c) the Acquisition
Documentation or any other material agreement, in each case, except for any
such amendment, supplement or modification that could not reasonably be
expected to have a Material Adverse Effect.

 

7.18.        Accounting Changes.  Permit, or cause any
of its Subsidiaries to make or permit, any material change in its accounting
policies or reporting practices, except as may be required by or permitted
under GAAP.

 

7.19.        Intellectual Property.

 

(a)  Knowingly perform any act or knowingly
instruct or authorize its licensees to perform any act whereby any material
Intellectual Property may become forfeited, abandoned or dedicated to the
public.

 

58

 

(b)  Knowingly perform any act or knowingly
instruct or authorize its licensees to perform any act that uses any material
Intellectual Property to infringe the intellectual property rights of any other
Person.

 

7.20.        Hazardous
Substances. 
Knowingly permit, or cause any of its Subsidiaries to knowingly permit,
any Hazardous Substances to be brought on to or located on any of the
Properties, except in compliance in all material respects with, and in a manner
not reasonably likely to lead to any liability pursuant to, all applicable
Environmental Laws only in such quantities and types as reasonably needed to
conduct the Business.  If any such
Hazardous Substance is brought by any Group Member or found located thereon due
to the actions of any Group Member in violation of this Section 7.20, the
Borrower shall diligently undertake all removal, remedial and other response
actions required under applicable Environmental Laws.  EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT ALL
MATERIALS OF ENVIRONMENTAL CONCERN HANDLING PRACTICES AND ENVIRONMENTAL
PRACTICES AND PROCEDURES ARE THE SOLE RESPONSIBILITY OF SUCH LOAN PARTY AND ITS
SUBSIDIARIES.  EACH LOAN PARTY FURTHER
ACKNOWLEDGES THAT NEITHER THE ADMINISTRATIVE AGENT NOR ANY LENDER IS AN
ENVIRONMENTAL CONSULTANT, ENGINEER, INVESTIGATOR OR INSPECTOR OF ANY TYPE
WHATSOEVER.  NO ACT (OR DECISION NOT TO
ACT) OF THE ADMINISTRATIVE AGENT OR ANY LENDER RELATED TO THIS AGREEMENT OR ANY
LOAN DOCUMENT SHALL GIVE RISE TO ANY OBLIGATION OR LIABILITY ON THE PART OF THE
ADMINISTRATIVE AGENT OR ANY LENDER WITH RESPECT TO ENVIRONMENTAL MATTERS OR
PURSUANT TO ENVIRONMENTAL LAWS.  IN NO
EVENT SHALL ANY INFORMATION OBTAINED FROM THE ADMINISTRATIVE AGENT OR ANY LENDER
OR THEIR RESPECTIVE EMPLOYEES, REPRESENTATIVES OR AGENTS PURSUANT TO THIS
AGREEMENT OR ANY LOAN DOCUMENT CONCERNING THE ENVIRONMENTAL CONDITION OF THE
PROPERTIES OR THE BUSINESS OF ANY LOAN PARTY OR ANY SUBSIDIARY OF ANY LOAN
PARTY BE CONSIDERED BY ANY LOAN PARTY OR ANY SUBSIDIARY OF ANY LOAN PARTY (OR
ANY OTHER RECIPIENT OF SUCH INFORMATION) AS CONSTITUTING LEGAL OR ENVIRONMENTAL
CONSULTING, ENGINEERING, INVESTIGATING OR INSPECTING ADVICE, AND NEITHER LOAN
PARTY NOR ANY SUBSIDIARY OF ANY LOAN PARTY (NOR ANY OTHER RECIPIENT OF SUCH
INFORMATION) SHALL RELY ON SAID INFORMATION. 
THE RESPONSIBILITY FOR COMPLIANCE WITH ENVIRONMENTAL LAWS WITH RESPECT
TO THE PROPERTIES OR BUSINESS RESTS SOLELY WITH EACH LOAN PARTY AND ITS
SUBSIDIARIES.  NOTHING IN THIS SECTION 7.20
SHALL LIMIT ANY RIGHTS THAT ANY LOAN PARTY OR ANY OF THEIR RESPECTIVE
SUBSIDIARIES MY HAVE TO SEEK CONTRIBUTION OR ALLOCATE RESPONSIBILITY PURSUANT
TO ENVIRONMENTAL LAW FROM ANY THIRD PARTY (OTHER THAN ANY SECURED PARTY).

 

59

 

SECTION 8.  EVENTS OF
DEFAULT

 

If any of the following events shall occur and be continuing:

 

(a)  the Borrower shall fail to pay any principal
of any Loan when due in accordance with the terms hereof; or the Borrower shall
fail to pay any interest on any Loan, or any other amount payable hereunder or
under any other Loan Document, within five Business Days after any such
interest or other amount becomes due in accordance with the terms hereof; or

 

(b)  any representation or warranty made or deemed
made by any Loan Party herein or in any other Loan Document or that is
contained in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this Agreement or any
such other Loan Document shall prove to have been inaccurate in any material
respect on or as of the date made or deemed made; or

 

(c) (i) any Loan Party shall
default in the observance or performance of any agreement contained in Sections
6.4(a)(i), 6.7(a) or 7 of this Agreement or Sections 5.4 or 5.7(b) of the
Guarantee and Collateral Agreement or (ii) an “Event of Default” under and as
defined in any Mortgage shall have occurred and be continuing; or

 

(d)  any Loan Party shall default in the
observance or performance of any other agreement contained in this Agreement or
any other Loan Document (other than as provided in paragraphs (a) through (c)
of this Section 8) and such default shall continue unremedied for a
period of 30 days after notice thereof from the Administrative Agent to
the Borrower (which notice shall be given promptly at the request of any
Lender); or

 

(e)  any Group Member shall (i) default in making
any payment of any principal of any Indebtedness (including any Guarantee
Obligation, but excluding the Loans) on the scheduled or original due date with
respect thereto; or (ii) default in making any payment of any interest on any
such Indebtedness beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created; or (iii)
default in the observance or performance of any other agreement or condition
relating to any such Indebtedness 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 beneficiary of such Indebtedness (or a
trustee or agent on behalf of such holder or beneficiary) to cause, with the
giving of notice if required, such Indebtedness to become due prior to its
stated maturity or to become subject to a mandatory offer to purchase by the
obligor thereunder or (in the case of any such Indebtedness constituting a
Guarantee Obligation) to become payable; provided, that a default, event
or condition described in clause (i), (ii) or (iii) of this paragraph (e) shall
not at any time constitute an Event of Default unless, at such time, one or
more defaults, events or conditions of the type described in clauses (i), (ii)
and (iii) of this paragraph (e) shall have occurred and be continuing with
respect to Indebtedness the outstanding principal amount of which exceeds in
the aggregate $500,000; or

 

(f) (i) any Group Member
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 

 

60

 

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 any Group
Member shall make a general assignment for the benefit of its creditors; or
(ii) there shall be commenced against any Group Member any case, proceeding or
other action of a nature referred to in clause (i) above that (A) results in
the entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against any Group Member 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 that results
in the entry of an order for any such relief that shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the entry
thereof; or (iv) any Group Member 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) any Group Member generally
shall not, or shall be unable to, or shall admit in writing its inability to,
pay its debts as they become due; or

 

(g) (i) 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 shall arise on the assets of any Group Member or any Commonly
Controlled Entity, (ii) any Person shall engage in any “prohibited transaction”
(as defined in Section 406 of ERISA or Section 4975 of the Code) involving
any Plan, (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 Group Member 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, a Multiemployer Plan or (vi) any other
event or condition shall occur or exist with respect to a Plan; and in each
case in clauses (ii) through (vi) above, such event or condition, together with
all other such events or conditions, if any, could, in the sole judgment of the
Required Lenders, reasonably be expected to have a Material Adverse Effect; or

 

(h)  one or more judgments or decrees shall be
entered against any Group Member involving in the aggregate a liability (not
paid or fully covered by insurance as to which the relevant insurance company
has acknowledged coverage) of $500,000 or more, and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within 60 days from the entry thereof; or

 

(i)  any of the Security Documents shall cease,
for any reason other than as set forth in Section 10.14, to be in full force
and effect, or any Loan Party or any Affiliate of any Loan Party shall so
assert, or any Lien created by any of the Security Documents covering
Collateral having a fair market value in excess of $250,000 shall cease to be
enforceable and of the same effect and priority purported to be created
thereby; or

 

61

 

(j)  the guarantee contained in Section 2 of the
Guarantee and Collateral Agreement shall cease, for any reason, to be in full
force and effect or any Loan Party or any Affiliate of any Loan Party shall so assert;
or

 

(k)  Holdings shall (i) conduct, transact or
otherwise engage in, or commit to conduct, transact or otherwise engage in, any
business or operations other than those incidental to its ownership of the
Capital Stock of the Borrower, (ii) incur, create, assume or suffer to exist
any Indebtedness or other liabilities or financial obligations, except (x)
nonconsensual obligations imposed by operation of law, (y) pursuant to the Loan
Documents to which it is a party and (z) obligations with respect to its
Capital Stock, or (iii) own, lease, manage or otherwise operate any properties
or assets (including cash (other than cash received in connection with
dividends made by the Borrower in accordance with Section 7.6 pending
application in the manner contemplated by said Section) and Cash Equivalents)
other than the ownership of shares of Capital Stock of the Borrower; or

 

(l)  Holdings or the Borrower shall have breached
any of their respective obligations under the Engagement Letter; or

 

(m)  any Group Member’s right of publicity to use
Elvis Presley’s name and likeness shall be held invalid or unenforceable and
such holding could reasonably be expected to result in a material diminution of
the Consolidated EBITDA of the Borrower and its Subsidiaries (taken as a
whole); or

 

(n)  any portion of the Copyrights (as defined in
the Guarantee and Collateral Agreement) becomes invalidated, falls into the
public domain or otherwise becomes impaired, unless such an event could not
reasonably be expected to cause a Material Adverse Effect; or

 

(o)  the Borrower shall have insufficient
cash on hand to contribute or pay any amounts to the Seller, EPE or LLC as may
be required under the EPE Charter, the Operating Agreement or the Shareholders
Agreement (or any related document, including the letter agreement in respect
thereof dated February 7, 2005 (the “Distribution Letter”) among the
Seller, EPE, LLC, the Borrower, RFX and Holdings) and otherwise permitted under
Section 7.6(d), unless RFX and/or its applicable members shall have exercised
the RFX Warrants in an amount up to $2.5 million (as may be necessary fund such
payment) and such amount shall have been contributed or paid such amounts to
the Seller, EPE or LLC, as applicable;

 

then, and in
any such event, (A) if such event is an Event of Default specified in clause
(i) or (ii) of paragraph (f) above with respect to the Borrower, automatically
the Loans hereunder (with accrued interest thereon and the prepayment premium
in respect thereof) and all other amounts owing under this Agreement and the
other Loan Documents shall immediately become due and payable, and (B) if such
event is any other Event of Default, with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Loans
hereunder (with accrued interest thereon and the prepayment premium in respect
thereof) and all other amounts owing under this Agreement and the other Loan
Documents to be due and payable forthwith, whereupon the same shall immediately
become due and payable.  Except as
expressly provided 

 

62

 

 

above
in this Section 8, presentment, demand, protest and all other notices of any kind
are hereby expressly waived by the Borrower and Holdings.

 

SECTION 9.  THE AGENTS

 

9.1.          Appointment.  Each Lender hereby irrevocably designates and
appoints each Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes such Agent,
in such capacity, to take such action on its behalf under the provisions of
this Agreement and the other Loan Documents and to exercise such powers and
perform such duties as are expressly delegated to such Agent by the terms of
this Agreement and the other Loan Documents, together with such other powers as
are reasonably incidental thereto.  
Notwithstanding any provision to the contrary elsewhere in this
Agreement, no Agent shall 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 Agreement or any other Loan Document or otherwise
exist against any Agent.

 

9.2.          Delegation
of Duties.  Each
Agent may execute any of its duties under this Agreement and the other Loan
Documents by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties.  No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.

 

9.3.          Exculpatory
Provisions. 
Neither any Agent nor any of their respective officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or any other Loan Document (except to the extent
that any of the foregoing are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from its or such Person’s own
gross negligence or willful misconduct) or (ii) responsible in any manner to
any of the Lenders for any recitals, statements, representations or warranties
made by any Loan Party or any officer thereof contained in this Agreement or
any other Loan Document or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agents under or in
connection with, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document or for any failure of any Loan Party a party
thereto to perform its obligations hereunder or thereunder.  The Agents shall not be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of any Loan
Party.

 

9.4.          Reliance
by Agents.  Each
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and statements
of legal counsel (including counsel to Holdings or the Borrower), independent
accountants and other experts selected by such Agent.

 

63

 

The Administrative Agent may
deem and treat the payee of any Note as the owner thereof for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Administrative Agent. 
Each Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability
and expense that may be incurred by it by reason of taking or continuing to
take any such action.  The Agents shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Loan Documents in accordance with a request of the
Required Lenders (or, if so specified by this Agreement, all Lenders), 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 Loans.

 

9.5.          Notice
of Default.  No
Agent shall be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default hereunder unless such Agent has received notice
from a Lender, Holdings or the Borrower referring to this 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 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 (or,
if so specified by this Agreement, all Lenders or any other instructing group
of Lenders specified by this Agreement); provided, 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.

 

9.6.          Non-Reliance on
Agents and Other Lenders.  Each Lender expressly acknowledges that
neither the Agents nor any of their respective officers, directors, employees,
agents, attorneys-in-fact or affiliates have made any representations or
warranties to it and that no act by any Agent hereafter taken, including any
review of the affairs of a Loan Party or any affiliate of a Loan Party, shall
be deemed to constitute any representation or warranty by any Agent to any
Lender.  Each Lender represents to the
Agents that it has, independently and without reliance upon any 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
Loan Parties and their affiliates and made its own decision to make its Loans
hereunder and enter into this Agreement. 
Each Lender also represents that it will, independently and without
reliance upon any 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 Agreement and the other Loan Documents, 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 Loan Parties and
their affiliates.  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 

 

64

 

business, operations, property,
condition (financial or otherwise), prospects or creditworthiness of any Loan
Party or any affiliate of a Loan Party that may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.

 

9.7.          Indemnification.  The Lenders agree to indemnify each Agent in
its capacity as such (to the extent not reimbursed by Holdings or the Borrower
and without limiting the obligation of Holdings or the Borrower to do so),
ratably according to their respective Aggregate Exposure Percentages in effect
on the date on which indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the Bridge Commitments
shall have terminated and the Loans shall have been paid in full, ratably in
accordance with such Aggregate Exposure Percentages immediately prior to such
date), from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever that may at any time (whether before or after the payment of
the Loans) be imposed on, incurred by or asserted against such Agent in any way
relating to or arising out of, the Bridge Commitments, this Agreement, any of
the other Loan Documents 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 such Agent under or in connection with any of the
foregoing; provided 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 that are found by a final
and nonappealable decision of a court of competent jurisdiction to have
resulted from such Agent’s gross negligence or willful misconduct.  The agreements in this Section 9.7 shall survive
the payment of the Loans and all other amounts payable hereunder.

 

9.8.          Agent in Its Individual Capacity.  Each Agent and its affiliates may make loans
to, accept deposits from and generally engage in any kind of business with any
Loan Party as though such Agent were not an Agent.  With respect to its Loans made or renewed by
it, each Agent shall have the same rights and powers under this Agreement and
the other Loan Documents as any Lender and may exercise the same as though it
were not an Agent, and the terms “Lender” and “Lenders” shall include each
Agent in its individual capacity.

 

9.9.          Successor Administrative Agent.  The Administrative Agent may resign as
Administrative Agent upon 10 days’ notice to the Lenders and the Borrower.  If the Administrative Agent shall resign as
Administrative Agent under this Agreement and the other Loan Documents, then
the Required Lenders shall appoint from among the Lenders a successor agent for
the Lenders, which successor agent shall (unless an Event of Default under
Section 8(a) or Section 8(f) with respect to the Borrower shall have occurred
and be continuing) be subject to approval by the Borrower (which approval shall
not be unreasonably withheld or delayed), 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 Agreement or any holders of the Loans.  If no successor agent has accepted
appointment as Administrative Agent by the date that is 10 days following a
retiring Administrative Agent’s notice of 

 

65

 

resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become
effective and the Lenders shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above.  After any retiring Administrative Agent’s
resignation as Administrative Agent, the provisions of this Section 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 Agreement and the other Loan Documents.

 

9.10.        Agents
Generally.  Except as expressly set forth herein, no Agent shall have any
duties or responsibilities hereunder in its capacity as such.

 

9.11.        The
Lead Arranger.  The
Lead Arranger, in its capacity as such, shall have no duties or
responsibilities, and shall incur no liability, under this Agreement or any
other Loan Document.

 

9.12.        Withholding
Tax.  To the extent
required by any applicable law, the Administrative Agent may withhold from any
interest payment to any Lender an amount equivalent to any applicable
withholding tax.  If any Governmental
Authority asserts a claim that the Administrative Agent did not properly
withhold tax from amounts paid to or for the account of any Lender because the
appropriate form was not delivered or was not properly executed or because such
Lender failed to notify the Administrative Agent of a change in circumstance
which rendered the exemption from, or reduction of, withholding tax ineffective
or for any other reason, such Lender shall indemnify the Administrative Agent
fully for all amounts paid, directly or indirectly, by the Administrative Agent
as tax or otherwise, including any penalties or interest and together with all
expenses (including legal expenses, allocated internal costs and out-of-pocket
expenses) incurred.

 

SECTION 10. 
MISCELLANEOUS

 

10.1.        Amendments
and Waivers.  Neither this Agreement, any other Loan Document, nor any terms
hereof or thereof may be amended, supplemented or modified except in accordance
with the provisions of this Section 10.1. 
The Required Lenders and each Loan Party party to the relevant Loan
Document may, or, with the written consent of the Required Lenders, the
Administrative Agent and each Loan Party party to the relevant Loan Document
may, from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Loan Parties hereunder or thereunder
or (b) waive, on such terms and conditions as the Required Lenders or the
Administrative Agent, as the case may be, may specify in such instrument, any
of the requirements of this Agreement or the other Loan Documents or any
Default or Event of Default and its consequences; provided, however,
that no such waiver and no such amendment, supplement or modification shall (i)
forgive the principal amount or extend the final scheduled date of maturity of
any Loan (inclusive of any interest capitalized pursuant to Section 3.5(e)),
reduce the stated rate of any interest or fee payable hereunder (except in
connection with the waiver of applicability of any post-default increase in
interest rates, which waiver shall be effective with the consent of the
Required Lenders) or extend the scheduled date of any payment 

 

66

 

thereof,
in each case without the written consent of each Lender directly affected
thereby;  (ii) eliminate or reduce the
voting rights of any Lender under this Section 10.1 without the written consent
of such Lender; (iii) reduce any percentage specified in the definition of
Required Lenders, consent to the assignment or transfer by the Borrower of any
of its rights and obligations under this Agreement and the other Loan Documents
or, except as set forth in Section 10.14, release all or substantially all of
the Collateral or release the Guarantor from its obligations under the
Guarantee and Collateral Agreement, in each case without the written consent of
all Lenders; or (iv) amend, modify or waive any provision of Section 9 without
the written consent of each Agent adversely affected thereby.  Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Loan Parties, the Lenders, the Agents and all future
holders of the Loans.  In the case of any
waiver, the Loan Parties, the Lenders and the Agents shall be restored to their
former position and rights hereunder and under the other Loan 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.

 

10.2.        Notices.  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 when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice,
when received, addressed as follows in the case of Holdings, the Borrower and
the Agents, and as set forth in an administrative questionnaire delivered to
the Administrative Agent in the case of the Lenders, or to such other address
as may be hereafter notified by the respective parties hereto:

 

	
  Holdings:

  	
   

  	
  Sports Entertainment
  Enterprises, Inc.

  
	
   

  	
   

  	
  650 Madison Avenue, 16th
  Floor

  
	
   

  	
   

  	
  New York, New York 10022

  
	
   

  	
   

  	
  Attention: General Counsel

  
	
   

  	
   

  	
  Telecopy: (212) 753-3188

  
	
   

  	
   

  	
  Telephone: (212) 407-9101

  
	
   

  	
   

  	
   

  
	
  The Borrower:

  	
   

  	
  EPE Holding Corporation

  
	
   

  	
   

  	
  650 Madison Avenue, 16th
  Floor

  
	
   

  	
   

  	
  New York, New York 10022

  
	
   

  	
   

  	
  Attention: General Counsel

  
	
   

  	
   

  	
  Telecopy: (212) 753-3188

  
	
   

  	
   

  	
  Telephone: (212) 407-9101

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Paul, Hastings, Janofsky
  & Walker LLP

  
	
   

  	
   

  	
  75 East 55th Street

  
	
   

  	
   

  	
  New York, New York 10022

  
	
   

  	
   

  	
  Attention: William
  Schwitter, Esq.

  
	
   

  	
   

  	
  Telecopy: (212) 230-7834

  
	
   

  	
   

  	
  Telephone: (212) 318-6400

  

 

67

 

	
  The Administrative Agent:

  	
   

  	
  Bear Stearns Corporate
  Lending Inc.

  
	
   

  	
   

  	
  383 Madison Avenue

  
	
   

  	
   

  	
  New York, New York 10179

  
	
   

  	
   

  	
  Attention: Kevin Cullen

  
	
   

  	
   

  	
  Telecopy: (212) 272-9184

  
	
   

  	
   

  	
  Telephone: (212) 272-5724

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Latham & Watkins LLP

  
	
   

  	
   

  	
  885 Third Avenue, Suite
  1000

  
	
   

  	
   

  	
  New York, New York 10022

  
	
   

  	
   

  	
  Attention: Michèle Penzer,
  Esq.

  
	
   

  	
   

  	
  Telecopy: (212) 751-4864

  
	
   

  	
   

  	
  Telephone: (212) 906-1245

  

 

provided
that any notice, request or demand to or upon any Agent or the Lenders shall
not be effective until received.

 

Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall
not apply to notices pursuant to Section 2 unless otherwise agreed by the
Administrative Agent and the applicable Lender. 
The Administrative Agent or the Borrower may, in its discretion, agree
to accept notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it; provided that approval of such
procedures may be limited to particular notices or communications.

 

10.3.        No Waiver; Cumulative Remedies.  No failure to exercise and no delay in
exercising, on the part of any Agent or any Lender, any right, remedy, power or
privilege hereunder or under the other Loan Documents 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.

 

10.4.        Survival of Representations and
Warranties.  All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.

 

10.5.        Payment of Expenses and Taxes.  The Borrower agrees (a) to pay or reimburse
each Agent for all its reasonable out-of-pocket costs and expenses incurred in
connection with the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including the reasonable fees and disbursements of counsel to such
Agent (and excluding corporate overhead and other non out-of-pocket expenses)
and filing and recording fees and expenses, with statements with respect to the

 

68

 

foregoing to be submitted to
the Borrower prior to the Closing Date (in the case of amounts to be paid on
the Closing Date) and from time to time thereafter on a monthly basis or such
other periodic basis as such Agent shall deem appropriate, (b) to pay or
reimburse each Lender and Agent for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including the
fees and disbursements of counsel (and excluding corporate overhead and other
non out-of-pocket expenses) to each Lender and of counsel to such Agent and (c)
to pay, indemnify, and hold each Lender and 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 taxes, if any, that 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, this Agreement, the other Loan Documents and any such other
documents.  Holdings and the Borrower
jointly and severally agree to pay, indemnify, and hold each Lender and Agent
and their respective officers, directors, employees, affiliates, agents and
controlling persons (each, an “Indemnitee”) 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 this Agreement, the other Loan Documents and
any such other documents, including any of the foregoing relating to the use of
proceeds of the Loans or the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of any Group Member
or any of the Properties or the Business or the unauthorized use by Persons of
information or other materials sent through electronic, telecommunications or
other information transmission systems that are intercepted by such Persons and
the reasonable fees and expenses of legal counsel in connection with claims,
actions or proceedings by any Indemnitee against any Loan Party under any Loan
Document (all the foregoing, collectively, the “Indemnified Liabilities”),
provided, that neither Holdings nor the Borrower shall have any obligation
hereunder to any Indemnitee with respect to Indemnified Liabilities to the
extent such Indemnified Liabilities are found to have resulted from the gross
negligence or willful misconduct of such Indemnitee.  Without limiting the foregoing, and to the
extent permitted by applicable law, Holdings and the Borrower agree not to
assert and to cause their respective Subsidiaries not to assert, and hereby
waive and agree to cause their respective Subsidiaries to waive, all rights for
contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, violations, settlements, damages, costs
and expenses of whatever kind or nature, under or related to Environmental
Laws, that any of them might have by statute or otherwise against any
Indemnitee.  All amounts due under this
Section 10.5 shall be payable not later than 10 days after written demand
therefor.  Statements payable by Holdings
or the Borrower pursuant to this Section 10.5 shall be submitted to the General
Counsel of the Borrower (Telephone No. (212) 407-9101)
(Telecopy No. (212) 753-3188), at the address of the Borrower set forth
in Section 10.2, or to such other Person or address as may be hereafter
designated by Holdings or the Borrower in a written notice to the
Administrative Agent.  The agreements in
this Section 10.5 shall survive repayment of the Loans and all other amounts
payable hereunder.

 

69

 

10.6.        Successors and Assigns; Participations
and Assignments. 
(a)  The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that (i)
neither Holdings nor the Borrower may assign or otherwise transfer any of their
respective rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by Holdings or the
Borrower without such consent shall be null and void) and (ii) no Lender may
assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section (and any attempted assignment or transfer in
violation of this Section 10.6 shall be null and void).

 

(b)
(i)  Subject to
the conditions set forth in paragraph (b)(ii) below, any Lender may assign to
one or more assignees (each, an “Assignee”) all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Bridge Commitments and the Bridge Loans at the time owing to it) with the prior
written consent (such consent not to be unreasonably withheld) of:

 

(A) the Borrower, provided
that no consent of the Borrower shall be required for an assignment to a
Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default
has occurred and is continuing, any other Person; and

 

(B) the Administrative Agent, provided that
no consent of the Administrative Agent shall be required for an assignment to
an Assignee that is a Lender, an Affiliate of a Lender or an Approved Fund
immediately prior to giving effect to such assignment.

 

(ii)
Assignments shall be subject to the following additional conditions:

 

(A) except in the case of an assignment to a Lender,
an Affiliate of a Lender or an Approved Fund or an assignment of the entire
remaining amount of the assigning Lender’s Bridge Commitments or Bridge Loans,
the amount of the Bridge Commitments or Bridge Loans of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative
Agent) shall not be less than $1,000,000 unless each of the Borrower and the
Administrative Agent otherwise consent, provided that (1) no such
consent of the Borrower shall be required if an Event of Default has occurred
and is continuing and (2) such amounts shall be aggregated in respect of each
Lender and its affiliates or Approved Funds, if any;

 

(B) the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Assumption, together with a processing and recordation fee of $3,500;

 

(C) the Assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent an
administrative questionnaire; and

 

70

 

(D) in the case of an
assignment to a CLO, the assigning Lender shall retain the sole right to
approve any amendment, modification or waiver of any provision of this
Agreement and the other Loan Documents, provided that the Assignment and
Assumption between such Lender and such CLO may provide that such Lender will
not, without the consent of such CLO, agree to any amendment, modification or
waiver that (1) requires the consent of each Lender directly affected thereby
pursuant to the proviso to the second sentence of Section 10.1 and (2) directly
affects such CLO.

 

(iii)
 Subject to acceptance and recording
thereof pursuant to paragraph (b)(iv) below, from and after the effective
date specified in each Assignment and Assumption the Assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 3.9, 3.10, 3.11 and 10.5).  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
Section 10.6 shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.

 

(iv)  The Administrative Agent, acting for this
purpose as an agent of the Borrower, shall maintain at one of its offices a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Bridge
Commitments of, and principal amount and stated interest of the Loans owing to,
each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. 
The Register shall be available for inspection by the Borrower and any
Lender, at any reasonable time and from time to time upon reasonable prior notice.

 

(v)  Upon its receipt of a duly completed
Assignment and Assumption executed by an assigning Lender and an Assignee, the
Assignee’s completed administrative questionnaire (unless the Assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative Agent
shall accept such Assignment and Assumption and record the information contained
therein in the Register.  No assignment
shall be effective for purposes of this Agreement unless it has been recorded
in the Register as provided in this paragraph.

 

(c)  (i)  Any Lender may, without the consent of the
Borrower or the Administrative Agent, sell participations to one or more banks
or other entities (a 

 

71

 

“Participant”) in all
or a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Bridge Commitments and the Loans owing to
it); provided that (A) such Lender’s obligations under this
Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrower, the Administrative Agent and the Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement.  Any agreement pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such agreement
may provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver that (1) requires the consent of
each Lender directly affected thereby pursuant to the proviso to the second
sentence of Section 10.1 and (2) directly affects such Participant.  Subject to paragraph (c)(ii)
of this Section, the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 3.9, 3.10 or 3.11 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section 10.6.  To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 10.7(b) as though it were a Lender, provided such Participant
shall be subject to Section 10.7(a) as though it were a Lender.

 

(ii)  A
Participant shall not be entitled to receive any greater payment under Section
3.9 or 3.10 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written
consent.  Any Participant that is a
Non-U.S. Lender shall not be entitled to the benefits of Section 3.10
unless such Participant complies with Section 3.10(d).

 

(d) 
Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; provided that no such pledge or assignment of a
security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or Assignee for such Lender as a party hereto.

 

(e) 
The Borrower, upon receipt of written notice from the relevant Lender,
agrees to issue Notes to any Lender requiring Notes.

 

(f) 
Notwithstanding the foregoing, any Conduit Lender may assign any or all
of the Loans it may have funded hereunder to its designating Lender without the
consent of the Borrower or the Administrative Agent and without regard to the
limitations set forth in Section 10.6(b). 
Each of Holdings, the Borrower, each Lender and the Administrative Agent
hereby confirms that it will not institute against a Conduit Lender or join any
other Person in instituting against a Conduit Lender any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding under any
state bankruptcy or similar law, for one year and one day after the payment in
full of the latest maturing commercial paper note issued by such Conduit
Lender; provided, 

 

72

 

however,
that each Lender designating any Conduit Lender hereby agrees to indemnify,
save and hold harmless each other party hereto for any loss, cost, damage or
expense arising out of its inability to institute such a proceeding against
such Conduit Lender during such period of forbearance.

 

10.7.        Adjustments;
Set-off.  (a)  Except to the extent that this Agreement
expressly provides for payments to be allocated to a particular Lender, if any
Lender (a “Benefited Lender”) shall receive any payment of all or part
of the Obligations owing to it, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 8(f), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of the Obligations owing to such other Lender, such
Benefited Lender shall purchase for cash from the other Lenders a participating
interest in such portion of the Obligations owing to each such other Lender, or
shall provide such other Lenders with the benefits of any such collateral, as
shall be necessary to cause such Benefited Lender to share the excess payment
or benefits of such collateral 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 interest.

 

(b)  In addition to any rights and remedies of the
Lenders provided by law, each Lender shall have the right, without prior notice
to Holdings or the Borrower, any such notice being expressly waived by Holdings
and the Borrower to the extent permitted by applicable law, upon any amount
becoming due and payable by Holdings or the Borrower hereunder (whether at the
stated maturity, by acceleration or otherwise), to set off and appropriate and
apply against such amount 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 or agency thereof to or for the credit or
the account of Holdings or the Borrower, as the case may be.  Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such setoff and application
made by such Lender, provided that the failure to give such notice shall
not affect the validity of such setoff and application.

 

10.8.        Counterparts.  This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts, and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument.  Delivery of an
executed signature page of this Agreement by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.  A set of the copies of this Agreement signed
by all the parties shall be lodged with the Borrower and the Administrative
Agent.

 

10.9.        Severability.  Any provision of this Agreement that 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.

 

73

 

10.10.      Integration.  This Agreement and the other Loan Documents
represent the entire agreement of Holdings, the Borrower, the Agents and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by any Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.

 

10.11.      GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

10.12.      Submission To Jurisdiction;
Waivers.  Each of Holdings and
the Borrower hereby irrevocably and unconditionally:

 

(a)  submits for itself and its property in any
legal action or proceeding relating to this Agreement and the other Loan
Documents to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the courts
of the State of New York, the courts of the United States for the Southern
District of New York, and appellate courts from any thereof;

 

(b)  consents that any such action or proceeding
may be brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;

 

(c)  agrees that service of process in any such
action or proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage prepaid, to
Holdings or the Borrower, as the case may be, at its address set forth in
Section 10.2 or at such other address of which the Administrative Agent shall
have been notified pursuant thereto;

 

(d)  agrees that nothing herein shall affect the
right to effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction; and

 

(e)  waives, to the
maximum extent not prohibited by law, any right it may have to claim or recover
in any legal action or proceeding referred to in this Section any special,
exemplary, punitive or consequential damages.

 

10.13.      Acknowledgments.  Each of Holdings and the Borrower hereby
acknowledges that:

 

(a)  it has been advised
by counsel in the negotiation, execution and delivery of this Agreement and the
other Loan Documents;

 

(b)  no Agent or Lender
has any fiduciary relationship with or duty to Holdings or the Borrower arising
out of or in connection with this Agreement or any of the other Loan Documents,
and the relationship between the Agents and Lenders, on one hand, and Holdings 

 

74

 

and the Borrower, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor; and

 

(c)  no joint venture is
created hereby or by the other Loan Documents or otherwise exists by virtue of
the transactions contemplated hereby among the Lenders or among Holdings, the
Borrower and the Lenders.

 

10.14.      Releases
of Liens.  (a)  Notwithstanding anything to the contrary
contained herein or in any other Loan Document, the Administrative Agent is
hereby irrevocably authorized by each Lender (without requirement of notice to
or consent of any Lender except as expressly required by Section 10.1) to take
any action requested by the Borrower having the effect of releasing any
Collateral (i) to the extent necessary to permit consummation of any
transaction not prohibited by any Loan Document or that has been consented to
in accordance with Section 10.1 or (ii) under the circumstances described in
paragraph (b) below.

 

(b)  At such time as the Loans and the other
obligations under the Loan Documents (other than obligations under or in
respect of Hedge Agreements) shall have been paid in full and the Bridge
Commitments have been terminated, the Collateral shall be released from the
Liens created by the Security Documents, and the Security Documents and all
obligations (other than those expressly stated to survive such termination) of
the Administrative Agent and each Loan Party under the Security Documents shall
terminate, all without delivery of any instrument or performance of any act by any
Person and the Administrative Agent agrees (at the sole cost and expense of the
Borrower) to take such actions as may reasonably be requested by the Borrower
to evidence such release and termination.

 

10.15.      Confidentiality.  Each Agent and each Lender agrees to keep
confidential all non-public information provided to it by any Loan Party
pursuant to or in connection with this Agreement that is designated by such
Loan Party as confidential; provided that nothing herein shall prevent any
Agent or any Lender from disclosing any such information (a) to any Agent, any
other Lender or any Lender Affiliate, (b) subject to an agreement to comply
with the provisions of this Section 10.15, to any actual or prospective
Transferee or any direct or indirect counterparty to any Hedge Agreement (or
any professional advisor to such counterparty), (c) to its employees,
directors, agents, attorneys, accountants and other professional advisors or
those of any of its affiliates, (d) upon the request or demand of any Governmental
Authority, (e) in response to any order of any court or other Governmental
Authority or as may otherwise be required pursuant to any Requirement of Law,
(f) if requested or required to do so in connection with any litigation or
similar proceeding, (g) that has been publicly disclosed, (h) to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information about a
Lender’s investment portfolio in connection with ratings issued with respect to
such Lender, or (i) in connection with the exercise of any remedy hereunder or
under any other Loan Document.

 

10.16.      WAIVERS OF JURY TRIAL.  HOLDINGS, THE BORROWER, THE
AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY
JURY IN ANY LEGAL ACTION OR

 

75

 

PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

10.17.      Delivery
of Addenda.  Each
initial Lender shall become a party to this Agreement by delivering to the
Administrative Agent an Addendum duly executed by such Lender.

 

10.18.      USA
PATRIOT Act.  Each
Lender hereby notifies the Borrower that pursuant to the requirements of the
USA PATRIOT Act (Title III of Publ. L. 107-56 (signed into law October 26,
2001)), (the “Patriot Act”), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender
to identify the Borrower in accordance with the Patriot Act.

 

76

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered by their proper and duly authorized officers as of the day and year
first above written.

 

	
   

  	
  SPORTS ENTERTAINMENT ENTERPRISES,

  INC., a Colorado Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas P. Benson

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Thomas P. Benson

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President, Chief

  Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EPE HOLDING CORPORATION, a Delaware

  corporation, as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas P. Benson

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Thomas P. Benson

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President, Chief

  Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BEAR, STEARNS & CO. INC., as Sole Lead

  Arranger

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Keith C. Barnish

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Keith C. Barnish

  
	
   

  	
   

  	
  Title:

  	
  Senior Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BEAR STEARNS CORPORATE LENDING INC.,

  as Administrative Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Victor Bulzacchelli

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Victor Bulzacchelli

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
							

 

77

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