Document:

Exhibit 10.1

 

 

 

CONTRIBUTION AND EXCHANGE AGREEMENT

 

 

among

 

 

THE PROMENADE TRUST

 

 

and

 

 

RFX ACQUISITION LLC

 

 

and

 

 

SPORTS ENTERTAINMENT ENTERPRISES, INC.

 

 

Dated as of December 15, 2004

 

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I DEFINITIONAL PROVISIONS AND
  INTERPRETATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  Definitional Provisions; Interpretation.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II CONTRIBUTION AND EXCHANGE OF LLC
  INTERESTS AND EPE SHARES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  2.1

  	
  Contribution
  and Exchange of LLC Interests and EPE Shares

  	
   

  
	
  Section
  2.2

  	
  Consideration

  	
   

  
	
  Section
  2.3

  	
  Escrow;
  Payment of Cash Consideration

  	
   

  
	
  Section
  2.4

  	
  Transfer
  of LLC Interests and EPE Shares

  	
   

  
	
  Section
  2.5

  	
  Payment
  of the Stock Consideration

  	
   

  
	
  Section
  2.6

  	
  Pay-Off
  of Outstanding Indebtedness

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III CLOSING AND DELIVERIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  3.1

  	
  Closing

  	
   

  
	
  Section
  3.2

  	
  Deliveries
  by Seller

  	
   

  
	
  Section
  3.3

  	
  Deliveries
  by Purchasers

  	
   

  
	
  Section
  3.4

  	
  Timing
  and Order of the Closing

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV REPRESENTATIONS AND WARRANTIES
  OF SELLER

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  4.1

  	
  Organization

  	
   

  
	
  Section
  4.2

  	
  Authority
  and Authorization; Advice.

  	
   

  
	
  Section
  4.3

  	
  Title
  to Transferred Subsidiaries.

  	
   

  
	
  Section
  4.4

  	
  Consents
  and Approvals

  	
   

  
	
  Section
  4.5

  	
  Noncontravention

  	
   

  
	
  Section
  4.6

  	
  Sufficiency
  of Assets

  	
   

  
	
  Section
  4.7

  	
  Financial
  Statements; No Contingent Liabilities

  	
   

  
	
  Section
  4.8

  	
  Litigation
  and Claims

  	
   

  
	
  Section
  4.9

  	
  Taxes.

  	
   

  
	
  Section
  4.10

  	
  Employee
  Benefits.

  	
   

  
	
  Section
  4.11

  	
  Labor
  Matters.

  	
   

  
	
  Section
  4.12

  	
  No
  Default; Compliance with Laws

  	
   

  
	
  Section
  4.13

  	
  Environmental
  Matters

  	
   

  
	
  Section
  4.14

  	
  Contracts.

  	
   

  
	
  Section
  4.15

  	
  Title
  to Tangible Personal Property

  	
   

  
	
  Section
  4.16

  	
  Title
  to Owned and Leased Real Properties; Absence of Encumbrances.

  	
   

  
	
  Section
  4.17

  	
  Absence
  of Material Adverse Effect; Ordinary Course of Operations and Capital
  Expenditures

  	
   

  
	
  Section
  4.18

  	
  Insurance

  	
   

  

 

i

 

	
  Section
  4.19

  	
  Permits.

  	
   

  
	
  Section
  4.20

  	
  Intellectual
  Property.

  	
   

  
	
  Section
  4.21

  	
  Indebtedness

  	
   

  
	
  Section
  4.22

  	
  Finders’
  Fees

  	
   

  
	
  Section
  4.23

  	
  Investment
  Representations

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V REPRESENTATIONS AND WARRANTIES OF
  PURCHASING LLC AND PUBLICO

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  5.1

  	
  Organization
  and Qualification

  	
   

  
	
  Section
  5.2

  	
  Corporate
  Authorization

  	
   

  
	
  Section
  5.3

  	
  Capitalization;
  Purchasing LLC’s Shareholding in Publico After the Concurrent Contribution

  	
   

  
	
  Section
  5.4

  	
  Consents
  and Approvals

  	
   

  
	
  Section
  5.5

  	
  Noncontravention

  	
   

  
	
  Section
  5.6

  	
  Financial
  Statements; No Contingent Liabilities

  	
   

  
	
  Section
  5.7

  	
  Finders’
  Fees

  	
   

  
	
  Section
  5.8

  	
  Litigation.

  	
   

  
	
  Section
  5.9

  	
  SEC
  Reports and Financial Statements

  	
   

  
	
  Section
  5.10

  	
  Supplied
  Information

  	
   

  
	
  Section
  5.11

  	
  Business
  of Publico

  	
   

  
	
  Section
  5.12

  	
  Absence
  of Material Adverse Effect

  	
   

  
	
  Section
  5.13

  	
  Compliance

  	
   

  
	
  Section
  5.14

  	
  Trading
  in Stock

  	
   

  
	
  Section
  5.15

  	
  Investment
  Representations

  	
   

  
	
  Section
  5.16

  	
  Availability
  of Funds.

  	
   

  
	
  Section
  5.17

  	
  Representations
  and Warranties of Publico Acquisition Agreement

  	
   

  
	
  Section
  5.18

  	
  Solvency

  	
   

  
	
  Section
  5.19

  	
  Taxes

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  6.1

  	
  Pre-Closing
  Covenants of Seller

  	
   

  
	
  Section
  6.2

  	
  Certain
  Other Agreements.

  	
   

  
	
  Section
  6.3

  	
  Other
  Post-Closing Covenants.

  	
   

  
	
  Section
  6.4

  	
  Tangible
  Personal Property

  	
   

  
	
  Section
  6.5

  	
  Tax
  Matters.

  	
   

  
	
  Section
  6.6

  	
  No
  Solicitation or Other Transaction

  	
   

  
	
  Section
  6.7

  	
  No
  Breaches

  	
   

  
	
  Section
  6.8

  	
  Audited
  Financial Statements

  	
   

  
	
  Section
  6.9

  	
  Confidentiality

  	
   

  

 

ii

 

	
  Section
  6.10

  	
  Termination
  of Related Party Arrangements; Liquidation of Certain Seller Entities

  	
   

  
	
  Section
  6.11

  	
  Board
  Seat for Beneficiary

  	
   

  
	
  Section
  6.12

  	
  [Intentionally
  omitted]

  	
   

  
	
  Section
  6.13

  	
  Discharge
  of Indebtedness

  	
   

  
	
  Section
  6.14

  	
  Ancillary
  Agreements

  	
   

  
	
  Section
  6.15

  	
  Sarbanes-Oxley
  Advisors

  	
   

  
	
  Section
  6.16

  	
  Prohibited
  Activities

  	
   

  
	
  Section
  6.17

  	
  Simultaneous
  Closing

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII CONDITIONS TO CLOSING

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  7.1

  	
  Conditions
  to the Obligations of Purchasers and Seller

  	
   

  
	
  Section
  7.2

  	
  Conditions
  to the Obligations of Purchasers

  	
   

  
	
  Section
  7.3

  	
  Conditions
  to the Obligations of Seller

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII SURVIVAL; INDEMNIFICATION

  	
   

  
	
   

  	
   

  
	
  Section
  8.1

  	
  Survival

  	
   

  
	
  Section
  8.2

  	
  Indemnification
  by Purchasing LLC and Publico

  	
   

  
	
  Section
  8.3

  	
  Indemnification
  by Seller.

  	
   

  
	
  Section
  8.4

  	
  Third-Party
  Claim Indemnification Procedures

  	
   

  
	
  Section
  8.5

  	
  Computation
  of Losses Subject to Indemnification.

  	
   

  
	
  Section
  8.6

  	
  Threshold
  for Recovery; Aggregate Limit on Indemnity.

  	
   

  
	
  Section
  8.7

  	
  Limitation
  on Remedies.

  	
   

  
	
  Section
  8.8

  	
  Escrow
  Procedures; Parties’ Delivery of Certificates

  	
   

  
	
  Section
  8.9

  	
  Remediation

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX TERMINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  9.1

  	
  Termination

  	
   

  
	
  Section
  9.2

  	
  Effect
  of Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  10.1

  	
  Notices

  	
   

  
	
  Section
  10.2

  	
  Amendment

  	
   

  
	
  Section
  10.3

  	
  Assignment.

  	
   

  
	
  Section
  10.4

  	
  Entire
  Agreement

  	
   

  
	
  Section
  10.5

  	
  Disclosure
  Schedules; Exhibits

  	
   

  
	
  Section
  10.6

  	
  Parties
  in Interest; No Third-Party Beneficiaries

  	
   

  
	
  Section
  10.7

  	
  Public
  Disclosure

  	
   

  
	
  Section
  10.8

  	
  Requests
  for and Return of Information

  	
   

  
	
  Section
  10.9

  	
  Expenses

  	
   

  

 

iii

 

	
  Section 10.10

  	
  Amounts Paid and Calculated in U.S. Dollars; Receivables and Payable
  Currency

  	
   

  
	
  Section 10.11

  	
  No Other Representations or Warranties; Authorized Representatives;
  Bulk Sales; No Obligation to Register Preferred Stock; Legend

  	
   

  
	
  Section 10.12

  	
  GOVERNING LAW

  	
   

  
	
  Section 10.13

  	
  Waivers

  	
   

  
	
  Section 10.14

  	
  Counterparts

  	
   

  
	
  Section 10.15

  	
  Headings

  	
   

  
	
  Section 10.16

  	
  Severability

  	
   

  
	
  Section 10.17

  	
  Purchasers’ Corporate Opportunities; Trustees not Personally Liable

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI DEFINITIONS AND TERMS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  11.1

  	
  Specific
  Definitions

  	
   

  
	
  Section
  11.2

  	
  Other
  Terms

  	
   

  

 

iv

 

EXHIBITS

 

	
  Exhibit A

  	
  Purchase and Sale Agreement

  
	
  Exhibit B

  	
  Operating Agreement

  
	
  Exhibit C

  	
  Closing Escrow Agreement

  
	
  Exhibit D

  	
  Instrument of Assignment

  
	
  Exhibit E

  	
  Bill of Sale and Instrument of Assumption

  
	
  Exhibit F-1

  	
  Form of Legal Opinion of Proskauer Rose LLP

  
	
  Exhibit F-2

  	
  Form of Legal Opinion of Glankler Brown PLLC

  
	
  Exhibit F-3

  	
  Form of Legal Opinion of Greenberg Traurig

  
	
  Exhibit G

  	
  Letter Agreement with Beneficiary

  
	
  Exhibit H

  	
  Form of Employment Agreement

  
	
  Exhibit I

  	
  Form of Beneficiary Employment Agreement

  
	
  Exhibit J

  	
  Unaudited Financial Statements

  
	
  Exhibit K

  	
  Publico Financial Statements

  
	
  Exhibit L

  	
  Tax Sharing Agreement

  
	
  Exhibit M

  	
  [Intentionally Omitted]

  
	
  Exhibit N

  	
  Prohibited Activities

  
	
  Exhibit O

  	
  Publico Preferred Stock Term Sheet

  
	
  Exhibit P

  	
  Consulting and Non-Competition Agreement

  
	
  Exhibit Q

  	
  Knowledge of Seller

  
	
  Exhibit R

  	
  Mansion Agreement

  
	
  Exhibit S

  	
  EPE Series A and Series B Preferred Stock Term Sheet

  
	
  Exhibit T

  	
  Other Preferred Stock Term Sheet

  

 

v

 

SCHEDULES

 

	
  Schedule A

  	
  Excluded Assets and Excluded Liabilities

  
	
  Schedule 3.2(h)

  	
  Title Endorsements

  
	
  Schedule 3.3(b)

  	
  Employment Agreements

  
	
  Schedule 4.1

  	
  Beneficiaries under the Trust Agreement

  
	
  Schedule 4.3(a)

  	
  Subsidiaries of Seller

  
	
  Schedule 4.3(b)

  	
  Transferred Subsidiaries

  
	
  Schedule 4.4

  	
  Consents and Approvals Required for Seller

  
	
  Schedule 4.5

  	
  Seller Non-Contravention

  
	
  Schedule 4.8

  	
  Litigation and Claims

  
	
  Schedule 4.9(a)

  	
  Taxes – EPE Shares

  
	
  Schedule 4.9(b)

  	
  Taxes – Contributed Assets

  
	
  Schedule 4.10(a)

  	
  Employee Benefit Plans

  
	
  Schedule 4.10(c)

  	
  Employee Benefits

  
	
  Schedule 4.11(a)

  	
  Labor Matters

  
	
  Schedule 4.11(b)

  	
  List of Employees

  
	
  Schedule 4.12

  	
  No Default and Compliance with Laws

  
	
  Schedule 4.13

  	
  Environmental Matters

  
	
  Schedule 4.14(a)

  	
  Material Contracts

  
	
  Schedule 4.14(b)

  	
  Breaches of Material Contracts

  
	
  Schedule 4.14(c)

  	
  Guarantees

  
	
  Schedule 4.14(d)

  	
  Material Contracts Requiring Consent

  
	
  Schedule 4.15

  	
  Title to Tangible Personal Property

  
	
  Schedule 4.16(a)

  	
  All Owned Real Property and All Leased Real Property used by Seller
  or the Transferred Subsidiaries to Conduct the Business

  
	
  Schedule 4.16(b)

  	
  Exceptions to Title to Owned and Leased Real Properties

  
	
  Schedule 4.16(d)

  	
  Defaults and Related Matters

  
	
  Schedule 4.17

  	
  Material Adverse Effects

  
	
  Schedule 4.18

  	
  Insurance

  
	
  Schedule 4.19

  	
  Permits

  
	
  Schedule 4.20(a)

  	
  Intellectual Property Rights

  
	
  Schedule 4.20(c)(i)

  	
  Pending Lawsuits, Actions and/or Formal Claims Relating to Intellectual
  Property Rights

  
	
  Schedule 4.20(c)(ii)

  	
  List of Recipients of Cease and Desist Letters Regarding Intellectual
  Property Rights

  
	
  Schedule 4.20(c)(iii)

  	
  Persons Infringing Intellectual Property Rights

  
	
  Schedule 4.20(d)

  	
  Pending Claims, Demands and Suits Asserting that Intellectual Property
  Rights Infringe Upon Third Party Rights

  
	
  Schedule 4.20(e)(i)

  	
  Musical Compositions

  

 

vi

 

	
  Schedule 4.20(e)(ii)(a)

  	
  Schedule of “Suspense Account” Monies (Those Royalty Monies Due to
  But Not Paid to Songwriters and/or Other Participants)

  
	
  Schedule 4.20(e)(ii)(b)

  	
  Schedule of “Suspense Account” Monies (Those Monies Received by or on
  Behalf of Seller in Regard to Musical Compositions Neither Owned or
  Controlled by Seller)

  
	
  Schedule 4.20(e)(iv)(A)

  	
  Songwriters and Other Royalty Participants

  
	
  Schedule 4.20(e)(iv)(B)

  	
  List of Agreements with Include “Controlled Compositions” Clauses
  and/or Other Compensation Clauses Below Industry Norms

  
	
  Schedule 4.20(e)(v)

  	
  List of Extant Exclusive Agreements

  
	
  Schedule 4.20(e)(vii)

  	
  Schedule of Advances

  
	
  Schedule 4.20(f)(i)

  	
  Audio/Visual Masters and Corresponding Agreements

  
	
  Schedule 4.20(f)(iii)

  	
  Audio/Visual Material Outstanding Advances

  
	
  Schedule 4.20(g)(i)

  	
  Audio Masters and Corresponding Agreements

  
	
  Schedule 4.20(g)(iii)

  	
  Audio Master Material Outstanding Advances

  
	
  Schedule 4.20(h)(i)

  	
  Written Works

  
	
  Schedule 4.20(h)(iii)

  	
  Written Works

  
	
  Schedule 4.20(i)

  	
  Trademarks

  
	
  Schedule 4.20(j)

  	
  Identity Rights

  
	
  Schedule 4.20(k)

  	
  Photographs

  
	
  Schedule 4.20(l)

  	
  Owned or Validly Licensed Software

  
	
  Schedule 4.20(m)(i)

  	
  Material Intellectual Property Contracts

  
	
  Schedule 4.21

  	
  Outstanding Indebtedness of the Business

  
	
  Schedule 5.1

  	
  Members of Purchasing LLC

  
	
  Schedule 5.3(c)

  	
  Capital Stock or Other Equity Interests of any Person held by Publico

  
	
  Schedule 5.4

  	
  Consents and Approvals Required for Purchasers

  
	
  Schedule 5.5

  	
  Purchasers Non-Contravention

  
	
  Schedule 5.9

  	
  SEC Reports and Financial Statements Not Filed Timely or Related
  Matters

  
	
  Schedule 5.12

  	
  Business of Publico

  
	
  Schedule 5.14

  	
  Trading in Stock

  
	
  Schedule 5.19

  	
  Taxes – Publico

  
	
  Schedule 6.1(e)

  	
  Permitted Dividends and Distributions

  
	
  Schedule 6.1(j)

  	
  Permitted Indebtedness

  
	
  Schedule 6.9(b)

  	
  Certain Confidential Information

  
	
  Schedule 6.10(a)

  	
  Related Party Agreements which Shall be Terminated

  
	
  Schedule 6.10(b)

  	
  Liquidation of Certain Seller Entities

  
	
  Schedule 6.13

  	
  Meadow Oaks Debt Fee

  
	
  Schedule 7.2(i)

  	
  Exceptions to Audited Financial Statements Condition

  
	
  Schedule 7.2(j)

  	
  Liabilities

  
	
  Schedule 10.17(a)

  	
  Controlling Person’s Activities

  

 

vii

 

CONTRIBUTION AND
EXCHANGE AGREEMENT, dated as of December 15, 2004
among The Promenade Trust, a grantor trust created under the laws of Tennessee
(“Seller”), Sports Entertainment Enterprises, Inc., a Colorado
corporation (“Publico”) and RFX Acquisition LLC, a Delaware limited
liability company (“Purchasing LLC,” and together with Publico, “Purchasers”),
(each a “Party,” and collectively, the “Parties”).

 

W I T N E S S E T H:

 

WHEREAS, Purchasing
LLC has identified Publico, as an appropriate vehicle for the transactions
contemplated by this Agreement and the operation of the Business after the
Closing hereunder, and has entered into an acquisition agreement with Publico
of even date herewith pursuant to which (i) Purchasing LLC will acquire control
of Publico at the closing simultaneously with the Closing hereunder, and (ii)
Purchasing LLC will make certain cash contributions to Publico (the closing of
such contribution and acquisition transaction, the “Concurrent Contribution”);

 

WHEREAS,
Seller desires to contribute and Publico desires to accept and receive, an
interest in the assets, properties and rights, and to assume the liabilities
and obligations related thereto, of Seller that are used or useful in
businesses and operations and relate in any way to Elvis Presley or to Seller,
excluding only (i) the assets, properties and rights set forth on Schedule A
(the “Excluded Assets”) and (ii) the liabilities and obligations set
forth on Schedule A (the “Excluded Liabilities”) (such businesses
and operations and such assets, properties, rights liabilities and obligations
thereof, excluding the Excluded Assets and the Excluded Liabilities, the “Business”);

 

WHEREAS,
Seller will form a Delaware limited liability company (“LLC”) and
contribute and transfer to LLC (the “LLC Contribution”), at or before
the Closing, all of the assets, properties and rights of the Business, other
than those held directly or indirectly by Elvis Presley Enterprises, Inc., a
Tennessee corporation (“EPE”) (the “Contributed Assets”), and LLC
will accept such assets and accept and assume the liabilities and obligations
of Seller to the extent related to the Contributed Assets, as provided
hereunder;

 

WHEREAS,
EPE and LLC together will hold at Closing all of the assets, properties and
rights, and liabilities and obligations of the Business;

 

WHEREAS,
simultaneous with the Concurrent Contribution, Seller desires to contribute to
Publico by means of the contributions, transfers and assignments contemplated
hereby and on the terms and subject to the conditions hereof, 100% of the outstanding
Class A membership interests of LLC as of the Closing Date (such contributed
interests, the “LLC Interests”) and the EPE Shares, with Seller
retaining the Retained Interest;

 

WHEREAS,
Seller and Publico will enter into: (i) a stockholders agreement covering the
Parties ownership of the EPE Shares (“Stockholders

 

 

Agreement”),
and (ii) an Operating Agreement covering the Parties ownership of the LLC
Interests, in the form set forth on Exhibit B hereto, governing the
operation after Closing of EPE and LLC, respectively;

 

WHEREAS,
all the transactions, contributions, transfers and assignments contemplated by
this Agreement and by the Concurrent Contribution are intended to be part of a
single integrated plan and are together intended to qualify as a tax-free
contribution to the capital of Publico under Section 351 of the Code;

 

NOW, THEREFORE,
in consideration of the mutual covenants and undertakings contained herein, and
subject to and on the terms and conditions herein set forth, the Parties agree
as follows:

 

ARTICLE I

 

DEFINITIONAL
PROVISIONS AND INTERPRETATION

 

Section 1.1             Definitional
Provisions; Interpretation.

 

(a)           The
words “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.

 

(b)           Terms
defined in the singular shall have a comparable meaning when used in the
plural, and vice versa.

 

(c)           This
Agreement shall be construed without regard to any presumption or rule requiring
construction or interpretation against the party drafting or causing any
instrument to be drafted.

 

(d)           For
purposes of Article VIII the words “indemnify”, “indemnification” and “indemnity”
shall be deemed to also refer to the words “defend” and “hold harmless”.

 

(e)           Whenever
the words “include”, “including” or “includes” appear in this Agreement, they
shall be read to be followed by the words “without limitation” or words having
similar import.

 

ARTICLE II

 

CONTRIBUTION AND
EXCHANGE OF LLC INTERESTS AND EPE SHARES

 

Section 2.1             Contribution
and Exchange of LLC Interests and EPE Shares.  Upon the terms and subject to the conditions
set forth in this Agreement, at the Closing, Seller shall contribute to Publico
the LLC Interests and the EPE Shares (the “Seller Contribution”),

 

2

 

free and clear
of any and all Encumbrances (other than Encumbrances related to Outstanding
Indebtedness) for the consideration specified in Section 2.2 below.

 

Section 2.2             Consideration.  In exchange for the Seller Contribution,
Seller shall receive from Publico, and Publico shall deliver:

 

(a)           $50,125,000
in cash (the “Cash Consideration”), payable as set forth in Section 2.3 below;

 

(b)           such
number of shares of Preferred Stock having an aggregate initial liquidation
preference equal to (w) $47,275,000, plus (x) all amounts paid by any
Transferred Subsidiary prior to Closing for the acquisition of the
Entertainment Rights less (y) the sum of (i) Entertainment Indebtedness
outstanding at Closing and (ii) Outstanding Indebtedness;

 

(c)           500,000
shares of Publico Common Stock; and

 

(d)           one
share of Other Preferred Stock.

 

Section 2.3             Escrow;
Payment of Cash Consideration.  As of
the date hereof, Purchasing LLC shall deliver $5,000,000 of the Cash
Consideration (such $5,000,000, the “Closing Escrow Amount”) into escrow
with an escrow agent mutually agreed upon by Seller and Purchasing LLC,
pursuant to an escrow agreement in the form attached hereto as Exhibit C
(the “Closing Escrow Agreement”). 
At Closing:

 

(a)           Purchasing
LLC, together with Seller’s consent and cooperation, shall cause the Closing
Escrow Agent to release to Seller on behalf of Publico, in accordance with the
terms and procedures of the Closing Escrow Agreement, the entire Closing Escrow
Amount; and

 

(b)           Publico
shall pay to Seller, by wire transfer or other delivery of immediately
available funds, an amount equal to (x) the Cash Consideration minus (y) the
Closing Escrow Amount.

 

Section 2.4             Transfer
of LLC Interests and EPE Shares.  At
Closing, Seller will deliver to Purchasers:

 

(a)           an
instrument of assignment transferring ownership of the LLC Interests to Publico
substantially in the form of Exhibit D (the “Instrument of Assignment”);
and

 

(b)           a
certificate or certificates evidencing the EPE Shares, duly endorsed in blank
or accompanied by stock powers duly executed in blank, in proper form for
transfer to Publico.

 

3

 

Section 2.5             Payment
of the Stock Consideration.  At Closing,
Publico shall deliver a certificate or certificates evidencing the Preferred
Stock, duly endorsed in blank or accompanied by stock powers duly executed in
blank, in proper form for transfer to Seller.

 

Section 2.6             Pay-Off
of Outstanding Indebtedness.  Subject
to Section 6.13, at Closing Publico shall repay or fund the defeasance of all
Outstanding Indebtedness in the amounts and pursuant to the instructions set
forth on the applicable Pay-Off Letters, as defined in Section 6.13(a)(ii), to
the extent such letters are obtained by Seller.

 

ARTICLE III

 

CLOSING AND
DELIVERIES

 

Section 3.1             Closing.

 

(a)           Subject
to the satisfaction or, to the extent permitted by applicable law, waiver of
the conditions contained in Article VII hereof, the closing of the Seller
Contribution and the exchanges and payments therefor as contemplated hereunder
(the “Closing”) shall take place at 10:00 a.m., New York time, on a date
to be specified by Purchasing LLC and Seller, which date shall not be later
than the third business day next following the satisfaction or, to the extent
permitted by applicable law, waiver of the conditions set forth in
Article VII hereto (other than those conditions that by their nature are
to be satisfied at the Closing, but subject to the fulfillment or, to the
extent permitted by applicable law, waiver of those conditions), unless another
time or date is agreed to by such parties.

 

(b)           The
Closing will be held at the offices of Greenberg Traurig, LLP, the MetLife
Building, 200 Park Avenue, New York, NY 10166 or at such other
location as is agreed to by the parties. 
The date on which the Closing is to occur as provided by this Section
3.1 is herein called the “Closing Date” and the time and date on which
the Closing is to occur as provided in this Section 3.1 are herein called the “Closing
Time.”  Notwithstanding the
foregoing, the Closing shall for all purposes be deemed to occur at 12:01 a.m.,
New York City time, on the Closing Date.

 

Section 3.2             Deliveries
by Seller.  At or prior to the
Closing, Seller shall deliver or cause to be delivered to Purchasers, the
following:

 

(a)           an
executed copy of the Bill of Sale and Instrument of Assumption, substantially
in the form of Exhibit E (the “Bill of Sale”);

 

(b)           a
certificate signed by a trustee of Seller, dated as of the Closing Date, to the
effect that the conditions set forth in Sections 7.2(a) and 7.2(b) have
been satisfied, expressly reciting such conditions;

 

4

 

(c)           a
certificate pursuant to Treasury Regulation Section 1.1445-2(b)(2) certifying
that Seller is not a “foreign person” within the meaning of Section 1445(a) of
the Code (the “Seller Tax Certificate”);

 

(d)           a
legal opinion of:

 

(i)            Proskauer Rose LLP,
counsel for Seller, dated as of the Closing Date, containing opinions
substantially identical to the opinions set forth on Exhibit F-1 subject to
customary qualifications; and

 

(ii)           Glankler Brown PLLC ,
counsel for Seller, dated as of the Closing Date, substantially identical to
the form set forth on Exhibit F-2;

 

(e)           a
certificate setting forth a complete and correct statement of all Outstanding
Indebtedness of the Transferred Subsidiaries as of the Closing Date which shows
the creditor as to each item of Indebtedness listed thereon (the “Closing Debt
Schedule”);

 

(f)            an
executed copy of each of the Ancillary Agreements, it being understood that
each of the Parties shall use their reasonable best efforts to cause the Escrow
Agent to execute and deliver the Escrow Agreement;

 

(g)           an
owner’s title insurance policy in the name of EPE or a “marked-up” title
insurance commitment, subject only to Permitted Encumbrances, from a national
title insurance company issued (x) in the amount of $20 million insuring owner’s
leasehold title to the Mansion Property, and (y) in the amount of $2.6 million
insuring owner’s fee title to the Parking Lot Property (the “New Title
Insurance Policies”);

 

(h)           the
endorsements to the New Title Insurance Policies and existing title policies
issued to Seller or the Subsidiaries of Seller as listed on Schedule 3.2(h),
subject only to Permitted Encumbrances (the “Title Endorsements”);

 

(i)            a
copy of the letter agreement attached hereto as Exhibit G signed and
delivered by Beneficiary and addressed to the Purchasers and the trustees of
Seller;

 

(j)            a
cross-receipt executed by Seller acknowledging receipt of the Consideration;
and

 

(k)           such
instruments of transfer, recordation and filing contemplated by or required in
respect of Section 4.20.

 

Section 3.3             Deliveries
by Purchasers.  At or prior to the
Closing, Purchasers shall deliver or cause to be delivered the following:

 

5

 

(a)           certificates
signed by executive officers of Publico and Purchasing LLC, dated as of the
Closing Date, to the effect that the conditions set forth in Sections 7.3(a)
and 7.3(b) have been satisfied, expressly reciting such conditions;

 

(b)           an
executed copy of each of the Ancillary Agreements, it being understood that
each of the Parties shall use their reasonable best efforts to cause the Escrow
Agent to execute and deliver the Escrow Agreement, and executed copy of the
employment agreement in the form set forth on Exhibit H with each of the
individuals listed on Schedule 3.3(b) (the “Employment Agreements”);

 

(c)           certificates
representing the securities identified in Section 2.2, registered in such name
as Seller designates at least two days prior to Closing;

 

(d)           a
cross-receipt executed by Publico acknowledging receipt of the LLC Interests
and the EPE Shares;

 

(e)           a
legal opinion of Greenberg Traurig, LLP, counsel for Purchasing LLC, dated as
of the Closing Date, containing opinions substantially identical to the
opinions set forth on Exhibit F-3, subject to customary qualifications;

 

(f)            a
copy of the letter agreement attached hereto as Exhibit G signed and
delivered by the Controlling Person and Purchasers and addressed to the
trustees of Seller; and

 

Section 3.4             Timing
and Order of the Closing.  Subject to
applicable terms and conditions, the Closing hereunder and the Concurrent
Contribution shall take place simultaneously and the Parties shall reasonably
cooperate with respect to effecting such simultaneous closings.

 

ARTICLE IV

 

REPRESENTATIONS
AND WARRANTIES OF SELLER

 

As of the date hereof and as of the Closing
Date, except with respect to any representations and warranties that are
expressly made as of a specific date, which are made only as of such date,
Seller hereby represents and warrants to Purchasers that, except as set forth
in the applicable section of the Disclosure Schedule:

 

Section 4.1             Organization.  Seller has been duly created, and is validly
existing under the laws of Tennessee, with all requisite trust power and
authority to carry on the Business as currently conducted, except where the
failure to be so organized, existing, or in good standing, as the case may be,
would not materially impair or delay Seller’s ability to perform its
obligations hereunder.  Seller has
heretofore delivered to Purchasing LLC complete and correct copies of:

 

6

 

(a)           the
Trust Agreement, and this is the only trust agreement or other organizational
document currently in effect for Seller, and

 

(b)           the
certificate of incorporation and the by-laws or limited liability company agreement
(or similar organizational documents), as the case may be, of the Transferred
Subsidiaries, in each case, as presently in effect.  Schedule 4.1 sets forth a list of all
beneficiaries under the Trust Agreement. 
Seller is not in violation of any provision of its Trust Agreement and
none of the Transferred Subsidiaries is in violation of any provision of its
by-laws or limited liability company agreement (or other similar organization
document), as applicable, except in each case for any such violation that is
not reasonably likely to have a Material Adverse Effect or materially impair or
delay its ability to perform its obligations hereunder or under the Ancillary
Agreements or Bill of Sale, as applicable.

 

Section 4.2             Authority
and Authorization; Advice.

 

(a)           Seller
has all requisite power and authority and has taken all action under its Trust
Agreement necessary to duly and validly execute and deliver this Agreement,
each of the Ancillary Agreements to which it is a party, and the Bill of Sale,
to perform its obligations hereunder and thereunder, and to consummate the
transactions contemplated hereby and thereby. 
The execution, delivery and performance of this Agreement and each of
the Ancillary Agreements to which it is a party and the Bill of Sale by Seller
has been duly and validly
authorized and no additional trust authorization or consent is required in this
respect.

 

(b)           Each
of the Transferred Subsidiaries has all requisite power and authority and has
taken all action under its certificate of incorporation, limited liability
company agreement, by-laws and any other organizational documents, as the case
may be, necessary in order to duly and validly execute and deliver each of the
Ancillary Agreements to which such Transferred Subsidiary is a party, and in
the case of LLC, the Bill of Sale, to perform its obligations thereunder, and
to consummate the transactions contemplated for it hereby and thereby.  The execution, delivery and performance of
each of the Ancillary Agreements by such Transferred Subsidiary, and, the Bill
of Sale by the LLC, when executed, delivered and performed, will have been duly and validly authorized and no
additional corporate or limited liability company authorization or consent will
be required in this respect.

 

(c)           This
Agreement is, and when executed and delivered, each of the Ancillary Agreements
and the Bill of Sale will be, a valid and legally binding obligation of each of
Seller and the Transferred Subsidiaries party thereto, enforceable against each
of Seller and the Transferred Subsidiaries party thereto in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors’ rights and to general equitable principles.

 

7

 

Section 4.3             Title
to Transferred Subsidiaries.

 

(a)           Schedule
4.3(a) sets forth a list of all the Subsidiaries of Seller, including LLC
and EPE and each of their direct and indirect Subsidiaries and any other Person
in which Seller or any of its Subsidiaries has any ownership interest. Each of
the Transferred Subsidiaries is a corporation or limited liability company, as
the case may be, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization and has all requisite
corporate or limited liability company power and authority to own and operate
its assets and to carry on the Business as presently conducted and is qualified
to do business and is in good standing as a foreign corporation or foreign
limited liability company in each jurisdiction where the ownership or operation
of its assets or conduct of the Business requires such qualification, except
where the failure to be so is not reasonably likely to have a Material Adverse
Effect.

 

(b)           Schedule
4.3(b) sets forth for each Transferred Subsidiary the amount of its
authorized capital stock or limited liability company interests or other equity
interests and the record and beneficial owners of its outstanding capital stock
or limited liability company interests or other equity interests, as the case
may be.

 

(c)           Seller
and the Transferred Subsidiaries, as the case may be, own all right, title and
interest in and to, all outstanding stock and limited liability company
interests or other equity interests of the Transferred Subsidiaries, as set
forth on Schedule 4.3(b), free from Encumbrances other than restrictions
on transfer under state and federal securities laws and Encumbrances related to
any Outstanding Indebtedness.

 

(d)           All
of the outstanding stock and limited liability company interests or other
equity interests of the Transferred Subsidiaries have been duly authorized and
validly issued, and are fully paid and non-assessable.  There are no bonds, debentures, notes or
other Indebtedness, in any such case having general voting rights (or
convertible into securities or instruments having such rights) of the
Transferred Subsidiaries issued and outstanding.

 

(e)           There
are no preemptive or other outstanding rights, options, warrants, conversion
rights, stock appreciation rights, redemption rights, repurchase rights,
agreements, arrangements or commitments of any character under which the
Transferred Subsidiaries are or may become obligated to issue or sell, or
giving any Person a right to subscribe for or acquire, or any way dispose of
any shares of the capital stock or limited liability company interests or other
equity interests, or any securities or obligations exercisable or exchangeable
for or convertible into any shares of the capital stock or limited liability
company interests or other equity interests of the Transferred Subsidiaries, as
the case may be, and no securities or obligations evidencing such rights are
authorized, issued or outstanding, other than Encumbrances related to any
Outstanding Indebtedness.  The
outstanding stock and limited liability company interests or other equity
interests of the Transferred Subsidiaries, as the case may be, are not subject
to any voting trust agreement or other agreement or commitment restricting or
otherwise relating to the voting, dividend rights or disposition of such stock
or limited liability company interests or other equity interests, other than
Encumbrances related to

 

8

 

any Outstanding Indebtedness.  There are no phantom stock or similar rights
providing economic benefits based, directly or indirectly, on the value or
price of the stock or limited liability company interests or other equity
interests, as the case may be, of the Transferred Subsidiaries.  There are no outstanding obligations or other
commitments of the Transferred Subsidiaries to make any investment (in the form
of a loan, capital contribution or other obligation to provide funds) in, any
other Person (other than another Transferred Subsidiary that is wholly owned by
Seller or a Transferred Subsidiary).

 

(f)            Upon
consummation of the transactions contemplated by this Agreement, and assuming
that Publico has acquired the EPE Shares and the LLC Interests in good faith
without “notice of any adverse claim” (as defined in the Uniform Commercial
Code as in effect in the State of Delaware) with respect to the EPE Shares or
the LLC Interests at the time of such purchase, Publico will acquire the EPE
Shares and the LLC Interests free of any “adverse claim,” other than
Encumbrances related to any Outstanding Indebtedness.

 

(g)           Except
as otherwise contemplated by this Agreement or any of the Ancillary Agreements,
neither Seller nor any Transferred Subsidiary owns any shares of capital stock
of Publico.

 

Section 4.4             Consents
and Approvals.  Except (a) for any
filings and or notices required pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the “HSR Act”) or other
Competition Laws or (b) as set forth on Schedules 4.4 or 5.4, no
consent, approval, waiver or authorization is required to be obtained by Seller
from, and no notice or filing is required to be given by Seller, to or made by
Seller with, any Governmental Entity, similar regulatory authority or court in
connection with the execution, delivery and performance by Seller of this
Agreement, other than in all cases where the failure to obtain such consent,
approval, waiver or authorization, or to give or make such notice of filing is
not, individually or in the aggregate, reasonably likely to materially impair
or delay the ability of Seller to effect the Closing or effect the transactions
contemplated hereby.

 

Section 4.5             Noncontravention.  Except as set forth on Schedule 4.5,
the execution, delivery and performance by Seller of this Agreement, by Seller
and LLC of the Bill of Sale, and by Seller and each of the Transferred
Subsidiaries of each of the Ancillary Agreements to which it is a party, and
the consummation of the transactions contemplated hereby and thereby, does not
and will not:

 

(i)            violate
any provision of the Trust Agreement or other organizational documents of
Seller, EPE, or LLC;

 

(ii)           result
in a breach of or default under, require notice or consent under (or give rise
to any right of payment, termination, cancellation or acceleration under) any
of the terms, conditions or provisions of any Contract, except for such
breaches or defaults (or rights of termination, cancellation or acceleration) as
to which requisite waivers or consents have been obtained, and

 

9

 

(iii)          assuming
the consents, approvals, waivers, authorizations, notices and filings set forth
on Schedules 4.4 and 5.4 are granted or made, as the case may be,
violate or result in a breach of or constitute a default under any Law to which
Seller or the Transferred Subsidiaries is subject;

 

other than in
the cases of clauses (ii) and (iii), any violation, breach or default, or any
required consent or change in rights, which is not reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect or
materially impair or delay the ability of Seller to effect the Closing or
effect the transactions contemplated hereby and provided, that no
representation is made with respect to any matters relating to Environmental
Laws, which are exclusively governed by and the subject of Section 4.13.

 

Section 4.6             Sufficiency
of Assets.

 

(a)           Except
as otherwise provided in this Agreement or any of the Ancillary Agreements, the
assets, properties and rights of the Transferred Subsidiaries will constitute,
upon Closing, all the assets, properties and rights necessary to conduct the
Business, in all material respects, immediately following the Closing as such
Business was conducted on September 15, 2004 (other than the Excluded Assets).

 

(b)           The
Beneficiary does not conduct the Business through any entity other than Seller
or a Transferred Subsidiary.

 

Section 4.7             Financial
Statements; No Contingent Liabilities.  Set
forth on Exhibit J is a copy of the unaudited balance sheet as of
December 31, 2003 and September 30, 2004 and the related unaudited statements
of income, changes in stockholders’ equity and cash flows for the Business for
the fiscal year, and the nine month period, then ended, which have been
prepared by Seller in accordance with GAAP, consistently applied, to the extent
reasonably possible and otherwise in accordance with Seller’s and its
accountants and advisors best judgment, and which fairly present in all
material respects the financial condition and results of operations of the
Business as of the dates thereof, subject to normal year-end adjustments that
are not material in amount or effect and the absence of footnotes and similar
presentation items therein (the “Unaudited Financial Statements”).  Except as reflected, reserved against or
otherwise disclosed in the Unaudited Financial Statements, the Business does
not have any liabilities or obligations of any nature (absolute, accrued,
fixed, contingent or otherwise) required by GAAP to be set forth on a balance
sheet of the Business, other than liabilities or obligations that are not
material to the Business, taken as a whole.

 

Section 4.8             Litigation
and Claims.  Except as set forth on Schedule
4.8, there is no, and within the past 2 years, there has not been, any
civil, criminal or administrative action, suit, demand, claim, hearing,
proceeding or investigation pending or, to Seller’s Knowledge, threatened,
against Seller in respect of the Business, or against the Transferred
Subsidiaries, or any Transferred Subsidiaries’ directors, officers, agents or
employees (in their respective capacities as such) that seeks equitable relief
or involves claims of more than $75,000 individually or more than $1,000,000 in
the aggregate.

 

10

 

Neither Seller
nor any Transferred Subsidiaries, nor, to Seller’s Knowledge, any of their
respective directors, officers, agents or employees (in their respective
capacities as such), is subject to any Order that is reasonably likely to have
a Material Adverse Effect.  No
representation is made with respect to any matters relating to Environmental
Laws, which are exclusively governed by and the subject of Section 4.13.

 

Section 4.9             Taxes.

 

(a)           For
the purpose of this Section 4.9, references to EPE shall be deemed to include
any predecessor to EPE or any Person from which EPE incurs transferee liability
for Taxes.  With respect to the EPE
Shares, except as set forth on Schedule 4.9(a):

 

(i)            EPE and its
Subsidiaries have duly filed (and prior to the Closing Date will duly
file), on a timely basis taking into account extensions, all tax returns,
reports, statements or estimates, including information returns (“Tax Returns”)
that were due or will be due prior to the Closing Date, except where such
failure is not reasonably likely to have a Material Adverse Effect.  Such Tax Returns have been, or will be, true,
correct and complete in all material respects. 
No claims, investigations, or adjustments relating to such Taxes have been
made or proposed in writing by any taxing authority and no written claim has
ever been made by an authority in a jurisdiction where EPE or any of its
Subsidiaries does not file Tax Returns that EPE or any of its Subsidiaries is
or may be subject to taxation by that jurisdiction.  All Taxes reflected on such Tax Returns as
due and payable have been paid;

 

(ii)           The Unaudited Financial
Statements reflect adequate reserves in accordance with GAAP (without regard to
any amounts reserved for deferred Taxes) for all liabilities for Taxes accrued
by EPE but not yet paid for all Tax periods and portions thereof through
September 30, 2004.  Since September 30,
2004, EPE has not incurred any liability for Taxes other than in the ordinary
course of business consistent with past custom and practice;

 

(iii)          EPE is not, and never
has been, an S corporation within the meaning of Section 1361(a) of the Code,
or within the meaning of any other laws (applicable to EPE) comparable to
Section 1361(a) of the Code;

 

(iv)          None of EPE or its
Subsidiaries has a permanent establishment in any foreign country;

 

(v)           There has been no
waiver granted or requested of any applicable statute of limitations or
extension of the time for the assessment of any Tax of EPE or its Subsidiaries;

 

11

 

(vi)          There are no liens or
encumbrances for any Tax that is due and payable upon any EPE Shares or any
asset of EPE;

 

(vii)         No power of attorney granted
by EPE is currently in force with respect to any matter relating to Taxes that
could affect EPE;

 

(viii)        Neither EPE nor any of its
Subsidiaries will be required to include any item of income or gain in, or
exclude any item of deduction or loss from, taxable income for any taxable
period (or portion thereof) ending after the Closing Date as a result of any:
(u) closing agreement (as defined in Section 7121 of the Code) or any
similar provision of any state, local, or foreign Tax law; (v) private letter
ruling; (w) change in method of accounting for a taxable period ending on or
prior to the Closing Date; (x) intercompany transaction or excess loss account
described in Treasury Regulations under Section 1502 of the Code (or any
corresponding or similar provision of state, local or foreign income Tax law);
(y) installment sale or open transaction disposition made on or prior to the
Closing Date; or (z) prepaid amount received on or prior to the Closing Date;

 

(ix)           Neither EPE nor any of
its Subsidiaries (x) has been a member of an affiliated group filing a
consolidated federal income Tax Return (other than a group the common parent of
which was EPE) or (y) has any Liability for the Taxes of any Person (other
than EPE or any of its Subsidiaries) under Treasury Regulation 1.1502-6
(or any similar provision of state, local, or foreign law), as a transferee or
successor, by contract, or otherwise;

 

(x)            None of EPE or its
Subsidiaries is a party to, is bound by, nor has any obligation under, any Tax
sharing, Tax indemnity or similar agreement;

 

(xi)           EPE is a “small
business corporation” as defined in Section 280G(b)(5) of the Code;

 

(xii)          EPE has not filed a
consent pursuant to Section 341(f) of the Code or agreed to have Section
341(f)(2) of the Code apply to any disposition of any asset owned by EPE;

 

(xiii)         EPE has not constituted a
“distributing corporation” in a distribution of stock qualifying for tax free
treatment under Section 355 of the Code;

 

(xiv)        The Seller Tax Certificate
provided in Section 3.2(c) is complete and accurate; and

 

12

 

(xv)         None of the assets of EPE
or its Subsidiaries (i) is tax-exempt use property within the meaning of
Section 168(h) of the Code or (ii) directly or indirectly secures any debt, the
interest on which is exempt under Section 103(a) of the Code.

 

(b)           With
respect to the Contributed Assets, except as set forth on Schedule 4.9(b):

 

(i)            Seller has duly
filed or caused to be filed (and prior to the Closing Date will duly file), on
a timely basis taking into account extensions, all Tax Returns that were due or
will be due prior to the Closing Date relating to the Contributed Assets,
except where such failure to file is not reasonably likely to have a Material
Adverse Effect.  Such Tax Returns have
been, or will be, true, correct and complete in all material respects.  No claims, investigations, or adjustments
relating to Taxes relating to the Contributed Assets have been made or proposed
in writing by any taxing authority and no written claim has been made by a
taxing authority in a jurisdiction where Seller does not file Tax Returns that
Seller is or may be subject to taxation relating to the Contributed Assets by
that jurisdiction.  All Taxes reflected
on such Tax Returns as due and payable have been paid;

 

(ii)           Seller is not subject
to any private letter ruling or other comparable rulings by any taxing
authorities;

 

(iii)          No closing agreement (as
defined in Section 7121 of the Code, or any similar provision of any state,
local, or foreign law) has been entered into by or with respect to Seller;

 

(iv)          Seller is not a party
to, is not bound by, and does not have any obligation under, any Tax sharing,
Tax indemnity or similar agreement;

 

(v)           There has been no
waiver granted or requested of any applicable statute of limitations or
extension of the time for the assessment of any Tax of Seller relating to the
Contributed Assets;

 

(vi)          Seller has withheld all
amounts required to be withheld, of payments of compensation and payments to
non-U.S. Persons and remitted such amounts to the proper authorities, and has
paid all employer contributions and premiums, in compliance with all applicable
laws in all material respects;

 

(vii)         There are no liens or
encumbrances for any Tax that is due and payable upon any Contributed Asset;

 

13

 

(viii)        None of the Contributed
Assets (i) constitutes “tax-exempt use property” within the meaning of
Section 168(h)(1) of the Code, (ii) is “tax-exempt bond financed property”
within the meaning of Section 168(g) of the Code, (iii) is subject to
Section 168(g)(1)(A) of the Code, or (iv) is “limited use property”
(as the term is used in Rev. Proc. 2001-28);

 

(ix)           Seller (x) has not been
a member of an affiliated group filing a consolidated federal income tax return
(other than a group the common parent of which was Seller) and (y) has no
liability for the Taxes of any Person under Treas. Reg. §1.1502-6 (or any
similar provision of state, local, or foreign law), as a transferee or
successor, by contract, or otherwise; and

 

(x)            Seller has no
intention or plan to transfer or otherwise engage in a transaction involving
Publico stock that would cause the Transferors collectively, not to have
Section 351 Control.

 

Section 4.10           Employee
Benefits.

 

(a)           Schedule
4.10(a) sets forth a list of each of the following, if any, which is
sponsored, maintained or contributed to by Seller or EPE for the benefit of the
current or former employees of the Transferred Subsidiaries (collectively, the “Employees”)
or agents, or current or former directors of Seller or the Transferred
Subsidiaries or with respect to which Seller or the Transferred Subsidiaries
has or could reasonably be expected to have any actual or contingent liability:  each “employee benefit plan,” as such term is
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974
(“ERISA”), and any trust created thereunder; and each personnel policy,
employee manual or other statements of rules or policies concerning employment,
stock option plan, stock purchase plan, stock appreciation rights plan,
collective bargaining agreement, bonus plan or arrangement, incentive award
plan or arrangement, workers’ compensation, vacation and sick leave policy,
fringe benefit plan, life, health, dental, vision, hospitalization or
disability plan, severance pay policy or agreement, deferred compensation
agreement or arrangement, employment or consulting agreement, change in control
arrangement, contracts and commitments of any type whatsoever concerning
employment, and each other material employee benefit plan, agreement, trust,
arrangement, program, practice, or understanding including any compensation
arrangement relating to the transactions contemplated hereby, whether oral or
written (the “Benefit Plans”).

 

(b)           True,
correct and complete copies of each of the Benefit Plans (if any), and related
trusts, if applicable, including all amendments thereto, summary plan
descriptions, the three most recent reports on Form 5500, Internal Revenue
Service determination letter, if applicable, and all documents and contracts,
investment

 

14

 

management agreements, and recordkeeping
agreements related thereto, have been furnished or made available to Purchasing
LLC.

 

(c)           Except
as otherwise set forth in Schedule 4.10(c),

 

(i)            Neither Seller nor the
Transferred Subsidiaries contributes to or has an obligation to contribute to,
or has at any time within the last six calendar years had an obligation to contribute
to a multiemployer plan within the meaning of Section 3(37) of ERISA (“Multiemployer
Plan”), a multiple employer plan within the meaning of Section 413(b) and
(c) of the Code, or a “single-employer plan,” within the meaning of Section
4001(a)(15) of ERISA.

 

(ii)           Seller and the
Transferred Subsidiaries have substantially performed all obligations,
including those to a Governmental Entity, whether arising by operation of law
or by contract, required to be performed by them in connection with the Benefit
Plans;

 

(iii)          Each of the Benefit
Plans 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;

 

(iv)          There are no actions,
suits or claims pending (other than routine claims for benefits) or, to the
Knowledge of Seller, threatened against, or with respect to, any of the Benefit
Plans or their assets;

 

(v)           None of the Benefit
Plans or any trust created thereunder or with respect thereto has engaged in
any “prohibited transaction” as such term is defined in Section 4975 of the
Code and Section 406 of ERISA, and, to the Knowledge of the Seller, there have
been no acts or omissions by Seller or the Transferred Subsidiaries which have
given rise to or could reasonably be expected to give rise to material fines, penalties,
taxes or related charges under Section 502 of ERISA or Chapters 43, 47, 68 of
100 of the Code;

 

(vi)          There is no matter
pending (other than routine qualification determination filings) with respect
to any of the Benefit Plans before the Internal Revenue Service, the Department
of Labor, the PBGC or any other Governmental Entity;

 

(vii)         None of Seller or the
Transferred Subsidiaries has any obligation to provide health benefits or death
benefits to former employees, or to present employees after termination of
their employment,

 

15

 

except as
specifically required by Law.  Seller and
the Transferred Subsidiaries have each complied in all material respects with
the notice and continuation coverage requirements, and all other requirements,
of Section 4980B of the Code and Parts 6 and 7 of Title I of ERISA, and the
regulations thereunder, and any other applicable Law with respect to each
welfare plan of Seller or the Transferred Subsidiaries; and

 

(viii)        Neither the execution and
delivery of this Agreement nor the consummation of any or all of the
transactions contemplated hereby will: (A) entitle any current or former
employee or director of Seller or Transferred Subsidiaries to severance pay,
unemployment compensation or any similar payment, (B) accelerate the time of
payment or vesting or increase the amount of any compensation due to any such
employee or former employee, or (C) directly or indirectly result in any
payment made to or on behalf of any person to constituting a “parachute payment”
within the meaning of Section 280G of the Code.

 

Section 4.11           Labor
Matters.

 

(a)           Except
as set forth in Schedule 4.11(a):

 

(i)            there are no material
claims, controversies or litigation, pending or, to the Knowledge of Seller,
threatened between Seller or the Transferred Subsidiaries and any of their
respective Employees;

 

(ii)           none of Seller or the
Transferred Subsidiaries are a party to or bound by any collective bargaining
agreement or other labor union contract applicable to Employees employed by
Seller or the Transferred Subsidiaries, nor, to the Knowledge of Seller, are
there any activities or proceedings of any labor union to organize any such
Employees;

 

(iii)          there is no strike,
slowdown, work stoppage or lockout, or, to the Knowledge of Seller, threat
thereof, by or with respect to any employees of Seller or the Transferred
Subsidiaries;

 

(iv)          none of the Seller or
the Transferred Subsidiaries has received written notice of any material claim
or proceeding pending before any federal, state, local or foreign agency
responsible for the enforcement of labor or employment laws relating to the
Business, and, to Seller’s Knowledge, no investigation relating to any such
material claim is in progress; and

 

(v)           none of Seller or the
Transferred Subsidiaries is a party to or bound by any labor, employment or
severance agreement with any Employee or former Employee concerning terms and
conditions of employment that is not set forth on Schedule 4.11.

 

16

 

(b)           Schedule
4.11(b) sets forth a list of all Employees of the Transferred Subsidiaries
with an annual salary over $75,000 inclusive of any bonuses during the twelve
months ended on the date hereof, and each such person’s date of hire, accrued
vacation and accrued sick leave.  Seller
and the Transferred Subsidiaries are in compliance with all applicable laws and
contracts relating to the employment of employees, including those related to
wages, hours, eligibility for employment, collective bargaining and the payment
and withholding of taxes and other sums as required by the appropriate
Governmental Entity, except where the failure so to comply, in the aggregate,
has not been and is not reasonably likely to have a Material Adverse
Effect.  None of Seller or the
Transferred Subsidiaries is a party to, or otherwise bound by, any consent
decree with, or citation by, any Governmental Entity relating to employees or
employment practices.

 

Section 4.12           No
Default; Compliance with Laws. 
Except as set forth on Schedule 4.12:

 

(a)           Each
of Seller and the Transferred Subsidiaries is in compliance with applicable
Law, Orders, and enforceable arbitration awards, concessions and grants, except
where the failure so to comply, in the aggregate, is not reasonably likely to
have a Material Adverse Effect.

 

(b)           Neither
Seller nor any Transferred Subsidiary, has received any written communication
from a Governmental Entity that alleges that the Business is not being
conducted in compliance in all material respects with all applicable material
Laws.

 

Section 4.13           Environmental
Matters.  Except as set forth on Schedule
4.13:

 

(a)           Environmental
Reports.  Schedule 4.13 sets
forth a list of all environmental reports, audits, assessments or studies in
the possession of Seller and the Transferred Subsidiaries with respect to any
of the properties used in connection with the conduct of the Business. To
Seller’s Knowledge, all such reports, disclosures, notifications, applications
and plans are true, accurate and complete in all material respects.

 

(b)           Compliance.  To Seller’s Knowledge, except as set forth on
Schedule 4.13 or described with specificity and in reasonable detail in
the reports and surveys listed on such schedule (collectively, the “Environmental
Reports”) Seller and the Transferred Subsidiaries are in compliance with
all Environmental Laws, permits, authorizations and approvals relating to the
Business, except as is not reasonably likely to have a Material Adverse Effect.

 

(c)           Notices.  To Seller’s Knowledge, none of Seller, the
Transferred Subsidiaries or any legally responsible predecessor thereof, has
received any written claim, notice, complaint, Order or request for information
from any Governmental Entity or private party (i) alleging any violation of, or
asserting any non-compliance with any Environmental Law or Permit, (ii)
asserting potential or actual Liability under Environmental Laws for matters
relating to Hazardous Substances contamination or

 

17

 

exposure or (iii) requesting information or
investigation or clean-up of any site under any Environmental Law.

 

(d)           Hazardous
Materials.  To Seller’s Knowledge and
except as set forth in the Environmental Reports: (i) no Hazardous Materials
have been used, generated, stored or disposed of by Seller or the Transferred
Subsidiaries at or from any property owned, operated or leased by the
Transferred Subsidiaries in violation of any Environmental Laws, except as is
not reasonably likely to have a Material Adverse Effect; and (ii) there has
been no Release (as defined in CERCLA) or Hazardous Materials at or transported
from any of the properties owned, operated or leased by the Transferred
Subsidiaries or any legally responsible predecessor thereof that has or could
reasonably be expected in the future to give rise to the incurrence of response
costs, except as is not reasonably likely to have a Material Adverse Effect.

 

(e)           Storage.  To Seller’s Knowledge and except as set forth
in the Environmental Reports: (i) there are no underground storage tanks as
defined under Environmental Laws, on any of the properties owned or leased by
the Transferred Subsidiaries; and (ii) there is not now, nor has there been
previously, located on any of the properties owned or leased by the Transferred
Subsidiaries any areas or vessels used or intended for the treatment, storage
or disposal of Hazardous Materials. 
Neither Seller nor, to Seller’s Knowledge, any of the Transferred
Subsidiaries have transported, or arranged for the transportation of, storage,
treatment or disposal, by contract, agreement or otherwise, of any Hazardous
Material at or to any location including any location stored and used for the
treatment, storage or disposal of Hazardous Materials, other than minor
quantities of Hazardous Materials used in connection with the Seller’s or the
Transferred Subsidiaries’ business in accordance with all Environmental Laws.

 

(f)            Encumbrances.  To the Seller’s Knowledge, no Governmental
Entity has obtained or asserted an Encumbrance upon the assets of the Business
as a result of any Release, use or cleanup of any Hazardous Material for which
Seller or the Transferred Subsidiaries is legally responsible, nor has any such
Release, use or cleanup occurred which could result in the assertion or
creation of such an Encumbrance.

 

Section 4.14           Contracts.

 

(a)           Schedule
4.14(a), sets forth a list of all Material Contracts.

 

(b)           Except
as set forth on Schedule 4.14(b),

 

(i)            the Material Contracts
are valid, binding and in full force and effect in all material respects and
are enforceable by Seller or the Transferred Subsidiaries party thereto, as
applicable, in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights and to general
equitable principles;

 

18

 

(ii)           Seller and each
Transferred Subsidiary party thereto are not (with or without the lapse of time
or the giving of notice, or both) in breach or default thereunder, except for
such breaches or defaults as are not material to the contract as to which there
is a breach or default, and, to Seller’s Knowledge, no other party to any such
Material Contract is (with or without the lapse of time or the giving of
notice, or both) in breach or default thereunder, except for such breaches or
defaults as are not material to the contract as to which there is a breach or
default;

 

(iii)          neither Seller nor the
Transferred Subsidiaries have received any written notice of the intention of
any party to terminate early any Material Contract; and

 

(iv)          complete and correct
copies of all Material Contracts, together with all material modifications and
amendments thereto, have been made available to Purchasing LLC.

 

(c)           Except
(i) as set forth on Schedule 4.14(c) and (ii) for liabilities or
obligations related to the Outstanding Indebtedness, none of the Transferred
Subsidiaries are liable for, a party to, or otherwise subject to, and none of
the assets of the Business are subject to, any material guarantees, whether
direct or indirect, contingent, or otherwise, with respect to any Indebtedness
and none of the Transferred Subsidiaries or assets of the Business are subject
to any Indebtedness of other Persons which are secured by any Encumbrance on
any Transferred Subsidiary or material asset of the Business, in each case,
other than:

 

(i)            liabilities or
obligations of any Transferred Subsidiary to another Transferred Subsidiary;

 

(ii)           the Transferred
Subsidiaries’ benefit obligations with respect to the Benefit Plans listed on Schedule
4.10(a);

 

(iii)          liabilities or
obligations listed on the unaudited balance sheet in the Unaudited Financial
Statements as of September 30, 2004; or

 

(iv)          liabilities or
obligations incurred since September 30, 2004, that are not material to the
Business, taken as a whole.

 

(d)           Other
than each Material Contract related to the Outstanding Indebtedness, Schedule
4.14(d) sets forth each Material Contract with respect to which the consent
of the other party or parties thereto must be obtained by virtue of the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby to avoid the invalidity of the transfer of
such Contract, the termination thereof or any material breach, violation or
default thereunder or any other material change or modification to the terms
thereof, except where the failure to obtain such consent is not material to the
operation of the Business.

 

19

 

(e)           No
representation is made in this Section 4.14 with respect to any Intellectual
Property, which is exclusively governed by and the subject of Section 4.20.

 

Section 4.15           Title
to Tangible Personal Property. 
Except as set forth on Schedule 4.15, as of the date hereof,
Seller or the Transferred Subsidiaries, as the case may be, have, and the
Transferred Subsidiaries will have at Closing, good and valid title to, or a
valid leasehold interest in or right to use, all material Tangible Personal
Property, other than property that is obsolete or has been retired or disposed
of in the Ordinary Course of Business, free and clear of any Encumbrances,
other than (i) Permitted Encumbrances, or (ii) Encumbrances related to the
Outstanding Indebtedness.

 

Section 4.16           Title
to Owned and Leased Real Properties; Absence of Encumbrances.

 

(a)           Schedule
4.16(a) sets forth a list of all Owned Real Property and all Leased Real
Property used by Seller or the Transferred Subsidiaries to conduct the Business
as of the date hereof.  Except as set
forth on Schedule 4.16(a), none of the Owned Real Property or Leased
Real Property is leased or licensed by Seller or the Transferred Subsidiaries
to any other Person.

 

(b)           As
of the date hereof, except as disclosed on Schedule 4.16(b), Seller or
the Transferred Subsidiaries have, and the Transferred Subsidiaries will have
at Closing, marketable title to, or, with respect to leasehold interests, a
valid leasehold interest in, the Owned Real Property and the Leased Real
Property, as the case may be, free and clear of all Encumbrances, except for:

 

(i)            Permitted Encumbrances
and such imperfections of title and easements as do not and are not reasonably
likely, individually or in the aggregate, to materially impair the conduct of
the Business as conducted as of the date hereof, and

 

(ii)           Encumbrances related to
the Outstanding Indebtedness.

 

(c)           Neither
Seller nor any Transferred Subsidiary has received written notice of any pending
or threatened appropriation, condemnation, eminent domain or like proceedings
relating to the Owned Real Property and the Owned Real Property and the Leased
Real Property have not suffered any material damage by fire, casualty or
otherwise which has not heretofore been repaired and restored in all material
respects, except in any such cases as do not and are not reasonably likely,
individually or in the aggregate, to materially impair the conduct of the
Business as conducted as of the date hereof.

 

(d)           Except
as set forth in Schedule 4.16(d):

 

(i)            Seller does not have
any Knowledge that there is a default (or event that, with or without the
giving of notice or the lapse of time or both, could constitute a default) that
exists under the leases for the Leased

 

20

 

Real Property
or the leases for the Owned Real Property which is leased to third parties or
the deeds of trust encumbering the Real Property,

 

(ii)           Seller does not have
any Knowledge that there are any adverse or other parties in possession of the
Real Property or the Mansion Property, or of any part thereof or any third
party has been granted any license, lease, or other right relating to the use
or possession of the Real Property or the Mansion Property, or any part
thereof, except tenants under written leases;

 

(iii)          neither Seller nor any
Transferred Subsidiary has received written notice that there are any material
building code or other code enforcement violations with respect to any portion
of the Real Property or the Mansion Property; and

 

(iv)          neither Seller nor any
Transferred Subsidiary has received written notice that there are any material
unpaid impact fees, special assessments and permit fees with respect to the
Real Property or the Mansion Property, if applicable.

 

(e)           Neither
Seller nor the Transferred Subsidiaries have granted any rights, options,
rights of first refusal, or any other agreements of any kind, which are
currently in effect, to purchase or to otherwise acquire the Real Property or
the Mansion Property or any part thereof or any interest therein, except the
rights of Purchasers under this Agreement.

 

Section 4.17           Absence
of Material Adverse Effect; Ordinary Course of Operations and Capital
Expenditures.  Except (a) as reflected,
reserved against or otherwise disclosed on the Unaudited Financial Statements
or (b) as disclosed on Schedule 4.17 , since September 30, 2004:

 

(i)            Seller and the
Transferred Subsidiaries have conducted the Business only in the Ordinary
Course of Business, except as would be permitted by this Agreement if it
applied during all of such period;

 

(ii)           the Business has not
experienced any event, change or condition that has had or is reasonably likely
to have a Material Adverse Effect; and

 

(iii)          Seller has not taken, or
permitted the Transferred Subsidiaries to take, any of the actions or permitted
to occur any of the events specified in Section 6.1(b) through 6.1(t).

 

Section 4.18           Insurance.  Schedule 4.18 sets forth a list of all
material insurance policies covering the properties, assets, employees and
operations of the Business (including policies providing property, casualty,
liability, and workers’ compensation coverage) or renewals thereof are currently in full force and effect
insuring the Business.  All

 

21

 

premiums due
and payable in respect of such policies have been paid in full, and no default
or other circumstance exists which would create the substantial likelihood to
Seller’s Knowledge that any such policy will be cancelled, or will not be
renewed, prior to the Closing Date, or thereafter other than the transactions
contemplated by this Agreement.  As of
the Closing Date, the named insured under all such insurance policies shall be
one or more Transferred Subsidiaries and Seller shall no longer be listed as a
named insured or additional named insured on any such policy.

 

Section 4.19           Permits.

 

(a)           Schedule
4.19 sets forth a list of all Permits.

 

(b)           Except
as set forth on Schedule 4.19,

 

(i)            as of the date hereof,
Seller and the Transferred Subsidiaries possess, and as of the Closing Date,
the Transferred Subsidiaries will possess, all Permits,

 

(ii)           each such Permit is
valid and in full force and effect and will not be invalidated or otherwise
negatively affected by consummation of the transactions contemplated by this
Agreement, and

 

(iii)          to Seller’s Knowledge,
no violations are or have been recorded in respect of any Permit, no event has
occurred that is reasonably likely to allow revocation or termination or the
impairment in any material respect of Seller’s or the Transferred Subsidiaries’
rights with respect to any such Permit, and no proceeding is pending or, to
Seller’s Knowledge, threatened, to revoke, limit or enforce any such Permit,

 

except in the
case of clauses (i) and (ii) above, where the failure to possess any such
Permit is not reasonably likely to have a Material Adverse Effect.

 

Section 4.20           Intellectual
Property.

 

(a) (i)       It
is the intention of the Parties to include in this transaction all Intellectual
Property Rights in which Seller or a Transferred Subsidiary owns any right,
title or interest and all Intellectual Property Rights in which Seller or a
Transferred Subsidiary has any right, license or permission to use, or uses, in
any manner in connection with the Business as conducted as of the date hereof
(the “Seller Intellectual Property Rights”). Except as noted on Schedules
4.20(e)(i), 4.20(f)(i), 4.20(g)(i), 4.20(h)(i), 4.20(i),
4.20(j), 4.20(k) and 4.20(l), no part of Seller’s share of
such Intellectual Property Rights has been assigned or transferred by Seller to
any third party other than a Transferred Subsidiary or otherwise pledged or
encumbered, other than (A) Encumbrances related to Outstanding Indebtedness,
(B) non-exclusive licenses, (C) exclusive licenses with an exclusivity term of
less than 2 years, (D) Permitted Encumbrances (without giving effect to clause
(x) in the definition of Permitted

 

22

 

Encumbrances)
and (E) Seller’s or a Transferred Subsidiary’s royalty payment obligations
incurred in the Ordinary Course of Business (clauses A through E, the “Permitted
Exceptions”).

 

(ii) Except for commonly available
over-the-counter or off-the-shelf license rights acquired to assist in
connection with the routine administrative operations of the Business, Schedule
4.20(a) sets forth and identifies those Seller Intellectual Property Rights
which Seller is able to identify, through the exercise of all reasonable care,
as of the date of this Agreement.

 

(b)           (i)            As
of the date of this Agreement, Seller or a Transferred Subsidiary is, and as of
the Closing Date a Transferred Subsidiary will be, to the extent set forth and
identified on the schedules listed below in this Section 4.20(b)(i), the owner
or the licensee of its respective share of all right, title and interest in and
to the following Intellectual Property Rights:

 

•      the
musical compositions (the “Compositions”) set forth and identified on Schedule
4.20(e)(i),

 

•      the
audio-visual recordings (the “Audio/Visual Masters”) set forth and
identified on Schedule 4.20(f)(i),

 

•      the
audio recordings (the “Audio Masters”) set forth and identified on Schedule
4.20(g)(i),

 

•      the
literary property (the “Written Works”) set forth and identified on Schedule
4.20(h)(i),

 

•      the
trademarks, service marks, trade dress and all other designations of origin,
trade names and all other forms of business names, and Internet domain names as
and to the extent applicable (collectively, the “Trademarks”) set forth
and identified on Schedules 4.20(i),

 

•      the
rights of publicity (including, without limitation, all name, sobriquet, voice,
signature, photograph, likeness and portrait rights as and to the extent
applicable) (collectively, the “Identity Rights”) set forth and
identified on Schedule 4.20(j),

 

•      the
rights in the photographs (collectively, the “Photographs”) set forth
and identified on Schedule 4.20(k) and

 

•      the
software and databases (collectively, the “Software”) set forth and
identified on Schedule 4.20(l).

 

23

 

(ii)           The
Intellectual Property Rights set forth on Schedules 4.20(e)(i), 4.20(f)(i),
4.20(g)(i), 4.20(h)(i), 4.20(i), 4.20(j), 4.20(k)
and 4.20(l) will constitute, upon Closing, such Intellectual Property
Rights as used to conduct the Business, in all material respects, as of the
date of the Letter of Intent.

 

(iii)          On
or before the Closing Date, Seller or such Transferred Subsidiary, as
applicable, shall have executed such documents as are required and allowed by
applicable law to fully and properly vest Seller’s respective share of all
right, title and interest in and to the Intellectual Property Rights set forth
on Schedules  4.20(e)(i), 4.20(f)(i), 4.20(g)(i), 4.20(h)(i),
4.20(i), 4.20(j), 4.20(k) and 4.20(l) in a
Transferred Subsidiary and shall have submitted same for recordation in the
U.S. Copyright Office and/or U.S. Patent and Trademark Office. The Parties
shall work in good faith both before and after the Closing to prepare and submit
for recordation in the applicable state, foreign or other registries for the
registration and recordation of such rights such documents as are required and
allowed by applicable law to fully and properly vest Seller’s respective share
of all right, title and interest in and to such rights in a Transferred
Subsidiary.

 

(c)           Schedule
4.20(c) sets forth and identifies:

 

(i)            all
lawsuits, actions and other formal claims relating to Seller Intellectual
Property Rights pending on or after January 1, 2003, which lawsuits, actions or
other formal claims were made by or on behalf of Seller or the Transferred
Subsidiaries;

 

(ii)           all
parties who have been the subject of cease and desist letters sent by or on
behalf of Seller or the Transferred Subsidiaries regarding Seller Intellectual
Property Rights who have not, to the Knowledge of Seller, ceased the complained
of conduct as of December 3, 2004; and

 

(iii)          any
other Persons Infringing, to the Knowledge of Seller, any Seller Intellectual
Property Rights within the two-year period prior to the date of this Agreement.

 

Except as set forth on Schedules
4.20(c)(i), (ii), and (iii), to the Knowledge of Seller, no
Person is Infringing any Seller Intellectual Property Rights.

 

(d)           Except
as set forth on Schedule 4.20(d), within the two-year period prior to
the date of this Agreement, there has been no claim, demand, suit, action or
other proceeding, or, to Seller’s Knowledge, any threat of the foregoing,
asserting that the Seller Intellectual Property Rights Infringe upon the
intellectual property or other rights of any third party.

 

(e)           Musical
Compositions.

 

24

 

(i)            Except
to the extent specifically set forth and identified on Schedule 4.20(e)(i),
(A) Seller or a Transferred Subsidiary is, and as of the Closing Date a
Transferred Subsidiary will be, the sole and exclusive owner or licensee of its
respective share of all right, title and interest in and to the Compositions,
including the lyrics and music thereof and all other rights in and to the
Compositions, and all claims and demands accrued or to accrue with respect to
the Compositions, and the copyrights and the future contingent renewal and
extended terms of copyrights in and to the Compositions, and all rights to secure
renewals and extensions of copyright, throughout the world, (B) (other than
royalty obligations of Seller under any “Songwriter Agreements” (as defined in
Section 4.20(e)(ii) below)), no person or business entity other than Seller or
a Transferred Subsidiary has or as of the Closing Date will have, or may
validly claim, a proprietary, administrative or participatory interest in any
Composition, and (C) Seller or a Transferred Subsidiary has a good and
marketable interest in and to the Compositions (to the extent of its respective
percentage interest reflected on Schedule 4.20(e)(i)), and no such
interest has been assigned, pledged or otherwise transferred or encumbered,
other than Permitted Exceptions. With respect to each instance in which a right
or interest is marked on Schedule 4.20(e)(i) as “unsettled,” all reasons
for such designation are listed on said Schedule 4.20(e)(i) and there
exist no other reasons for such designation.

 

(ii)           (A)          Except
to the extent specifically set forth and identified on Schedule 4.20(e)(i)
(including but not limited to those Compositions for which Schedule
4.20(e)(i) indicates agreements are missing), all of the grants of rights
and conveyances contained in the agreements or other instruments of transfer
between Seller (or any predecessor of Seller) and the writers and composers of
the Compositions (hereinafter sometimes referred to as the “Songwriters”),
and between Seller (or any predecessor of Seller) and publishers or other
grantors from whom Seller (or any predecessor of Seller) acquired rights in the
Compositions (“Grantors”), are in full force and effect (all such
agreements with Songwriters and Grantors, “Songwriter Agreements”).

 

(B)           Seller
has performed all of Seller’s material obligations under the Songwriter Agreements
in all material respects and is not in material breach of or in default with
respect to any such agreements in any material respect; and, without limitation
of the generality of the foregoing, Seller has accounted and paid or has caused
to have accounted and paid all royalties in accordance with the terms of the
Songwriter Agreements. To the extent any royalties due or owing to Songwriters
or other royalty participants have not been paid, such royalty monies are set
forth and identified on Schedule 4.20(e)(ii)(a).  To the extent any monies have been received
by or on behalf of Seller in connection with musical compositions or rights in
musical compositions not owned or controlled by Seller or a Transferred
Subsidiary, such monies are set forth and identified on Schedule
4.20(e)(ii)(b).

 

(iii)          Except
as set forth and identified on Schedule 4.20(e)(i), (A) none of Seller’s
or Transferred Subsidiaries’ copyright, administration or other rights under
the Songwriter Agreements or otherwise related to the Compositions are subject
to

 

25

 

termination or
reversion pursuant to the terms of such Songwriter Agreements.  Except as set forth and identified on Schedule
4.20(e)(i), neither Seller nor the Transferred Subsidiaries have received
any notices of termination provided under Sections 203 or 304 of the U.S.
Copyright Act as of the date of this Agreement, and (B) none of Seller’s or the
Transferred Subsidiaries’ copyright, administration or other rights under the
Songwriter Agreements are subject to termination or reversion pursuant to the
U.S. Copyright Act or the copyright laws of any other country or territory,
including, without limitation, the so-called British Reversionary Rights under
the copyright laws of the United Kingdom.

 

(iv)          (A)          Schedule
4.20(e)(iv)(A) sets forth all Songwriters and other royalty participants to
whom Seller or the Transferred Subsidiaries are obligated to account with
respect to exploitation of the Compositions.

 

(B)           Schedule
4.20(e)(iv)(B) sets forth any and all so-called “controlled composition”
clauses affecting the Compositions or other agreements which purport to fix the
compensation payable with respect to any uses of the Compositions below
industry norms.

 

(v)           Except
as provided in Schedule 4.20(e)(v), neither Seller nor the Transferred
Subsidiaries are bound in respect of the Compositions by any administration
agreement, subpublishing agreement, print agreement or other exclusive
agreement or exclusive license, which exclusive agreement or exclusive license
extends more than two years beyond the date of this Agreement.  All such agreements are assignable by Seller
or the Transferred Subsidiaries.  No
Person holds a power of attorney on behalf of Seller or the Transferred
Subsidiaries affecting, directly or indirectly, any of Seller’s or the
Transferred Subsidiaries’ interests in the Compositions, other than powers of
attorney customarily granted to administrators and subpublishers of music
publishing rights.

 

(vi)          Except
as provided in Schedule 4.20(e)(i), in each instance in which the U.S.
Copyright Act requires registration to prevent a work from entering the public
domain, certificates of copyright registration and, where the original term of
copyright has expired, in each instance in which the U.S. Copyright Act
requires registration as a condition of continuation of such copyright
protection, certificates of renewal copyright registration, in respect of the
Compositions have been issued by the United States Register of Copyrights and
said copyright and renewal copyright certificates were validly, duly and timely
applied for and remain valid and in full force and effect.  No action by or with the express authority or
express consent of Seller has been taken or omitted which would destroy or
impair protection of any of the Compositions under the United States Copyright
Law or other copyright law, or any other statutory or common law copyright laws
of any state or country.

 

(vii)         As
of the Closing Date, and except as otherwise set forth on Schedule
4.20(e)(vii), there are no material outstanding advances recoupable from
earnings of the Compositions made to Seller or any Transferred Subsidiary by
any

 

26

 

administrator,
foreign subpublisher, print or other exclusive licensee.  At no time within the year prior to the
Closing Date has Seller or any Transferred Subsidiary caused the acceleration
of income payable with respect to the Compositions or deferred any royalty
obligations or other credits or offsets to such income.

 

(f)            Audio/Visual
Masters.

 

(i)            With
respect to the Audio/Visual Masters set forth on Schedule 4.20(f)(i),
Seller or a Transferred Subsidiary owns the full right, title and interest
(including any income interest) set forth in the agreements listed on Schedule
4.20(f)(i).  Seller or a Transferred
Subsidiary owns and has a good and marketable interest in and to each of the
Audio/Visual Masters to the extent of Seller’s or such Transferred Subsidiary’s
interest identified on Schedule 4.20(f)(i).

 

(ii)           The
Persons identified in the agreements listed on Schedule 4.20(f)(i) or
their successors-in-interest are the only Persons (other than talent agencies
referenced in Schedule 4.20(m)(i), unions or guilds and certain
songwriters and third-party music publishers with respect to payments for
synchronization and/or mechanical license fees paid in the normal course of
business) to whom Seller or a Transferred Subsidiary has any material payment
obligations in connection with the exploitation of the Audio/Visual Masters
listed on Schedule 4.20(f)(i).

 

(iii)          As
of the Closing Date, and except as otherwise set forth on Schedule
4.20(f)(iii), there are no material outstanding advances recoupable from
earnings of the Audio/Visual Masters made to Seller or any Transferred
Subsidiary.  At no time within the year
prior to the Closing Date has Seller or any Transferred Subsidiary caused the
acceleration of income payable with respect to the Audio/Visual Masters or
deferred any royalty obligations or other credits or offsets to such income.

 

(g)           Audio
Masters.

 

(i)            With
respect to the Audio Masters set forth on Schedule 4.20(g)(i), Seller or
a Transferred Subsidiary owns the full right, title and interest (including any
income interest) set forth in the agreements listed on Schedule 4.20(g)(i).
Seller or a Transferred Subsidiary owns and has a good and marketable interest
in and to each of the Audio Masters to the extent of Seller’s or such
Transferred Subsidiary’s interest identified on Schedule 4.20(g)(i).

 

(ii)           The
Persons identified in the agreements listed on Schedule 4.20(g)(i) or
their successors-in-interest are the only Persons (other than talent agencies
reference in Schedule 4.20(m)(i), unions or guilds and certain
songwriters and third-party music publishers with respect to payments for
synchronization and/or mechanical license fees paid in the normal course of
business) to whom Seller or a Transferred Subsidiary has any material payment
obligations in connection with the exploitation of the Audio Masters listed on Schedule
4.20(g)(i).

 

27

 

(iii)          As
of the Closing Date, and except as otherwise set forth on Schedule
4.20(g)(iii), there are no material outstanding advances recoupable from
earnings of the Audio Masters made to Seller or any Transferred
Subsidiary.  At no time within the year
prior to the Closing Date has Seller or any Transferred Subsidiary caused the
acceleration of income payable with respect to the Audio Masters or deferred
any royalty obligations or other credits or offsets to such income.

 

(h)           Written
Works.

 

(i)            With
respect to the Written Works set forth on Schedule 4.20(h)(i), Seller or
a Transferred Subsidiary owns the full right, title and interest (including any
income interest) set forth in the agreements listed on Schedule 4.20(h)(i).
Seller or a Transferred Subsidiary owns and has a good and marketable interest
in and to each of the Written Works to the extent of Seller’s or such
Transferred Subsidiary’s interest identified on Schedule 4.20(h)(i).

 

(ii)           The
Persons identified in the agreements listed on Schedule 4.20(h)(i) or
their successors-in-interest are the only Persons (other than unions or guilds)
to whom Seller or a Transferred Subsidiary has any material payment obligations
in connection with the exploitation of the Written Works listed on Schedule
4.20(h)(i).

 

(iii)          As
of the Closing Date, and except as otherwise set forth on Schedule
4.20(h)(iii), there are no material outstanding advances recoupable from
earnings of the Written Works made to Seller or any Transferred
Subsidiary.  At no time within the year
prior to the Closing Date has Seller or any Transferred Subsidiary caused the
acceleration of income payable with respect to the Written Works or deferred
any royalty obligations or other credits or offsets to such income.

 

(i)            Trademarks.  Seller or a Transferred Subsidiary is the
present registered owner of the Trademarks, as and to the extent applicable,
set forth and identified on Schedule 4.20(i) within the fields of use
and geographic territory shown on such schedule. No Trademarks set forth and
identified on Schedule 4.20(i), as and to the extent applicable, have
been assigned, pledged or otherwise transferred or encumbered, other than
Encumbrances related to Outstanding Indebtedness and other than Permitted
Exceptions.

 

(j)            Identity
Rights.  Seller or a Transferred
Subsidiary is the present registered owner of the Identity Rights, as and to
the extent applicable, set forth and identified on Schedule 4.20(j), within
the geographic territory shown on such schedule. No Identity Rights set forth
and identified on Schedule 4.20(j), as and to the extent applicable,
have been assigned, pledged or otherwise transferred or encumbered, other than
Permitted Exceptions.

 

(k)           Photographs.  Seller or a Transferred Subsidiary (i) owns
the full right, title and interest in and to or (ii) owns or controls the
right, license or permission to use in any manner the Photographs set forth and
identified on Schedule 4.20(k). No

 

28

 

Photographs
set forth and identified on Schedule 4.20(k) have been assigned, pledged
or otherwise transferred or encumbered, other than Permitted Exceptions.

 

(l)            Software
and Databases.  The data embodied on the
software and databases set forth and identified on Schedule 4.20(l) and,
where indicated on Schedule 4.20(l), the software itself, are owned or
licensed by Seller or a Transferred Subsidiary, and Seller or such Transferred
Subsidiary has good and marketable title to or has and maintains a current and
valid license to use such software and databases. Seller or a Transferred
Subsidiary has and maintains current and valid licenses for all commonly
available over-the-counter or off-the-shelf license rights acquired to assist
in connection with the routine administrative operations.

 

(m)          Material
IP Contracts.

 

(i)            “Material
IP Contracts” shall mean all material Contracts to which Seller or any
Transferred Subsidiary is a party, bound or is a beneficiary, that give rise to
a material right, obligation or entitlement of Seller or a Transferred
Subsidiary with respect to the Seller Intellectual Property Rights other than
songwriter agreements (including, without limitation, Songwriter Agreements).  Schedule 4.20(m)(i) sets forth a list
of all such Material IP Contracts that Seller is able to identify, through the
exercise of all reasonable care, as of the date of this Agreement.  All Contracts relating to Intellectual
Property Rights to which Seller or any Transferred Subsidiary is a party or
bound, containing material exclusivity provisions, covenants not to compete,
material restrictions or material obligations in respect of the operation or
conduct of the Business are specifically identified as such on Schedules
4.20(e)(v), 4.20(f)(i), 4.20(g)(i), 4.20(h)(i) and 4.20(m)(i).  There are no breaches by Seller or the
applicable Transferred Subsidiary, or to Seller’s knowledge, by the other
parties thereto, of the Contracts set forth on Schedules 4.20(e)(v), 4.20(f)(i),
4.20(g)(i), 4.20(h)(i) and 4.20(m)(i).

 

(ii)           Except
to the extent specifically set forth and identified on Schedule 4.20(m)(i):

 

(A)          All
Material IP Contracts are valid, binding and in full force and effect in all
material respects and are enforceable by Seller or the Transferred Subsidiaries
party to such Material IP Contracts, as applicable, in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors’ rights and to general equitable principles;

 

(B)           Seller
and each Transferred Subsidiary party to the Material IP Contracts are not
(with or without the lapse of time or the giving of notice, or both) in breach
or default under such Material IP Contracts, except for such breaches or
defaults as are not reasonably likely to be material to the applicable
Contract, and, to Seller’s Knowledge, no other party to any such Material IP
Contract is (with or without the lapse of time or the giving of notice, or
both) in breach or default under such Material IP

 

29

 

Contracts,
except for such breaches or defaults as are not reasonably likely to be
material to applicable Contract;

 

(C)           neither
Seller nor the Transferred Subsidiaries have received any written notice of the
intention of any party to terminate early any Material IP Contract; and

 

(D)          complete
and correct copies of the Material IP Contracts, together with all material
modifications and amendments to such Material IP Contracts, have either been
made available to Purchasing LLC at the offices of Provident Financial
Management in Santa Monica, California, the offices of Glankler Brown, PLLC, in
Memphis, Tennessee, or the offices of Chrysalis Music Group in Los Angeles,
California or are set forth or referenced on Schedule 4.20(m)(i).

 

(iii)          Except
(A) as set forth on Schedules 4.20(e)(v), 4.20(f)(i), 4.20(g)(i),
4.20(h)(i) and 4.20(m)(i), and (B) for liabilities or obligations
related to the Outstanding Indebtedness, none of the Material IP Contracts are
subject to any material guarantees, whether direct or indirect, contingent, or
otherwise, with respect to any Indebtedness and none of the Material IP
Contracts are subject to any Indebtedness of other Persons which are secured by
any Encumbrance on any Material IP Contracts, in each case, other than:

 

(1)           liabilities
or obligations of any Transferred Subsidiary to another Transferred Subsidiary;

 

(2)           the
benefit obligations of the Transferred Subsidiaries with respect to the Benefit
Plans listed on Schedule 4.10(a);

 

(3)           liabilities
or obligations listed on the unaudited balance sheet in the Unaudited Financial
Statements as of September 30, 2004;

 

(4)           liabilities
or obligations incurred since September 30, 2004, that are not material to the
Business, taken as a whole; or

 

(5)           liabilities
or obligations that are not reasonably likely to have a Material Adverse
Effect.

 

(iv)          Other
than each Material IP Contract related to the Outstanding Indebtedness and
except as and to the extent specifically set forth and identified as such on Schedules
4.20(e)(v), 4.20(f)(i), 4.20(g)(i), 4.20(h)(i) and 4.20(m)(i),
there are no Material IP Contracts with respect to which the consent of the
other party or parties thereto must be obtained by virtue of the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby to avoid the invalidity of the transfer of such Material IP Contract,
the termination thereof or any material breach, violation or default thereunder
or any other material change or modification to the terms

 

30

 

thereof,
except where the failure to obtain such consent is not material to the
operation of the Business.

 

(n)           All
right, title and interest in and to all Seller Intellectual Property Rights
owned by Elvis Presley or by any entity owned or controlled by Elvis Presley at
the time of his death passed under the Last Will and Testament of Elvis
Presley, dated March 3, 1977, and filed for probate August 22, 1977 with the
Probate Court for Shelby County, Tennessee and filed in Will Book 209, Page 266
(the “Will”), to The Elvis Presley Residuary Trust created under Item IV
of the Will (the “Residuary Trust”), and that, subject to the next
following sentence, the Residuary Trust transferred and assigned all right,
title and interest in and to any and all Intellectual Property Rights to Seller
by that certain assignment agreement, dated as of February 1, 1993. The
Residuary Trust transferred and assigned all rights of publicity (including,
without limitation, all name, sobriquet, voice, signature, photograph, likeness
and portrait rights) to EPE. Except as indicated in Schedule 4.20(m)(i)
or the applicable schedules referenced on Schedule 4.20(m)(i), at no
time prior to the date of this Agreement have any Seller Intellectual Property
Rights indicated on Schedule 4.20(m)(i) or the applicable schedules
referenced on Schedule 4.20(m)(i) been transferred or assigned by Seller
to any third party other than EPE or a Transferred Subsidiary other than
pursuant to Permitted Exceptions.

 

Section 4.21           Indebtedness.  As of the date hereof, Schedule 4.21
sets forth a complete and correct statement of all outstanding Indebtedness of
the Seller with respect to the Business and of the Transferred Subsidiaries and
shows the original creditor and, to the extent known, any subsequent creditor
as to each item of Indebtedness listed thereon. 
Neither Seller nor the Transferred Subsidiaries is currently in default
and no waiver of default is currently in effect, in the payment of any
principal or interest on any Indebtedness of the Business.

 

Section 4.22           Finders’
Fees.  Except for The Salter Group,
LLC, whose fees and commissions will be paid in full by Seller, there is no
investment banker, broker, finder or other intermediary which has been retained
by or is authorized to act on behalf of Seller or any Affiliate of Seller or
the Transferred Subsidiaries who might be entitled to any fee or commission
from Purchasers or their Affiliates or the Transferred Subsidiaries after the
Closing in connection with the transactions contemplated by this Agreement.

 

Section 4.23           Investment
Representations.  Seller acknowledges
that Purchasing LLC’s and Publico’s reliance on federal and state securities
law exemptions from registration and qualification is predicated, in part, on
the representations in this Section 4.23.

 

(a)           No
Intent to Sell. Seller is acquiring the Preferred Stock solely for its own
account, for investment purposes only, and not with a view to or an intent to
sell, or to offer for resale in connection with any unregistered distribution
of all or any portion of the Preferred Stock within the meaning of the
Securities Act of 1933, as amended (the “Securities Act”), or applicable
state securities laws.

 

31

 

(b)           Accredited
Investor.  Seller is an “accredited
investor” as defined in Regulation D promulgated under the Securities Act.

 

(c)           No
Reliance on Purchasers.  In
evaluating the merits and risks of an investment in the Preferred Stock, Seller
has relied and will have relied upon the advice of each of its own legal
counsel, tax advisors, and/or investment advisors. Seller has reviewed the
legal, accounting, tax and other economic aspects of the acquisition of
Preferred Stock with its own advisors and is not relying on Purchasing LLC or
Publico for any legal, tax, accounting or other advice involved in the
acquisition of the Preferred Stock.

 

(d)           Restrictions
on Preferred Stock.  Seller
understands that the Preferred Stock is and will be characterized as “restricted
securities” under the federal securities laws since the Preferred Stock is
being acquired from Publico in a transaction not involving a public offering
and that under such laws and applicable regulations such securities may be
resold without registration under the Securities Act only in certain limited
circumstances.  Seller will not make any
disposition of all or any portion of the Preferred Stock, except in compliance
with all applicable federal and state securities laws.  Except as required pursuant to the
Registration Rights Agreement, Seller acknowledges that it has been made aware
and agreed that, notwithstanding anything to the contrary in this Agreement,
Publico has no obligation to register the Preferred Stock or file any
registration statement under either federal or state securities laws, or to
include such Preferred Stock in any future registrations or registration
statements, or agreements in respect thereof, that Publico or its Affiliates
may effect or agree to effect.

 

(e)           No
General Solicitation.  Seller was not
presented with or solicited by any promotional meeting or material relating to
the Preferred Stock.

 

(f)            Share
Certificate Legend.  Seller
understands and acknowledges that it has been made aware and agreed that any
certificate evidencing the Preferred Stock (or evidencing any other securities
issued with respect thereto pursuant to any stock split, stock dividend or
other form of reorganization or recapitalization) when issued shall bear, in
addition to any other legends which may be required by applicable state
securities laws, the following legend:

 

“OWNERSHIP OF
THE PURCHASED SHARES EVIDENCED BY THIS CERTIFICATE AND ANY INTEREST THEREIN ARE SUBJECT TO RESTRICTIONS ON TRANSFER UNDER APPLICABLE LAW
AND UNDER AN AGREEMENT WITH SPORTS ENTERTAINMENT ENTERPRISES, INC., INCLUDING
RESTRICTIONS ON SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION, A COPY
OF WHICH IS AVAILABLE FOR REVIEW AT THE OFFICE OF THE SECRETARY OF SPORTS
ENTERTAINMENT ENTERPRISES, INC.

 

THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES
ACT OF 1933, AS

 

32

 

AMENDED (THE “ACT”), NOR HAVE THEY BEEN REGISTERED OR QUALIFIED UNDER
THE SECURITIES LAWS OF ANY STATE. NO TRANSFER OF SUCH SECURITIES WILL BE
PERMITTED UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH
TRANSFER, THE TRANSFER IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR
(BASED UPON AN OPINION OF COUNSEL), REGISTRATION UNDER THE ACT IS UNNECESSARY
IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT AND WITH APPLICABLE STATE
SECURITIES LAWS.”

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES

OF PURCHASING LLC AND PUBLICO

 

As of the date
hereof and as of the Closing Date, except with respect to any representations
and warranties that are expressly made as of a specific date, which are made
only as of such date, Purchasing LLC and Publico, jointly and severally,
represent and warrant to Seller that, except as set forth in the applicable section of
Purchasers’ Disclosure Schedule:

 

Section 5.1             Organization
and Qualification.  Publico is
a corporation duly organized, validly existing and in good standing under the
laws of Colorado.  Purchasing LLC is a
limited liability company duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization.  Each of Publico and Purchasing LLC has all
requisite corporate or limited liability company power and authority to own and
operate and to carry on its business as currently conducted, and at Closing,
shall have all requisite corporate or limited liability company power and
authority to carry on the Business as currently conducted, except where the
failure to be so organized, existing, or in good standing would not reasonably
be expected to have a Publico Material Adverse Effect.  Each of Publico and Purchasing LLC has
heretofore delivered to Seller complete and correct copies of its certificate
of incorporation and by-laws or limited liability company agreement (or similar
organization documents), in each case, as amended to date and as presently in
effect.  Schedule 5.1 sets
forth a list of all the members of Purchasing LLC.  Neither Publico nor Purchasing LLC is in
violation of any provision of its certificate of incorporation or by-laws or
limited liability company agreement (or other similar organization document),
as applicable, except for any such violation that would not be reasonably
expected to have a Publico Material Adverse Effect.

 

Section 5.2             Corporate
Authorization.  Each of
Publico and Purchasing LLC has all requisite corporate or limited liability
company power and authority and has taken all action under its certificate of
incorporation, limited liability company agreement, by-laws and any other
organization documents, as the case may be, necessary in order to duly and
validly execute and deliver this Agreement and each of the Ancillary Agreements
to which it is a party, and to perform its obligations hereunder and thereunder
and to consummate the transactions contemplated hereby and thereby.  The execution, delivery

 

33

 

and performance
by each of Publico and Purchasing LLC of this Agreement and each of the
Ancillary Agreements to which it is a party has been duly and validly
authorized and no additional corporate or limited liability company
authorization or consent is required in this respect.  No meeting of the shareholders of Publico is
necessary to authorize the consummation of the transactions contemplated hereby
and by the Ancillary Agreements to which Publico is a party.  This Agreement is, and when executed and
delivered, each of the Ancillary Agreements to which it is a party will be, a
valid and legally binding obligation of each of Publico and Purchasing LLC,
enforceable against each of Publico and Purchasing LLC in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors’ rights and to general equitable principles.

 

Section 5.3             Capitalization;
Purchasing LLC’s Shareholding in Publico After the
Concurrent Contribution.

 

(a)           The
authorized equity securities of Publico consist of 100,000,000 shares of common
stock, par value $0.001 per share, of which 4,283,061 are issued and
outstanding; 5,000,000 shares of Series A Preferred Stock, no par value, of
which no shares are issued and outstanding. 
As of the date hereof, no other shares of capital stock of Publico are
issued and outstanding.  All the issued
and outstanding shares of capital stock of Publico have been offered and sold
in compliance with applicable U.S. Federal and state securities or “blue sky”
laws.  None of such shares are owned by
Purchasing LLC or any its Affiliates.  The offer, sale and issuance of Publico
shares pursuant to the provisions of this Agreement will comply with all
applicable U.S. Federal and state securities or “blue sky” laws.  Neither Publico nor any person or entity
acting on its behalf has taken or will take any action which would subject the
offering, sale and issuance of Publico shares to the registration requirements
of the Securities Act.

 

(b)           Immediately
after the Closing and the closing of the Concurrent Contribution, on a fully
diluted basis:

 

(i)            Transferors
shall collectively legally and beneficially own at least 80% of the issued and
outstanding shares of Publico Common Stock; and

 

(ii)           Publico
shall have legally issued all of the issued and outstanding shares of Preferred
Stock, Publico Common Stock and Other Preferred Stock, and the capitalization
of Publico shall substantially conform to the capitalization table previously
delivered to Seller and initialed by the Parties.

 

(c)           Except
as set forth on Schedule 5.3(c), there are no preemptive or other
outstanding rights, options, warrants, conversion rights, stock appreciation
rights, redemption rights, repurchase rights, agreements, arrangements or
commitments of any character, written or oral, under which Publico is or may
become obligated to issue or sell, or giving any Person a right to subscribe
for or acquire, or any way dispose of any

 

34

 

shares of the capital stock or other equity interests, or any
securities or obligations exercisable or exchangeable for or convertible into
any shares of the capital stock or other equity interests of Publico, and no
securities or obligations evidencing such rights are authorized, issued or
outstanding.  The outstanding stock or
other equity interests of Publico are not subject to any voting trust agreement
or other agreement or commitment restricting or otherwise relating to the
voting, dividend rights or disposition of such stock or other equity
interests.  There are
no phantom stock or similar rights providing economic benefits based,
directly or indirectly, on the value or price of the stock or other equity
interests of Publico.  Other than the
transactions contemplated by this Agreement, there are no outstanding obligations
or other commitments of Publico to make any investment (in the form of a loan,
capital contribution or other obligation to provide funds) in, any other
Person.

 

(d)           Upon
issuance thereof, the shares of Other Preferred Stock, shares of Publico Common
Stock being issued hereunder, shares of Preferred Stock and the Conversion
Shares will be free of any Encumbrances other than restrictions on transfer
under state and federal securities laws.  The Other Preferred Stock, the Publico
Common Stock and the Preferred Stock, upon issuance in accordance with the
terms of this Agreement, and the Conversion Shares, upon issuance in accordance
with the terms of the Certificate of Designation, will be duly authorized,
validly issued, fully paid and nonassessable, and owned by Seller, free from
Encumbrances other than restrictions on transfer under state and federal
securities laws.  The Conversion Shares have been duly
and validly reserved for issuance on the conversion of the Preferred Stock.

 

(e)           Publico
does not:

 

(i)            have any direct or indirect Subsidiaries; or

 

(ii)           own, directly or indirectly, any of the capital stock or
other equity securities of any other Person.

 

(f)            Except
as otherwise contemplated by this Agreement or any of the Ancillary Agreements,
neither Purchasing LLC nor any of its Affiliates owns any shares of capital
stock of Publico.

 

Section 5.4             Consents
and Approvals.  Except (a) for
any filing or notices required pursuant to the HSR Act or other Competition
Laws, (b) for filings or notices required pursuant to the Securities Act and the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the “Exchange Act”) or (c) as set forth on Schedule 5.4,
no consent, approval, waiver or authorization is required to be obtained by
either of the Purchasers from, and no notice or filing is required to be given
by either of the Purchasers to, or made by either of the Purchasers with, any
Government Entity, similar regulatory authority or court in connection with the
execution, delivery and performance by such Party of this Agreement and each of
the Ancillary Agreements and the transactions to be consummated hereby and
thereby, other than in all cases where the failure to obtain such consent,
approval, waiver or authorization, or to give or make such

 

35

 

notice of filing
is not, individually or in the aggregate, reasonably likely to materially
impair or delay the ability of such Party to effect the Closing or effect the
transactions contemplated hereby and thereby.

 

Section 5.5             Noncontravention.  Except as set forth on Schedule 5.5,
the execution, delivery and performance by each of the Purchasers of this
Agreement and each of the Ancillary Agreements to which it is a party and the
consummation of the transactions contemplated hereby and thereby, does not and
will not:

 

(a)           violate any provision of the certificate of incorporation or
by-laws of Publico or the limited liability company agreement of Purchasing
LLC,

 

(b)           assuming
the consents, approvals, waivers, authorizations, notices and filings set forth
on Schedules 4.4 and 5.4 are granted or made, as the case may be,
violate or result in a breach of or constitute a default under any Law
applicable to which either of the Purchasers is subject,

 

(c)           result
in a breach of or default under, require notice or consent under (or cause an
event, which with notice or lapse of time or both would become a default) as
the case may be, or give rise to any right of payment, termination,
cancellation or acceleration under, any of the terms, conditions or provisions
of any Indebtedness or Contract, or

 

(d)           trigger any payment or other obligations to any of Publico’s
present or former employees;

 

other
than in the cases of clauses (b), (c) or (d) any violation, breach or default,
or any required consent or change in rights, which is not reasonably likely,
individually or in the aggregate, to have a Publico Material Adverse Effect.

 

Section 5.6             Financial
Statements; No Contingent Liabilities.  Set
forth on Exhibit K is a copy of: (i) the audited balance sheet as of December 31,
2003 and the related audited statements of income, changes in stockholders’
equity and cash flows for Publico for the fiscal year then ended, which have
been prepared by Publico in accordance with GAAP, consistently applied (the “Publico
Audited Financial Statements”); and (ii) the unaudited balance sheet as of September 30,
2004 and the related unaudited statements of income, changes in stockholders’
equity and cash flows for Publico for the nine month period then ended (the “Publico
Unaudited Financial Statements,” together with the Publico Audited
Financial Statements, the “Publico Financial Statements”).  The Publico Financial Statements have been
prepared by Publico in accordance with GAAP, consistently applied, which fairly
present in all material respects the financial condition and results of
operations of Publico as of the dates thereof, subject to normal year-end
adjustments that are not material in amount or effect and the absence of
footnotes and similar presentation items therein.  Except as set forth in the Publico Financial
Statements, Publico does not have any liabilities or obligations of any nature
(absolute, accrued, fixed, contingent or otherwise) required by GAAP to be set
forth on a balance sheet of Publico, other than as

 

36

 

incurred in the Ordinary Course
of Business since September 30, 2004 or that are not material to Publico,
Purchasing LLC or, following the Closing, will not be material to the Business,
taken as a whole.

 

Section 5.7             Finders’
Fees.  Except for Bear
Stearns, whose fees and commissions will be paid in full by Purchasers, there
is no investment banker, broker, finder or other intermediary which has been
retained by or is authorized to act on behalf of Purchasing LLC, Publico or any
of their respective Affiliates who might be entitled to any fee or commission
from Seller, LLC, EPE or any of their respective Affiliates in connection with
the transactions contemplated by this Agreement.

 

Section 5.8             Litigation.  

 

(a)           There
is no, and within the past two years, there has not been, any civil, criminal
or administrative action, suit, demand, claim, hearing, proceeding or
investigation pending or, to either Purchaser’s knowledge, threatened, against
the Purchasers, or any of their respective directors, officers, agents or
employees (in their respective capacities as such) that:

 

(i)            seeks
equitable relief or involves claims or more than $75,000 individually or more
than $1,000,000 in the aggregate; or

 

(ii)           either individually or in the aggregate, could reasonably be
expected to have a Publico Material Adverse Effect.

 

(b)           Neither
of the Purchasers, nor, to the knowledge of Purchasers, any of their respective
directors, officers, agents or employees (in their respective capacities as
such), is subject to any Order of any Governmental Entity, which would be
reasonably expected to have a Publico Material Adverse Effect, and there is no
reasonable basis therefore or threat thereof.

 

Section 5.9             SEC
Reports and Financial Statements. 
Except as set forth on Schedule 5.9, Publico has filed on a
timely basis with the SEC all forms, reports, schedules, registration
statements, definitive proxy or information statements and other documents
required to be filed by Publico with the SEC since January 1, 2001 (as
they have been amended since the time of their filing, and including any
documents filed as exhibits thereto as well as any Form 8-Ks that have been
filed with or furnished to the SEC, collectively, the “SEC Reports”).  As of their respective dates, except as set
forth in Schedule 5.9, each SEC Report (including, without
limitation, any financial statements or schedules included or incorporated by
reference therein) complied in all material respects with the requirements of
the Exchange Act and the Securities Act that are or were applicable to such SEC
Report, and none of the SEC Reports contained when filed or contains any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of
the circumstances under which they were made, not misleading.

 

37

 

Section 5.10           Supplied
Information.  None of the information
supplied by Publico specifically for inclusion or incorporation by reference in
the Public Transaction Report or any document filed or to be filed with the SEC
in connection with the transactions contemplated by this Agreement and the
Ancillary Agreements (the “Other Filings”) at the time filed with the
SEC or will, at the respective times filed with the SEC and (as applicable) at
the date it or any amendment or supplement thereto is mailed to stockholders of
Publico, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading, provided that no representation is made by Publico with
respect to information furnished by Seller in writing specifically for
inclusion therein.  The Public
Transaction Report and Other Filings made by Publico will, at the respective
times filed with the SEC and mailed to the stockholders (as applicable), comply
as to form in all material respects with the provisions of the Exchange Act,
except that no representation is made by Publico with respect to statements
made therein based on information supplied by Seller in writing specifically
for inclusion in the Public Transaction Report or Other Filings.

 

Section 5.11           Business
of Publico.  Since August 31,
2002, Publico has not conducted any business or activities other than the
filing of SEC Reports, the issuance of stock options, warrants and Publico
Common Stock, the negotiation and execution of this Agreement, the Ancillary
Agreements and the agreements related to the Concurrent Contribution and the
consummation of the transactions contemplated hereby and thereby and other
customary ministerial matters incidental to Publico’s existence and ongoing
operations.  Purchasers have provided to
Seller true and complete copies of: (i) a capitalization table of Publico that
reflects the capital structure of Publico as of the Closing Date, including the
transactions contemplated by this Agreement and the Ancillary Agreements and
the Concurrent Contribution and transactions related thereto; and (ii) all
amendments to the charter or by-laws of Publico, and all stockholders or other
similar agreements relating to the equity securities or ownership of Publico,
in each case, to be entered into in connection with the Closing and the closing
of the Concurrent Contribution and the transactions related thereto. Other than this Agreement, the Ancillary
Agreements and the other agreements and instruments contemplated hereunder and
the Publico Acquisition Agreement and
the agreements and instruments contemplated thereunder, there are no Contracts between, on the one
hand, Publico or its subsidiaries and, on the other hand, Purchasing LLC or its
Affiliates.

 

Section 5.12           Absence
of Material Adverse Effect. 
Except (a) as reflected, reserved against or otherwise disclosed on the
Publico Financial Statements or (b) as disclosed on Schedule 5.12,
since September 30, 2004, Publico has not experienced any event or
condition that has had or is reasonably likely to have a Publico Material
Adverse Effect.

 

Section 5.13           Compliance.  To the Knowledge of Publico, Publico is in
compliance with all applicable Laws, Orders, and enforceable arbitration
awards, concession and grants (including, without limitation, environmental
laws, labor laws and the Foreign Corrupt

 

38

 

Practices
Act), except where the failure so to comply, in the aggregate, is not
reasonably likely to have a Publico Material Adverse Effect.  There is no term or provision of any
Indebtedness or other Contract to which Publico is a party or by which it is
bound, or of any provision of any Law applicable to or binding upon Publico,
which restricts in any respect the conduct of its business, or that in any
manner relates to its policies, affairs or management, or that would reasonably
be expected to have a Publico Material Adverse Effect.  Publico has not, during the past two years,
received any notice relating to any violation or potential violation of any
applicable Laws and arbitration awards.

 

Section 5.14           Trading
in Stock.  Except as otherwise
set forth on Schedule 5.14, since March 31, 2004, to the
knowledge of Publico no Beneficial Owner of more than 5% of the Publico Common
Stock, nor any Affiliate thereof, has purchased, offered, pledged, sold,
contracted to sell, sold any option or contracted to purchase, purchased any
option or contracted to sell, granted any option, right or warrant for the sale
of, or otherwise acquired, disposed of or transferred any shares of Publico
Common Stock or any securities convertible into or exchangeable or exercisable
for Publico Common Stock.

 

Section 5.15           Investment
Representations.  Each of the
Purchasers acknowledges that Seller’s reliance on federal and state securities
law exemptions from registration and qualification is predicated, in part, on
the representations in this Section 5.15.

 

(a)           No
Intent to Sell. Publico is acquiring the EPE Shares and the LLC Interests
solely for its own account, for investment purposes only, and not with a view
to or an intent to sell, or to offer for resale in connection with any
unregistered distribution of all or any portion of the EPE Shares or the LLC
Interests within the meaning of the Securities Act, or applicable state
securities laws.

 

(b)           Accredited
Investor.  Publico is an “accredited
investor” as defined in Regulation D promulgated under the Securities Act.

 

(c)           No
Reliance on Seller.  In evaluating
the merits and risks of an investment in the EPE Shares and the LLC Interests,
Publico has relied and will have relied upon the advice of its own legal
counsel, tax advisors, and/or investment advisors.  Publico has reviewed the legal, accounting, tax
and other economic aspects of the acquisition of the EPE Shares and the LLC
Interests with its own advisors and is not relying on Seller for any legal,
tax, accounting or other advice involved in the acquisition of the EPE Shares
or the LLC Interests.

 

(d)           Restrictions
on EPE Shares and LLC Interests. 
Each of Publico and Purchasing LLC understands that the EPE Shares and
the LLC Interests each will be characterized as “restricted securities” under
the federal securities laws since the EPE Shares and the LLC Interests are
being acquired from Seller in a transaction not involving a public offering and
that under such laws and applicable regulations such securities may be resold
without registration under the Securities Act only in certain limited circumstances.  Publico will not make any disposition of all
or any portion of the such securities, except in
compliance with all applicable federal and state securities laws.

 

39

 

Publico acknowledges that it
has been made aware and agreed that, notwithstanding anything to the contrary
in this Agreement, Seller has no obligation to register the EPE Shares or the
LLC Interests or file any registration statement under either federal or state
securities laws, or to include such EPE Shares or LLC Interests in any future
registrations or registration statements, or agreements in respect thereof,
that Seller may effect or agree to effect.

 

(e)           No
General Solicitation.  Publico was
not presented with or solicited by any promotional meeting or material relating
to the EPE Shares or the LLC Interests.

 

(f)            Securities
Certificate Legend.  Each of Publico
and Purchasing LLC understands and acknowledges that it has been made aware and
agreed that any certificate evidencing the EPE Shares or the LLC Interests (or
evidencing any other securities issued with respect thereto pursuant to any
stock split, stock dividend or other form of reorganization or
recapitalization) when issued shall bear, in addition to any other legends
which may be required by applicable state securities laws, the following
legend:

 

“OWNERSHIP OF
THE PURCHASED SECURITIES EVIDENCED BY THIS CERTIFICATE AND ANY INTEREST THEREIN
ARE SUBJECT TO RESTRICTIONS ON TRANSFER UNDER APPLICABLE LAW AND UNDER AN
AGREEMENT WITH [EPE][LLC], INCLUDING RESTRICTIONS ON SALE, ASSIGNMENT,
TRANSFER, PLEDGE OR OTHER DISPOSITION, A COPY OF WHICH IS AVAILABLE FOR REVIEW
AT THE OFFICE OF THE [SECRETARY] [MANAGER] OF [EPE][LLC].

 

THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), NOR HAVE THEY BEEN REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATE. NO TRANSFER OF SUCH SECURITIES WILL BE
PERMITTED UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH
TRANSFER, THE TRANSFER IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR
(BASED UPON AN OPINION OF COUNSEL), REGISTRATION UNDER THE ACT IS UNNECESSARY
IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT AND WITH APPLICABLE STATE
SECURITIES LAWS.”

 

Section 5.16           Availability
of Funds.

 

(a)           Purchasing LLC shall
have sufficient immediately available funds, in cash, to fund the Concurrent
Contribution and to pay any other amounts payable pursuant to this Agreement
and the Ancillary Agreements at Closing when and as payable and to effect the
Transactions, including any amounts required to be paid pursuant
to Pay-Off Letters.  Upon request, Purchasing LLC
shall provide evidence of such availability reasonably satisfactory to Seller.

 

40

 

(b)           Publico
shall have sufficient immediately available funds, in cash, to pay the Cash
Consideration and to pay any other amounts payable pursuant to this Agreement
and the Ancillary Agreements at Closing when and as payable and to effect the
Transactions, including any amounts required to be paid pursuant to Pay-Off
Letters.  Publico has provided evidence
of such availability reasonably satisfactory to Seller.

 

Section 5.17           Representations
and Warranties of Publico Acquisition Agreement.  The representations and warranties of each of
the Purchasers contained in the Publico Acquisition Agreement are true and
correct as of the date each such representation and warranty is made or deemed
made pursuant to and in accordance with the terms of such agreement.

 

Section 5.18           Solvency.  Purchasing LLC is and upon the consummation
of the Transactions and the Concurrent Contribution Purchasers will be,
Solvent.

 

Section 5.19           Taxes.  Except as set forth on Schedule 5.19:

 

(a)           Publico
has duly filed (and prior to the Closing Date will duly file), on a timely
basis taking into account extensions, all Tax Returns that were due or will be
due prior to the Closing Date, except where such failure is not reasonably
likely to have a Publico Material Adverse Effect.  Such Tax Returns have been, or will be, true,
correct and complete in all material respects. 
No claims, investigations, or adjustments relating to such Taxes have
been made or proposed in writing by any taxing authority and no written claim
has ever been made by an authority in a jurisdiction where Publico or any of
its Subsidiaries does not file Tax Returns that Publico or any of its
Subsidiaries is or may be subject to taxation by that jurisdiction.  All Taxes reflected on such Tax Returns as
due and payable have been paid;

 

(b)           Publico
has withheld all amounts required to be withheld of payments of compensation
and payments to non-U.S. Persons and remitted such amounts to the proper
authorities, and has paid all employer contributions and premiums, in
compliance with all applicable laws in all material respects;

 

(c)           There
has been no waiver granted or requested of any applicable statute of
limitations or extension of the time for the assessment of any Tax of Publico;

 

(d)           There
are no liens or encumbrances for any Tax that is due and payable upon any of
the capital stock or any asset of Publico;

 

(e)           Publico
will not be required to include any item of income or gain in, or exclude any
item of deduction or loss from, taxable income for any taxable period (or
portion thereof) ending after the Closing Date as a result of any: (u) closing
agreement (as defined in Section 7121 of the Code) or any similar
provision of any state, local, or foreign Tax law; (v) private letter ruling;
(w) change in method of accounting for a taxable period ending on or prior to
the Closing Date; (x) intercompany transaction or excess loss account described
in Treasury Regulations under Section 1502 of the Code

 

41

 

(or any corresponding or similar provision of
state, local or foreign income Tax law); (y) installment sale or open
transaction disposition made on or prior to the Closing Date; or (z) prepaid
amount received on or prior to the Closing Date;

 

(f)            Publico
(i) has not been a member of an affiliated group filing a consolidated federal
income Tax Return (other than a group the common parent of which was Publico)
or (ii) does not have any Liability for the Taxes of any Person (other than
Publico or any of its Subsidiaries) under Treasury Regulation 1.1502-6 (or any
similar provision of state, local, or foreign law), as a transferee or
successor, by contract, or otherwise;

 

(g)           Publico
is not a party to, is bound by, and does not have any obligation under, any Tax
sharing, Tax indemnity or similar agreement; and

 

(h)           Neither
Purchasing LLC nor Publico has any intention or plan to issue, transfer or
otherwise engage in a transaction involving Publico stock that would cause the
Transferors collectively, not to have Section 351 Control.

 

ARTICLE VI

 

COVENANTS

 

Section 6.1             Pre-Closing
Covenants of Seller.  During
the period from the date hereof to the Closing, except (i) as otherwise
provided for in this Agreement or the transactions contemplated hereby, (ii) as
may be described in the Unaudited Financial Statements, (iii) as to which
Purchasing LLC shall otherwise consent, which shall not be unreasonably
withheld, conditioned or delayed, or (iv) as otherwise expressly contemplated
and permitted by the qualifications and exceptions in clauses (a) through (t)
below with respect to the specific subject matter covered in the applicable
clause, Seller covenants and agrees, that it will, and will cause the
Transferred Subsidiaries to:

 

(a)           (i)
conduct the Business in the Ordinary Course of Business; (ii)  use commercially reasonable efforts to
preserve any business relationships with customers, suppliers, creditors and
others having business dealings with the Business; and (iii) use commercially
reasonable efforts to keep available the services of present officers and
employees of the Business in the cases of clauses (ii) and (iii) above, other
than fluctuations in the Ordinary Course of Business;

 

(b)           not
subject any of the assets of the Business to any material Encumbrance, other
than (i) in the Ordinary Course of Business, but excluding any liens or pledges
on a material asset securing Indebtedness, and with prior notice to Purchasing
LLC in the case of any Encumbrances on any material assets of the Business and
(ii) Permitted Encumbrances;

 

42

 

(c)           not knowingly permit any of the material insurance policies
of the Business to be canceled or terminated or any of the coverage thereunder
to lapse, without simultaneously securing substantially similar replacement
insurance policies;

 

(d)           except
as prohibited by applicable Laws, not enter into, amend in any material respect
or terminate, any Material Contract or any Contract that (i) would be a
Material Contract upon signing, or (ii) provides for advances in excess of
$100,000 that are recoupable from earnings, or (iii) any license agreement with
a term of greater than 2 years, in each case, except in the Ordinary Course of
Business and with prior notice to Purchasing LLC;

 

(e)           not
declare, set aside or pay any dividend or distribution on any shares of capital
stock or limited liability interests of the Transferred Subsidiaries other than
dividends or distributions set forth on Schedule 6.1(e);

 

(f)            not
issue, sell, pledge, transfer, dispose of or encumber any shares of the
Transferred Subsidiaries’ capital stock or limited liability company interests
or securities or instruments convertible into or exchangeable for any such
shares or limited liability company interests, or any rights, warrants,
options, calls or commitments to acquire any such shares or limited liability
company interests or other convertible securities or instruments;

 

(g)           not knowingly dispose of or permit to lapse any rights in,
to or for the use of any material Intellectual Property Rights of the Business;

 

(h)           not
settle any claims, actions, arbitrations, disputes or other proceedings that
would result in Seller or the Transferred Subsidiaries being enjoined in any
respect that is reasonably likely to have a Material Adverse Effect;

 

(i)            not

 

(i)            increase the compensation (including bonus) of, or make any
material change to the Benefits Plans provided to, any of the directors,
officers, employees or independent contractors of the Business,

 

(ii)           hire any employee or individual independent contractor,
(except to replace employees or independent contractors that have resigned or
been terminated or as necessary on a seasonal basis consistent with past
practice),

 

(iii)          enter
into any new employment agreements for any person, if such person’s annual
aggregate compensation exceeds $75,000, or

 

(iv)          enter into any severance agreements that would result in
post-termination payments that would exceed $75,000 in the aggregate

 

43

 

becoming due or
payable upon or after termination of employment or of an independent
contractor,

 

except:

 

(A)          with
respect to (i), (ii) and (iii), in the Ordinary Course of Business and which do
not cause the Business to incur additional liabilities or expenses in excess of
$150,000 per annum in the aggregate,

 

(B)           with
respect to (i), (ii), (iii) and (iv) pursuant to the terms of agreements or
plans currently in effect, or

 

(C)           with
respect to (i), (ii), (iii) and (iv), as required by applicable Law;

 

(j)            except
for Anthology Indebtedness, Entertainment Indebtedness or as set forth on Schedule 6.1(j),
not incur any additional Indebtedness, except under the current terms of the
agreements, Contracts or facilities for Indebtedness disclosed on Schedule 4.14(c)
or Schedule 4.21 in the Ordinary Course of Business, or assume any
guarantee of any material obligations of another Person, or make any material
loans or capital contributions to another Person;

 

(k)           not assume or enter into any collective bargaining agreement
relating to the Business;

 

(l)            Unless
required by GAAP or applicable Law, not:

 

(i)            make or rescind any material election relating to Taxes of
any Transferred Subsidiaries,

 

(ii)           file
any amended income Tax Returns that will result in a material increase in
taxable income for any Transferred Subsidiary for any period beginning after
the Closing Date or the portion of the Straddle Period after the Closing Date,
or

 

(iii)          make any material change in any method of accounting,
keeping its books of account or accounting practices or in any material method
of Tax accounting of any of the Transferred Subsidiaries.

 

(m)          not
acquire (by merger, consolidation or acquisition of stock or assets) any
corporation, partnership or other business organization or any equity interest
therein, and not sell, acquire or enter into derivative transactions in respect
of, Publico securities;

 

44

 

(n)           not
acquire assets other than in the Ordinary Course of Business, or make capital
expenditures in excess of those contemplated by the existing budget (except as
necessary to comply with clause (r) below), or sell or dispose of assets of the
Business, other than sales or disposals in the Ordinary Course of Business
involving consideration of less than $100,000 in the aggregate with respect to
any transaction or series of related transactions;

 

(o)           not
cancel or compromise any material debt or claim or waive or dispose of any
rights or assets of material value to the Business without the Business
receiving a realizable benefit of similar or greater value, or voluntarily
suffer any extraordinary loss;

 

(p)           perform
its material obligations as landlord in connection with any Real Property
leased to third parties or tenant under the Leased Real Property in all
material respects, and not terminate, cause the termination or enter into,
alter, amend, or otherwise modify or supplement any material terms to any lease
except in the Ordinary Course of Business, without Purchasing LLC’s consent, which
consent will not be unreasonably withheld, conditioned or delayed;

 

(q)           not:

 

(i)            sell,
assign, hypothecate or convey any right, title or interest in or to the Real
Property or the Mansion Property other than sales or disposals in the Ordinary
Course of Business involving consideration of less than $100,000 in the
aggregate with respect to any transaction or series of related transactions, or

 

(ii)           create
or permit to exist any Encumbrance on the Real Property or the Mansion Property
without properly discharging the same, other than (x) in the Ordinary Course of
Business, (y) Permitted Encumbrances and (z) Encumbrances related to the
Outstanding Indebtedness;

 

(r)            keep,
maintain, and repair the Real Property and the Mansion Property in a good and
presentable condition consistent with past practice, ordinary wear and tear
excepted, and comply in all material respects with all Laws affecting the Real
Property or the Mansion Property;

 

(s)           provide
Purchasers with a statement, to Seller’s Knowledge, listing the Closing Date
tax basis and the gain reported by Seller with respect to each of the
Contributed Assets and the EPE Shares in connection with the contribution and
exchange contemplated by this Agreement; and

 

(t)            not authorize or enter into an agreement, contract,
commitment or arrangement to do any of the foregoing.

 

45

 

Section 6.2             Certain
Other Agreements.

 

(a)           Commercially
Reasonable Efforts; Regulatory Approval.

 

(i)            Subject
to the terms and conditions hereof, Seller and Purchasers will, and will cause
their Affiliates to, use reasonable best efforts to take all action and to do
all things necessary, proper or advisable to consummate and make effective the
transactions contemplated by this Agreement including fulfilling the conditions
precedent to the other party’s obligations hereunder, securing as promptly as
practicable all consents, approvals, waivers and authorizations and making any
filings required under applicable Law, including those required by the
Competition Laws (and promptly filing any additional information requested as
soon as practicable after receipt of request thereof) required in connection
with the transactions contemplated hereby and agree to use such foregoing
efforts to effect the Closing as soon as practicable; provided, that,
none of Seller, Purchasers or any of their respective Affiliates shall be
required to make any payment therefor, other than filing, recordation or
similar fees payable to any Governmental Entity, which fees shall be paid by
Purchasing LLC. Notwithstanding anything to the contrary contained herein, none
of Seller, Purchasers, or any of their Affiliates shall be required in
connection with any Competition Law to (A) agree to sell, divest, dispose of or
hold separate any assets or businesses, or otherwise take or commit to take any
action that could reasonably limit their freedom of action with respect to, or
their ability to retain, one or more businesses or assets or (B) litigate, (or
defend) against any administrative or judicial action or proceeding (including
any proceeding seeking a temporary restraining order or preliminary injunction)
challenging any of the transactions contemplated hereby as violative of any
Competition Law.

 

(ii)           Seller
and its Affiliates and Purchasers shall cooperate with each other and shall
furnish to the other Party all information necessary or desirable in connection
with making any filing under the HSR Act and for any application or other
filing to be made pursuant to any Competition Law, and in connection with
resolving any investigation or other inquiry by any Governmental Entity under
any Competition Laws with respect to the transactions contemplated by this
Agreement.  Each of the Parties shall
promptly inform the other Party of any communication with, and any proposed
understanding, undertaking or agreement with, any Governmental Entity regarding
any such filings or any such transaction. 
None of the Parties shall participate in any meeting with any
Governmental Entity in respect of any such filings, investigation or other
inquiry without giving the other Party prior notice of the meeting.  The Parties will consult and cooperate with
one another in connection with any

 

46

 

analyses, appearances, presentations, memoranda, briefs, arguments,
opinions and proposals made or submitted by or on behalf of any Party in
connection with all meetings, actions and proceedings under or relating to the
HSR Act or other Competition Laws (including, with respect to the Party making
a particular filing, by providing copies of all such documents to the
non-filing Party and their advisors prior to filing and, if requested, giving
due consideration to all reasonable additions, deletions or changes suggested
in connection therewith).

 

(b)           Access.

 

(i)            Upon
reasonable notice, and except as may otherwise be required by applicable Laws,
Seller and the Transferred Subsidiaries shall afford the officers, employees,
counsel, accountants and other authorized representatives (including
representatives of entities providing or arranging financing) (“Representatives”)
of Purchasing LLC reasonable access, during normal business hours throughout
the period prior to Closing, to their respective properties, books, Contracts
and records to the extent related to the Business and, during such period,
Seller and its Affiliates shall furnish promptly to Purchasing LLC all such
information, including monthly financial information and information on an
ongoing basis on working capital of the Business and any other regular
financial reports that as are typically available for review by Beneficiary or
the Trustee, and reasonable access to the Employees, in each case to the extent
related to the Business as Purchasing LLC or its Representatives may reasonably
request and Seller and its Affiliates shall further cooperate with Purchasing
LLC and its Representatives (at Purchasing LLC’s expense) and provide
reasonable access, during normal business hours as Purchasing LLC may request
for the purpose of Purchasing LLC obtaining title insurance policies or
commitments (as applicable), land surveys, physical inspections and engineering
and structural reports with respect to each site included within the Real
Property and the Mansion Property; provided, that, no
investigation pursuant to this Section 6.2(b) shall affect or be deemed to
modify any representation or warranty made by Seller; and provided, further
the foregoing shall not require Seller to permit any inspection to disclose any
information which would violate applicable Laws (including Competition Laws)
based on advice of Seller’s counsel or which in the reasonable judgment of
Seller, would result in the disclosure of any trade secrets of third parties or
violate any obligation of Seller with respect to confidentiality.  All requests for information made pursuant to
this Section 6.2(b)(i) shall be directed to an
executive officer of Seller or such Person as may be designated by any such
officer.  All such information shall be
governed by the terms of the Confidentiality Agreement;

 

47

 

(ii)           Upon
reasonable notice, and except as may otherwise be required by applicable Laws,
the Purchasers shall afford the Representatives of Seller reasonable access,
during normal business hours throughout the period prior to Closing, to their
respective properties, books, Contracts and records to the extent related to
Publico and, during such period, the Purchasers shall, and shall cause their
respective Affiliates to, furnish promptly to Seller all such information,
including monthly financial information and information on an ongoing basis on
working capital of Publico and any other regular financial reports of Publico
that are typically available for their review, and reasonable access to the
Employees, in each case to the extent related to the acquisition of the
Preferred Stock by Seller, as Seller or its Representatives may reasonably
request and the Purchasers shall, and shall cause their respective Affiliates
to, further cooperate with Seller and its Representatives (at Seller’s expense)
and provide reasonable access, during normal business hours as Seller may
request for the purposes of conducting due diligence; provided, that, the
foregoing shall not require the Purchasers to disclose any information which
would violate applicable Laws (including Competition Laws) based on advice of
Purchasers’ counsel or which in the reasonable judgment of the Purchasers,
would result in the disclosure of any trade secrets of third parties or violate
any obligation of the Purchasers with respect to confidentiality.  All requests for information made pursuant to
this Section 6.2(b)(ii) shall be directed to an
executive officer of Purchasing LLC or such Person as may be designated by any
such officer.  All such information shall
be governed by the terms of the Confidentiality Agreement; and

 

(iii)          Purchasing
LLC and Seller agree to use their reasonable best efforts to obtain title
insurance policies and endorsements, as necessary to satisfy the condition
contained in Section 7.2(k), and Seller shall execute and deliver to the
title company all affidavits, certificates and other instruments as are
customarily and reasonably requested by the title company to cause the title company
to issue the New Title Insurance Policies and the Title Endorsements.

 

(iv)          The
cost of obtaining the policies and endorsements necessary to satisfy to
conditions set forth in Section 7.2(k) shall be paid 85% by Purchasing LLC
and 15% by Seller.

 

(c)           On
or before the Closing Date, Seller shall form the Delaware limited liability
company referred to in this Agreement as “LLC” and Seller shall contribute to
the LLC all of the Contributed Assets, and the LLC shall assume all liabilities
and obligations to the extent related thereto, in accordance with the Bill of
Sale, and Seller and its Affiliates shall take such other actions necessary in
order to make the representation contained in Section 4.6 true and correct
as contemplated by this

 

48

 

Agreement and
otherwise such that as of Closing all of the assets, properties and rights of
the Business, will be held by EPE and the LLC.  Seller shall cause the LLC to acquire the
Contributed Assets free and clear of all liabilities, obligations and
commitments of Seller, as contemplated hereunder, other than assumed
liabilities, obligations and commitments, and otherwise free and clear of all
Encumbrances, other than Permitted Encumbrances or Encumbrances related to the
Outstanding Indebtedness.  Seller will
consult with Purchasing LLC on an ongoing basis in respect of the LLC
Contribution and shall provide Purchasing LLC with drafts in a timely manner in
advance and consult with and take reasonable comments from Purchasing LLC on,
all documents and instruments utilized to effect the
LLC Contribution.  As of the Closing
Date, Publico shall execute and deliver the Operating Agreement, substantially
in the form attached hereto as Exhibit B.  On or before the Closing Date, Seller shall
amend and restate the certificate of incorporation of EPE to provide for the
issuance of the Series A Preferred Stock and Series B
Preferred Stock of EPE.  Seller shall
take no action that will cause the contributions contemplated hereby not to
qualify as part of an exchange described in Section 351(a) of the Code,
except to the extent otherwise provided in Section 351(b) of the
Code.  Seller shall not dispose of (A)
any of its Publico stock prior to the first anniversary of the Closing Date or
(B) more than 20% in the aggregate of its Publico stock prior to the eighteen
month anniversary of the Closing Date.

 

(d)           At
Closing, Purchasing LLC and Publico shall cause the Transferors to collectively
acquire Section 351 Control assuming Seller makes the contributions
contemplated hereby, the Seller’s representation in Section 4.9(b)(x) is accurate and there is no breach by Seller of its
covenants in the last two sentences of Section 6.2(c).  Without limiting the foregoing:

 

(i)            Purchasing
LLC shall not dispose of (A) any of its Publico stock prior to the first
anniversary of the Closing Date or (B) more than 20% in the aggregate of its
Publico stock prior to the eighteen month anniversary of the Closing Date,
other than in connection with a distribution of Publico stock to the members of
Purchasing LLC, provided that the members of Purchasing LLC enter into an
agreement with Seller pursuant to which the members agree to be bound in the
aggregate to the restrictions set forth in clause (A) of this Section 6.2(d)(i)).

 

(ii)           Publico
shall cause each of the Concurrent Investors, if any, not to dispose of any of
their Publico stock prior to the first anniversary of the Closing Date; and

 

(iii)          In
the event Publico issues additional shares of stock in exchange for cash or
other property prior to the first anniversary of the Closing Date (the
recipients of such stock, the “Subsequent Transferors”), Publico shall
cause the Subsequent Transferors not to dispose of any of their Publico stock
prior to one year following the receipt of such stock, provided (A) if stock is
issued in connection with an acquisition of assets

 

49

 

or stock of a public company, the foregoing restrictions shall only
apply with respect to shareholders owning at least 10% of the stock of the
business being acquired, (B) the Subsequent Transferors shall be permitted to
dispose of their stock after the first anniversary of the Closing and prior to
the first anniversary of the receipt of stock pursuant to their exercise of “piggyback
rights” and (C) the foregoing shall not apply to issuances of stock by Publico
in connection with a public offering. Publico will not issue any stock (or
options, warrants or similar rights to acquire stock) or adopt a plan to issue
stock (or options, warrants or similar rights to acquire stock) in exchange for
services (to an employee, independent contractor or otherwise) in excess in the
aggregate of 10% of the stock outstanding of Publico prior to the first anniversary
of Closing.  Publico will not issue, or
adopt a plan to issue, any shares of nonvoting stock (or options, warrants or
similar rights to acquire nonvoting stock) prior to the first anniversary of
Closing.

 

(iv)          All
parties shall report, act and file all Tax Returns in all respects and for all
purposes consistent with the transaction constituting an exchange described in Section 351
of the Code.  No Party shall take any
inconsistent position on any Tax Return or other report or return filed with or
provided to any tax authority, or in any audit or administrative or judicial
proceeding or otherwise unless required to do so by a final determination
within the meaning of Section 1313 of the Code.  Purchasers shall file any other statements or
reports required by law or reasonably requested by Seller in a manner
consistent with the foregoing.

 

(v)           Publico
will not unreasonably refuse a request to take additional action if made by
Seller and accompanied by a written statement of tax counsel that failure to
comply with such request is more likely than not to cause the contributions by
Seller of the EPE shares and the LLC Interests to fail to qualify as part of an
exchange described in Section 351(a) of the Code (except as those provided
in Section 351(b) of the Code). Notwithstanding any other provision of
this Agreement, Seller’s damages from the breach of this covenant shall be
limited to any additional tax liability (including interest and penalties)
resulting from a failure of Sellers contributions to qualify under Section 351(a)
of the Code (except as otherwise provided in Section 351(b) of the Code)
which failure is a direct result of Publico’s unreasonable refusal to take any
action as described in the first sentence.

 

(e)           Prior
to the Closing, Publico will not conduct any business or activities other than
the filing of SEC Reports, the issuance of stock options, warrants and Publico
Common Stock, the negotiation and execution of this Agreement, the Ancillary
Agreements and the agreements related to the Concurrent Contribution and the

 

50

 

consummation
of the transactions contemplated hereby and thereby and other customary
ministerial matters incidental to Publico’s existence and ongoing operations.

 

(f)            Prior to
the Closing Purchasing LLC shall not and shall cause its Affiliates not to,
sell acquire or enter into derivative transactions in respect of, Publico
securities.

 

(g)           Prior
to Closing, Purchasers shall not amend the terms of the Publico Acquisition
Agreement in any manner that would have a material and negative effect on
Publico or Seller without Seller’s consent. 
Prior to Closing, Purchasing LLC will assign to Publico all of
Purchasing LLC’s rights to indemnification contained in Article VIII of
the Publico Acquisition Agreement.

 

Section 6.3             Other
Post-Closing Covenants.

 

(a)           Litigation
Support.  In the event and for so
long as any of the Purchasers or Seller actively is contesting or defending
against any charge, complaint, suit, hearing or investigation of a third party
in connection with (i) any transaction contemplated under this Agreement or
(ii) any fact, circumstance, action, failure to act or transaction on or prior
to the Closing Date involving the Transferred Subsidiaries or the Business, all
Parties will cooperate with such other Party and such Party’s counsel in the
contest or defense, make available their personnel and provide such testimony
and access to their Books and Records as shall be reasonably necessary in
connection with the contest or defense, all at the sole cost and expense (which
cost and expense shall be limited to reasonable out-of-pocket costs only) of
the contesting or defending Party, except to the extent: (x) the contesting or
defending Party may be entitled to indemnification therefor hereunder in
respect of such matters; or (y) where any conflict of interest between the
Parties or a potential counterclaim of one Party against the other exists in
respect of such charge, complaint, suit, hearing or investigation creates a
conflict of interest.

 

(b)           Further
Assurances.  Without affecting the
terms of this Agreement, at any time after the Closing Date, the Parties shall
promptly execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, any other assurances or documents reasonably
requested by the Parties or any designees, as the case may be, and reasonably
necessary for the Parties or any of their Affiliates or designees, as the case
may be, to give effect to this Agreement. Without limiting the foregoing, (i)
Seller upon reasonable request from Publico will at any time now or in the
future assist and support Publico in establishing the Transferred Subsidiaries’
rights in the intellectual property of the Business existing at the time of the
Closing, including, executing, acknowledging and delivering any additional
documents as Publico may reasonably deem necessary to evidence, effectuate or
perfect such rights hereunder, and (ii) Publico shall, and shall cause the
Transferred Subsidiaries to, take all actions reasonably necessary to release
Seller, Beneficiary or any of their respective Affiliates from any guarantees
of (or similar obligations with respect to) liabilities or other

 

51

 

obligations
of the Transferred Subsidiaries; provided, that Publico shall not be
required to incur material expense or encumber any assets.

 

(c)           Release.  Other than as provided in Section 8.9,
as of and after the Closing, each of Publico and Purchasing LLC fully
relinquishes, releases and discharges Seller and its trustee, beneficiaries,
agents, employees and affiliates from and against all suits, causes of action,
legal or administrative proceedings, liabilities, claims, damages, losses,
costs or expenses of any kind, known or unknown, including, without limitation,
any action under CERCLA or any other Environmental Law, which Publico or
Purchasing LLC had, has or may have, based upon the presence, discharge,
treatment, recycling, use, migration, storage, generation, release, disposal or
transportation to or from the Real Property of any Hazardous Substances.

 

(d)           Assignees.  Publico shall not, and shall not permit any
of its subsidiaries to, directly or indirectly, sell, transfer, assign, or
otherwise dispose of all or any portion of the Business, unless prior thereto,
the transferee agrees in writing for the benefit of Seller, in form and
substance satisfactory to Seller, to comply with the obligations of the
Purchasers set forth in this Section 6.3(d) and Sections 6.4, 6.9, and 6.16.

 

Section 6.4             Tangible
Personal Property.  Subject to
Section 6.16, EPE shall have the right to use during the term of Mansion
Agreement, free of charge, any of the Tangible Personal Property set forth
under Item 4 of Schedule A in any reasonable way in connection with the
operations of the Business. At all times while EPE is in possession of such
Tangible Personal Property, (i) at no expense to Seller, Publico shall cause
EPE to use its commercially reasonable efforts to preserve, maintain, repair, store,
catalog and insure such Tangible Personal Property, including all memorabilia
and collections, in each case, in a manner consistent with, and no less
favorable than, past practice and (ii) Publico shall not cause to exist, and
shall prohibit EPE from causing to exist, or through inaction permit a creditor
of Publico or its subsidiaries, as such, 
to have, any Encumbrances on Seller’s rights in and to such Tangible
Personal Property.  Seller shall not be
entitled to receive any insurance proceeds payable, or other compensation, in
connection with any loss, destruction or damage to the Tangible Personal
Property.  Neither Seller nor Beneficiary
will remove any of the Tangible Personal Property on display or stored at the
Mansion Property or stored in the storage facilities of the Business without
the express written consent of Seller. 
The Parties agree that the rights of EPE to use such Tangible Personal
Property form an integral part of the transactions contemplated hereby and part
of the consideration exchanged at the Closing hereunder, that the Tangible
Personal Property has no economic value to Seller after Closing and that title
is being retained solely for non-economic reasons (it being understood that the
Tangible Personal Property has significant personal, emotional and sentimental
significance and value to the Beneficiary, and that the Beneficiary would
suffer irreparable harm upon a breach of the covenants in Section 6.4).

 

52

 

Section 6.5             Tax
Matters.

 

(a)           With
respect to the EPE Shares:

 

(i)            Liability
for Taxes.  Notwithstanding any other
provisions of this Agreement, Seller shall pay, or shall cause to be paid when
due, all Taxes imposed on or assessed against EPE with respect to any
Pre-Closing Period, and shall indemnify and hold harmless Purchasers for the
imposition of any such Taxes.  Publico shall
pay or shall cause to be paid when due Taxes imposed on or assessed against EPE
other than Pre-Closing Period Taxes;

 

(ii)           Straddle
Period.  In the case of any Taxes
imposed on or assessed against EPE with respect to a period that begins before
and ends after the Closing Date (a “Straddle Period”), the amount of any
Taxes based on or measured by income or receipts of EPE and its Subsidiaries
for the period ending on or prior to the Closing Date shall be determined based
on an interim closing of the books as of the close of business on the Closing
Date (and for such purpose, the taxable period of any partnership or other
pass-through entity in which EPE or any of its Subsidiaries holds a beneficial
interest shall be deemed to terminate at such time) and the amount of other
Taxes of EPE and its Subsidiaries for a Straddle Period that relates to the period
ending on or prior to the Closing Date shall be deemed to be the amount of such
Tax for the entire taxable period multiplied by a fraction the numerator of
which is the number of days in the taxable period ending on the Closing Date
and the denominator of which is the number of days in such Straddle Period;

 

(iii)          Responsibility
for Filing Tax Returns.  Subject to
the cooperation requirements set forth in clause (iv) below:  (A) Seller shall prepare or cause to be
prepared and file or cause to be filed all Tax Returns of EPE and its
subsidiaries for all taxable periods ending on or prior to the Closing Date;
(B) Publico shall prepare or cause to be prepared and file or cause to be filed
all Tax Returns for EPE and its Subsidiaries for all taxable periods ending
after the Closing Date; provided, that Publico shall (I) provide Seller with a
copy of any Straddle Period Tax Returns of EPE at least ten days prior to the
filing thereof and shall permit Seller to review and comment on such Tax
Returns and (II) shall have good faith discussions with Seller (and, if requested,
Publico’s independent public accountants) with respect to any such comments;
and (C) Publico shall not file any amended Tax Returns for EPE or any of its
Subsidiaries for any Pre-Closing Period without the reasonable consent of
Seller, unless required to by applicable Law;

 

(iv)          Cooperation
on Tax Matters.

 

53

 

(A)          Publico,
EPE and its Subsidiaries, and Seller shall cooperate fully, as and to the
extent reasonably requested by the other Party, in connection with the filing
of Tax Returns pursuant to this Section 6.5 and any audit, litigation or
other proceeding with respect to Taxes, and agrees to provide the other Parties
hereto with notice of any audit or proceeding with respect to Taxes which are the
responsibility of such other Parties hereunder. 
After receiving notice, the Indemnifying Party shall provide the
notification required pursuant to Section 8.4(b).  Such cooperation shall be at the expense of
the party requesting such cooperation. 
Such cooperation shall include the retention and (upon the other Party’s
request) the provision of records and information that are reasonably relevant
to any such audit, litigation or other proceeding and making employees
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder and the taking of such actions
as Seller reasonably requests to contest or permit the Seller to contest
(provided that, except as set forth below, Seller shall be permitted to contest
the validity, applicability or amount of Tax or proposed adjustment to Taxes
only to the extent the Tax can be contested in a proceeding separate from the
contest of Taxes with respect to which Seller has no obligation to indemnify
Publico) the validity, applicability and amount of the imposition of any Tax or
proposed adjustment to Taxes with respect to any Pre-Closing Period with
respect to which Seller would be obligated to indemnify Publico; provided,
however, that Seller shall have no right to direct Publico in connection
with, or to control any contest, if Publico waives in writing its right to
indemnification hereunder or with respect to issues with respect to which
Seller is not obligated to indemnify Publico. 
Seller shall be permitted to control any audit or proceeding that is
solely with respect to any Pre-Closing Periods; provided that Seller shall
permit Publico to participate fully in all negotiations, consultations and
other meetings with the applicable tax authorities and shall provide Publico
with all correspondence relating to such contest, and will otherwise consult in
good faith during the course of such contest and Seller shall not agree to any
resolution or settlement of a contest that would result in an increase of EPE’s
liability for Taxes with respect to which Seller is not indemnifying Publico
without Publico’s consent, not to be unreasonably withheld, conditioned or

 

54

 

delayed.  Seller may agree to a resolution or settlement
of a contest, without Publico’s consent, if such resolution does not result in
an increase of EPE’s liability for Taxes with respect to which Seller is not
indemnifying Publico.  Either Party can
settle its years without the consent of the other Party, unless such settlement
results in an increase in Taxes for the years not subject to
indemnification.  In the event of an
audit or proceeding which covers both a Pre-Closing and a Post-Closing period,
the Parties shall use good faith efforts to have the audit or proceeding
bifurcated.  If the audit or proceeding
cannot be bifurcated into two separate audits or proceedings, Publico will
control the contest but will upon receipt of a written request of Seller, retain
an independent accounting firm (not regularly retained by Publico) to
coordinate the pursuit of such contest under the direction of Publico’s Board
of Directors and officers.  Publico will
direct such independent accounting firm to cooperate with Seller and provide
Seller with the same access to personnel participating in the audit as
Publico.  Publico will permit Seller to
participate fully in all negotiations, consultations and other meetings with
the applicable tax authorities.  Publico
will, and will request independent accounting firm to, act reasonably and in
good faith in connection with the pursuit of such contest and the negotiation
of any settlement or compromise, taking into account the interests of Seller in
the years in which Seller may ultimately be liable to indemnify for the taxes
that are the subject of such contest as well as the interests of Publico for
the years in which Publico will ultimately be liable to indemnify for the taxes
that are the subject of such contest.  In
the event Publico reaches a settlement with the taxing authority or receives a
notice of determination (or other similar notice) which it does not wish to
contest for any year for which Seller would have an obligation to indemnify
Publico, Seller shall have the opportunity to reject such settlement or contest
such notice and take control of the contest, provided that Seller will assume
all costs of the contest including the payment of taxes for years in which
Seller would not otherwise be obligated to indemnify purchaser to the extent
such Taxes exceed the amount of Taxes for such periods under the proposed
settlement agreement or notice.  In the
event a notice of determination (or other similar notice) is received, and
Seller does not wish to contest the deficiency for the pre-closing periods,
then if Publico contests such

 

55

 

determination,
Publico shall indemnify Seller for any increase in Taxes for the Pre-Closing
Periods above the amount of Taxes set forth in the notice.  EPE and its subsidiaries, Publico and Seller
agree (y) to retain all books and records with respect to tax matters pertinent
to EPE and its subsidiaries in their possession until the expiration of the
statute of limitations including extensions thereof, and to abide by all record
retention agreements entered into with any taxing authority and (z) to give the
other Parties reasonable written notice prior to transferring, destroying or
discarding any such books and records and, if such other Parties so request,
EPE and its Subsidiaries, Publico or Sellers, as the case may be, shall allow such
other Parties to take possession of such books and records; and

 

(B)           Publico
and Seller agree, upon request, to use their best efforts to obtain any
certificate or other document from any governmental authority or any other
Person as may be necessary to mitigate, reduce or eliminate any Tax that could
be imposed (including, but not limited to, with respect to the transactions
contemplated hereby);

 

(v)           Tax
Sharing Agreements.  The Parties
shall enter into a Tax Sharing Agreement in the form set forth on Exhibit L
(the “Tax Sharing Agreement”). 
All other tax-sharing agreements or similar agreements with respect to
or involving EPE and its Subsidiaries shall be terminated as of the Closing
Date and, after the Closing Date, EPE and its Subsidiaries shall not be bound
thereby or have any liability thereunder; and

 

(vi)          Certain
Taxes and Fees.  All transfer, documentary, sales, use, stamp,
registration and other such Taxes, and all conveyance fees, recording charges
and other fees and charges (including any penalties and interest) incurred in
connection with consummation of the transactions contemplated by this Agreement
shall be paid 50% by Purchasers and 50% by Seller when due.  Publico will at its own expense file all
necessary Tax Returns and other documentation with respect to all such Taxes,
fees and charges.  To the extent
reasonably requested, each Party will, and will cause their respective
Affiliates to, join in the execution of any such Tax Returns and other
documentation;

 

(vii)         Refunds.  If Publico, Purchasers, EPE or any of its
subsidiaries receive a refund of any Taxes for any Pre-Closing Period of

 

56

 

EPE or any of its Subsidiaries, it shall make a payment in such amount
to Seller within thirty (30) days following receipt of such refund.

 

(b)           With
respect to the Contributed Assets:

 

(i)            Liability
for Taxes.  Notwithstanding any other
provisions of this Agreement, Seller shall pay, or shall cause to be paid when
due, all Taxes imposed on or assessed against Seller with respect to the
Contributed Assets for any Pre-Closing Period, and shall indemnify and hold
harmless Purchasers for the imposition of any such Taxes.  Publico shall pay or shall cause to be paid
when due Taxes imposed on or assessed against the Contributed Assets other than
for any Pre-Closing Period;

 

(ii)           Straddle
Period.  With respect to the
Contributed Assets, in the case of any Taxes imposed on or assessed against
Seller with respect to a Straddle Period, the amount of any Taxes based on or
measured by income or receipts of Seller for the period ending on or prior to
the Closing Date shall be determined based on an interim closing of the books
as of the close of business on the Closing Date and the amount of other Taxes
of Seller for a Straddle Period that relates to the period ending on or prior
to the Closing Date shall be deemed to be the amount of such Tax for the entire
taxable period multiplied by a fraction the numerator of which is the number of
days in the taxable period ending on the Closing Date and the denominator of
which is the number of days in such Straddle Period;

 

(iii)          Certain
Taxes and Fees.  All transfer,
documentary, sales, use, stamp, registration and other such Taxes, and all
conveyance fees, recording charges and other fees and charges (including any
penalties and interest) incurred in connection with consummation of the
transactions contemplated by this Agreement shall be paid 50% by Purchasers and
50% by Seller when due.  Publico will, at
its own expense, file all necessary Tax Returns and other documentation with
respect to all such Taxes, fees and charges. To the extent reasonably
requested, each Party will, and will cause their respective Affiliates to, join
in the execution of any such Tax Returns and other documentation;

 

(iv)          Cooperation
on Tax Matters.

 

(A)          Each
party hereto shall cooperate fully, as and to the extent reasonably requested
by the other party in connection with any audit, litigation or other proceeding
with respect to Taxes and agrees to provide the other parties hereto with
notice of any audit or proceeding with respect to Taxes which are the
responsibility of such other parties hereunder. 
After receiving notice, the Indemnifying Party shall provide the
notification required pursuant to Section 8.4(b).  Such

 

57

 

cooperation shall
be at the expense of the party requesting such cooperation.  Such cooperation shall include the retention
and (upon the other Party’s request) the provision of records and information
that are reasonably relevant to any such audit, litigation or other proceeding
and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder and
the taking of such actions as Seller reasonably requests to contest or permit
Seller to contest the validity, applicability and amount of the imposition of
any Tax or proposed adjustment to Taxes with respect to any Pre-Closing Period
with respect to which Seller would be obligated to indemnify Publico; provided,
however, that in the contest of a tax, other than income tax, a portion
of which would be subject to indemnification and a portion of which would not
be subject indemnification, Seller and Publico shall jointly control such
contest.  Seller, Publico or LLC, as the
case may be, agree (x) to retain all books and records with respect to Tax
matters pertinent to the Contributed Assets in their possession until the expiration
of the statute of limitations including extensions thereof, and to abide by all
record retention agreements entered into with any taxing authority and (y) to
give the other Parties reasonable written notice prior to transferring,
destroying or discarding any such books and records and, if such other Parties
so request, Seller, Publico or LLC, as the case may be, shall allow such other
Parties to take possession of such books and records; and

 

(B)           Purchasers,
Seller and LLC agree, upon request, to use their best efforts to obtain any
certificate or other document from any governmental authority or any other
Person as may be necessary to mitigate, reduce or eliminate any Tax that could
be imposed (including, but not limited to, with respect to the transactions
contemplated hereby); and

 

(v)           All
tax-sharing agreements or similar agreements with respect to or involving the
Contributed Assets shall be terminated as of the Closing Date and, after the
Closing Date, Seller shall not be bound thereby or have any liability
thereunder.

 

(c)           Except
as otherwise expressly provided herein, Section 8.4 shall not apply with
respect to matters covered by Section 6.5.

 

58

 

Section 6.6             No
Solicitation or Other Transaction.  From the date hereof until consummation of the
Closing or termination of this Agreement in accordance with Article IX,
and except as required by applicable Law, as evidenced by the written opinion
of Counsel to Seller (a copy of which will be delivered to Purchasing LLC),
Seller will not, nor will it authorize or permit the Transferred Subsidiaries
or any of its respective Affiliates, nor will it authorize any investment
banker or other representative or agent retained by Seller or its Affiliates to
(and shall direct such bankers or similar representatives or agents not to):

 

(a)           directly
or indirectly, solicit, initiate, or participate in any way (including by way
of furnishing information) in any discussions or negotiations with any Person
or other entity or group (other than Purchasing LLC or an Affiliate of
Purchasing LLC) concerning any merger, consolidation, sale of the Business (or
any portion thereof other than sales of assets (tangible or intangible) in the
Ordinary Course of Business) by asset sale, sale of shares of capital stock or
similar transactions in respect of the Transferred Subsidiaries or the Business
(each, an “Acquisition Proposal”),

 

(b)           knowingly
disclose, directly or indirectly, to any Person preparing to make an
Acquisition Proposal any confidential information concerning the Transferred
Subsidiaries or Business, or

 

(c)           enter
into any understanding, agreement or commitment with any third party providing
for a business combination involving, equity investment in, or sale of the
Transferred Subsidiaries or the Business (or any portion thereof other than
sales of assets (tangible or intangible) in the Ordinary Course of Business) by
asset sale other than with Purchasing LLC and the transactions contemplated
hereby.

 

Section 6.7             No
Breaches.  Each of the Parties shall,
in the event of, or promptly after the occurrence of, or promptly after
obtaining knowledge of the occurrence of or the impending or threatened
occurrence of, any fact or event which would cause or constitute a Material Adverse
Effect, or a breach as of the Closing Date of any of the representations and
warranties in this Agreement made by Seller, Purchasing LLC or Publico, give
detailed notice thereof to the other Party hereto in accordance with and if
required by Section 8.7(a)(ii). 
Such other Party’s sole remedy for any such breach shall be the remedy
set forth in Section 8.7(a) hereto. 
No disclosure by any Party pursuant to this Section 6.7 shall be
deemed to amend or supplement the Disclosure Schedules or cure any Material
Adverse Effect or misrepresentation or breach of warranty.

 

Section 6.8             Audited
Financial Statements.  Seller will
furnish Purchasers with the Audited Financial Statements and will use
reasonable best efforts to cause to be delivered therewith such associated
auditor opinions and consents as are reasonably required by Purchasing LLC or
Publico in respect of the preparation and filing of the Public Transaction
Report and any Other Filing required in connection with the Transactions, at
least 10 days prior to the Closing Date; provided, that (i) Seller shall not be
required to undertake any liability with respect to the delivery of such
auditor opinions or consents,

 

59

 

and (ii) all out-of-pocket fees and expenses
related to the preparation of the Audited Financial Statements shall be paid
directly by Purchasers and shall not be allocated to EPE or LLC after the
Closing.

 

Section 6.9             Confidentiality.  

 

(a)           For
a period of ten years after the Closing Date, Seller will not, and will cause
its Affiliates and Representatives not to, directly or indirectly, disclose any
information which is confidential, proprietary or otherwise not publicly
available, including any confidential data, or information relating to the
business practices, products, prospects, ideas, designs, marketing, sales,
methods, manuals, strategies or financial affairs (collectively, the “Confidential
Information”):

 

(i)            of
the Business as of the Closing Date, or

 

(ii)           of the business of Purchasers or their Affiliates and
Representatives, obtained in connection with the negotiation, preparation or
performance of this Agreement, the Operating Agreement or the Stockholders
Agreement.

 

(b)           Purchasers
will not, and will cause their Affiliates and Representatives not to, directly
or indirectly, disclose any information which is confidential, proprietary or
otherwise not publicly available, relating to the personal life or finances of
Beneficiary or any member of Beneficiary’s family (“Beneficiary Confidential
Information”), in each case, obtained in connection with the negotiation,
preparation or performance of this Agreement; provided, that Purchasers
may disclose confidential information related to Elvis Presley if such
disclosure (i) could not directly or indirectly impugn the character, honesty,
integrity, morality, business acumen, or abilities or otherwise disparage or
encourage or induce others to disparage Elvis Presley and (ii) does not
directly or indirectly include any of the information referred to on Schedule 6.9(b).

 

(c)           Notwithstanding
the foregoing, Confidential Information or Beneficiary Confidential Information
will not include such information:

 

(i)            which at the time of disclosure is publicly available or
becomes publicly available through no act or omission of the Party or its
Affiliates or Representatives;

 

(ii)           becomes
available to the Party or its Affiliates or Representatives on a
non-confidential basis from a source other than the other Parties or their
respective Affiliates or Representatives; provided that such source is
not known by the receiving Party or its Affiliates or Representatives to be
bound by a confidentiality agreement or other obligations of secrecy; or

 

60

 

(iii)          is required to be disclosed in accordance with applicable
Law or legal process or the rules of a stock exchange or national market
system.

 

(d)           In
the event of a breach of the obligations hereunder, the Parties agree that, in
addition to all other available remedies, the non-breaching Party or its
Affiliates will be entitled to injunctive relief to enforce such obligations in
any court of competent jurisdiction.

 

(e)           Effective
upon the Closing, the Confidentiality Agreement shall terminate with respect to
information relating solely to the Business; provided, however,
that each of the Purchasers acknowledges that any and all other information
provided to it by Seller or Beneficiary concerning only Seller or Beneficiary
and not the Business shall remain subject to the terms and conditions of the
Confidentiality Agreement after the Closing Date.

 

Section 6.10           Termination
of Related Party Arrangements; Liquidation of Certain Seller Entities.

 

(a)           Prior
to the Closing, Seller shall cause all Contracts and other arrangements set
forth on Schedule 6.10(a) to be terminated, dividended or
distributed to Seller or one of its Affiliates (outside the Business), in a
manner such that the Transferred Subsidiaries and their Affiliates as of
immediately following Closing shall have no further liabilities or obligations
or rights in respect of such Contracts and other arrangements.

 

(b)           Seller
shall cause all entities set forth on Schedule 6.10(b) to be
liquidated, dissolved and wound-up with no further liabilities or obligations of
any nature to which the Transferred Subsidiaries or Purchasers could be
subject.

 

Section 6.11           Board
Seat for Beneficiary.  Each of
Publico and Purchasing LLC shall take all actions reasonably requested,
including, in the case of Purchasing LLC, voting its shares of Publico, to
elect a director designated by Beneficiary who is reasonably acceptable to
Publico to the board of directors of Publico, so long as Beneficiary or
Beneficiary’s descendants, immediate family members or any trust or other
entity formed for tax or estate planning purposes, in either case, for the
benefit of the foregoing (i) beneficially owns at least 50% of the outstanding
Preferred Stock (or such amount of Publico Common Stock receivable upon
conversion of such Preferred Stock) beneficially owned by Beneficiary as of the
Closing Date, and (ii) the appointment and continuation of such designee is not
prohibited by the Securities Act or the rules of any national securities
exchange or national over-the-counter market on which the Publico Common Stock
is listed or traded or other applicable Law.

 

Section 6.12           [Intentionally
omitted]

 

61

 

Section 6.13           Discharge
of Indebtedness.

 

(a)           Seller
shall use reasonable efforts to arrange in writing with all holders of
Outstanding Indebtedness of the Transferred Subsidiaries, after giving effect
to the contributions to LLC contemplated by Section 6.2(c), for such
holders to:

 

(i)            deliver a certificate at least three Business Days prior to
Closing, indicating the complete payoff amount necessary to fully discharge the
Indebtedness;

 

(ii)           in
exchange for the pay-off of the Indebtedness, deliver an instrument (each, “Pay-Off
Letter”) at Closing in favor of each of the Transferred Subsidiaries and
their Affiliates evidencing an unconditional and complete discharge of the
Indebtedness (including the full and unconditional release of Seller and
Beneficiary or any of their respective Affiliates of any guarantees or pledges
related thereto) and any obligations in respect thereof.

 

(b)           Any
fees or expenses related to such Pay-Off Letters shall be paid one-half by
Seller and one-half by Purchasing LLC; provided, that:

 

(i)            Seller
shall not agree to any such fee or expense without the prior consent of
Purchasing LLC, which consent shall not be unreasonably withheld, conditioned
or delayed, and

 

(ii)           any portion of Purchasing LLC’s fees and expenses shall be
paid directly by Purchasing LLC.

 

(c)           If
notwithstanding the foregoing reasonable efforts with respect to the early
repayment of the Indebtedness set forth on Schedule 6.13, Seller is unable
to enter into the arrangements contemplated by clause (a) above, Seller agrees
to defease such indebtedness in accordance with the terms of the governing
document, in full, simultaneous with Closing.

 

(d)           Any
additional amounts due as a result of a defeasance of the indebtedness
contemplated by (c) above, in excess of the principal amount outstanding
thereunder at Closing, must be paid by Seller; provided that Seller
shall have the option to cause the Purchasers to pay either (x) $200,000 or (y)
$400,000 of such costs; provided  further that, Purchaser will not
be required to pay more than total amount of such additional costs due as a
result of such defeasance, taking into account amounts being paid by Seller.

 

Section 6.14           Ancillary
Agreements.  Each of the Parties or
their applicable Affiliates shall enter into and deliver the Ancillary
Agreements to which they are a party prior to or at Closing. Prior to Closing,
the Parties shall mutually agree to the form of the Certificate of Designation,
the Other Publico Certificate of Designation, Registration Rights Agreement,
EPE Series A Certificate of Designation and EPE Series
B Certificate of Designation.  At
Closing, Publico and Seller shall enter into the Stockholders Agreement 

 

62

 

in respect of their rights as holders of
EPE preferred stock which shall contain substantially identical terms to those
in Operating Agreement subject to such adjustments as are reasonably necessary
to reflect the fact that EPE is a C-corporation for tax purposes.  At Closing, Publico shall cause its relevant
Affiliates to enter into a license agreement with Beneficiary and take such
other actions reasonably necessary to provide Beneficiary and her heirs with a
lifetime and irrevocable license to use the Intellectual Property Rights in
respect of the name “Elvis Presley” or derivations thereof, as expressly
permitted by the first sentence of Section 10.17(c) hereof, but as limited
by the second sentence of Section 10.17(c).

 

Section 6.15           Sarbanes-Oxley
Advisors.  Seller shall continue to
cooperate in good faith with Cornick, Garber & Sandler and provide them
with full access at reasonable times and upon reasonable notice to the Books
and Records, personnel, work papers, historical financial information or other
items of Seller and the Transferred Subsidiaries reasonably necessary for them
to conduct their review and render their advice in accordance with the terms of
their engagement including advice that the Business is in compliance with Section 404
of the Sarbanes-Oxley Act.  Any fees or
expenses related to such review and engagement shall be paid directly by
Purchasers and shall not be allocated to EPE or LLC after the Closing.

 

Section 6.16           Prohibited
Activities.  Other than any action
that is consistent with the past practice of the Business, Purchasers shall
not, and shall cause the Transferred Subsidiaries and, in the case of clauses
(b) and (c), any Person under the control of the Company, and the respective
directors, officers, employees, agents and representatives, acting in such
capacity, not to, directly or indirectly: (a) undertake any of the activities
set forth on Exhibit N (the “Improper Activities”), (b) take any action
(including, by granting any third party any right or license) that could
reasonably be expected to associate the Transferred Subsidiaries or their
subsidiaries, the Business 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 (c) take any action that is offensive, immoral, derogatory or in
poor taste that would tarnish the reputation or public image of Elvis Presley,
Seller or the Beneficiary, or EPE (including the name (including assumed or
professional names), image and likeness and other identifiable attributes).

 

Section 6.17           Simultaneous
Closing.  Purchasers and
Seller will cooperate with each other in causing the Closing contemplated by
this Agreement and the Closing contemplated by the Concurrent Contribution to
occur and be effected simultaneously; it being understood and agreed that the
Closing hereunder will not be consummated until all conditions to closing in
respect of the closing of the Concurrent Contribution, have been satisfied or
waived other than those which by their nature are to be satisfied at the
closing.  Purchasers shall provide Seller
with all documentation relating to the Concurrent Contribution reasonably
requested by Seller and shall afford Seller a reasonable opportunity to review
and comment on such documentation.

 

63

 

ARTICLE VII

 

CONDITIONS TO CLOSING

 

Section 7.1             Conditions
to the Obligations of Purchasers and Seller.  The obligations of the Parties to effect the Closing are subject to the satisfaction of the
following conditions:

 

(a)           Regulatory
Consents.  The waiting periods
applicable to the consummation of the Seller Contribution under the HSR Act
shall have expired or been terminated and the notices, reports and other
filings required to be made or obtained at or prior to the Closing under other
Competition Laws shall have been made or obtained;

 

(b)           No
Injunctions.  No Governmental Entity
shall have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, judgment, order, decree, injunction or other legal restraint
(individually and collectively, an “Order”) which is in effect on the
Closing Date preventing or otherwise restraining the transactions contemplated
by this Agreement;

 

(c)           Simultaneous
Closings. The closing of transactions comprising the Concurrent
Contribution shall be occurring simultaneously with the Closing hereunder.

 

Section 7.2             Conditions
to the Obligations of Purchasers. 
The obligation of Purchasing LLC to effect the
Closing is subject to the satisfaction (or waiver by Purchasing LLC in its sole
discretion, it being understood that Publico may not waive any conditions to
Closing) of the following conditions:

 

(a)           Representations
and Warranties.  The representations
and warranties of Seller contained in this Agreement qualified as to
materiality or a Material Adverse Effect shall be true and correct, and those
not so qualified shall be true and correct in all material respects, as of the
date hereof and as of the Closing Date as if made on and as of such time,
except to the extent such representations and warranties expressly relate to an
earlier date, in which case such representations and warranties qualified as to
materiality or a Material Adverse Effect shall be true and correct, and those
not so qualified shall be true and correct in all material respects, on and as
of such earlier date;

 

(b)           Covenants.  The covenants and agreements of Seller to be
performed on or prior to the Closing shall have been duly performed by the
Closing, in all material respects;

 

(c)           Certificate.  Purchasers shall have received a certificate
signed by Seller, dated as of the Closing Date, to the effect that the
conditions set forth in Sections 7.2(a) and 7.2(b) have been satisfied;

 

64

 

(d)           Third
Party Consents.  Each of the
consents, approvals or authorizations set forth in Schedule 4.4
under “Third Party Conditional Consents,” shall have been obtained and shall be
in full force and effect;

 

(e)           No
Proceedings.  There shall not be
pending by any Governmental Entity, any suit, action or proceeding:

 

(i)            challenging
or seeking to restrain or prohibit any transactions contemplated by this
Agreement or seeking to obtain from Purchasers or any of their Affiliates in
connection with the transactions contemplated by this Agreement any damages
that are material in relation to any of the Purchasers and their Affiliates
taken as a whole,

 

(ii)           seeking
to prohibit or limit the ownership or operation by any of the Purchasers or any
of their Affiliates of any material portion of the business or assets of
Purchasers (including the Business), or any of their Affiliates, or to compel
any of the Purchasers, or any of their Affiliates to dispose of or hold
separate any material portion of the business or assets of any of the
Purchasers (including the Business), Seller, the Transferred Subsidiaries or
any of their respective Affiliates, in each case as a result of the
transactions contemplated by this Agreement,

 

(iii)          seeking
to impose limitations on the ability of any of the Purchasers to acquire or
hold, or exercise full rights of ownership of, as the case may be, the LLC
Interests, the EPE Shares or the Transferred Subsidiaries or

 

(iv)          seeking to prohibit any of the Purchasers or any of their
Affiliates from effectively controlling, in any material respect, the Business;

 

(f)            Opinion
of Counsel.  Purchasers shall have
received a legal opinion of:

 

(i)            Proskauer
Rose LLP, counsel for Seller, dated as of the Closing Date, containing opinions
substantially identical to the opinions set forth on Exhibit F-1, subject to
customary qualifications; and

 

(ii)           Glankler
Brown PLLC, counsel for Seller, dated as of the Closing Date, containing
opinions substantially identical to the opinions set forth on Exhibit F-2,
subject to customary qualifications;

 

(g)           Tax
Certificate.  Purchasers shall have
received from Seller the Seller Tax Certificate;

 

65

 

(h)           Deliveries.  Purchasers shall have received each of (i)
the Audited Financial Statements, together with such associated auditor
opinions and consents as are required by Purchasers in respect of the
preparation and filing of any Other Filings required to be filed in connection
with the Transactions, (ii) an executed copy of each of the Ancillary
Agreements and the Bill of Sale; and (iii) a copy of the Closing Debt Schedule;

 

(i)            Audited
Financial Statements. Except as set forth on Schedule 7.2(i), the
Audited Financial Statements shall be consistent in all material respects with
the Unaudited Financial Statements other than those inconsistencies,
deficiencies or charges, that are not material and
adverse to the Business taken as a whole or to the value of the Business to
Purchasers.

 

(j)            Liabilities.
Except as set forth on Schedule 7.2(j), the Business shall not have any
liabilities of any nature (absolute, accrued, fixed, contingent or otherwise)
required by GAAP to be set forth on a balance sheet of the Business or in the
notes thereto other than those reflected in the Audited Financial Statements or
those incurred in the Ordinary Course of Business since September 30, 2004
which are not material to the Business, taken as a whole;

 

(k)           Title
Insurance.  The New Title Insurance
Policies and the Title Endorsements, as required by Sections 3.2(g) and (h)
shall be in effect; and

 

(l)            Indebtedness.
Each holder of the outstanding Indebtedness of the Transferred Subsidiaries as
of the Closing Date shall have delivered a Pay-Off Letter, which complies with
the terms contemplated by Section 6.13;

 

(m)          Inducement
Letter.  Beneficiary shall have
delivered an executed copy the letter agreement attached hereto as Exhibit G;
and

 

(n)           Evaluation
of Termination Right.  Purchasing LLC
shall have had five days from the receipt of any notice pursuant to Section 8.7(a)(ii) duly delivered in accordance with Section 10.1 to
evaluate and make a determination in respect of any such matter that is the
subject of such notice.

 

Section 7.3             Conditions
to the Obligations of Seller.  The
obligation of Seller to effect the Closing is subject
to the satisfaction (or waiver) of the following conditions:

 

(a)           Representations
and Warranties.  The representations
and warranties of Purchasing LLC and Publico contained in this Agreement
qualified as to materiality or a material adverse effect shall be true and
correct, and those not so qualified shall be true and correct in all material
respects, as of the date hereof and as of the Closing Date as if made on and as
of such time, except to the extent such representations and warranties
expressly relate to an earlier date, in which case such representations and warranties
qualified as to materiality or a material adverse effect shall

 

66

 

be
true and correct, and those not so qualified shall be true and correct in all
material respects, on and as of such earlier date;

 

(b)           Covenants.  The covenants and agreements of Purchasing
LLC and Publico to be performed on or prior to the Closing shall have been duly
performed by the Closing, in all material respects;

 

(c)           Certificates.  Seller shall have received a certificate signed
by a Vice President or other executive officer of Purchasing LLC, dated as of
the Closing Date, to the effect that the conditions set forth in Sections
7.3(a) and 7.3(b) as they relate to Purchasing LLC have been satisfied, and a
certificate signed by an executive officer of Publico, dated as of the Closing
Date, to the effect that the conditions set forth in Sections 7.3(a) and 7.3(b)
as they relate to Publico have been satisfied;

 

(d)           Purchasing
LLC’s Shareholding in Publico After the Closing.
The Concurrent Contribution shall have been structured such that, immediately
upon the closing of the Concurrent Contribution on a fully diluted basis:

 

(i)            The
Transferors collectively, shall hold at least 80% of the issued and outstanding
shares of Publico Common Stock;

 

(ii)           Publico
shall not have issued Preferred Stock or Other Preferred Stock to anyone other
than Seller,

 

(iii)          the
Transferors collectively shall have Section 351 Control assuming Seller’s
representation in Section 4.9(b)(x) is accurate and assuming no breach by
Seller of its covenants in the last two sentences of Section 6.2(c), and

 

(iv)          there
shall be no plan or intention of Purchasers to take any action that would cause
the contribution by Seller of the EPE Shares and the LLC Interests not to
qualify as part of an exchange described in Section 351(a) of the Code
(except as to the extent otherwise provided in Section 351(b) of the
Code).

 

(e)           Receipt
of Shares.  Seller shall have
received from Publico a certificate or certificates evidencing the Preferred
Shares, the Other Preferred Stock and the Publico Common Stock being issued
hereunder, duly endorsed in blank or accompanied by stock powers duly executed
in blank, in proper form for transfer;

 

(f)            Receipt
of Purchase Price.  Seller shall have
received the payments required to be made pursuant to Section 2.3 hereof;

 

(g)           Deliveries.  Seller shall have received an executed copy
of each of the Ancillary Agreements;

 

67

 

(h)           Pay-Off
of Indebtedness.  Contemporaneously
with Closing, Publico shall have repaid all Outstanding Indebtedness in the
amounts and pursuant to the instructions set forth on the applicable Pay-Off
Letters to the extent such Pay-Off Letters are obtained by Seller and comply
with the terms contemplated by Section 6.13;

 

(i)            No
Trading Halt.  There shall not have
occurred any suspension or limitation in trading in, and minimum prices shall
not have been established for, Publico Common Stock on the OTC Bulletin Board,
and Publico shall not have received any notice threatening the continued
quotation of its common stock on the OTC Bulletin Board;

 

(j)            Opinion
of Counsel.  Sellers shall have
received a legal opinion of Greenberg Traurig, LLP, counsel for Purchasing LLC
dated as of the Closing Date, containing opinions substantially identical to
the opinions set forth on Exhibit F-3 subject to customary qualifications;

 

(k)           Concurrent
Contribution.  The Concurrent
Contribution shall have occurred on substantially the same terms and conditions
as those in the documents previously provided to Seller;

 

(l)            Investor
Certificate of Designation.  If a concurrent private equity
(institutional or otherwise) investment in Publico arranged by Purchasing LLC
takes place in connection with the transactions contemplated hereby (whether
constituting the Concurrent Contribution or otherwise), Seller shall have been
provided evidence to its reasonable satisfaction, that the terms of such
investment are materially consistent with the terms as previously provided in
writing by Purchasing LLC to Seller and do not contain terms adverse in any
material respect to Publico or Seller; and

 

(m)          Evaluation
of Termination Right.  Seller shall
have had five days from the receipt of any notice pursuant to Section 8.7(a)(ii) duly delivered in accordance with Section 10.1 to
evaluate and make a determination in respect of any such matter that is the
subject of such notice.

 

ARTICLE VIII

 

SURVIVAL; INDEMNIFICATION

 

Section 8.1             Survival.

 

(a)           All
of the representations and warranties of Seller, Purchasing LLC and Publico
contained in this Agreement delivered pursuant hereto, and all claims and
causes of action with respect thereto shall survive until the Closing and then
shall terminate in all respects, except that:

 

(i)            the representations and warranties in Sections 4.3(c) and
4.3(f) (Title to Transferred Subsidiaries), 4.6(a) (Sufficiency of Assets), 

 

68

 

4.15 (Title to Tangible Personal Property), 4.16(b) (Title to Owned and
Leased Real Properties; Absence of Encumbrances), 4.20(a)(i), 4.20
(b)(including all subsections: (i), (ii) and (iii)), 4.20(e)(i),
4.20(e)(ii)(A), 4.20(e)(iii), 4.20(e)(v), 4.20(e)(vi), 4.20(f)(i), 4.20(g)(i),
4.20(h)(i), 4.20(i), 4.20(j), 4.20(k), 4.20(l) (Intellectual Property), 5.3
(Capitalization; Purchasing LLC’s Shareholding in Publico After the Concurrent
Contribution), 5.9 (SEC Reports and Financial Statements) and 5.10 (Supplied
Information) shall survive for a period of 12 months after the Closing Date;

 

(ii)           the
representations and warranties in Section 5.17 (Representations and
Warranties of Concurrent Contribution) shall survive so long as the underlying
representations and warranties survive under the terms of the Publico
Acquisition Agreement; and

 

(iii)          the representations and warranties in Sections 4.9 (Taxes)
and 5.19 (Taxes) shall survive until the end of the applicable statute of
limitations or voluntary extensions thereof.

 

(b)           The
covenants and agreements of Seller, Purchasing LLC and Publico contained in
this Agreement will survive the Closing and will remain in full force and
effect in accordance with their terms; provided, that from and
after the Closing (i) except as provided in the following sentence all such
covenants and agreements of each of the Purchasers shall be performed by and be
the sole responsibility of Publico, and (ii) Seller shall have no liability to
Purchasing LLC for any covenants and agreements of Seller to be performed
following the Closing.  Notwithstanding
the foregoing, the covenants in Sections 6.2(c), 6.2(d), 6.3(b), 6.3(c), 6.9,
6.11 and 6.17 shall be performed by the respective Parties in accordance with
the terms of such covenants.

 

(c)           If
notice of any claim for indemnification under this Agreement shall have been
given (in accordance with this Article VIII and Section 10.1) within
the applicable survival period, the claims and rights to indemnification
relating to such breaches of representations and warranties, covenants or
agreements that are the subject of such indemnification claim shall survive
until such time as such claim is finally resolved.

 

Section 8.2             Indemnification
by Purchasing LLC and Publico. 
Subject to the limits set forth in this Article VIII:

 

(a)           From
and after the Closing, Purchasing LLC shall indemnify, defend and hold harmless
the Seller Indemnified Parties from, against and in respect of any and all
Losses sustained, incurred or suffered by any of Seller Indemnified Parties in
any such case to the extent arising out of any breach of any covenant,
undertaking or other agreement of Purchasing LLC contained in Sections 6.2(d),
6.3(b), 6.3(c), 6.9 or 6.11, to the extent to be performed by Purchasing LLC
after the Closing.

 

69

 

(b)           From
and after the Closing, Publico shall indemnify, defend and hold harmless Seller
Indemnified Parties from, against and in respect of any and all Losses
sustained, incurred or suffered by any Seller Indemnified Parties in any such
case to the extent arising out of any breach of:

 

(i)            any representation or warranty of Purchasing LLC or Publico
contained in this Agreement that survives the Closing; and

 

(ii)           any covenant, undertaking or other agreement of Purchasers
contained in this Agreement.

 

(c)           Prior
to Closing, Publico shall indemnify, defend and hold harmless Purchasing LLC
from, against and in respect of any and all Losses sustained, incurred or
suffered by Purchaser Indemnified Parties to the extent arising out of any
breach by Publico of any covenant, undertaking or other agreement of Publico
contained in this Section 8.2, and Article X (including Section 10.3
thereof), and any confidentiality or non-disclosure obligations to which it is
subject in respect of the transactions contemplated hereby.

 

Section 8.3             Indemnification
by Seller.

 

(a)           From
and after the Closing, subject to the limits set forth in this Article VIII,
Seller shall indemnify, defend and hold harmless the Purchaser Indemnified
Parties from, against and in respect of any Losses sustained, incurred or
suffered by any of Purchaser Indemnified Parties in any such case to the extent
arising out of any breach of:

 

(i)            any representation or warranty of Seller contained in this
Agreement that survives the Closing; and

 

(ii)           any
covenant, undertaking or other agreement of Seller or contained in this
Agreement; provided, that Seller shall have no liability to Purchasing
LLC for any such covenants, undertakings and agreements to be performed
following the Closing in respect of Purchasing LLC, from and after the Closing,
other than the covenants, undertakings and agreements of Seller contained in
Sections 6.2(c) (with respect to the last two sentences), 6.2(d), 6.3(b),
6.3(c), 6.9 and 6.11.

 

Section 8.4             Third-Party
Claim Indemnification Procedures.

 

(a)           Except
as otherwise provided in Section 6.5, if any written claim or demand (or
written threat of a claim or demand), or notice of a Tax audit or proceeding
(each, a “Claim”) for which a Party may be required to pay an indemnity
hereunder (such Party, an “Indemnifying Party”) is asserted against or
sought to be collected from any Person that may be entitled to indemnification
hereunder (an “Indemnified Party”) by a third party, such Indemnified
Party shall as promptly as possible, but in no event more

 

70

 

than 30 Business Days following
such Indemnified Party’s receipt of such Claim, notify the Indemnifying Party
of such Claim and the amount or the estimated amount thereof to the extent then
feasible (which estimate shall not be conclusive of the final amount of such
Claim) (the “Claim Notice”); provided, that the failure to
provide notice as provided herein will relieve the Indemnifying Party of its
obligations hereunder only to the extent that such failure prejudices the
Indemnifying Party hereunder.

 

(b)           The
Indemnifying Party shall have 30 Business Days from its receipt of the Claim
Notice (the “Notice Period”) to notify the Indemnified Party:

 

(i)            whether
or not the Indemnifying Party disputes the liability of the Indemnifying Party
to the Indemnified Party hereunder with respect to such Claim and

 

(ii)           whether or not it will defend the Indemnified Party against
such Claim.

 

In case any such Claim shall be
brought against any Indemnified Party and it shall notify the Indemnifying
Party of the commencement thereof, and, except as hereinafter provided, in the
event that the Indemnifying Party notifies the Indemnified Party within the
Notice Period that it will defend the Indemnified Party against such Claim, the
Indemnifying Party shall be entitled to participate therein and, to the extent
that it shall wish, to assume the defense thereof, with counsel selected by the
Indemnifying Party and the Indemnifying Party shall not be liable to the
Indemnified Party for any legal expenses of other counsel or any other
reasonable expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof. 
Subject to the Indemnified Party’s compliance with the notice
requirements under this Section 8.4, the Indemnifying Party shall be
liable for the reasonable fees and expenses of counsel employed by the
Indemnified Party for any period during which the Indemnifying Party has not
assumed the defense thereof.

 

(c)           The
Indemnified Party shall cooperate fully with the Indemnifying Party and its
counsel in the defense against any such asserted liability, including promptly
forwarding to the Indemnifying Party a copy of all written communications
received by the Indemnified Party with respect to a Claim.  The Indemnified Party shall have the right to
participate at its own expense in the defense of such asserted liability.  The Indemnifying Party shall not consent to
the entry of any judgment or enter into any settlement without the prior
written consent of the Indemnified Party, which consent shall not be
unreasonably withheld, conditioned or delayed; provided, that no Indemnified
Party shall be required to consent to any judgment or settlement if:

 

(i)            such judgment or settlement does not include as an
unconditional term thereof the giving by each claimant or plaintiff to each
Indemnified Party of an unconditional and complete release from all liability
in respect to such Claim,

 

71

 

(ii)           such
judgment or settlement would result in the finding or admission of any
violation of Law, or

 

(iii)          as
a result of such consent or settlement, injunctive or other equitable relief
would be imposed against the Indemnified Party or such judgment or settlement
could interfere with or adversely affect the business, operations or assets of
the Indemnified Party or any of its Affiliates.

 

Notwithstanding the foregoing,
with respect to Taxes, the consent of Purchasers shall not be required if the
proposed settlement does not increase Taxes of Purchasers for any period after
the Closing Date.

 

(d)           Notwithstanding
the foregoing,

 

(i)            The
Indemnifying Party shall not be entitled to assume the defense of (and shall be
liable for the fees and expenses of counsel incurred by the Indemnified Party
in defending) a third party Claim that seeks an Order, injunction or other
equitable relief or relief for other than money damages (or that the
Indemnified Party without also seeking money damages or that the Indemnified
Party reasonably determines, after conferring with its outside counsel, that
the Claim seeking relief for other than money damages cannot be separated from
any related Claim for money damages), in any such cases in respect of which the
interests of the Indemnifying Party are different or in conflict with those of
the Indemnified Party.  If such equitable
relief or other relief portion of the third-party Claim can be so separated
from that for money damages, the Indemnifying Party shall be entitled to assume
the defense of the portion relating to money damages, as contemplated in
respect of a Claim for money damages by this Section 8.4.

 

(ii)           If
the Indemnifying Party does not assume the defense or ceases to conduct the
defense of a third party Claim, the Indemnified Party may defend against such
Claim; provided, that the Indemnified Party shall not consent or settle (either
administratively or after the commencement of litigation) any Claim without the
prior written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld, conditioned or delayed (provided that the Indemnifying
Party may retain separate co-counsel at its sole cost and expenses and may
participate in the defense of such Claim).

 

Section 8.5             Computation
of Losses Subject to Indemnification. 

 

(a)           Losses
for which an Indemnified Party would be entitled to indemnification hereunder
shall be determined net of and by taking into account:

 

72

 

(i)            any
insurance proceeds recovered by such Indemnified Party;

 

(ii)           indemnity
payments to which such party or its Affiliates is entitled from parties other
than the Indemnifying Party hereunder in respect of such matter; and

 

(iii)          the
extent of any Indemnified Party’s direct or indirect equity holding position of
any entities to which such Losses relate in respect of the proportional amount
of Losses for which indemnification is properly due and owing.

 

(b)           If
an Indemnifying Party indemnifies an Indemnified Party with respect to Taxes,
and such Indemnified Party actually realizes a Tax Benefit in the year the
indemnification payment is made, or any year thereafter, the Indemnified Party
shall pay to the Indemnifying Party the amount of such Tax Benefit, but not in
excess of the indemnification payment or payments actually received by the
Indemnified Party from the Indemnifying Party with respect to such Losses.  For purposes of this Section 8.5(b), the
Indemnified Party shall be deemed to actually realize a tax benefit (“Tax
Benefit”) with respect to a taxable year if, and to the extent that, the
Indemnified Party’s liability for Taxes of a taxable year is less than the
actual liability for Taxes that would have been imposed on the Indemnified
Party for such taxable year if the circumstances giving rise to the
Indemnifying Party’s obligation to indemnify the Indemnified Party had not
occurred and the indemnity had not been paid. 
The amount of such Tax Benefit shall be determined by the Indemnified
Party; provided, however, that if the Indemnifying Party shall
dispute such calculation the Indemnified Party shall, at the request of the
Indemnifying Party, submit such determination to the Indemnified Party’s
independent public accounting firm for verification and shall permit the
Indemnifying Party to discuss such calculation with the Indemnified Party’s
independent public accounting firm, but in no event shall the Indemnifying
Party be provided access to any confidential information including tax returns
or reports of the Indemnified Party, and the determination of the independent
public accounting firm shall be final. The cost of the independent accounting
firm shall be paid by the Indemnifying Party unless the accountant determines
that the Tax Benefit should be increased by more than 5% of the Tax Benefit set
forth in the Indemnified Party’s calculation, in which case the Indemnified
Party shall pay the costs of the accountant. 
For the purposes of this Section 8.5(b) any Pre-Closing Period
Taxes paid by Seller (or, prior to Closing, by EPE) pursuant to the resolution
or settlement of an audit pursuant to Section 6.5 shall be deemed to have
been paid to Purchasers as an indemnification payment.

 

Section 8.6             Threshold for
Recovery; Aggregate Limit on Indemnity.

 

(a)           Other
than Losses with respect to breaches of Section 4.9  (Taxes) or pursuant to Section 6.5 (Tax
Matters) or with respect to breaches of Section 8.9 (Remediation), Seller
shall not be required to indemnify any Purchaser Indemnified Party

 

73

 

under this Agreement for any
Losses for which indemnification may be owing pursuant to (x) Section 8.3(a)(i)
and (y) Section 8.3(a)(ii) in respect of breaches of covenants and
agreements to the extent to be performed prior to Closing that are not willful
on the part of Seller:

 

(i)            unless
the aggregate for all such Losses for which Seller would, but for this Section 8.6(a),
be liable hereunder exceeds the Threshold Amount, and thereafter Purchaser
Indemnified Parties shall be entitled to recover all Losses (including those
which together exceeded the Threshold Amount) pursuant to this Article VIII;

 

(ii)           in
excess of the Maximum Amount in the aggregate; and

 

(iii)          in
respect of any representations and warranties in Section 4.16 relating to
the Real Property for which the New Title Policies and the Title Endorsements
are being issued, unless and to the extent Purchasing LLC or Publico is unable
to recover such Losses, despite commercially reasonable efforts to do so, which
shall not include preparation for or commencement of litigation, from the
issuer of the applicable New Title Insurance Policy or Updated Titled
Endorsement; provided, that Purchasing LLC and Publico shall only be
required to seek reimbursement of such Losses from the issuers of the New Title
Insurance Policies or Title Endorsements to the extent that a colorable claim
can be made that such Losses are covered under one or more of such policies or
endorsements; provided, further, that this clause shall not limit
the amount of Losses with respect to which Purchaser Indemnified Parties are
entitled to indemnification under this Article VIII, in excess of what is
available, if anything, under the applicable New Title Insurance Policy or
Updated Titled Endorsement.

 

(b)           Other
than Losses with respect to breaches of Section 5.19 (Taxes) or pursuant
to Section 6.5 (Tax Matters), neither Publico nor Purchasing LLC shall be
required to indemnify any Seller Indemnified Party under this Agreement for any
Losses for which indemnification may be owing pursuant to (x) Section 8.2(b)(i)
and (y) Section 8.2(b)(ii) in respect of breaches of covenants and
agreements to the extent to be performed prior to Closing that not willful on
the part of Purchasers:

 

(i)            unless
the aggregate for all such Losses for which Publico or Purchasing LLC would,
but for this Section 8.6(b), be liable exceeds the Threshold Amount, and
thereafter Seller Indemnified Parties shall be entitled to recover all Losses
(including those which together exceeded the Threshold Amount) pursuant to this
Article VIII, and

 

(ii)           in
excess of the Maximum Amount in the aggregate.

 

74

 

Section 8.7             Limitation on
Remedies.  

 

(a)           Remedies
Prior to Closing.

 

(i)            Prior
to the Closing, the sole and exclusive remedy of any Party against any other
Party shall be:

 

(A)          with
respect to any breach or inaccuracy of any of the representations and
warranties set forth in Articles IV or V of this Agreement, to terminate this
Agreement pursuant to Article IX;

 

(B)           in
respect of any breach of any of the covenants and agreements set forth in this
Agreement, to terminate this Agreement pursuant to Article IX; provided,
that, (x) Purchasing LLC may bring an action for specific performance to
enforce this Agreement against Seller or Publico, and (y) Seller may bring an
action for specific performance against Purchasing LLC or Publico solely to
enforce Sections 6.9, 8.7(a)(iii) and 10.3(b) hereof.

 

(ii)           In
furtherance of the foregoing, if management of any Party becomes aware and has
actual knowledge of any matter that would give rise to the right of such Party
to terminate this Agreement pursuant to clause (i) above (where it is
reasonably apparent that such matter would give rise to such a right to
terminate), such Party shall provide the other Parties with written notice,
specifying such matter in reasonable detail, within 5 days of becoming aware of
such matter and if such Party does not exercise its right to terminate this
Agreement within 5 days of receipt of such notice duly delivered in accordance
with Section 10.1, such breach or inaccuracy shall be deemed waived and
such Party shall not have any further rights in respect thereof for
indemnification or otherwise.

 

(iii)          Notwithstanding
anything to the contrary in this Agreement, in the event of a Purchaser Failure
to Close, the sole and exclusive remedy of any Seller Indemnified Party shall
be as follows:

 

(A)          Purchasers
shall promptly (I) cause the Closing Escrow Agent to release to Seller the
entire Closing Escrow Amount then remaining (not including any interest accrued
thereon) and (II) effect, with Seller, the termination of this Agreement and
all the Ancillary Agreements, as applicable (other than the Confidentiality
Agreement), and each of the Purchasers shall enter into a mutual release on
behalf of itself, its debt and equity holders, and successors and assigns,
unconditionally and irrevocably waiving, releasing and discharging any and all
rights or claims of any nature, that it has or may have against Seller and any
of its

 

75

 

successor and assigns, under this Agreement or any of the Ancillary
Agreements, other than in respect of the covenants contained in Sections 6.9.

 

(B)           Seller
shall effect, with Purchasers, the termination of this Agreement and all the
Ancillary Agreements, as applicable (other than the Confidentiality Agreement),
and enter into a mutual release on behalf of itself and Beneficiary and each of
their successors and permitted assigns, unconditionally and irrevocably
waiving, releasing and discharging any and all rights or claims of any nature,
that it or they have or may have against either Purchaser, their debt and
equity holders, employees, agents and successors and assigns under this Agreement
or any of the Ancillary Agreements, other than in respect of the covenants
contained in Sections 6.9.

 

(b)           Remedies
After the Closing.  From and after
Closing, the sole and exclusive remedy of any Party against any other Party
shall be:

 

(i)            in
respect of any breach or inaccuracy of any of the representations and
warranties set forth in Articles IV or V of this Agreement, a claim for
indemnification made pursuant to this Article VIII; or

 

(ii)           in
respect of any breach of any of the covenants and agreements set forth in this
Agreement, to bring either or both:

 

(A)          an
action for specific performance to enforce the Agreement against such other
Party in any court of competent jurisdiction; and

 

(B)           a
claim for indemnification made pursuant to this Article VIII.

 

(c)           Manner
of Payment.

 

(i)            Any
monetary indemnification claim of Purchaser Indemnified Party against Seller
which is judicially determined or agreed to be due and owing pursuant to the
terms and conditions of this Article VIII shall be satisfied solely by
offsetting the amount of the indemnification obligation against the Seller
Distribution to which Seller is entitled pursuant to the Operating Agreement
and the EPE Certificate of Designation; provided, that such offset shall
not exceed the maximum permitted offset pursuant to the Operating Agreement and
the EPE Certificate of Designation.  Any
remaining indemnification obligation

 

76

 

shall be offset against future Seller Distributions in accordance with
the proviso of the immediately preceding sentence.  Seller expressly consents and agrees to any
offset of the Seller Distribution permitted to be made by Purchasers pursuant
to and in accordance with this Section 8.7(c)(i) and, subject to Section 8.7(c)(ii)
below, hereby waives any right in law or equity to contest any such offset
(other than any contest regarding the amount of any indemnification claim
properly giving rise to such offset). 
Except as set forth in this Section 8.7(c)(i), no Purchaser Indemnified
Party shall have recourse against any asset of Seller or any of its Affiliates
in respect of any of the obligations under this Article VIII or otherwise.

 

(ii)           Notwithstanding
clause (i) above:

 

(A)          two-thirds
(2/3) of the aggregate amount of any monetary indemnification claim of a
Purchaser Indemnified Party against Seller that is determined or agreed to be
due and owing pursuant to a judicial determination, or a Final Determination,
as defined in Code Section 1313, the expiration of the applicable statute
of limitations, or a binding settlement agreement with the Internal Revenue
Service, or in the case of an audit of a tax that is not a United States
Federal income tax, a judicial determination, expiration of the applicable
statute of limitations or a binding settlement agreement with such taxing
authority in respect of a breach by Seller of Section 4.9(a) (EPE Taxes)
or pursuant to Section 6.5 (Tax Matters), shall not be subject to offset
against Seller Distributions in accordance with Section 8.7(c)(i) above,
and instead shall be satisfied by Seller in cash with the remaining one-third
(1/3) of such aggregate amount of any monetary indemnification claim of a
Purchaser Indemnified Party being subject to the offset provisions in Section 8.7(c)(i)
above; provided, that (i) if Seller does not pay such cash amount in
satisfaction of the two-thirds (2/3) of such aggregate amount of any monetary
indemnification claim of a Purchaser Indemnified Party within 20 Business Days
of written request by the Purchaser Indemnified Party, the Purchaser
Indemnified Party shall at such time be entitled to recover the entire amount
of such claim (both the two-thirds and the one-third together comprising the
entire amount of such monetary indemnification claim of a Purchaser Indemnified
Party) directly from Seller in cash;

 

(B)           any
claim of a Purchaser Indemnified Party against Seller in respect of a (I)
breach by Seller of Section 4.9(b) (Seller

 

77

 

Taxes) or (II) any tax audit of EPE, Seller or Seller’s Affiliates
which has commenced prior to the Closing and is open as of the Closing, in
either case, for which indemnification is determined or agreed to be due and
owing pursuant to a judicial determination, a Final Determination, as defined
in Code Section 1313, the expiration of the applicable statute of
limitations, or a binding settlement agreement with the Internal Revenue
Service, or in the case of an audit of a tax that is not a United States
Federal income tax, a judicial determination, expiration of the applicable
statute of limitations or a binding settlement agreement with such taxing
authority, shall not be subject to Section 8.7(c)(i) above and shall be
satisfied in full by Seller in cash;

 

(C)           any
claim of a Purchaser Indemnified Party against Seller pursuant to Section 8.3(a)(ii)
other than in respect of breaches of covenants and agreements to the extent to
be performed prior to Closing that are not willful on the part of Seller shall
not be subject to Section 8.7(c)(i) above and shall be satisfied in full
by Seller in cash; and

 

(D)          any
claim of a Purchaser Indemnified Party against Seller for a breach of Section 8.9
shall not be subject to Section 8.7(c)(i) above and shall be satisfied in
full by Seller in cash.

 

(d)           Post
Closing Rights and Obligations of Publico. 
Effective upon consummation of the Closing:

 

(i)            Purchasing
LLC (A) shall have no rights with respect to, or liabilities or obligations to,
Seller or Publico (whether then accrued, unaccrued, contingent or otherwise)
under or in respect of this Agreement (other than as to which Purchasing LLC
may be indirectly subject by reason of its ownership interest in Publico or in
respect of the covenants contained in Sections 6.2(c) (with respect to the last
two sentences), 6.2(d), 6.3(b), 6.3(c), 6.9 and 6.11), and (B) on behalf of
itself, its debt and equity holders, and successors and assigns,
unconditionally and irrevocably waives, releases and discharges any and all
rights or claims of any nature, that it has or may have against Seller and any
of its successor and assigns, under this Agreement;

 

(ii)           Seller
(A) shall have no rights with respect to, or liabilities or obligations to,
Purchasing LLC (whether then accrued, unaccrued, contingent or otherwise) under
or in respect of this Agreement (other than

 

78

 

in respect of the covenants contained in Sections 6.2(c) (with respect
to the last two sentences), 6.2(d), 6.3(b), 6.3(c), 6.9 and 6.11) and (B), on
behalf of itself and Beneficiary and each of their successors and permitted
assigns, unconditionally and irrevocably waives, releases and discharges any
and all rights or claims of any nature, that it or they have or may have
against Purchasing LLC, its debt and equity holders, employees, agents and
successors and assigns (other than Publico), under this Agreement, other than
in respect of the covenants contained in Sections 6.2(d), 6.3(b), 6.3(c), 6.9
and 6.11.

 

(iii)          This
clause (d) shall not affect or limit in any way Purchasing LLC’s rights by
virtue of its ownership of Publico, or otherwise through Publico, or Seller’s
rights against Publico as contemplated hereunder.

 

Section 8.8             Escrow
Procedures; Parties’ Delivery of Certificates.  The Parties shall deliver in a timely manner
to the Closing Escrow Agent all certificates and notices required for the
Closing Escrow Agent to make the distributions contemplated by Article II
and Section 8.7(a)(iii) of this Agreement and agree to use reasonable best
efforts to cause the Closing Escrow Agent to release and distribute the Closing
Escrow Amount to Seller and Purchasers, as the case may be, as set forth in the
Closing Escrow Agreement.  None of the
Parties will request the Closing Escrow Agent to distribute any Closing Escrow
Amount to such Party except in a Joint Certificate and all Parties agree to
direct and use their reasonable best efforts to cause the Closing Escrow Agent
to comply with any Judgment. The Parties agree not to cause amounts to be held
back by the Closing Escrow Agent from distribution pursuant to the Closing
Escrow Agreement unless there is a good faith reasonable basis to do so
hereunder or under the Closing Escrow Agreement.

 

Section 8.9             Remediation.

 

(a)           Prior
to Closing, Seller shall diligently seek approval (the “Approval”) from the
Tennessee Department of Environment and Conservation (“TDEC”) to abandon
in place all underground storage tanks on the Kings Mart Property (the “USTs”).
If Seller receives such approval prior to Closing, Seller shall immediately
take such commercially reasonable action necessary to abandon in place all USTs
in compliance with all Environmental Laws.

 

(b)           If
the TDEC does not grant or denies Seller’s request to abandon in place the USTs
(the “Request”) prior to Closing, Purchaser shall continue to pursue the
Approval for a period of 90 days following the Closing (the “90-day period”).  If the TDEC denies the Request or the
Approval is not granted within the 90-day period, then Purchaser shall promptly
remove all USTs on the Kings Mart Property in compliance with all Environmental
Laws.

 

79

 

(c)           As
required by and in compliance with all Environmental Laws,  Purchaser shall also assess and/or remediate
(or cause to be assessed and/or remediated) the Kings Mart Property to address
any remediation necessitated by the removal of the USTs.  Seller shall pay for the first $100,000 of
expenses to effect such UST removal and/or abandonment in place and
corresponding assessment, remediation, or corrective action, including, the
costs incurred in obtaining a UST removal approval and/or UST abandonment
approval, or, to the extent applicable, a No Further Action letter, or their
equivalents, from the TDEC (collectively, the “UST Obligations”).

 

(d)           Purchaser
shall conduct such UST Obligations in a diligent and reasonably cost effective
manner.  As reasonably requested by
Seller from time to time,  Purchaser
shall provide Seller with progress reports and correspondence pertinent to the
UST Obligations.  Should Purchaser
receive any reimbursement or recovery of costs incurred by either Seller or
Purchaser in connection with the environmental assessments and/or remediations
performed pursuant to this section (“Remediation Costs”) from the
prior seller of the Kings Mart Property owing an indemnity to Seller or from
TDEC, and if Purchaser has incurred Remediation Costs for which has not been
reimbursed under this Section, such recovery shall first be applied to make
Purchaser whole, and Purchaser shall promptly pay the proceeds, remaining, if
any, to Sellers.

 

(e)           Without
limiting the foregoing, if Seller notifies Purchaser in writing that Seller
wishes to pursue the prior seller of the Kings Mart Property owing an indemnity
to Seller or TDEC for recovery of Seller’s Remediation Costs and Purchaser does
not commence recovery actions and diligently pursue such actions within thirty
(30) days after the date of the notice, Seller may pursue such recovery actions
in Seller’s name, at Seller’s cost and without causing Purchaser to incur any
liabilities or obligations in respect thereof and Purchaser shall assign any
rights to such recovery to Seller (without prejudicing Purchaser’s rights in
respect of the indemnity as to other and future matters covered by such
indemnity).  After Seller has been
reimbursed Seller’s costs incurred in seeking such recovery and the Remediation
Costs paid or reimbursed by Seller, Seller shall reimburse Purchaser an amount
equal to the lesser of Purchaser’s Remediation Costs or any remaining funds
recovered. The covenants set forth in this Section 8.9 shall survive the
Closing Date.

 

ARTICLE IX

TERMINATION

 

Section 9.1             Termination.  This Agreement may only be terminated by a
Party by delivery of specific and reasonably detailed written notice setting
forth the basis for the termination, including, as applicable, details of the
conditions which have not been satisfied, to all other Parties at any time
prior to the Closing as follows:

 

(a)           by
mutual agreement of Purchasing LLC and Seller;

 

(b)           by
either Seller or Purchasing LLC, if any Governmental Entity shall have issued
an Order or taken any other action, permanently restraining, enjoining

 

80

 

or otherwise prohibiting the
transactions contemplated by this Agreement and such Order or other action
shall have become final and non-appealable after the date hereof; provided,
that, the right to terminate this Agreement pursuant to this clause (b)
shall not be available to any Party that has breached in any material respect
its obligations under this Agreement in any manner that shall have contributed
to the occurrence of the failure of the Closing to be consummated;

 

(c)           by
either Seller or Purchasing LLC, if the Closing shall not have occurred on or
prior to 60 days after the date hereof; provided, that, (x) the
right to terminate this Agreement pursuant to this clause (c) shall not be
available to any Party that has breached in any material respect its
obligations under this Agreement in any manner that shall have contributed to
the occurrence of the failure of the Closing to be consummated and (y) such
right to terminate shall be deferred:

 

(i)            up
to a maximum of 120 days after the date hereof to allow for a final
determination (or the expiration of any applicable waiting period) with respect
to the transactions contemplated by this Agreement by all applicable
Governmental Entities to the extent required to satisfy the condition set forth
in Section 7.1(a), if and so long as such determinations and waiting
periods or any matter in clause (ii) below are the only matters that preclude
the consummation of the Closing under the terms of this Agreement, other than
those conditions which by their nature are to be satisfied at the Closing;

 

(ii)           up
to a maximum of 120 days after the date hereof to allow for the completion and
delivery of the Audited Financial Statements, if and so long as the completion
and delivery of such Audited Financial Statements or any matter in clause (i)
above are the only matters that preclude the consummation of the Closing under
the terms of this Agreement, other than those conditions which by their nature
are to be satisfied at the Closing; or

 

(iii)          to
provide 30 days notice to Seller prior to Closing of a request to assign this
Agreement to a substitute company pursuant to Section 10.3 and to allow
Seller a reasonable opportunity to conduct diligence on, and approve or
disapprove, such substitute company in accordance with the terms of Section 10.3.

 

(d)           by
Seller if any of the Purchasers breaches or fails to perform or comply with any
of its material covenants or agreements contained herein, or breaches any of
the representations and warranties made by any of the Purchasers in any
material respect which would cause the non-satisfaction of the applicable
condition; provided  that, Seller has notified Purchasers in
writing of the breach in accordance with Section 8.7(a)(ii) and (x) the
breach is incapable of being cured, (y) such breach has continued without cure
for a period of five days after the receipt of notice of breach duly delivered

 

81

 

in accordance with Section 10.1
or (z) in the case of a breach by Publico, no assignment has taken place to a
substitute company acceptable to the Seller in accordance with Section 10.3
within 20 Business Days of receipt of notice such breach;

 

(e)           by
Purchasing LLC, if Seller breaches or fails to perform or comply with any of
its material covenants or agreements contained herein, or breaches any of the
representations and warranties made by Seller in any material respect which
would cause the non-satisfaction of the applicable condition; provided  that,
Purchasing LLC, has notified Seller in writing of the breach in accordance with
Section 8.7(a)(ii) and (x) the breach is incapable of being cured or (y)
such breach has continued without cure for a period of five days after receipt
of notice of breach duly delivered in accordance with Section 10.1; and

 

(f)            by
Seller, if Publico’s rights and obligations under this Agreement have been
terminated in accordance with Section 10.3 and no assignment has taken
place to a substitute company acceptable to the Seller in accordance with Section 10.3
within 20 Business Days of such termination.

 

Section 9.2             Effect
of Termination.  In the event of the
termination of this Agreement in accordance with Section 9.1 hereof, this
Agreement shall thereafter become void and have no effect, and no Party shall
have any liability to any other Party, their successors or permitted assigns or
their respective Affiliates, except for the obligations of the Parties
contained in (a) this Section 9.2, (b) the confidentiality provisions
contained in Section 6.9, (c) the provisions of the Confidentiality
Agreement to the extent such survive pursuant to Section 6.9, (d) Section 8.7(a)(i)
and (iii), (e) the provisions relating to the payment of fees and expenses
contained in Sections 6.2(a), 6.2(b)(iv), 6.8, 8.8 and 10.9 and (f) Sections
10.3(b)(i) and (ii).

 

ARTICLE X

MISCELLANEOUS

 

Section 10.1           Notices.  All notices or other communications hereunder
shall be deemed to have been duly given and made if in writing and if served by
personal delivery upon the party for whom it is intended, if delivered by
registered or certified mail, return receipt requested, or by an international
courier service, or by telecopier (with transmission confirmed), to the Person
at the address set forth below, or such other address as may be designated in
writing hereafter, in the same manner, by such Person:

 

82

 

To Purchasing LLC:

 

RFX Acquisition, LLC

650 Madison Avenue

16th Floor

New York, New York 10022

Telecopier: 
212-753-3188

Attention: Howard Tytel, Esq.

 

 

With a copy
(which shall not constitute notice) to:

GREENBERG TRAURIG LLP

The MetLife Building

200 Park Avenue

New York, NY  10166

Telephone:  (212) 801-9242

Telecopier:  (212) 801-6400

Attention:       Alan I. Annex

 

To Publico:

 

Sports Entertainment Enterprises, Inc.

6730 South Las Vegas Boulevard

Las Vegas, Nevada 89119

Telecopier: 
(702) 309 7407

Attention: 
Vaso Boreta

 

 

With a copy
(which shall not constitute notice) to:

 

Krys Boyle,
P.C.

600
Seventeenth Street

Suite 2700
South Tower

Denver, CO
80202

Attention:
James P. Beck, Esq.

 

To Seller:

THE PROMENADE TRUST

Provident Financial Management

2850 Ocean Park Blvd.

Suite 300

Santa Monica, CA 90405

Telephone:  (310) 789-5200

83

 

Telecopier:  (310) 789-5299

Attention:  Barry J. Siegel

 

Lisa Marie
Presley

c/o Barry J.
Siegel, Provident Financial Management

2850 Ocean
Park Boulevard, Suite 300

Santa Monica,
CA  90405-2955

Telephone:
(310) 789-5200

Telecopier:
(310) 789-5299

 

 

With a copy
(which shall not constitute notice) to:

PROSKAUER ROSE LLP

2049 Century Park East, Suite 3200

Los Angeles, California 90067

Telephone:  (310) 557-2900

Telecopier:  (310) 557-2193

Attention:  Michael A. Woronoff, Esq.

 

Section 10.2           Amendment.  Any provision of this Agreement may be
amended if, and only if, such amendment is in writing and signed, in the case
of an amendment, by Purchasing LLC and Seller.

 

Section 10.3           Assignment.  

 

(a)           No
Party to this Agreement may assign this Agreement, or any of its rights or
obligations hereunder, without the prior written consent of the other Parties
hereto which consent may be withheld in the sole discretion of the Party from
whom consent is sought.

 

(b)           Notwithstanding
anything to the contrary, but subject to the provisos below, in consideration
of the agreement by the Parties hereto that Publico shall have limited
obligations hereunder until the Closing and the Concurrent Contribution have
occurred, and in connection with Purchasing LLC’s agreements with Publico
pursuant to the Concurrent Contribution, Publico hereby grants to Purchasing
LLC and Seller jointly, and Purchasing LLC and Seller shall have, the right,
exercisable jointly, and only jointly, upon written notice signed by each of
Purchasing LLC and Seller to Publico, to terminate all (but not less than all)
of Publico’s rights and obligations hereunder, and effective immediately upon
delivery of such written notice to Publico, all of Publico’s rights and
privileges and obligations and liabilities hereunder, including in respect of
breaches of this Agreement prior to such termination shall automatically,
irrevocably and unconditionally be discharged and terminated, without any
further action of any Parties hereto (including Publico), and Publico hereby
agrees to such automatic

 

84

 

termination and waives any such
rights it may have against the other Parties hereto and their Affiliates and
successors and permitted assigns, in law or in equity, which may entitle such
parties to contest or dispute or not perform or observe the agreements of this Section 10.3,
or otherwise be compensated in respect of such termination of this
Agreement.  Effective automatically upon
such termination,

 

(i)            Publico
on behalf of itself, its debt and equity holders, and any of their successors
and assigns, unconditionally and irrevocably waives, releases and discharges
any and all rights or claims of any nature, that they have or may have against
Purchasing LLC and Seller and their respective debt and equity holders,
beneficiaries, and any of their successors and assigns, in respect of this
Agreement and the transactions contemplated hereby, and

 

(ii)           each
of Purchasing LLC and Seller, on behalf of themselves and on behalf of their
respective debt and equity holders, beneficiaries, and any of their successors
and permitted assignees, unconditionally and irrevocably waives, releases and
discharges any and all rights or claims of any nature, that they have or may
have against Publico, in respect of this Agreement and the transactions
contemplated hereby; provided that, (x) Publico shall comply with its
obligations under Section 6.9(b) and under the confidentiality and
non-disclosure agreements and obligations to which it is subject in respect of
the transactions contemplated hereby; and (y) such releases and discharges
shall only be effective to the extent the Parties have complied with their
respective obligations in Section 8.2(c), Section 8.3 and Article X,
including this Section 10.3.

 

(c)           Seller
is entitled to consent, or withhold consent, to any assignment of Publico’s
rights and obligations hereunder to another Person as requested by Purchasing
LLC, in its sole discretion.  Any such
assignee approved by Seller shall execute and deliver to Seller a joinder or
other similar agreements in a form satisfactory to Seller to reflect the
joinder of the new entity and its substitution for Publico.

 

(d)           Without
limiting Section 6.3(b) or 10.3(c) the Parties agree to execute and
deliver such instruments and agreements as may be necessary to effect the
terminations, releases, substitutions and assignments contemplated by this Section 10.3.

 

Section 10.4           Entire
Agreement.  This Agreement (including
all Disclosure Schedules hereto) and the Ancillary Agreements and the
instruments and agreements delivered pursuant hereto contain the entire
agreement among the Parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with
respect to such matters, including the Letter of Intent, except for the
Confidentiality Agreement (to the extent such agreement would otherwise fall
within the notion of prior agreements and understandings as meant in this Section 10.4),
which will remain in force

 

85

 

and effect with respect to certain matters
pursuant to and as specified by the terms of Section 6.9.

 

Section 10.5           Disclosure
Schedules; Exhibits.  If a disclosure
is made in one of or in any part of any of the Disclosure Schedules to this
Agreement, such disclosure will be deemed to have also been made in each other
Disclosure Schedule hereto where the relevance of such disclosure is
apparent on the face of any disclosure. The fact that any item or information
has been included on any of the Disclosure Schedules to this Agreement shall
not be construed to establish, in whole or in part, any standard of the extent
disclosure is required (including any standard of materiality) for purposes of
the Disclosure Schedules or this Agreement. 
The Disclosure Schedules and all Exhibits attached hereto are hereby
incorporated by reference into, and made a part of, this Agreement.

 

Section 10.6           Parties
in Interest; No Third-Party Beneficiaries. 
Except as set forth in Sections 6.9, 6.11, 6.16, 8.2, 8.3, 8.6,
8.7(a)(i)(B), (b), (c) and (d), 8.7(a)(iii), 10.3 and 10.17, this Agreement
shall only inure to the benefit of and be binding upon the Parties hereto and
their respective successors and permitted assigns and nothing in this
Agreement, express or implied, is otherwise intended to confer upon any Person
other than Purchasers or Seller or their successors or permitted assigns, any
rights or remedies under or by reason of this Agreement.

 

Section 10.7           Public
Disclosure.  Notwithstanding anything
herein to the contrary, each of the Parties to this Agreement hereby agrees
with the other Parties hereto that they will not issue any publication or
disseminate any press release or other public announcement concerning the
transactions contemplated hereby without the prior written consent of the other
Party (which consent will not be unreasonably withheld, conditioned or
delayed), except that in such circumstances where the release or announcement
may be required by law or the rules or regulations of any United States or
foreign securities exchange, in which case, the disclosing Party will give the
other Parties notice in advance of such issuance and a reasonable opportunity
to approve such release or announcement, which approval shall not be
unreasonably withheld, conditioned or delayed. 
Purchasing LLC intends to issue a release publicly announcing the
transaction on or shortly after the date hereof which announcement shall
include, among other customary information, certain figures and items from the
Unaudited Financial Statements and Purchasing LLC shall provide Seller with a
reasonable opportunity to approve such press release in advance, which approval
shall not be unreasonably withheld, conditioned or delayed.

 

Section 10.8           Requests
for and Return of Information.  All
requests by Purchasing LLC or any of its representatives for information
regarding, or for the opportunity to communicate directly with the current
management of, the Business as permitted hereunder shall only be made to the
designated representatives of Seller as Seller may direct.

 

86

 

Section 10.9           Expenses.  Whether or not the transactions contemplated
by this Agreement are consummated, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall
be borne by the party incurring such expenses, except as otherwise expressly
set forth hereunder.

 

Section 10.10         Amounts
Paid and Calculated in U.S. Dollars; Receivables and Payable Currency.  Any amounts which are contemplated to be
calculated or paid or determined hereunder shall be calculated and paid in
United States Dollars.

 

Section 10.11         No Other
Representations or Warranties; Authorized Representatives; Bulk Sales; No
Obligation to Register Preferred Stock; Legend. 

 

(a)           Except
for the representations and warranties contained in Article IV or in the
Ancillary Agreements, none of Seller or its Affiliates, nor any other Person on
behalf of Seller or its Affiliates makes any other express or implied
representation or warranty in connection with the transactions contemplated
hereunder, notwithstanding the delivery or disclosure to Purchasers or any of
their Representatives or any other Person of any other documentation or other
information by Seller, or any of its Representatives or any other Person with
respect to any one or more of the foregoing. 
Notwithstanding any other representations and warranties in Article IV,
the representations and warranties contained in Section 4.13 constitute
the sole representations and warranties of Seller with respect to any
Environmental Law, Hazardous Substance or environmental liabilities.

 

(b)           Except
for the representations and warranties contained in Article V or in the
Ancillary Agreements, none of Purchasers or any other Person on behalf of
Purchasers makes any other express or implied representation or warranty in
connection with the transactions contemplated hereunder, notwithstanding the
delivery or disclosure to Seller or any of its representatives or any other
Person of any other documentation or other information by Purchasers or any of
their representatives or any other Person with respect to any one or more of
the foregoing.

 

(c)           The
Parties hereby waive compliance with the requirements of the bulk sales Laws
(or similar Laws for the protection of creditors) of any jurisdiction in
connection with the transactions contemplated hereby.

 

(d)           Except
as required pursuant to the Registration Rights Agreement, notwithstanding
anything in the contrary in this Agreement, Publico has no obligation to
register the Preferred Stock or file any registration statement under either
federal or state securities laws, or to include such Preferred Stock in any
future registrations or registration statements, or agreements in respect
thereof, that Publico or its Affiliates may effect or agree to effect. Any
certificate evidencing the Preferred Stock (or evidencing any other securities
issued with respect thereto pursuant to any stock split, stock dividend or
other form of reorganization or recapitalization) when issued shall bear, in
addition to any other legends which may be required by applicable state
securities laws, the legend set forth in the final two paragraphs of Section 4.23(f).

 

87

 

Section 10.12         GOVERNING LAW.  THIS AGREEMENT AND ANY
DISPUTES, CLAIMS OR CONTROVERSIES ARISING FROM OR RELATING TO THIS AGREEMENT
SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED,
CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.  THE PARTIES HEREBY IRREVOCABLY SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF CALIFORNIA LOCATED IN THE COUNTY OF
LOS ANGELES AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE
CENTRAL DISTRICT IN CALIFORNIA SOLELY, IN RESPECT OF THE INTERPRETATION AND
ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT AND OF THE DOCUMENTS REFERRED
TO IN THIS AGREEMENT (UNLESS OTHERWISE PROVIDED THEREIN), AND IN RESPECT OF THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, AND HEREBY WAIVE, AND AGREE NOT
TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR THE
INTERPRETATION OR ENFORCEMENT HEREOF OR OF ANY SUCH DOCUMENT, THAT IT IS NOT
SUBJECT THERETO OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR
IS NOT MAINTAINABLE IN SAID COURTS OR THAT THE VENUE THEREOF MAY NOT BE
APPROPRIATE OR THAT THIS AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE ENFORCED IN
OR BY SUCH COURTS, AND THE PARTIES HERETO IRREVOCABLY AGREE THAT ALL CLAIMS SHALL
BE HEARD AND DETERMINED IN SUCH CALIFORNIA STATE OR FEDERAL COURT.  THE PARTIES HEREBY CONSENT TO AND GRANT ANY
SUCH COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT
MATTER OF SUCH DISPUTE AND AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN
CONNECTION WITH ANY SUCH CLAIM BY CERTIFIED MAIL IN THE MANNER PROVIDED IN SECTION 10.1
OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW SHALL BE VALID AND
SUFFICIENT SERVICE THEREOF.  SPECIFIC
PERFORMANCE SHALL BE AVAILABLE ONLY AS PROVIDED BY SECTION 8.7 HEREOF.

 

Section 10.13         Waivers.  Except as otherwise provided in this
Agreement, any failure of any of the Parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the Party entitled to
the benefits thereof only by a written instrument signed by the Party granting
such waiver, but such waiver or failure to insist upon strict compliance with
such obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure.

 

Section 10.14         Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same Agreement.  Copies of executed counterparts transmitted
by telecopy, telefax or other electronic transmission service shall be
considered original

 

88

 

executed counterparts for purposes of this Section 10.14,
provided, that, receipt of copies of such counterparts is confirmed.

 

Section 10.15         Headings.  The heading references herein and the table
of contents hereto are for convenience purposes only, do not constitute a part
of this Agreement and shall not be deemed to limit or affect any of the
provisions hereof.

 

Section 10.16         Severability.  The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.  If any provision of this Agreement, or the
application thereof to any Person or entity or any circumstance, is invalid or
unenforceable, (a) a suitable and equitable provision shall be substituted
therefor in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid or unenforceable provision and (b) the
remainder of this Agreement and the application of such provision to other
persons, entities or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in
any other jurisdiction.

 

Section 10.17         Purchasers’
Corporate Opportunities; Trustees not Personally Liable 

 

(a)           For
a period of ten (10) years following the Closing Date, Publico shall cause the
Controlling Person not to, directly or indirectly, purchase, invest or
otherwise participate in any significant manner, in investments, businesses and
commercial operations in the media or entertainment sectors, unless such
purchase, investment or participation is conducted by and through Publico or
its subsidiaries; provided, that: (i) the Controlling Person may make
investments in securities of any Person listed on any national securities
exchange or any national market system; provided that the Controlling Person’s
ownership does not exceed five percent of the outstanding voting power of such
Person; and (ii) this Section 10.17(a) shall not apply to the activities
of Controlling Person as set forth on Schedule 10.17(a).  Notwithstanding the foregoing, the
obligations pursuant to this Section 10.17(a) shall terminate immediately
upon: (i) a change in control of Publico (as such concept is defined in
Controlling Person’s employment agreement); (ii) the later of (A) the
termination of the Controlling Person’s employment with Publico following the
expiration of the initial term of the Controlling Person’s employment agreement
with Publico, if Publico has elected as of such time not to renew such
employment agreement on reasonable terms and (B) the date that is five (5)
years following the Closing Date; and (iii) the later of (A) the termination of
the Controlling Person’s employment with Publico without cause or upon a
constructive termination, in each case as such concepts are defined in
Controlling Person’s employment agreement, and (B) the date that is three (3)
years following the Closing Date.

 

(b)           Publico
shall not, and shall not permit any of its Affiliates to purchase, invest or
otherwise participate in the commercialization of “Elvis Presley”,

 

89

 

or the business
activities directly related thereto, unless (i) such purchase,
investment or participation is conducted by or through EPE or LLC, or (ii) if
such purchase, investment or participation is conducted by an Affiliate of
Publico, other than EPE or the LLC, and EPE or the LLC receives a
licensing or similar fee approved in accordance with the terms of the Operating
Agreement or Shareholder Agreement.

 

(c)           Purchasers
acknowledge and agree that Beneficiary and her heirs may use the name “Elvis
Presley” or derivations thereof together with Beneficiary’s relationship to
Elvis Presley and the image and
likeness of Elvis Presley in furtherance of her or their professional
career as an entertainer and an individual celebrity as it evolves over
time.  Notwithstanding the foregoing,
neither Beneficiary nor her heirs shall use the name “Elvis Presley” or
derivations of “Elvis” in any commercial manner including in connection with
any product or service in agreement with a third party.  Nothing in this Agreement shall prevent
Beneficiary from using the name “Lisa Marie Presley” in any manner or form,
subject to the preceding sentence, engaging in any activities for her own
account.  Seller agrees that for a period
of three years immediately following the Closing Date, Seller shall not
knowingly, and shall not knowingly permit any of its Affiliates to, directly or
indirectly, (i) solicit the employment or services of, hire, or retain or (ii)
encourage to terminate the employment with the Business of, any person who as
of the Closing Date was employed in the Business and which person had
significant managerial, supervisory or executive responsibilities in the
Business; provided, that Purchasers hereby acknowledge and agree that
the foregoing shall not prohibit the Beneficiary from engaging the services of
Gary Hovey, Barry Siegel or Provident Financial Management for any purpose.

 

(d)           The
trustees of the Seller shall not be personally liable to Purchaser Indemnified
Parties under this Agreement.

 

ARTICLE XI

 

DEFINITIONS AND TERMS

 

Section 11.1           Specific
Definitions.  As used in this
Agreement, the following terms shall have the meanings set forth or as referenced
below:

 

“Acquisition
Proposal” shall have the meaning set forth in Section 6.6;

 

“Affiliate”
shall mean, with respect to any Person, any Persons directly or indirectly
controlling, controlled by, or under common control with, such other Person as of
the date on which, or at any time during the period for which, the
determination of affiliation is being made;

 

“Agreement”
shall mean this Agreement, as the same may be amended, modified or supplemented
from time to time in accordance with the terms hereof;

 

90

 

“Ancillary
Agreements” shall mean the Closing Escrow Agreement, the Consulting and
Non-Competition Agreement, the Employment Agreements, the Instrument of
Assignment, the Operating Agreement, the Stockholders Agreement, the Mansion
Agreement, the Tax Sharing Agreement, the Purchase and Sale Agreement and the
Registration Rights Agreement;

 

“Anthology
Indebtedness” shall mean any Indebtedness incurred in connection with the
Elvis by the Presleys (Anthology) program; provided that to the extent
such Indebtedness is incurred from and after the date hereof, Purchasers have
received advance written notice of the amount and terms of such Indebtedness, provided
further that all payments or advances received in connection with such
program shall be applied to costs and expenses in connection with the Elvis by
the Presleys program;

 

“Audio
Masters” shall have the meaning set forth in Section 4.20(b);

 

“Audio/Visual
Masters” shall have the meaning set forth in Section 4.20(b);

 

“Audited
Financial Statements” shall mean audited balance sheets as of December 31,
2001, 2002 and 2003 and September 30, 2004 and the related statements of
income, changes in stockholders’ equity and cash flows for the Business for the
fiscal years, and nine month period, then ended, audited by Deloitte &
Touche or such other auditor reasonably acceptable to Purchasing LLC, and
prepared in accordance with GAAP, consistently applied, as required by
applicable Law in connection with the filing of the Public Transaction Report;

 

“Beneficial
Owner” shall have the meaning ascribed to such term in Rule 13d-3 of
the Exchange Act;

 

“Beneficiary”
means Lisa Marie Presley;

 

“Beneficiary
Confidential Information” shall have the meaning set forth in Section 6.9(b).

 

“Benefit
Plans” shall have the meaning set forth in Section 4.10(a);

 

“Bill of
Sale” shall have the meaning set forth in Section 3.2(a);

 

“Books and
Records” shall mean originals of all books, ledgers, files, reports, plans
and operating records of, or maintained by, and related primarily to the
Business, as the case may be;

 

“Business”
shall have the meaning set forth in the Recitals to this Agreement;

 

“Business
Day” shall mean any day other than Saturday, Sunday or a day on which banks
in the State of New York are required to be closed;

 

91

 

“Cash and
Cash Equivalents” shall mean cash and all instruments with an original
maturity of three months or less;

 

“Cash
Consideration” shall have the meaning set forth in Section 2.2;

 

“Certificate
of Designation” shall mean the certificate of designation for the Preferred
Stock of Publico containing the terms set forth on Exhibit O hereto;

 

“Claim”
shall have the meaning set forth in Section 8.4

 

“Claim
Notice” shall have the meaning set forth in Section 8.4;

 

“Closing”
shall have the meaning set forth in Section 3.1;

 

“Closing
Date” shall have the meaning set forth in Section 3.1;

 

“Closing
Debt Schedule” shall have meaning set forth in Section 3.2(e);

 

“Closing
Escrow Agent” shall have the meaning set forth in the Closing Escrow
Agreement;

 

“Closing
Escrow Agreement” shall have the meaning set forth in Section 2.3;

 

“Closing
Escrow Amount” shall have the meaning set forth in Section 2.3;

 

“Closing
Time” shall have the meaning set forth in Section 3.1;

 

“Code”
shall mean the Internal Revenue Code of 1986, as amended;

 

“Competition
Laws” shall mean any Laws that are designed or intended to prohibit,
restrict or regulate actions having the purpose or effect of monopolization or
restraint of trade;

 

“Compositions”
shall have the meaning set forth in Section 4.20(b);

 

“Concurrent
Contribution” shall have the meaning set forth in the Recitals to this
Agreement;

 

“Concurrent
Investors” shall mean any private equity investor (institutional or
otherwise) making an equity investment Publico simultaneous with the
transactions contemplated hereby on terms materially consistent with the terms
as previously provided in writing by Purchasing LLC to Seller ;

 

“Confidential
Information” shall have the meaning set forth in Section 6.9;

 

92

 

“Confidentiality
Agreement” shall mean the confidentiality agreement, dated as of June 15,
2004 by and between FXM, Inc., on behalf of Purchasing LLC, and EPE, on behalf
of Seller;

 

“Consideration”
shall mean the Cash Consideration and the Preferred Stock;

 

“Consulting
and Non-Competition Agreement” shall mean the Consulting and
Non-Competition Agreement substantially in the form of Exhibit P;

 

“Contracts”
shall mean, whether written or oral, all agreements, contracts, leases,
subleases, indentures, mortgage documents and commitments, instruments,
documents and commitments creating security interests, guarantees, customer
orders, purchase orders, dealer and distributorship agreements, supply
agreements, licenses, sublicenses, joint venture agreements, partnership
agreements and other similar arrangements and commitments and rights
thereunder;

 

“Controlling Person” shall mean Robert
F. X. Sillerman and his Affiliates;

 

“Contributed
Assets” shall have the meaning set forth in the recitals to this Agreement;

 

“Conversion
Shares” shall mean the shares of Publico Common Stock into which the
Preferred Stock is convertible;

 

“Disclosure
Schedules” shall mean each and every Schedule, Exhibit and Annex to this
Agreement and the contents thereof;

 

“Employees”
shall mean have the meaning set forth in Section 4.10(a);

 

“Employment
Agreements” shall mean the employment agreements in the form attached as
Exhibits H and I;

 

“Encumbrance”
shall mean consensual liens, pledges, charges, security interests,
restrictions, claims and other encumbrances of any kind;

 

“Entertainment
Rights” shall mean the intellectual property rights being acquired under
that certain transaction currently contemplated by EPE as previously approved
by Purchasing LLC;

 

“Entertainment
Indebtedness” shall mean any Indebtedness incurred directly in connection
with the acquisition of the Entertainment Rights, not to exceed $300,000;

 

“Environmental
Law” shall mean all federal, regional, state, county or local Laws,
relating to public health or safety, pollution, damage to or protection of the
environment, environmental conditions, releases or threatened releases of

 

93

 

Hazardous
Materials into the environment or the use, manufacture, processing,
distribution, treatment, storage, generation, disposal, transport or handling
of Hazardous Materials, whether existing in the past or present or hereafter
enacted, rendered, adopted or promulgated prior to the Closing Date.  Environmental Laws include, but are not
limited to, the following laws, and the regulations promulgated thereunder, as
the same may be amended from time to time prior to the Closing Date: the
Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C.
9601 et seq.)  (“CERCLA”); the Resource
Conservation and Recovery Act (42 U.S.C. 6901 et seq.) (“RCRA”); the Clean Air
Act (42 U.S.C. 7401 et seq.); and the Clean Water Act (33 U.S.C. 1251 et seq.);

 

“EPE”
shall have the meaning set forth in the Recitals to this Agreement;

 

“EPE Series
A Certificate of Designation” shall mean the Certificate of Designation of
the Preferred Stock of EPE containing the terms set forth on Exhibit S
hereto;

 

“EPE Series
B Certificate of Designation” shall mean the Certificate of Designation of
the Preferred Stock of EPE, containing the terms set forth on Exhibit S
hereto;

 

“EPE Shares”
shall mean, collectively, (i) 85% of the common stock of EPE, on a fully
diluted basis and (ii) 100% of the Series A Preferred Stock of EPE, in each
case, issued and outstanding on the Closing Date;

 

“ERISA”
shall have the meaning set forth in Section 4.10(a);

 

“Exchange
Act” shall have the meaning set forth in Section 5.4;

 

“Excluded
Assets” shall have the meaning set forth in the recitals to this Agreement;

 

“Excluded
Liabilities” shall have the meaning set forth in the recitals to this
Agreement;

 

“GAAP”
shall mean generally accepted accounting principles in the United States;

 

“Governmental
Entity” shall mean any federal, state, local or foreign court or
governmental or regulatory authority, agency, commission, body or other
governmental entity;

 

“Grantors”
shall have the meaning set forth in Section 4.20(d)(ii)(A);

 

“Hazardous
Substances” shall mean any substance presently listed, defined, designated
or classified as hazardous, toxic or radioactive under any applicable
Environmental Law or regulated by any Governmental Entity 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

 

94

 

hazardous
waste,” “restricted hazardous waste,” “contaminant,” “toxic waste” or “toxic
substance” under any provision of Environmental Law;

 

“HSR Act”
shall have the meaning set forth in Section 4.4;

 

“Identity
Rights” shall have the meaning set forth in Section 4.20(b);

 

“Improper
Activities” shall have the meaning set forth in Section 6.16;

 

“Indebtedness”
shall mean

 

(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;

 

(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;

 

provided,
that, for purposes of determining the amount of Indebtedness outstanding of any
Person(s), guarantees or other Indebtedness referred to in clause (c) shall not
be calculated in duplication of Indebtedness referred to in clauses (a) or (b);

 

“Indemnified
Party” shall have the meaning set forth in Section 8.4;

 

“Indemnifying
Party” shall have the meaning set forth in Section 8.4;

 

“Infringing”
shall mean to infringe or violate Intellectual Property Rights;

 

“Instrument
of Assignment” shall have the meaning set forth in Section 2.4;

 

“Intellectual
Property Rights” shall mean any and all domestic and international patent
and trademarks, service marks, trade dress and all other designations of
origin,

 

95

 

trade names
and all other forms of business names, and all pending applications of all of
the foregoing, copyrights, Internet domain names, rights of publicity,
including, without limitation, the use of name, sobriquet, voice, signature,
photograph, likeness, portrait, and any other representations and any and all
registrations of any of the foregoing, technology, know-how, computer software
programs and applications, databases, tangible or intangible propriety
information or materials and any other intellectual property rights as that
term is commonly understood;

 

“Joint
Certificate” shall mean shall have the meaning set forth in the Closing
Escrow Agreement;

 

“Knowledge”
shall mean, in the case of Seller, the actual knowledge of the persons set
forth on Exhibit Q;

 

“Law”
or “Laws” shall mean any applicable law, statute, ordinance, rule,
regulation, order, judgment or decree of any jurisdiction (foreign or domestic)
of a Governmental Entity;

 

“Leased
Real Property” shall mean the real property which is leased by a third
party to Seller or the Transferred Subsidiaries;

 

“Letter of
Intent” shall mean the letter agreement dated September 15, 2004
between the Sillerman Companies and the Promenade Trust;

 

“Liabilities”
shall mean all liabilities, obligations, guarantees, damages, losses, debts,
claims, demands, judgments, fines, penalties or settlements of any nature or
kind, including, indebtedness, fixed, accrued, absolute or contingent,
liquidated or unliquidated, matured or unmatured;

 

“LLC”
shall have the meaning set forth in the recitals to this Agreement to this
Agreement;

 

“LLC
Contribution” shall have the meaning set forth in the recitals to this
Agreement;

 

“LLC
Interests” shall have the meaning set forth in the recitals to this
Agreement;

 

“Losses”
shall mean losses, damages, deficiencies, diminution of value, claims (including
claims made by any indemnified party’s equity holders, directors, officers or
employees), liabilities, obligations, penalties and reasonably incurred fees,
costs and expenses of any nature whatsoever, and including reasonable
out-of-pocket legal fees and expenses;

 

“Mansion
Property” shall have the meaning set forth on Schedule 4.16(a).

 

96

 

“Mansion
Agreement” shall mean the Lease Agreement by and between Seller, as
landlord, and EPE, as tenant, to be entered into as of the Closing Date, in the
form set forth on Exhibit R.

 

“Material
Adverse Effect” shall mean a material adverse effect on the business,
condition (financial or otherwise), results of operations, assets or
liabilities of the Business, taken as a whole; provided, that,
none of the following or the results thereof shall be a Material Adverse
Effect:  (i) any change or condition
generally affecting the industries in which the Business operates or (ii) any
change in Law or the interpretation thereof;

 

“Material
Contracts” shall mean all material Contracts to which Seller or any
Transferred Subsidiary is a party, bound, that is used, held for use or
intended for use in, the operation or conduct of the Business or that otherwise
relates to the Business, including (w) Contracts containing covenants not to
compete or exclusivity provisions or other similar covenants of Seller or its
Affiliates or the Transferred Subsidiaries in any way materially restricting or
limiting, or imposing material conditions on, the conduct of the Business; (x)
Contracts between Seller or Beneficiary or any other beneficiary or Affiliate
of Seller or Affiliate or an immediate family member of Beneficiary, as the
case may be, and a Transferred Subsidiary; and (y) Contracts that have an
aggregate future liability to any Person (other than Seller or the Transferred
Subsidiaries) equal to or greater than $150,000 per year that are not
terminable by Seller or the Transferred Subsidiaries by notice of not more than
60 days;

 

“Material
IP Contracts” shall have the meaning set forth in Section 4.20(m)(i);

 

“Maximum
Amount” shall mean $3,000,000;

 

“Multiemployer
Plan” shall have the meaning set forth in Section 4.10(c)(i);

 

“New Title
Insurance Policies” shall have the meaning set forth in Section 3.2(g);

 

“Notice
Period” shall have the meaning set forth in Section 8.4;

 

“Operating
Agreement” shall mean the Amended and Restated Operating Agreement of LLC
in the form of Exhibit B, to be entered into at the Closing concurrent with the
sale of the LLC Interests to Publico;

 

“Order”
shall have the meaning set forth in Section 7.1(b);

 

“Ordinary
Course of Business” shall mean the ordinary course of business of the
Business, consistent with past practice;

 

“Other
Filings” shall have the meaning set forth in Section 5.10;

 

97

 

“Outstanding
Indebtedness” shall mean the aggregate amount of outstanding Indebtedness
of the Transferred Subsidiaries as of the Closing Date, after giving effect to
the contributions to LLC contemplated by Section 6.2(c), excluding the
Anthology Indebtedness and the Entertainment Indebtedness, and including and
treating as Indebtedness, the principal amount of the defeasance contemplated
by Section 6.13;

 

“Owned Real
Property” shall mean the real property which is owned by Seller or the
Transferred Subsidiaries;

 

“Parking
Lot Property” shall have the meaning set forth on Schedule 4.16(a).

 

“Party”
shall have the meaning set forth in the Recitals to this Agreement;

 

“PBGC”
shall mean the Pension Benefit Guaranty Corporation;

 

“Permits”
shall mean material licenses, permits, authorizations, consents, exemptions,
waivers, rights, certificates of occupancy, franchises, orders or approvals of,
agreements, and registrations with any Governmental Entity necessary to operate
the Business as presently operated in compliance with all Laws;

 

“Permitted
Encumbrances” shall mean (i) mechanics’, materialmen’s, warehousemen’s,
carriers’, workers’, repairmen’s, landlords’ or other similar common law or
statutory Encumbrances arising or incurred in the ordinary and normal course of
business or which are not reasonably likely to impair operations, (ii)
Encumbrances arising under equipment leases with third parties entered into in
the ordinary and normal course of business which are not reasonably likely to
impair operations, (iii) Encumbrances for Taxes assessments and other
governmental charges not yet due or payable or due but not delinquent, (iv) any
easements or similar matters of record that, alone or in the aggregate, are not
reasonably likely to impair the operation of the Business or portion of the
Business being conducted at the Mansion Property as currently conducted in any
material respect, (v) zoning, building subdivision laws or ordinances or other
similar laws or rights reserved to or vested in any Governmental Entity to
control or regulate the use of any real property that do not prevent or inhibit
the operation of the Business or portion of the Business being conducted at the
Mansion Property as currently conducted in any material respect; (vi) any
Encumbrances, easements, rights-of-way, zoning, covenants, licenses,
encroachments, protrusions and other minor defects or irregularities in title
and other matters of record, in each case, that do not prevent or inhibit the
operation of the Business or portion of the Business being conducted at the
Mansion Property, as currently conducted in any material respect or that are
listed as exceptions and approved by Purchasing LLC on the New Title Insurance
Policies and Title Endorsements; (vii) Encumbrances in favor of customs and
revenues authorities arising as a matter of law to secure payment of customs
duties in connection with the importation of goods; (viii) Encumbrances on
property not securing Indebtedness for borrowed

 

98

 

money that do
not materially interfere with the use, 
disposition, or value of such property; (ix) deposits made in the
Ordinary Course of Business in connection with workers’ compensation,
unemployment insurance and other types of social security or to secure the
performance of statutory obligations, surety and customs bonds, bids, leases,
government contracts, trade contracts and other similar obligations; and (x)
licenses (with respect to Intellectual Property and other property) that are
described in Section 4.20(a);

 

“Permitted
Exceptions” shall have the meaning set forth in Section 4.20(a);

 

“Person”
shall mean an individual, a corporation, a partnership, an association, a trust
or other entity or organization or a government or any agency or political
subdivision thereof;

 

“Photographs”
shall have the meaning set forth in Section 4.20(b);

 

“Post-Closing
Period” shall mean any period which is not included in
the Pre-Closing Period;

 

“Pre-Closing
Period” shall mean all Tax periods ending on or before the Closing Date
and, with respect to any Tax period that includes but does not end on the
Closing Date, the portion of such period that ends on and includes the Closing Date
determined in accordance with Section 6.5(a)(ii) and 6.5(b)(ii);

 

“Preferred
Stock” shall mean the Voting Convertible Preferred Stock of Publico, to be
issued pursuant to the Certificate of Designation;

 

“Public
Transaction Report” shall mean a form 8-K or such other forms, documents,
consents and information, and any amendments or supplements thereto, required
under the Securities Act of 1933 and the Securities Exchange Act of 1934, each
as amended, in connection with the Seller Contribution to Publico and
transactions contemplated by this Agreement and the Ancillary Agreements, and
the rights and obligations hereunder and thereunder;

 

“Publico”
shall have the meaning set forth in the Recitals to this Agreement;

 

“Publico
Acquisition Agreement” shall mean the Purchase Agreement between Purchasing
LLC and Sports Entertainment Enterprises, Inc. and the other parties named
therein of even date herewith;

 

“Publico
Audited Financial Statements” shall have the meaning set forth in Section 5.6;

 

“Publico
Common Stock” shall mean the common stock, par value $0.001 per share, of
Publico;

 

“Publico
Financial Statements” shall have the meaning set forth in Section 5.6;

 

99

 

“Publico
Material Adverse Effect” shall mean: (i) a material impairment or delay of
the Purchasers’ ability to perform its obligations hereunder; or (ii) a
material adverse effect on the business, condition (financial or otherwise),
results of operations, assets or liabilities of Publico and following the
Closing, the Business, taken as a whole; provided, that, none of
the following or the results thereof shall be a Publico Material Adverse
Effect: (x) any change or condition generally affecting the industries in which
the Publico, Purchasing LLC, or the Business operates or (y) any change in Law
or the interpretation thereof;

 

“Publico
Unaudited Financial Statements” shall have the meaning set forth in Section 5.6;

 

“Purchase
and Sale and Agreement” shall mean the Purchase and Sale Agreement substantially
in the Form of Exhibit A hereto;

 

“Purchaser
Failure to Close” shall mean any failure by Purchasers (a) to timely cure
any breach by Purchasers of any provision of this Agreement that would permit
Seller to terminate this Agreement after receipt of written notice by Seller to
Purchasers specifying in reasonable detail the nature of such breach, provided
that Seller is not then in material breach of this Agreement and (b) to effect
the Closing promptly after receipt of written notice from Seller requesting
Purchasers to do so, provided that upon delivery of such notice, the
Seller is ready, willing and able to effect the Closing hereunder and the
conditions set forth in Sections 7.1 and 7.2 have been satisfied, other than
those conditions in Sections 7.1 and 7.2 which by their nature are to be
satisfied at Closing;

 

“Purchaser
Indemnified Parties” shall mean Purchasers and their Affiliates and any
permitted assignees and their Affiliates (other than Seller or Beneficiary);

 

“Purchasers”
shall have the meaning set forth in the Recitals to this Agreement;

 

“Purchasing
LLC” have the meaning set forth in the Recitals to this Agreement;

 

“Real
Property” shall mean all Owned Real Property (other than any Excluded
Asset) and all rights of Seller and the Transferred Subsidiaries in respect of
the Leased Real Property (including subleaseholds), including in each case, to
the extent applicable, all rights of Seller and the Transferred Subsidiaries in
respect of all improvements, fixtures, and fittings thereon, and easements,
rights-of-way, and other appurtenants thereto (including appurtenant rights in
and to public streets);

 

“Registration
Rights Agreement” shall mean a registration rights agreement containing the
terms in the Publico Preferred Stock Term Sheet 1 attached as Exhibit O;

 

“Representatives”
shall have the meaning set forth in Section 6.2(b);

 

“Residuary
Trust” shall have the meaning set forth in Section 4.20(n);

 

100

 

“Retained
Interest” shall mean, collectively (i) 100% of the outstanding Class B
membership interests of LLC, (ii) 15% of the common stock of EPE, on a fully
diluted basis and (iii) 100% of the Series B Preferred Stock of EPE, in each
case, issued and outstanding on the Closing Date;

 

“Sarbanes-Oxley
Act” shall mean the Sarbanes-Oxley Act of 2002, as amended, and the rules
promulgated thereunder;

 

“Securities
Act” shall have the meaning set forth in Section 4.23(a);

 

“SEC”
shall mean the United States Securities and Exchange Commission;

 

“SEC Reports”
shall have the meaning set forth in Section 5.9;

 

“Section 351
Control” shall mean Publico stock with at least 80% of the issued and
outstanding voting power of Publico and at least 80% of all other classes of
capital stock of Publico issued and outstanding;

 

“Seller”
shall have the meaning set forth in the Recitals to this Agreement;

 

“Seller
Contribution” shall have the meaning set forth in Section 2.1;

 

“Seller
Distribution” shall mean the Class B Distribution (as such term is defined
in the Operating Agreement of LLC) and the EPE Preferred Distribution (as such
term is defined in the EPE Certificate of Designation;

 

“Seller
Indemnified Parties” shall mean Seller and its Affiliates and any permitted
assignees and their Affiliates (other than the Transferred Subsidiaries);

 

“Seller
Intellectual Property Rights” shall have the meaning set forth in Section 4.20(a);

 

“Seller Tax
Certificate” shall have the meaning set forth in Section 3.2(c);

 

“Other
Publico Certificate of Designation” shall mean the certificate of
designation for the Preferred Stock of Publico containing the terms set forth
on Exhibit T hereto;

 

“Other
Preferred Stock” shall mean the Preferred Stock of Publico to be issued
pursuant to the Other Publico Certificate of Designation;

 

“Software”
shall have the meaning set forth in Section 4.20(b);

 

“Solvency”
with respect to any Person, shall mean that, as of the date of determination,
both (i)(a) the then fair saleable value of the property of such Person is
(1) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (2) not less than the amount that will be
required to pay the probable liabilities on such Person’s then existing debts
as they become absolute and due considering all financing alternatives and
potential asset sales reasonably

 

101

 

available to
such Person; (b) such Person’s capital is not unreasonably small in
relation to its business or any contemplated or undertaken transaction; and (c) such
Person does not intend to incur, or believe (nor should it reasonably believe)
that it will incur, debts beyond its ability to pay such debts as they become
due; and (ii) such Person is “solvent” within the meaning given that term and
similar terms under applicable laws relating to fraudulent transfers and
conveyances.  For purposes of this
definition, the amount of any contingent liability at any time shall be
computed as the amount that, in light of all of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability;

 

“Songwriter
Agreements” shall have the meaning set forth in Section 4.20(e)(ii);

 

“Songwriters”
shall have the meaning set forth in Section 4.20(d)(ii)(A);

 

“Stockholders
Agreement” shall have the meaning set forth in the recitals to this
Agreement;

 

“Straddle
Period” shall have the meaning set forth in Section 6.5(a)(ii);

 

“Subsidiary”
shall mean any Person of which any specified Person owns, directly or
indirectly through a Subsidiary, a nominee arrangement or otherwise, at least a
majority of the outstanding capital stock (or other shares of beneficial
interest) entitled to vote generally or otherwise having the power to elect a
majority of the board of directors or similar governing body or the legal power
to direct the business or policies of such Person;

 

“Tangible
Personal Property” shall mean all tangible personal property of Seller and
the Transferred Subsidiaries used in the Business, including all artifacts,
collections, personal effects or other items held at the Mansion Property or
the Mansion Property storage facilities or used in connection with the
operation of the Mansion Property or the Business;

 

“Taxes”
shall mean any domestic or foreign federal, state or local taxes, levies,
imposts, duties or other like assessments or charges of any kind whatsoever,
together with any interest or penalty, addition to tax or additional amount
imposed thereon, whether payable by reason of contract, assumption, transferee
liability, operation of law or otherwise (including any income, net income,
gross income, receipts, windfall profit, severance, property, production,
sales, use, license, excise, registration, franchise, employment, payroll,
withholding, alternative or add-on minimum, intangibles, ad valorem, transfer,
gains, stamp, estimated, transaction, title, capital, paid-up capital, profits,
occupation, premium, value-added, recording, real property, personal property,
federal highway use, commercial rent or environmental tax);

 

“Tax
Returns” shall have the meaning set forth in Section 4.9;

 

102

 

“Tax
Sharing Agreement” shall have the meaning set forth in Section 6.5(a)(v);

 

“Threshold
Amount” shall mean $1,000,000;

 

“Title
Endorsements” shall have the meaning set forth in Section 3.2(h);

 

“Trademarks”
shall have the meaning set forth in Section 4.20(b);

 

“Transactions”
shall mean the Seller Contribution, contributions and other transactions
contemplated by this Agreement;

 

“Transferred
Subsidiaries” shall mean EPE and LLC and their direct and indirect
subsidiaries;

 

“Transferors”
shall mean Seller, Purchasing LLC and the Concurrent Investors;

 

“Treasury
Regulations” shall mean the regulations promulgated by the United States
Department of the Treasury;

 

“Trust”
shall mean the Promenade Trust, a grantor trust created under the laws of
Tennessee;

 

“Trust
Agreement” shall mean Second Restated and Amended Trust Agreement, dated December 15,
2004, by and among Barry Siegel and Gary Hovey, as Co-Trustees, and
Beneficiary;

 

“Unaudited
Financial Statements” shall have the meaning set forth in Section 4.7;

 

“Will”
shall have the meaning set forth in Section 4.20(n);

 

“Willful” for purposes of Article VIII, shall mean an
action or omission known by the Person taking or failing to take such action,
or directing another Person to take or fail to take an action or allow an
omission occur, to be in breach of this Agreement; and

 

“Written Works” shall have the meaning set forth in Section 4.20(b).

 

Section 11.2           Other
Terms.  Other terms may be defined
elsewhere in the text of this Agreement and, unless otherwise indicated, shall
have such meaning throughout this Agreement.

 

103

 

IN WITNESS
WHEREOF, the Parties have executed or caused this Agreement to be executed as
of the date first written above.

 

 

	
   

  	
  RFX ACQUISITION LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Robert F.X. Sillerman

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Robert F.X. Sillerman

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SPORTS ENTERTAINMENT

  ENTERPRISES, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Vaso Boreta

  
	
   

  	
   

  	
  Name:

  	
  Vaso Boreta

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THE PROMENADE TRUST

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Gary Hovey

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Gary Hovey

  
	
   

  	
   

  	
  Title:

  	
  Co-Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Barry J. Siegel

  
	
   

  	
   

  	
  Name:

  	
  Barry J. Siegel

  
	
   

  	
   

  	
  Title:

  	
  Co-Trustee

  
					

 

 

Signature
Page to Contribution and Exchange AgreementExhibit
10.2

 

AMENDMENT
TO THE CONTRIBUTION AND EXCHANGE AGREEMENT, dated as
of February 7, 2005 among The Promenade Trust, a grantor trust created
under the laws of Tennessee (“Seller”), Sports Entertainment
Enterprises, Inc., a Colorado corporation (“Publico”)
and RFX Acquisition LLC, a Delaware limited liability
company (“Purchasing LLC,” and together with Publico,
“Purchasers”), (each a “Party,” and collectively, the “Parties”).

 

W I T N E S S E T
H:

 

WHEREAS,
the Parties hereto entered into that certain
Contribution and Exchange Agreement, dated as of December 15, 2004 (the “Contribution
Agreement”); and

 

WHEREAS,
pursuant to Section 10.2 of the Contribution Agreement, the Parties now
desire to amend the Contribution Agreement;

 

NOW,
THEREFORE, in consideration of the mutual covenants
and undertakings contained herein, and subject to and on the terms and
conditions herein set forth, the Parties agree as follows:

 

1.                                       Amendment
to Schedules.  Schedule 4.20 to
the Contribution Agreement is hereby amended and replaced in its entirety by Schedule 4.20
attached hereto as Exhibit 1.

 

2.                                       Amendment
to Schedule A.  Schedule A
to the Contribution Agreement is hereby amended and replaced in its entirety by
the Schedule A attached hereto as Exhibit 2.

 

3.                                       Interpretation
of Section 4.23.  In connection
with the transactions contemplated by the Contribution Agreement, Section 4.23
is agreed and deemed to be interpreted to also apply to the common stock
delivered to Seller pursuant thereto.

 

4.                                       Use
of Capitalized Terms.  Unless
specifically set forth in this Amendment, capitalized terms used shall have the
meaning ascribed to them in the Contribution Agreement.

 

5.                                       Terms
of the Contribution Agreement Control. 
Except as otherwise expressly set forth herein, nothing contained in
this Amendment shall be deemed to limit, amend, modify or waive any of the
rights, terms or obligations under the Contribution Agreement.  With respect to the interpretation of and any
disputes under this Amendment the relevant provisions of Article X to the
Contribution Agreement shall apply.

 

 

IN WITNESS
WHEREOF, the Parties have executed or caused this Agreement to be executed as
of the date first written above.

 

	
   

  	
  RFX
  ACQUISITION LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas P. Benson

  	
   

  
	
   

  	
   Name: Thomas
  P. Benson

  
	
   

  	
   Title:
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SPORTS ENTERTAINMENT ENTERPRISES,

  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas P. Benson

  	
   

  
	
   

  	
   Name: Thomas
  P. Benson

  
	
   

  	
   Title:
  Executive Vice President, Chief Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE PROMENADE TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary Hovey

  	
   

  
	
   

  	
   Name:

  	
  Gary Hovey

  
	
   

  	
   Title:

  	
  Co-Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Barry Siegel

  	
   

  
	
   

  	
   Name:

  	
  Barry Siegel

  
	
   

  	
   Title:

  	
  Co-Trustee

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00078-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00078-of-00352.parquet"}]]